As Foreclosures Rise, San Mateo County, California Braces For The Fallout.
San Mateo County, with a population of over 715,000 is located in the San Francisco Bay area. A new real estate report revealed recently that San Mateo County saw a doubling of foreclosure auction sales in December of 2008 as compared to the same period in 2007.
Some sixty-four homes were sold at foreclosure auctions last month countywide, up 205 percent, according to ForeclosureRadar, a Web site that tracks California foreclosure sales. Notices of Default, the first notices sent to homeowners who do not make mortgage payments for sixty days, are also on the rise in the county and state, a sign that future auction sales will climb, the report said.
Mary Doerr, a long-time California resident, former I.T. specialists, and a recent transition to a career as a loss mitigation specialist, offers an "up close and personal" view of the real estate market in San Mateo. She states that the foreclosure rate in her area is moderate to severe. Many homeowners have to hold two very large mortgages to cover the extremely high cost of housing on the peninsula south of San Francisco. It is becoming difficult to stop foreclosure in San Mateo County
Mrs. Doerr says the root causes for the foreclosure problem in the county are adjusting mortgage rates and the inability to sell because of so few lenders providing jumbo loans to fund the high cost of houses in the area. However, recently the Federal Housing Administration (FHA) made adjustments to allow jumbo loans to go to over $700,000. She says the peninsula, aside from San Francisco itself, are the most in demand areas to live in the country, so there will always be a demand for housing here as they cannot build upward due to earthquake risk, and there is very few areas to expand due to California's open space requirements. The area also routinely has the highest gas prices in the country and while the economy is not too bad, there is a risk that funding for innovation firms, such as those in the Silicon Valley where many of the residents work, is at risk.
The typical residence in foreclosure in the San Mateo area seems to be those that are extremely upside down on their mortgages, in wealthy areas as well as in areas where residents pay a high proportion of their income over the national average for housing, such as South San Francisco.
Is there any relief in sight? Mr. Doerr says the state organized and held an informational seminar with Congresswoman and Speaker of the House of Representatives, Nancy Pelosi (CA) and others at the Cow Palace Center, but nothing happened after the meeting.
What options are available for stricken homeowners? Mrs. Doerr thinks most have been trying to list with real estate agents, but most of the signs come down after a few months. Many of the local foreclosure list providers show that homes are going into foreclosure at an increasing rate.
Prices are definitely on the decline. A four bedroom house in 2007 sold for approximately $850,000; now these same types of houses are selling for about $530,000.
New construction is not occurring at all in San Mateo County and there has not been any new construction in this area for quite some time. This area is primarily a prime real estate location between San Francisco and the Silicon Valley. The neighborhoods have been in existence for over fifty years.
With foreclosures in San Mateo County continuing to climb, the future of the local real estate market is decidedly shaky. The county may see the number of foreclosures double yet again in 2008.
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