Just a few months ago, the consensus of opinion would have the public believe that the California real estate was putting in a bottom. The advice was ... buy before you have to pay more! Was this anything more than the standard real estate hype? In light of the July foreclosure news, the answer to this question seems quite evident.

Initial defaults (NOD) in California spiked 15 percent from the previous month, and the state registered the nation’s second highest state foreclosure rate for the third month in a row. One in every 123 California housing units received a foreclosure filing in July, nearly three times the national average. The July 2009 U.S. Foreclosure Market Report™, was released today by RealtyTrac®, the leading online marketplace for foreclosure properties, The report shows foreclosure filings — default notices, scheduled auctions and bank repossessions.

Seven California metro areas documented foreclosure rates among the nation’s top 10 in July. Stockton posted the second highest metro foreclosure rate in the nation — one in every 62 housing units received a foreclosure filing — followed by Modesto at No. 3 (one in 63), Merced at No. 5 (one in 66), Riverside-San Bernardino-Ontario at No. 6 (one in 67), Bakersfield at No. 7 (one in 76), Vallejo-Fairfield at No. 8 (one in 83), and Sacramento-Arden-Arcade-Roseville at No. 10 (one in 105).

Other cities with top 10 metro foreclosure rates were Cape Coral-Fort Myers, Fla., at No. 4, with one in every 64 housing units receiving a foreclosure filing, and Phoenix-Mesa-Scottsdale, Ariz., at No. 9, with one in every 103 housing units receiving a foreclosure filing.

The top four state foreclosure activity totals in July were reported by California, with 108,104 properties receiving a foreclosure filing; Florida, with 56,486 properties receiving a foreclosure filing; Arizona, with 19,694 properties receiving a foreclosure filing; and Nevada, with 19,535 properties receiving a foreclosure filing. Together these four states accounted for nearly 57 percent of the nation’s total foreclosure activity.

In San Diego California in August 2009, the San Diego County Treasurer-Tax Collector Dan McAllister said that 46,751 San Diego County residents were delinquent on, or have not paid, their property taxes. Delinquent taxpayers in the county owe more than $289 million in back taxes.
This sure sounds bad, but, the good news is that this year’s figures were actually lower than last year. Last year, the county sent out more than 50,000 tax default notices.

Dan McAllister said: “The number has decreased, which demonstrates that more people are stepping up to protect their single most important investment, their home. We are confident that the number will improve once taxpayers receive these notices.”

A recovery in the residential real estate market will occur when supply and demand begin to align across all price ranges. As of June 30 there were 8,868 detached and attached property active listings in the San Diego County MLS system. With the current absorption rate it would take 3.4 months to sell the existing supply of all properties (down from 5.9 months at the end of the 1st quarter). A supply of six to seven months is typically indicative of a normal market. The current market demand for properties priced below $400,000 appears likely to continue into the third quarter, assuming credit remains available and interest rates remain relatively stable. Tight credit, higher interest rates and the potential for future foreclosures in the $400,000 plus price ranges may continue to stall market activity in the higher price ranges.