01 Dec Default notices climb,but foreclosures in San Diego remain low
Default notices, which trigger the foreclosure process, ticked up last month, but still remain at historic lows for real estate in San Diego.
Lenders filed 474 notices of default in October, up 12.4 percent from 398 notices filed in September, according to the latest CoreLogic DataQuick figures. Default notices are the first step in the foreclosure process and are typically issued when a borrower’s mortgage is 90 days past due. The number of default notices are an important barometer of an area’s overall real estate health; the more default notices filed, the more likely it is homeowners are in financial trouble and may lose their homes to foreclosures in San Diego.
The last time default notices were nearly this high was in January, when 490 default notices were filed with the county. Still, the October figures are below the 10-year monthly average of 1,387 default notices.
The slight uptick isn’t alarming to real estate analysts because the numbers are still relatively low. Banks that wish to repossess property before the year’s end must do it now, which may explain the slight uptick. Experts are closely watching the number of foreclosures in the county, which remain low. Last month banks repossessed 138 properties, just 14 more than September. Year-over-year, foreclosures are down 18.5 percent — well below the record high of 2,004 in July 2008 during the housing market’s collapse.
Part of what’s helping real estate in San Diego is the area’s appreciation, stable median prices on homes for sale in San Diego, and record low foreclosures.
Annual home appreciation remains healthy, after setting records when home appreciation in San Diego spiked 24.1 percent in May 2013, fueled by heavy investor activity. It has slowed to single-digits since the spring, easing fears of a real estate bubble. Median prices, meanwhile, continue to increase. The median price of a home for sale in San Diego was $440,000 in October, down from $445,000 in September, but still well above the median price of $280,000 in January 2009 when the market bottomed out with home prices in coastal communities such as Carmel Valley, Del Mar, La Jolla, Rancho Santa Fe, Santaluz and Solana Beach also affected.
Typically, the extra home equity helps homeowners who are in danger of losing their homes sell their property and avoid default.