Real Estate Analysts Predict Foreclosure Flood - CBS News 8 - San Diego, CA News Station - KFMB Channel 8

Real Estate Analysts Predict Foreclosure Flood

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President Obama has rolled out several initiatives since mid-February to stem the rising tide of foreclosures. But some analysts predict another strong round of foreclosures before those measures take hold.

Just when you thought the real estate market was hitting bottom, some analysts are predicting another foreclosure flood.

"I think there are going to be a lot of chances to pick up properties that are going through foreclosure," SDSU finance professor Leonard Baron said.

Professor Baron says a federal foreclosure moratorium has been lifted, which could open the floodgates.

According to RealtyTrac.com, foreclosure filings nationwide are up 32 percent from a year ago. Erik Weichelt, president of the San Diego Association of Realtors, says President Obama's plans to modify home loans could take another three to six months to take off.

"So they are hopeful that is going to work, but quite frankly with the backlog of properties, we anticipate that there is going to be a tick up in foreclosures," Weichelt said.

The hardest hit areas may be the so-called sand states - Nevada, where foreclosure activity is up 111 percent; Arizona, up 40 percent; Florida, 75 percent and California, up 42 percent from a year ago.

"You have a lot of buyers for these properties," Baron said.

Professor Baron says be careful lumping Southern California in with the rest. He expects low interest rates and location to help San Diego bounce back faster.

"Las Vegas and Phoenix have lots and lots of endless foreclosures and properties that are in trouble. San Diego is a different marketplace, not as many properties," Baron said.


Professor Baron says if you feel as if your home is slipping away, call your bank or a lender. The worst thing you can do is nothing, because foreclosure will ding your credit score by 300 to 400 points, preventing you from buying another property for up to seven years.

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