Since the housing bubble burst, San Diego’s real estate market has experienced one of the most impressive turnarounds in the nation. Home prices are up and so is demand.
For nearly a year now, there’s been month after month of positive news for San Diego, and, considering the way the market has been looking, that probably won’t be changing anytime soon.
Mortgage defaults continue to drop:
The strong recovery of San Diego’s real estate market has helped to keep foreclosures at relatively low levels, especially when compared to the rest of the country. The area has continued to show a gradual decline in the amount of homeowners who are experiencing mortgage distress, which, in turn, has made for a much healthier market.
According to reports from DataQuick released Tuesday, notices of default in the San Diego area fell 21% from June to July. While that’s certainly a significant decline, the news was even better when you look at it from an annual perspective. Notices of default, which represent the first formal step of the foreclosure process, were down 65% from the same time a year ago.
The amount of mortgage defaults in San Diego has seen double-digit percentage declines for the past 12 months. Much of that is due to the rise in home prices over the last year, which has freed many potential sellers from the negative equity in their homes. Now, struggling homeowners are more likely to be able to sell their house for a profit or, at the very least, break even.
“Prices are going up and people in trouble have options,” explained DataQuick analyst Andrew LePage. “As long as prices are steady and rising, a lot of people who might’ve gotten in trouble a year or two ago are going to be OK, and it won’t result in a foreclosure.”
Although the amount of default notices has fallen from June to July, the total number of foreclosures were up. In July, there were 168 foreclosures in the San Diego area. That’s an 11% increase from the previous month. However, the annual report remained positive. The number of foreclosures were down a whopping 63% from last year. The number of filed trustee deeds, which signify a foreclosure, have also fallen – they have seen double-digit percentage dips for the last 19 months.
Fewer bidding wars in San Diego:
Even though San Diego remains one of the most competitive housing markets in the country, the amount of bidding wars in the area has begun to ease up. In June, 82% of the deals reviewed by Redfin, an online real estate brokerage, faced multiple bids. That number fell to 70% in July. The national rate is currently 63%.
The decline in bid matching is due, in large part, to an increased number of houses on the market. As more and more listing become available, buyers should experience less competition. The rise in home prices and mortgage rates have also played a role in the amount of competition in the housing sector. High prices and unfriendly loans have discouraged some buyers from entering the market, and, in turn, have made it easier for persistent buyers to complete deals.
According to Redfin, these recent trends indicate that “the strong seller’s market is beginning to shift toward more balance, giving frustrated home-buyers a bit of relief.” Redfin’s report also predicted that the amount of bidding wars in San Diego would continue to fall in the coming months.