The latest economic data released by the Real Estate Research Council of Southern California at California Polytechnic University, Pomona, reveal a number of factors that might clear the way for an increase in local foreclosure activity in the not so distant future. (Read the related article for more details)

One thing is clear from what Dr. Michael Carney, executive director of the Council said at its quarterly meeting last week — although the signals are hard to read and interpret right now — not enough negative factors are in place. And the negative factors that do exist at present are not intense enough to cause concern about a repeat performance of the economic disaster that earmarked the early 1990s. Thus, no recession in the offing.

Foreclosures may go up due to the much anticipated resetting of interest rates coming due next year on adjustable rate mortgages (ARMs), but he does not expect jobs to be lost in the quantity that they were last decade to cause Notices of Default — the beginning of the foreclosure process in California — to skyrocket like they did back then.

If Dr. Carney’s forecast is correct, there will be a limited window of opportunity for investors to take advantage of increased numbers of foreclosures. This also suggests that for investors with cash to invest during this period, there will be a relatively short-term opportunity to re-sell properties for a profit, as the market “levels off” at lower foreclosure rates.

For members of RealtyTrac it means get your track shoes on now and be ready to race at a moment’s notice to search for however many foreclosures come down the pipeline once those rates are reset, and before the well dries up.

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