A quick skim of the national financial headlines yields similar takes on the residential
real estate market: rising foreclosure rates may not necessarily be bad news for sellers, buyers, or
investors. Indeed, after a COVID-influenced period of historic lows, foreclosure rates across the
country – and the state of California – are on the rise. According to multiple sources, the numb
of residential housing units across the country with foreclosure filings this past May rose nearly
14% from the previous year, while California foreclosures doubled between 2021 and 2022, and
the state has hovered around second in the U.S. for the number of people at risk of losing their
With this in mind, we will briefly examine the impact that California’s rising foreclosure
rates will have on its residential real estate sellers, purchasers, and prospective investors.
Turning first to sellers, while some might be concerned that California’s foreclosures
jumped 116% percent year over year, this is mostly non-concerning. Indeed, this rate stems from
the end of restrictions on lenders from moving against delinquent purchasers. This ease in
restrictions should be welcomed by sellers, as another avenue of recourse has been reopened.
Similarly, and in recognition of the fact that foreclosed properties need to be resold (usually in
short-sales or auctions), California sellers looking to sell properties in the traditional manner will
likely appeal to buyers, who are looking to avoid complicated sale transactions.
Turning next to buyers, we again note that rising foreclosure rates are mostly due to the
expiration of COVID-era government programs such as foreclosure moratoriums and loan
forbearance, leaving many homeowners across the country without any recourse. California’s
foreclosures doubled between 2021 and 2022, with the state sitting second in the U.S. for the
number of people at risk of losing their homes. Again, this should not worry buyers. Indeed,
increased foreclosure rates – and subsequent sales – will likely flood the market with inventory
and drive down prices. This will provide savvy buyers with more options and better deals as
Finally, on the investing side, an uneducated prospective investor might be leery of
California’s high foreclosure rate (one foreclosure per 3,794 households). Educated investors,
however, will easily find desirable properties and opportunities, because properties that would
have been subpar investments will likely have fallen prey to foreclosures or short sales.
Before concluding, we wanted to direct your attention to the latest Real Estate-owned property
to hit the Palm Springs market. Located at 3569 Arnico St., this 3-bedroom, 2-bathroom, 1,242
square-foot offering is on the market for $454,500. Similar listings are likely to follow and
provide different opportunities to members of the above groups. We are here to help and we stand by to offer any information/ideas/perspectives to you, your friends and your family as needed.