San Diego Housing Bubble News and Analysis

To get to the other side?

I believe 1993 was the peak of the recession as unemployment got the highest then. Recovery slowly took hold moving forward. 1990 prices did not get to par until 1997.
As for the LA Times article, check Bruce Norris's web site for his radio show. He's a long time Riverside County RE investor and he and others in his area think this is far more severe than the early 1990's.

It's the price.

The only real reason for foreclosure is being upside down. The reason is that if one was not upside down (after selling costs) they could sell their home and not suffer the credit hit from foreclosure. (There are exceptions, but this is by a wide margin the only important reason for sane people).

Once price declines end and there is slight upward movement people have the option to sell rather than be foreclosed on. The pricing bottom (in terms of nominal pricing) occurred in ~ Dec 1995 - Jan 1996. Many people were still upside down at this point.

When prices started creeping up in spring 1996 the foreclosure pace naturally declined since some folks were moving closer to break even (less underwater).

That is why foreclosures peaked at the bottom in pricing.

Remember NAS Miramar was closed in the early 90's and MCAS Miramar was opened in 1997. So San Diego had a major employer move-in in 1997.

What would happen if all those anti-Miramar people get their way?

General Dynamics was selling off San Diego divisions in the early 1990s - they employed 14K+ people in 1990 and just a few hundred by 1996 - lots of engineering and engineering support jobs gone

sdrealtor, unless you are joking, you misunderstood my question.

And that is, why didn't foreclosures peaked in 1994 instead ? Why did it lag the economic recovery by 3 years ?

I guess you missed my humor as in Why did the ..... (chicken cross the road)?

Actually, the numbers gn referred to were for California as a whole, not San Diego county.

The activities at Miramar and General Dynamics at that time would have been but a tiny blip on the radar of California.

I'm no expert, but I think FSD is on to the answer.

You don't need to foreclose if you can sell and cover your loan.

Foreclosures are by nature a vicious downward sprial that will force prices to the bottom, determined eventually by how many people are in houses they shouldn't be in, and at what point enough people are able to start buying those empty houses.

You can see why Gov't intervention is so problematic. Keeping property values high means someone still has to be able to afford the house.

Bailing people out with lower interest rates and write-downs does nothing to help inventory or future buyers.

Prices will fall until they reach an equilibrium of the historical price to income ratio. Even then, prices will probably overshoot. They did before.

I don't think we had recovered nicely in 94/95, maybe 96/97. Could it be that homeowners bought another home at the bottom and dumped the looser. Or homeowners held on as long as the could and then stopped paying and enjoyed free rent for a year.

I think there are a lot of investors and homeowners that have been hanging on for the last year or so, and are loosing the will to fight a loosing battle.

I have a few friends that can afford the negative cash flow on their investment properties but are strategically planning to bail.

The more that bail... the more that bail.