Through November, RealtyTrac tallied nearly 130,000 properties that entered some stage of foreclosure in California alone during 2006; accounting for roughly 11 percent of the nation’s foreclosures for the same period.

A dubious honor at best, the Golden State maintained a level of foreclosure activity during the past year that kept it in the nation’s upper echelon in terms of state foreclosure totals. The state hit its peak towards the end of the year, taking the nation’s top spot for September, October and November.

Economic data released recently by forecasters at the A. Gary Anderson Center for Economic Research at Chapman University in Orange, Calif., seem to indicate that California is economically sound and stable. That said, foreclosure levels for 2007 are more likely to be a continuation of 2006, rather than a reprise of the early 1990s when foreclosures were rampant due to extensive job losses, high interest rates, high inflation and a resulting recession.

This time around, the “r” word is only being used in a cautionary stance if unforeseen circumstances arise. “Slowdown” is the term of choice these days. Still, enough of the prime indicators are projected to turn and remain negative — or slightly positive at best — this year to conclude that the flow of California foreclosures will at least remain steady.

Only a slight uptick in job creation throughout California is expected, along with low housing affordability, a larger inventory of unsold houses, declining home prices, lower sales volume and less residential construction. At the end of the day, it will all amount to an economic environment in 2007 that will not be kind to distressed homeowners who need to sell to avoid foreclosure.

Even with interest rates remaining at or near historically low levels — thanks to the Federal Reserve — Esmael Adibi, director of the Anderson Center, is concerned about the resetting of mortgage rates on very risky adjustable-rate mortgages — particularly the interest-only and option loans home buyers have used to purchase more home than they could realistically afford during the past couple of years.

Although, it is understandable how so many potential homeowners would want to try and stretch their family budgets to own a home in California by utilizing one of these risky loans, affordability is still a major issue. The fact is that it takes 50.8 of the median family income to buy a median-priced home in the state compared to only 23.1 percent of the median family income to purchase a median-priced home at the national level, Adibi noted.

At the end of the day, it appears as if expectations that home prices will continue to go upward and build up more equity in 2007 is a gamble that is going to backfire on many of these short-term homeowners, resulting in opportunities for investors, real estate professionals and home buyers to purchase California homes at bargain prices.