SAN DIEGO–(BUSINESS WIRE)–
Blue Sky Capital, a San Diego-based real estate investment firm, says
San Diego County is in store for a second
wave of foreclosures, much bigger than the foreclosure wave that hit
the county several years ago.
Blue
Sky Capital has been tracking area properties and found that
mortgages secured with Option Arm and Alt-A funding are about to reset
at much higher rates. That will mean larger mortgage payments for
homeowners who can’t afford it, pushing many into foreclosure.
“While these Option
Arm and Alt-A
loans exist throughout the county, areas like Carmel Valley are filled
with them. During our tracking of distressed properties in the county we
found many homes in areas like Carmel Valley were purchased with zero,
or a small amount down, so there is very little equity in theses
properties,” said Chris Williams, CEO of Blue Sky Capital. “Carmel
Valley, just north of the city of San Diego, has a median income of
$90,000 and while higher end families have been able to withstand the
initial housing meltdown, things are about to change. We will see more
housing distress in Carmel Valley, and as a result, more foreclosures
and short sales.”
With more than 36
percent of all mortgages in San Diego underwater, or simply put,
having negative equity, Blue Sky Capital expects things to get worse
before they get better.
Blue Sky Capital also tracks housing supply and home prices and found
because of the negative
equity that exists, it’s affecting the inventory of available homes
on the market and that’s slightly pushing up the price of homes.
“You could say the positive of this negative equity is that it helps
drive home prices up, as underwater homeowners delay as long as possible
putting their home on the market which creates a supply constriction.
But it’s only temporary and not
a real sign that things are improving, “ said Williams. “These
situations are unsustainable and certainly short lived. Strategic
defaults, foreclosures and property value declines have to happen for
the market to reset and clear itself of the toxicity from the greatest
mortgage mess of this century.”
About Blue Sky Capital
Blue
Sky Capital is helping rebuild San Diego neighborhoods through a
systematic and disciplined approach to real estate investment. Chris
Williams can be heard regularly on the Chris
Williams Real Estate Show on Blog Talk Radio. Recent discussion
topics have included, Shadow
Inventory, Foreclosures,
Housing
Market Breakdown and 100
Year Opportunity.
Article source: http://www.nbcsandiego.com/news/local-beat/Painful_Cuts_Ahead_for_San_Diego__Mayor_San_Diego-113452849.html
