Is The Foreclosure Crisis In San Diego Leveling Off?
San Diego County is experiencing a record number of foreclosure and default lows
, but is it a sign that the crisis is easing and the home market in San Diego will stabilize?It could be, but there needs to be more flexibility from lenders in order for the housing market in San Diego to get back on its foundations.
According to a report by MDA DataQuick, San Diego County experienced the lowest number of foreclosures and mortgage defaults in the second quarter of 2010 than in the last three years.In 2009, 9,866 homes went into default compared with the second quarter of 2010s number of 5,458.
California is also experiencing some of these positive effects.Defaults are down 44 percent year-to-year while foreclosures are up 4 percent, a change attributed to abrupt rises in neighbourhoods in Orange County, Marin, Los Angeles, San Francisco, San Mateo and Santa Barbara counties.
Is it too soon to predict that the foreclosure crisis is leveling off?Of course!However, since San Diegos foreclosures and defaults are experiencing record lows and California itself is experiencing some positive changes in the number of defaults, we have reason to hope.As the economy turns around, real estate will inevitably go through a roller coaster of value changes and defaults, so ups and downs are hardly surprising.
However, there still isnt enough being done to address the problem of mass foreclosure and the overall negative effect it is having on San Diegos home market.Lenders in particular are not being flexible enough to prevent the widespread negative effects of mass foreclosure putting on the pressure at every sign of a stabilizing market merely drags the market back down as more homeowners go into default or foreclosure and home buyers hesitate, fearing that they could be next on the chopping block.
In January 2010, the U.S. Department of Housing and Urban Development (HUD) released Report to Congress on the Root Causes of the Foreclosure Crisis.In part, it outlined the need for efforts to support struggling homeowners and help them remain in their homes.These efforts include mortgage loan workouts, loan modifications that reduce both interest rate and principal payments, bankruptcy reform and community support programs.
HUDs report indicates that while San Diego may be looking at a better home market in the future, extensive reforms to todays struggling home owners will be needed to keep this market stable.Stemming the flow of aggressive subprime mortgages was only the first step.
Foreclosed homes do not contribute to the economy; not only are they tenantless buildings with unpaid taxes, they produce a wasteland effect in neighbourhoods, encouraging other home owners to leave.This results in a run-down appearance and criminal activity.The growing number of businesses that specialize in tenanting foreclosures to keep up appearances, the increased attention to the ghost towns that some neighbourhoods have become and the concerns about criminal activity in foreclosures are testaments to the seriousness of this blight threatening many San Diego area neighborhoods.
The foreclosure crisis in San Diego may be seeing its final days, but there is much that lenders can do to hasten the end of the recession.To get people back to viewing San Diego real estate as a good investment, they would do well to look at the overall image as opposed to going after people in default just to add another abandoned, empty house to their inventories.Instead of pushing people out of their homes, lenders would be better off by helping them stay and encourage other people to invest in the San Diego residential market.
by: Joshua Sloan
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