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Residential
San Francisco

Home foreclosure spike in Bay Area

Five-county region sees 90% jump in filings

San Fransisco home foreclosure on the rise
(Illustration by Priyanka Modi for The Real Deal with Getty)

Home foreclosures, which hit pause in the Bay Area during the pandemic, are on the rise.

During the first half of the year, foreclosure filings in the five-county region jumped 90 percent to 1,700 compared to the same period in 2021, the San Jose Mercury News reported, citing data from Attom.

The number of Bay Area foreclosure filings, one per 1,419 housing units, remains below pre-pandemic levels, and below the national average. Foreclosures across the U.S. rose 153 percent during the same period, affecting nearly 165,000 homes, or one per 854 housing units.

Real estate experts say the spike signals more of a return to normal rather than a coming housing crash, though foreclosures are likely to continue upward in the months ahead.

Rick Sharga, executive vice president of market intelligence at ATTOM Data Solutions (LinkedIn)

“We would need to see an exponential increase before the Bay Area market would start to feel an impact,” Rick Sharga, executive vice president of market intelligence at ATTOM Data Solutions, told the Mercury News. “It’s unlikely we’ll see enough foreclosed homes entering the market to have much of an effect on pricing.”

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The number of foreclosures has been cushioned by forbearance plans offered by the federal government and private lenders allowing struggling homeowners to pause their mortgage payments during the height of the coronavirus pandemic, Sharga said.
A $1 billion statewide mortgage relief program available to 13,000 Bay Area households has also helped thousands of borrowers.

A foreclosure moratorium on federally backed mortgages ended in July 2021, and many banks restarted foreclosures on private loans.

That’s caused some homeowners who became delinquent prior to the pandemic, or haven’t been able to take full advantage of emergency programs, to lose their homes.
Contra Costa County has had the highest foreclosure filing rate in the region this year at 0.12 percent of all homes, or one in every 833. That’s followed by Alameda County at .08 percent, Santa Clara County at 0.06 percent, San Mateo County at 0.05 percent and San Francisco County at 0.04 percent.

Sharga expects foreclosures to continue to increase and return to pre-pandemic levels in the Bay Area and across the country by the middle of next year. If inflation and interest rate hikes trigger an economic downturn, foreclosures could “return to slightly higher-than-normal levels a little bit more quickly,” he said.

Despite the rise in foreclosures, the 1,707 filings in the central Bay Area this year are 17 percent fewer than the same period in 2019, before the pandemic hit, and less than half the 4,555 filings in the first half of 2016, when foreclosures were still falling from their Great Recession.

– Dana Bartholomew

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Bay AreaForeclosuresInflationInterest RatesPandemic