Foreclosures fall to post-recession low

In a sign of health for San Diego County’s housing market, the number of foreclosures in the region fell to a post-Great Recession low in September. 

Last month, lenders foreclosed on 121 properties in San Diego County, the fewest since 109 homes were repossessed in June 2006, the midst of the housing bubble that led to the economic downturn, CoreLogic DataQuick reports. 

“To me the fact that we’re hitting a low in foreclosures is consistent with being in a very strong market,” said Mark Goldman, a loan officer and real-estate lecturer at San Diego State University.

The number of foreclosures in September was down from 137 in August, and 146 in September 2013. 

Foreclosures, which peaked at 2,004 in July 2008, have been trending downward over the last several years as San Diego County home prices have rebounded since the Great Recession. In September, the median price for a home in the county was $445,000, up from the bottom $280,000 in January 2009. The equity gained since then has given people an out if they can’t pay their mortgage: they can sell their home to avoid default.

“Foreclosures occur when people are upside down,” Goldman said. “There’s always things that can go wrong in the market, I would be amazed if we ever saw zero foreclosures, but I think that’s low and consistent with a very stable, maybe even a robust market.”

In September, foreclosure resales made up 3.3 percent of transactions in the county. Norm Miller, a real-estate professor at the University of San Diego, said about six months ago the university stopped using foreclosures in its models for predicting prices.

“The home prices have gone up enough now that we’re not seeing strategic defaults anymore,” he said. “There are a few pockets still with lingering inventory, and still some even here, but they’re not enough of the market to drive prices the way they were.”

Despite foreclosures subsiding, Goldman said he would continue to monitor them as one of several indicators of how the housing market is faring. However, he doesn’t consider them as important as gauges like inventory, number of sales, price, and default notices, which trigger the foreclosure process. 

CoreLogic DataQuick reports the default notices fell to 398 in September, down from 422 in August and 466 a year earlier. Default notices peaked at 3,832 in March 2009. Goldman said he considers those a better indicator because banks will foreclose depending on the time of year, whereas default notices occur after 90 days of missed payments. Compliments of the Union Tribune.