San Diego realtor Clayton Connolly talks about the current state of those in forbearance, and how he believes that these indicators show we will not have a market crash similar to 2006-2009.

Foreclosures Leading to a Market Crash

I wanted to keep you informed on a topic that I hear coming up a lot in my business and that's the topic of foreclosures. Is the market going to turn and are we going to see another crash similar to 2006 to 2009? And the answer is, all indicators right now are saying no. And one of the topics leading that question of, "Is the market going to crash?" is the topic of forbearance.

Now remember about a year ago when COVID opened up, the banks offered an opportunity called forbearance, where they allow homeowners to maybe delay their house payments. So let me put some things in context. Between 2006 and 2014, there were over 9.4 foreclosures, sadly enough, in this country. Now, keep that 9.4 figure in mind.

For forbearances last year, there was about 2.4 forbearances granted to everybody in America this year. Now the good news of that is that over half of them, about 50% are actually paid off right now. There's, and many of those didn't even need them. They just got it just in case. Another 34% of those who took a forbearance from the bank were able to renegotiate a payment plan, so they're safe. Now, the remaining 16%, those people still could be in trouble and of course our heart goes out to them.

The Upside

The good news for anybody experiencing financial hardship that had a forbearance is, you know, at least in San Diego, property values continue to rise. So for many people, as tragic as it may be to sell their home, at least they could sell it and not experience a foreclosure, so we may still see some foreclosures, but not enough to tip the market to a highly, highly motivated sellers market into, you know, the disaster we saw earlier.

If you would like to reach out to Clayton directly to talk more about your concerns and ask questions about the market. You can contact him at 619-374-5944

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