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County sees big drop in foreclosures, defaults

San Diego Union-Tribune -- A dramatic drop in home default notices and foreclosures last month may signal a stabilization of San Diego County's housing market, market analysts said yesterday.

Some economists interpreted the August statistics as reflecting improving economic conditions. But they cautioned that the trend must continue for several more months before they can be certain.

Locally based MDA DataQuick reported a 19.9 percent drop in notices of defaults — the first step on the way to foreclosure — from 3,318 in July to 2,658 in August for San Diego County. The number was 6.7 percent lower than in August 2008 and the lowest since last November.

Norm Miller, a real estate professor at the University of San Diego, said the new figures may reflect another factor.

“The unemployment rate is really what we should be watching,” he said. “When that bottoms out, that should correlate somewhat with the default rate bottoming out.”

He noted that San Diego's jobless rate remained unchanged in August, whereas the state and the nation's rates rose.

“It just may be that our unemployment situation is not as dire as the rest of the state or the country, because we do have the military and other stabilizing factors,” Miller said. A steadier economy would naturally help support housing values. (Full Story).