I probably received an excess of 20 phone calls this morning from real estate investors seeking information on available foreclosure homes in San Diego. While I was wondering why everybody was calling regarding REO properties today, later on this afternoon I saw DataQuick’s report that during the first half of 2007 there were 2,896 homes foreclosed in the San Diego County. WOW!
Though the number certainly seems high it is not a record year when compared to the foreclosures during the mid-90s. Today the total number of homes in the County is way higher to the number of homes in the mid 90s. To no surprise the report shows that the San Diego areas that had the most foreclosures in the County are the communities which experienced the highest growth in the late 90s and the beginning of 2000.
The 91913, 91915 and 91914 zip codes in Southeast Chula Vista which include the communities of Otay Ranch and Eastlake had the highest rate in foreclosed homes in the County, followed by the communities of San Ysidro 92173, Spring Valley 91977 and City Heights 92105. What I see that is interesting in this list is that while the communities in Southeast Chula Vista had a rapid growth in new housing developments during the early 2000 (still do), the other three communities on the top of the list have had no much of new developments growth, however what I see as the common factor is areas with some of the most affordable housing in San Diego.
In the Southeast Chula Vista areas of Otay Ranch and Eastlake, I saw homeowners who were stepping up to a larger home or buying a second home as an investment during 2003-2005 when those communities saw real estate values doubling and even tripling in some cases with the hope to cash-in, while in the areas of San Ysidro, Spring Valley and City Heights, I saw mostly first time home buyers who wanted a piece of the “American Dream”. Again what I see as a common factor is that both step-up/investors and first time homeowners, in most cases used an adjustable interest rate and little or no money down in some cases in order to buy the property. Then when the rate increased and the income remained the same, they had no choice other than stop making the mortgage payment.
Back in 2003-2005 when I was more involved in the mortgage industry, I remember advising against that (adjustable and interest only loans) and had in fact turned many prospective homebuyers away due to the fact that I knew that some day in the near feature those people will have to face the problem of not being able to make the payment when the rates would increase. You know what? Today I can sleep well because I know that NONE of the homebuyers whom I helped buy and/or finance their homes are or going to face that problem! Also notable is the fact that during the 2003-2005 real estate rise, one out of seven people in the San Diego County obtained a real estate license using it either buying properties for themselves or thinking that real estate is a quick and easy way to make lots and easy money. Guess what? I bet you that most of the people today that lost or are on their way to lose their home in foreclosure either have a real estate license themselves or did use an inexperienced agent unable to give them the right advice.
The banks today are putting on the market most of those foreclosed homes on the market where some good deal can be found, although the buyers who think that they can buy them at a very low price see that the banks are willing to take a loss but on the other hand they will certainly not give them away. If you are thinking of buying a foreclosure property at a good deal we might be able to point you in the right direction.