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San Diego Home Auctions Slowing, but Defaults Still Surging

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By : John Cutts    99 or more times read
San Diego home auctions are slowing, but defaults are still surging, based on foreclosure records from the Office of the San Diego Assessor.

In February this year, a total of 1,141 foreclosed homes in San Diego were listed for public auction, just one unit higher than the total in January and marked a 16.4-percent drop from the total deeds in February 2009.

In contrast, the number of default notices increased in February, the first time pre foreclosures in San Diego increased in a four-month period. A total of 2,345 default notices were filed, a sharp 25.5-percent jump from notices filed in January and the highest monthly total of defaults since the peak in October 2009. The total, however, was lower by 36.7 percent from the default total in February 2009.

Total February foreclosure filings, which included default notices and foreclosure deeds, marked a drop of 31 percent from total filings in February 2009.

Alan Gin, a professor at the University of San Diego, contended that the surge in defaults could just be random fluctuation and said that more data is needed before a trend can be determined.

On the other hand, broker Matt Battiata, who also heads Battiata Mortgage Group, contended that the increase in defaults occurred because lenders finally filed notices that were delayed when moratoriums were implemented last year.

Battiata also said that more properties will get listed for San Diego home auctions this year because of the continued rise in defaults, as shown in the February default data and in the 2009 data which showed a total of 38,136 default notices. He added that there is indeed a shadow inventory of foreclosures in San Diego.

Shadow inventory happens when actual foreclosures are delayed or when foreclosed properties are not released to the market in a single spurt. Loan modifications, short sales and bankruptcy filings are among the reasons for delays in the completion of foreclosure proceedings.

In San Diego, three months after a default notice is filed and sent to the homeowner, a trustee sale notice is typically filed if the default is not cured within the three-month period.

Currently, based on data from an online real estate firm, despite the prevalence of foreclosures in the San Diego market, the average home price is still relatively high at $413,662.

Of the estimated 21,000 homes for sale throughout the city, about 69 percent are homes in foreclosure listings and in listings held by companies conducting San Diego home auctions.

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