The San Diego Union-Tribune reported today, based on information from MDA DataQuick, a striking fall in both foreclosures (down nearly 40% in August of 2009 against August 2008) and notices of default (down nearly 7% over the same time interval) in San Diego County.
This may indicate a stabilization of the housing market, but it will require several months of improvement to be sure. There was, however, no let up in the rising delinquency rate. It is possible that this may reflect an increasing amount of mortgage loan restructuring and/or short sales replacing foreclosures, but it may be that banks are simply too overwhelmed with delinquencies to respond promptly with notices of default.
The key to the stabilization of the residential real estate market will be stabilization or improvement in unemployment. As has been the case recently, there has been a shift in the preponderance of troubled properties from neighborhoods with a lot of subprime loans to higher income neighborhoods, indicating that the primary driving force for delinquency is now unemployment.
Still, the news is encouraging that the market may be bottoming out. Meanwhile the foreclosure and short sale proliferation has put downward pressure on prices and provided a bargain market for buyers.