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Sentinel staff report– The latest report released from a real estate data tracking firm shows foreclosure filings in Citrus Heights and the Sacramento region were down more than 80% in November, compared to the prior year.
Data released this month by ATTOM Data Solutions shows Sacramento County saw over five times more foreclosure filings in November 2019 compared with November this year. Last year there were 66 completed foreclosures in November, compared with just seven this year, data show. October was similarly down, with just nine foreclosures this year.
Rick Sharga, executive vice president of RealtyTrac, an ATTOM affiliate, in an email to The Sentinel earlier this month attributed the reason for the dramatic drop in foreclosure activity in Sacramento and across the nation to various moratoria on foreclosures and evictions put in place during the pandemic. However, he described the numbers as “still artificially low,” noting that “the number of seriously delinquent loans continues to increase.”
“[W]e’ll see a significant – and probably quite sudden – burst of foreclosure activity once these various government programs expire,” he said.
At the federal level, moratoria on both foreclosures and evictions were recently extended through the end of January 2021 for any homes with federally backed mortgages. California has a more expansive moratorium in place through Jan. 31, and state lawmakers have proposed another extension.
Local real estate broker Beth Moran said it’s tough to predict what will happen with the housing market, due to numerous unknowns amid the pandemic. But she said forbearance programs should help lenders work with homeowners to keep their mortgages, and noted that most homes have equity from rising home values, unlike the last recession.
“Basically, the lenders are not too worried because they will regain their losses upon sale or a loan modification with the homeowners,” she said.
But for mom-and-pop investors who took a hit and lost rent, Moran said such tenants will likely face eviction once the moratorium ends. “If they can renegotiate the loan with their banks and keep their investment, that’s great, but if not will likely sell and cash out their equity,” she said.
“Unfortunately, a lot of small business owners will have closed their doors and their home equity will be their only option to either carry them through or underwrite a new start-up enterprise,” Moran said.
The current market in the Sacramento region remains strong, with overbidding coming “primarily due to low inventory and Bay Area refugees” coming to the area, according to Moran. She believes more homes will go on the market by the third quarter of 2021, “once the vaccine is distributed and the economy begins to recover.”
Looking ahead, Moran said it remains to be seen whether the pandemic-induced spike in the number of employees working from home will stay or not.
“Will companies who pivoted to work from home stick? As companies relocate out of CA, will those employees choose to stay local, move here or relocate with the company? Those are some of the mitigating factors I see that will drive our market and impact pricing and volume,” Moran said.
She also noted the passage of Proposition 19 will have an impact on the market. The voter-approved proposition goes into effect next year and allows greater flexibility for residents over age 55, the severely disabled, and wildfire or natural disaster victims, to sell their homes and relocate while keeping their existing property tax base. The proposition could likely result in more homes appearing on the market.
Additional data regarding foreclosures and national trends can be found in ATTOM Data’s U.S. Foreclosure Market Report. (See report)
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