In this post, we’re looking at a snapshot of the foreclosure situation in one of the key states in the nation: California. RealtyTrac.com recently released information on foreclosure trends, revealing that over 60,000 California homes entered the foreclosure process in November this year. This is an increase of about 6% in foreclosures compared to the previous month. When compared to November of last year, it’s a 51% increase. It works out to about 1 in every 218 homes is going into foreclosure in California.
A November article in BusinessWeek predicted this uptick in California foreclosures, after decreases in the numbers of foreclosures in September and October. A California law requires lenders to attempt to contact homeowners multiple times and then wait 30 days before issuing default notices. This has pushed back the time frame on home foreclosures, so there may be many more yet to come in California.
How this effects the rental market remains to be seen. Common sense would suggest that more people returning to the rental market might drive up prices or make finding a rental more competitive. The San Francisco rental market remains competitive with a 3.9% vacancy rate at the end of the second quarter of 2008 according to Apartment Finance Today’s October 2008 issue. That beats the 6% national vacany rate. San Diego also has a low vacancy rate of 3.6%, but some of that probably can be attributed to the falling of rental rates while in San Francisco rents have increased by 1.6%. Undoubtedly, each area will have its own rental fluctuations, so different areas may offer better opportunities for finding a house or apartment to rent.
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