On Thursday, Oct. 28, RealtyTrac reported that San Jose and San Francisco Bay Area Q3 2010 foreclosure rates dropped 21.7% from the same period in 2009 – a significant improvement. However, foreclosures were stable from Q2 to Q3 of this year with the rate essentially unchanged.
Stable foreclosure rates in 2010 are good news, but the “new normal” in San Jose homes for sale is not pretty. In Q3 nearly 18,000 homes showed foreclosure activity and 1.06% of homes in the Bay Area are facing foreclosure.
High foreclosure activity in San Jose, CA continues to be driven by:
- Lingering high unemployment rates
- Strict bank lending standards
- Reset of the last of the teaser rate loans from the 2006/07 era
It doesn’t look like unemployment or slow bank lending will end soon, so expect foreclosure rates to hover at historically high levels.
The high levels of distressed homes mean ongoing pressure on the San Jose home market. And that means opportunities for bargain purchases of short sales and bank owned properties will continue. San Jose home buyers need to be prepared to take advantage of these opportunities by having strong credit and working with a solid mortgage professional. Make sure you qualify for the financing needed to purchase a home. Financing is difficult these days – the banks want everything documented and are very picky about who they’ll loan to.