San Francisco Avoids Worst of Mortgage Delinquency Rise

By:
Kirk Haverkamp | October 05, 2010

Everyone knows the California real estate market has been pummeled in recent years. But San Francisco Bay Area, at least, seems to be holding its own among the nation’s major metropolitan areas when it comes to serious delinquencies and foreclosures. 

Both San Francisco-Oakland and San Jose rank among the bottom third of the nation’s 100 largest cities when it comes to foreclosure rates, according to a new study from the Center for Housing Policy. And in a year when every single one of the nation’s 366 metropolitan areas showed a worsening rate of serious delinquencies, including foreclosures, San Francisco-Oakland was at least in the middle of the pack.
 

Rising foreclosures expected

 
To be sure, the news is not good. The Center for Housing Policy says the average 32 percent annual increase in serious delinquencies, measured last March, means foreclosures are sure to rise. But the seriousness of the problem varies dramatically across the nation.
 
"The most rapid increases in mortgage delinquency occurred in metro areas where home prices are much higher than local incomes can afford," said Tom Kingsley, a senior fellow at the Urban Institute, which was a partner in the study. "The other factors associated with rising delinquencies were declining employment, plunging home prices and higher densities of sub-prime lending in the peak period from 2004 to 2006."
 

Miami, Las Vegas in worst shape

 
The nation’s highest rate of seriously delinquencies, which the study defines as both mortgages in foreclosure or at least 90 days past due, is Miami-Ft. Lauderdale, Fla., where 26 percent of outstanding mortgages are seriously delinquent, including a 17.8 percent foreclosure rate. Not coincidentally, the area also had the nation’s second-highest annual increase in serious delinquencies at 6.6 percent, trailing only the 7.4 percent increase posted by Las Vegas, which had the second-highest overall rate at 25.1 percent.
 
At the other end of the scale were Austin, Texas, whose 4.4 percent serious delinquency rate was among the nation’s lowest among the 100 largest metropolitan areas, and Omaha, Neb., whose 1.0 percent increase was the smallest annual gain.
 

Better off than most large cities

 
That provides some perspective for the Bay area’s ratings. San Francisco-Oakland posted an 8.1 percent seriously delinquency rate, including 3.5 percent of all mortgages in foreclosure, putting it at number 189 of all 366 metro areas and in the bottom third of the 100 largest. It’s 2.0 percent annual rise in delinquencies also put it right in the middle of the pack, at number 171.
 
San Jose-Santa Clara had a somewhat better overall serious delinquency rate at 7.9 percent, but posted a larger annual increase at 2.3 percent. By contrast, the Vallejo/Fairfield area had one of the nation’s highest serious delinquency rates, at 14.8 percent number 30 among all metropolitan areas, and with a 2.5 percent annual gain.
 
The Center for Housing Policy is the research affiliate of the nonprofit National Housing Conference. The complete results of the study are available here.

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