The month of May was full of housing news. 2010 saw an increase in the median sale prices of homes in the California counties of San Diego and Riverside. At the same time, the number of foreclosures in the said counties fell in dramatic fashion.
Riverside’s home prices increased, with the median up to $210,000. This is an increase of 16.7 percent compared to that of the same month during the previous year. Meanwhile, in the county of San Diego, the median price increased to $340,000, also a 16.7 percent increase from May of last year. Also, an increase in the median home prices was noted in the North County, increasing to $475,000, which amounts to a 21.5 percent boost.
In general, the number of home sales also increased in Southern California during the last month, except in the areas with the lowest price groups. This is attributed to buyers who are taking advantage of the lower mortgage rates and the government tax credits.
On the other hand, foreclosure activity decreased in the said counties. In the county of Riverside, only 2,292 default notices were sent out, down by a significant 52 percent compared to the previous year. Foreclosed homes totaled only 2,101 in the Riverside County, which is 4.2 percent lower than May of last year. In Southwest Riverside, notice of defaults tumbled down by 45 percent, while foreclosures fell by 84 percent.
In the county of San Diego, lenders only sent out notice of defaults totaling 1,748, which is lower by 46 percent compared to the same month last year. A total of 1,239 homes were foreclosed in San Diego this year, which is also 7 percent lower than last year. In North County, the number of notice of defaults dropped by 47 percent, while the number of foreclosures fell by 83 percent.
Similar trends were noted throughout the entire state of California. Notice of defaults were sent out to 23,911 residents in the state, which is a decline of 43 percent from last year. Meanwhile, finalized foreclosures amounted to 17,819, which is lower by 1.9 percent compared to last year’s numbers.
Economic analysts, such as Foreclosure Radar and Beacon Economics, however, are questioning the reduced foreclosure activity. The decline in foreclosures allegedly does not make much sense. Foreclosures should be increasing and not falling, given the large number of home loans that are not being paid on time. The decreasing number of foreclosures could be attributed to lenders allowing people to stay in their homes even if they have been unable to pay. Doing so would minimize the number of homes that are up for sale, which would reduce supply. Decreasing the supply is a good way to help push the prices of homes up.