The San Diego Union Tribune has a front page story this morning (Sunday, August 5th) about the increasing rate of mortgage defaults and the implications for homeowners in the San Diego area. While default rates are skyrocketing — as they are across the country — the current rate of defaulted homes on the market is only around 10%. Certainly, this represents a marked increase versus last year, however, it’s well off the peak of 15% which was reached twice during the 1990s. As we have yet to see the trough of defaults (or apex, depending on which perspective you’re viewing the market), it makes sense for potential home buyers to wait and observe the extent of the damage. According to the experts quoted in the article, the current defaults have not yet impacted the market strongly enough to allow widespread value. Homes are still selling for market price and without any significant discounts. While a couple of homeowners have found diamonds in the rough, this is still a rare phenomenon in San Diego County. If default/re-listed homes reach 20-30% of the market then it’s likely significant value will be seen. San Diego Foreclosures
