I biked our neighborhood with our son yesterday and to my surprise I did not see one single house on the market. I'm not talking a bike around the block, we went a good 5 miles and it didn't hit me until I got home. Where are all of the foreclosed homes? Where are all of the distressed home owners? When people talk about Real Estate in San Diego one common denominator I hear frequently would be "there is no inventory" or "the cash buyers are scooping up inventory".

When evaluating foreclosures and trending in foreclosed homes you want to take a look at the notices of default or NOD. In California the Notice of Default is a legal action, the first step to the beginning of the foreclosure process. NOD is a notice that is recorded with the county, goes on public record and begins the countdown to a foreclosure/trustee's sale which usually occurs on the courthouse steps in auction format.
In San Diego county notices of default are down, according to the San Diego County Recorders Office from November 2011 to November 2012 NOD's fell 53%. Lenders issued 882 NODs to borrowers in November 2012 down from the 1,880 issued last November 2011.

A Notice of Default is the first step in the process of foreclosure, 90 days following the filing of an NOD the lender can publish a Notice of Trustee's Sale as the next step in the foreclosure process. The lender must publish the NOTS in a local newspaper in the same county as the property. The lender must also file the notice with the county recorder's office and mail a copy to the borrower. The lender must post a copy of the NOTS at the location of the property in foreclosure and in a public location within the same county. The borrower may rectify the default at any time up to five days before the scheduled sale date.
Notice of Trustee's Sale - the final step in the foreclosure process that transfers the property from the delinquent borrower back to the lender or third party have lessened in November 2012 with 534 properties filed. According to the San Diego County Assessor's Office this is 44% less than November 2011.  

 

What does this mean for 2013??

The housing market is strengthening and the distressed homeowners are becoming fewer. A steady rise of short sales could be contributing to the falling of foreclosed upon homes. If you are considering a short sale be sure to read our article "Is A Short Sale Right For You". With the housing market picking back up and the prices slowly rising fewer homeowners are "upside down" and less likely to "walk away". Drops in completed foreclosures make well for the homeowner but it does put a bit of a damper on the home buyer with less inventory on the market.

Job growth combined with low interest rates provide support for the housing market. I predict that a slow and steady rise in home prices will occur in 2013 and Real Estate Agents will have to come up with more clever ideas to keep their clients happy.

What do you think will be the biggest impact on San Diego Real Estate for 2013?