REAL ESTATE BOOM WAS LOWERED IN 2005.

Byline: GREGORY J. WILCOX

Now we know where some of the badness is lurking as the residential real estate market continues unwinding -- 2005. The year the boom market turned.

That clue revealed itself last week when DataQuick Information Systems released a report that showed third quarter foreclosure activity soaring across the state from the year-ago levels.

DataQuick's analysis found that mortgages in default in the last quarter had a median age of 14 months, and more than half of them were originated last year.

Typically, a default pops up in about the first 18 months of ownership, noted DataQuick analyst Andrew LaPage.

So how much trouble in terms of foreclosure pressure is visible out the rear window?

Maybe not that much.

Last year the median price -- the point at which half the units cost more and half less -- of a San Fernando Valley house averaged a record $569,208. That was 20 percent more than the year before.

This year's average median will probably finish close to last year's.

Prices are now narrower than they've been since 1997.

But lots of homeowners -- those who bought between 1998 and early last year -- have a substantial equity cushion.

So who'll feel the pain?

``It's just the people who bought in the last year, had an exotic mortgage and pressed too hard,'' said Jack Kyser, chief economist at the Los Angeles County Economic Development Corp.

``Anyone who owned a home for the last five years and has a fixed rate mortgage, well, they're going to sail right through this thing.''

But foreclosure activity is going to be a part of this market mix for a while after being out of the limelight for years.

The company report tracks notices of default, which lenders send to borrowers, when they fall three or more months behind on their loan.

And it offers a glimpse of how fast debt can pile up.

On primary mortgages, homeowners were a median of five months behind on their payments when the notice of default arrived. Borrowers owed a median $9,829 on a median $306,000 mortgage.

Lines of credit found homeowners a median six months behind on their payments. They owed a median $3,200 on a median $60,000 credit line. (DataQuick could not find out how much of the amount of credit was actually from public records).

Most homeowners work their way out of trouble.

But this part of the market will be getting more attention.

People who get into the market now will be doing so for the most basic or reasons. And they won't be able to treat their house like an ATM machine.

On the same day that DataQuick rattled the foreclosure sabres, the California Association of Realtors issued its 2007 forecast.

It calls for a 2 percent decline in the median price.

That would be the first in about 15 years.

``The housing market clearly downshifted in 2006 from the record-setting sales and robust price gains of the last few years,'' association president Vince Malta said in presenting the forecast.

Markets are always cyclical. In 1997 we saw a depressed market end.

With 2007 approaching, we are watching one with booming prices end.

And while we can see bad times ahead, there is no clue to how long they will last.

greg.wilcox(at)dailynews.com

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