October Foreclosure Activity

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2,228 default notices were delivered to delinquent homeowners in San Diego last month. This is down from August's record-setting pace but higher than the default count in September or, for that matter, any other month besides August.

Lenders also sent 911 trustee sale notices, which inform defaulting homeowners that repossession is imminent. October's trustee notice count was an all-time record.

In the typical foreclosure timeline, the notice of default (NOD) is followed by a notice of trustee sale (NOT) three months later. Three weeks after the NOT, the home can be auctioned off and, if there are no takers (there usually aren't), repossessed by the bank. Only then can it be appraised, cleaned up, and put on the market as a bank-owned home. These are minimum allowable times, incidentally; the delays involved are often longer than the minimums.

The point is that an NOD sent in October represents a property that, if it is to end up as a bank-owned home for sale, will not hit the market until just about March 2008 at the earliest. Similarly, many bank-owned homes on the market right now are the result of NODs that were delivered back in May or even earlier.

The recent months' surge in foreclosure activity has not even begun to pressure the market yet, in other words. This pipeline of future must-sell inventory is one of the reasons I think that the housing downturn is far from over.

-- RICH TOSCANO