San Diego foreclosures plummet
A recent industry report indicated that foreclosure activity for real estate in San Diego plummeted in the third quarter of 2012. The report analyzed the foreclosure activity in the third quarter of 2012 in 212 of the nation's largest markets and found that 62 percent of these large markets saw foreclosure activity decline. This trend of ongoing decline is viewed as another positive sign for a national housing market stabilization.
San Diego was among the markets that experienced the most significant declines in foreclosure activity. According to Southern California Public Radio, the three top California cities that observed year-over-year declines in foreclosure activity were San Francisco, Los Angeles and San Diego, which saw declines of 36, 29 and 26 percent respectively.
"The foreclosure crisis hit California so hard that its cities have a long way to go before the situation normalizes," reported author Matthew DeBord. "Ironically, we need those foreclosures - and we need the foreclosure market to get back to normal. In southern California, we have a price bubble in housing at the lower end of the market, due to a lack of supply to meet surging demand."
DeBord noted that until housing construction kicks up, foreclosures will be a significant part of the local housing economy, providing relief to homebuyers.
Underwater mortgages and relief
In an article in the San Diego Source, author J. Patrick Ford explained that despite the recent reports that are predicting a turnaround in the San Diego real estate market, people shouldn't expect this to happen immediately as there are roughly 178,000 upside-down home mortgages in the metro.
While upside-down home mortgages are far from being eliminated, a recent report from the San Diego Union-Tribune indicated that the number of San Diego homeowners who have been issued a mortgage default notice are at a six-year low. As notices of default are considered the first step in the foreclosure process, this is good news for the San Diego housing market.
NBC San Diego reported on October 10 that the first cases of mortgage relief coming from a $25 billion settlement have arrived in San Diego. The mortgage relief is part of the settlement between 49 states and five major U.S. banks: Citibank, JP Morgan Chase, Wells Fargo, Bank of America and Ally Financial. The settlement was reached after these banks were accused of rushing the foreclosure process without following legal procedures. With mortgage relief being sent out and decreases in mortgage defaults and foreclosures, the San Diego housing market appears to be in a prime position of recovery.