A Comprehensive Guide to Buying Houses on the Courthouse Steps in San Diego County
If you’re interested in buying a house in foreclosure on the courthouse steps in San Diego County, you might have come across news about an increase in foreclosures in the current housing market. It’s natural to feel uncertain about this situation when considering a home purchase. However, it’s crucial to delve deeper into the context to understand the truth behind the headlines.
According to a recent report from ATTOM, a property data provider, foreclosure filings have risen by 2% compared to the previous quarter and 8% over the past year. While media headlines tend to focus on this increase, solely considering the numbers might lead to unnecessary worry about a potential housing market crash. In reality, while foreclosures are indeed on the rise, the data indicates that we are not heading towards a foreclosure crisis.
To gain a better perspective, let’s explore the current situation with some context and compare it to previous years.
A More Moderate Increase Than It Seems
In the past few years, foreclosures reached record lows due to various factors, such as the forbearance program and other relief options for homeowners in 2020 and 2021. These initiatives helped millions of homeowners keep their homes during challenging times and allowed them to recover from financial hardships. Simultaneously, rising home values enabled many homeowners to leverage their equity and sell their properties instead of facing foreclosure. Going forward, equity will likely continue to play a significant role in preventing foreclosures.
With the government’s moratorium on foreclosures coming to an end, it was expected that foreclosures would increase. However, it’s essential to understand that an increase in foreclosures doesn’t necessarily indicate trouble in the housing market. As clarified by Clare Trapasso, Executive News Editor at Realtor.com:
“Many of these foreclosures would have occurred during the pandemic, but were put off due to federal, state, and local foreclosure moratoriums designed to keep people in their homes . . . Real estate experts have stressed that this isn’t a repeat of the Great Recession. It’s not that scores of homeowners suddenly can’t afford their mortgage payments. Rather, many lenders are now catching up. The foreclosures would have happened during the pandemic if moratoriums hadn’t halted the proceedings.”
Bankrate also explains that the situation is drastically different from the housing crash aftermath:
“In the years after the housing crash, millions of foreclosures flooded the housing market, depressing prices. That’s not the case now. Most homeowners have a comfortable equity cushion in their homes. Lenders weren’t filing default notices during the height of the pandemic, pushing foreclosures to record lows in 2020. And while there has been a slight uptick in foreclosures since then, it’s nothing like it was.”
In essence, there is no sudden flood of foreclosures on the horizon. Instead, the increase is partly due to the delayed activity explained above and partly influenced by economic conditions.
A Look at the Numbers
To paint a clearer picture of how different the situation is now compared to the housing crash, let’s examine the graph below. It showcases data on foreclosure filings for the first half of each year since 2008, highlighting that foreclosure activity has been consistently lower since the crash.
While foreclosures are indeed climbing, it’s evident that the foreclosure activity today is far from the record-high numbers reported during the housing market crash. Furthermore, today’s buyers are generally more qualified and less likely to default on their loans, contributing to a more stable market.
The Bottom Line
At present, it’s crucial to view the data in context. While the housing market is experiencing a rise in foreclosures as expected, it’s essential to remember that we are nowhere near the crisis levels witnessed during the housing bubble burst. Consequently, this increase in foreclosures is unlikely to lead to a crash in home prices. If you’re considering buying a house on the courthouse steps in San Diego County, understanding the current housing market dynamics can help you make informed decisions and navigate the process with confidence.