Home foreclosures are rising in the Bay Area after the pandemic has mostly stopped, although Marin County’s impact has been relatively mild so far, according to a market analytics firm.
Property experts say the recent surge is more indicative of a return to normal than an upcoming housing crash, but foreclosures are poised to continue their upward trend in the coming months. is in order.
Marin County has seen a 38% increase in foreclosure starts in the first six months of 2021 compared to the same period in 2021, according to Rick Sharga, executive at Attom Data Solutions in Irvine.
However, the increase in marine is slower than in other regions. Nationwide, foreclosures increased by 153 percent during that period, he said, Sharga said.
He also said the year-over-year increase was somewhat skewed because foreclosures were artificially low in 2021. This is due to pandemic-related government protections for homeowners.
From the first half of 2019 to the first half of this year, foreclosure initiations fell by about 37% in Marin, Sharga said. Nationwide, it was down 1%.
Foreclosures began in five Bay Area county sections (Contra Costa, Alameda, Santa Clara, San Mateo County, and San Francisco) in the first half of this year, up 90% from the same period in 2021. Data from the atom. Still, the number of foreclosure applications is one for every 1,419 of his homes in the area, below pre-pandemic levels.
“Marine populations are increasing year by year, but they are much smaller than national populations and California populations,” says Sharga. “The level of foreclosure activity has not started to pick up as quickly as elsewhere, which is a good thing.”
Foreclosure activity, or initiation of a foreclosure, means that the homeowner has received notice to begin the process and does not necessarily mean that they have finally lost their home.
“We need to see exponential growth before the Bay Area market starts to feel the impact,” said Sharga. “It is unlikely that there will be enough foreclosed homes to enter the market to have a significant impact on prices.”
Shharga said this was largely due to tolerance plans offered by the federal government and private lenders to allow struggling homeowners to suspend mortgage payments during the coronavirus pandemic. Additionally, a statewide $1 billion mortgage relief program available to an estimated 13,000 Bay Area households has helped thousands of borrowers.
But since the moratorium on federally-backed mortgage foreclosures expired in July 2021, and many banks resumed private loan foreclosures around the same time, they were either in arrears or had an emergency prior to the pandemic. Homeowners who fail to take full advantage of the program are increasingly losing their homes.
Pandemic programs are also ending for renters. Final statewide eviction protections expired late last month, but some Bay Area cities and counties passed their own eviction moratoriums, which are still in effect.
According to Attom, 72 foreclosures began in Marin County in the first six months of this year. Last year he had 52, in 2020 he had 91, and in 2019 he had 114.
San Francisco, the East Bay, and the South Bay have received 1,707 foreclosure filings so far this year, down 17% from the same period in 2019 before the pandemic hit. This is less than half of the 4,555 started in these areas during his first six months of 2016, when foreclosures were still declining from the peak of the Great Recession in the late 2000s.
This year, Contra Costa County’s foreclosure application rate was 0.12% of all homes, or 1 in every 833 homes. Alameda County was 0.08%. Santa Clara County, 0.06%. San Mateo County, 0.05%. San Francisco County is 0.04%.
Shalga expects foreclosures to continue to rise and return to at least pre-pandemic levels by mid-2023 across the Bay Area and across the country. It will cause homeowners and foreclosures to “return to slightly higher than normal levels a little quicker.”
Oakland foreclosure attorney Jason Estabillo said another factor could be leading to a surge in foreclosures. In recent weeks, he’s been inundated with calls from homeowners, concerned that their moratorium agreement is now ending.
“Banks require advance payment for all delinquencies during the grace period,” Estabilo said.
The surge in foreclosure activity comes as the raging pandemic Bay Area housing market enters a cooling phase as rising interest rates weigh on buyers and a growing supply of homes for sale. According to the California Association of Realtors, the median selling price of existing single-family homes in the area fell 7% from May to June to $1.4 million.
Median single-family home prices fell more than 7% from $2.025 million in May to $1.875 million in June, according to data from the Marin County Assessor’s Office.
Real estate experts agree that foreclosures have little to do with the recent softening in prices. This is in contrast to the 2008 housing crash and recession. At that time, millions of homeowners across the country defaulted on risky variable rate mortgages, and the entire housing market was submerged.
But more foreclosure activity could have a disheartening effect on some home hunters, as the economy as a whole looks more volatile, said John Heckenberg, a realtor at San Mateo-based Compass. Stated.
“I think it affects the psychological mindset of buyers,” said Heckenberg. “There are many external factors that influence people’s decisions.”
For homeowners who have fallen behind on their mortgage payments or received foreclosure notices, Heckenberg said the first step is to contact their bank to see if they can come up with a difficult repayment plan. He said that with home prices still at historic highs, homeowners with enough equity in their properties could sell and avoid foreclosures altogether. Added.
“It’s ahead of its time,” says Heckenberg. “The longer you wait, the fewer options you have.”