San Diego County foreclosures have plummeted to a nearly seven-year low, in light of rising home values, the effects of government intervention and new protections for California consumers, said real estate tracker DataQuick on Tuesday.
A total of 175 trustee deeds, which signal a foreclosure, were recorded countywide in May. That’s the lowest level since September 2006, when 172 homes were foreclosed upon and the local housing market began to see troubling declines in prices and sales.
“We’ve pretty much gone back to normalcy in foreclosures,” said Alan Nevin, a housing analyst with the London Group in downtown San Diego.
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The most obvious reason for the foreclosure drop is that notices of default, the first step in the foreclosure process, also have fallen drastically. A total of 642 default notices were filed in May, down 52 percent from a year ago.
That figure tends be sporadic month-to-month, due to sudden hikes or drops in filings from major mortgage servicers, Nevin said. Still, defaults have generally been trending down. May’s total is about 28 percent lower than the one-year average of 887, DataQuick numbers show.
A mix of factors — from an improving housing market to multibillion-dollar mortgage settlements — have played roles in cutting real estate distress throughout the county, said DataQuick analyst Andrew LePage.
The median price for a home sold in May rose past the $400,000 mark, the first time in five-plus years. May also marked the ninth straight month of double-digit annual gains in prices. That has been instrumental in lifting homeowners out of negative equity, especially those on the brink of defaulting on their mortgages, LePage said.
Those market dynamics give more hope to consumers, who now have “far greater incentive to hang on” to their properties, he added.
Troubled homeowners in the past year also have had more access to foreclosure alternatives through government settlements with major banks accused of foreclosure abuses.
Those deals required companies such as Bank of America, Wells Fargo and Chase to provide more homeowner aid. That help has included loan modifications, principal reductions and short sales, deals that let homeowners sell their homes for less than what they owe on their loans.
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