San Francisco (Bay Area) foreclosure Statistics, Facts and Trends 2020-2019

  • March 2020: 0.012% of San Francisco homes under foreclosure
  • April 2016: 4.24% of loans were delinquent nationally
  • 2008: 35,000 homes in San Francisco foreclosed on
  • 2012: Foreclosures in CA increased by 18% from 2011
  • 2008: 608% increase in foreclosures in Marin County
  • Q1 2020: the average home sold 5.07% below list
  • July 2019: National foreclosures down 21% from 2018
  • 2020: San Francisco home prices to increase by 4.6% annually
  • September 2017: Mortgage delinquencies down 0.2% from 2016

As of March 2020, at any given time, one out of every 8087 homes in the San Francisco area is under foreclosure. This means that roughly 0.012% of all residences in San Francisco are at some part of the foreclosure process. The foreclosure process includes homes that are in pre-foreclosure status, up for auction, or have been foreclosed on and are currently bank-owned. When compared to national averages, this rate is on the higher end. National foreclosure rates average out at about one in every 13,500 (roughly 0.007%) homes at any given time being under foreclosure. The future of these rates is very much unknown, as these figures only begin to reflect the vast unemployment crisis that the coronavirus outbreak has created in the San Francisco Bay area. Source

Looking back at the mortgage crisis of 2008, we can see this was largely caused by delinquent home loans. One recent statistic shows that 4.24% of all loans in the United States were delinquent. Even though 4.24% were 30 or more days past due, they were not yet foreclosed on. The delinquency metrics is important to know since it is the first step in foreclosure. The number of non-current home loans (loans in some form of delinquency) was 5.4% during that period. This was down 14.6% compared to the previous year, which indicates some strength returning to the market. Source

The financial crash of 2008 hit the high cost of living areas like San Francisco, especially hard. After the market crash in 2008, over 35,000 homes in San Francisco were foreclosed on. To put that into perspective, before the financial crash, the average foreclosure rate in San Francisco was around 1.3%. There are about 350,000 mortgaged homes in San Francisco, which means a normal year prior to 2008, around 4,550 homes would have been foreclosed on. The fact that over 35,000 homes were foreclosed on in 2008 means that there was a 670% increase in foreclosures in just that one year. This record-setting rate of foreclosures persisted in both San Francisco and the United States as a whole. This is discussed in the following paragraph. Source

Although the housing market collapsed in 2008, foreclosure rates in California continued to increase for years. For example, from June 2011 to June 2012, foreclosure rates across California increased by 18%. July of 2012 also marked the first time in history that there were more foreclosures in California than in Nevada over a 30-day period. This data suggest that even years after the financial collapse of 2008, housing markets in California were still declining. Source

In the middle of the 2008 financial crisis, counties around the San Francisco Bay Area saw a massive increase in foreclosure rates. For example, Marin County, located just north of San Francisco, saw a 608% increase in foreclosure rates compared to a year earlier. During that same period, San Mateo County, which encompasses San Francisco, saw a shocking 831% in foreclosures. This data reflects both the high home prices in the San Francisco Bay area and the collapse of the mortgage market nationally. These two counties were by no means unique in terms of how quickly foreclosure rates skyrocketed in the latter months of 2008. Source

In this Mercury News article from September 2017, San Francisco’s falling mortgage delinquencies were compared to rising housing prices. Still, there appears to be a logical disconnect between the two figures. Overall mortgage delinquencies in the metropolitan San Francisco Bay Area decreased from 2% in September of 2016 to 1.8% in September to 2017. This seems to be at odds with the rising cost of home prices in San Francisco. For example, the source cites a CoreLogic study with housing prices rising 19.7% during that time. Rising housing costs would seem to correlate with rising mortgage delinquencies, not falling ones. After all, if the price of homes is increasing at a steady rate, logic would suggest fewer people would be able to afford them. One explanation for this apparent disconnect could be the healthy labor market in San Francisco. Source

As of July 2019, total national foreclosure rates had decreased by 21% when compared to July 2018. This can be taken as a sign that the flood of foreclosures triggered by the 2008 financial crisis has finally began to trickle out. This 21% decrease in foreclosures is mirrored by a striking 41% decrease in bank repossessions nationally compared to July 2018. This means that fewer people were entering into the foreclosure process, and even less lost their homes or had the banks repossess them. This is overall a very positive sign in relation to the health of the San Francisco real estate and employment market. Source

For years, the booming real estate market in California, and San Francisco specifically, has been a common talk within financial news. However, recent data suggests growth in that market is slowing. In the first quarter of 2020, the average home in San Francisco was sold for 5.07% (roughly $61,000) less than it initially listed for. In other words, most home sellers had to lower their listing prices to attract a buyer. This is an indication that the market in San Francisco may be leveling off. For new buyers, this is good news, as the average home price in San Francisco now tops $1.2 million. This figure does not suggest the average home price is leveling off, just that sellers need to lower their asking price about 5% to attract buyers. Source

With that being said, many still believe average home prices in San Francisco will continue to rise. According to Zillow, the median home value in San Francisco in 2020 is $1,387,263, making it an expensive city for people considering buying a home. Norada Real Estate Investment estimates that the average price of a home in San Francisco will continue increasing by 4.6% annually. From 2015 to 2020, the average home price in San Francisco has increased from $1,003,000 to $1,450,000, which is roughly a 41% ROI over four years. All indicators discussed in this article suggest that San Francisco real estate will continue to increase in value year after year steadily. Source

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