The imminent threat of foreclosures persists throughout California due to a significant decrease in asset values compounded with high debt levels, continued economic instability, and a general lack of liquidity in the marketplace. While many counties in California, particularly Riverside, San Bernardino, San Joaquin, and Kern counties are suffering from exceptionally high foreclosure rates, San Diego County’s foreclosure crisis has seemed to peak.
Signs of this peak are attributed to stabilized employment rates in San Diego County, and a significant decrease in foreclosures from last year’s amount of 2,000-2,500 per month to 800-900 per month this year. Increasingly, home prices are remaining relatively steady and mortgage loans are performing better, which will lead to a decrease in foreclosures.
A steady demand of potential home owners and historically low interest rates are proving more beneficial to buy than rent. This is a stark contrast to the market of 2004-2007 when buyers purchased at inflated prices and interest rates, with no money down, and no income qualification loan programs.
While foreclosure rates are on the decline in San Diego County, there is no way to determine the long-term outcome in this unstable economic downturn. As there are areas in South County with 50 percent of the market being a short sale, it will be a formidable road to recovery.
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