San Diego Housing Market News and Analysis
May Foreclosure Activity
Submitted by Rich Toscano on June 18, 2007 - 7:58am
Whether one looks at Notices of Default or Notices of Trustee Sale, San Diego's foreclosure rate is now as bad as or worse than it was during most of the 1990s housing bust:
Nonetheless, analysts are still out there asserting that defaults are low as a percentage of overall housing supply*. The problem with that statement is that while they may comprise a small fraction of the overall housing supply, they are at (or above) a level that was able to cause big problems in the 90s.
Foreclosures may be a small fraction of overall housing, but they are a much larger fraction of for sale inventory, or (more important in my mind) the number of sales.
If you believe that comparing sales volume to foreclosure activity provides a decent read on market health, then things are looking far, far worse than they did one year ago.
* - Some data detail: in the first chart, I used labor force instead of population or housing supply because the latter are not available in a monthly series, and since labor force is a decent enough approximation I just used that rather than going through the hassle of estimating monthly changes based on an annual series. The May estimate is arrived at by applying April's year-over-year rate of change to last May's figure. I'm not concerned about estimating labor force because NODs and NOTs are much more volatile than labor force, and therefore any monthly changes in the NODs/labor force or NOTs/labor force will be almost entirely due to changes in the NODs and NOTs.**
** - Wow, I even bored myself typing that last paragraph.
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