One in every 38 houses in the Inland region received a foreclosure notice of some kind during the first quarter of this year, the second-highest foreclosure rate per household of any metro market nationwide during that time.

In all, 37,239 foreclosure notices - default notices, auction sale notices or bank repossessions -- were issued on properties in Riverside and San Bernardino counties during the first three months of this year, a 230.8% increase compared with the first quarter of 2007, according to RealtyTrac in Irvine, which charts foreclosure rates throughout the United States.

The activity represented a 39.1% jump in foreclosures compared with the fourth quarter of 2007, RealtyTrac found.

Only Stockton, with 7,560 foreclosure notices - one in every 30 households - recorded a higher foreclosure rate per household than the Inland Empire.

Las Vegas/Paradise, Bakersfield and Sacramento rounded out the top five foreclosure markets nationwide during the first three months of this year, according to report released April 29.

The Los Angeles/Long Beach market recorded 32,177 foreclosure filings in the first quarter, or one for every 104 households, ranking it 17th among 100 submarkets.

Nearly all of the foreclosure notices listed by RealtyTrac involved residential properties, but a few went to commercial properties.

One Inland housing analyst warned that the local housing market probably will get worse before it gets better.

"Unfortunately, I think we're looking at the tip of the iceberg," said Steve Johnson, director with the Riverside office of Metrostudy, a housing information and consulting firm based in Houston. "Because of the jobs we've lost and the other economic problems we're having, I think we're going to see a lot of foreclosures for at least nine more months. I believe this has become an economic issue, not just a subprime issue."

Inland economist John Husing disputed RealtyTrac's conclusions, saying its data are unfairly biased against markets like the Inland region, which experienced record levels of home building through the end of 2005, when the local housing market first began to slip.

"Obviously we're in a housing recession, but we end up ranked so high because we have a smaller housing stock to begin with," Husing said. "Los Angeles is a lot bigger market, but it's also a lot more established market than the Inland Empire. Not as many houses were for sale there to begin with. Of course we're having troubles, but their whole process is skewed against markets that have a lot of new home building."

The Inland region's high level of foreclosures isn't bad news for everyone. The Norris Group in Riverside, which buys, restores and sells foreclosed houses, expects to be busy at least through the end of 2009, said Aaron Norris, the company's marketing director.

Since November, The Norris Group has bought 10 single-family homes in the Inland region and sold seven of them. All but one of the houses were in Moreno Valley and the company bought each of them for about $200,000, Norris said.

"The buyers are out there," Norris said . His company expects to buy and restore 50 to 100 foreclosed homes in the two-county region this year.

"I think the market got out of control - some people were buying a house without having to make a down payment, people who never should have been allowed to buy - but eventually it will come down," the real estate investor said. "All of California will be reborn because it's still a sweet place to live."

Nationally, 649,917 households received default notices during the first three months of this year. That represented a 23% increase from the fourth quarter of 2007 and a 112% year-to-year increase from the first quarter of 2007, according to RealtyTrac's report.

One in every 194 U.S. households received a foreclosure filing of some kind during the first quarter of this year.

Foreclosure filings were reported on nearly 170,000 properties in California during the first quarter of this year, the highest total among any state and a rate of one filing for every 78 households.

Metropolitan areas in California and Florida accounted for 13 of the top 20 foreclosure markets in the U.S. during the first quarter, according to RealtyTrac.

Forty-six states and 90 of the l00 largest metropolitan markets experienced a year-to-year increase in foreclosures during the first quarter of this year, according to RealtyTrac.