Bay Area home foreclosures are rising after a pause in the pandemic.

Brace yourself: Home foreclosures are on the rise in the Bay Area after most pandemics have stopped.

But real estate experts say the recent spike is more indicative of a return to normality than a looming housing crash, although the foreclosures are aimed at continuing the upward trend in the coming months.

During the first half of this year, foreclosure initiations in the five-county area increased 90 percent compared to the same period in 2021. New data From real estate analytics firm ATTOM. Still, the number of Bay Area foreclosure filings — one for every 1,419 housing units — is below pre-pandemic levels.

“We’ll need to see rapid growth before we feel the impact on the Bay Area market,” said Rick Sharga, executive vice president of market intelligence at ATTOM, noting that the region’s foreclosure rate is below the national average. Is.” “It’s unlikely we’ll see enough foreclosed homes enter the market to have much of an impact on prices.”

Sharga said it’s thanks to forbearance plans offered by the federal government and private lenders that have allowed homeowners to freeze their mortgage payments during the height of the coronavirus pandemic. Additionally, the $1 billion statewide mortgage relief program available to an estimated 13,000 Bay Area households has helped thousands of borrowers.

But since the foreclosure moratorium on federally backed mortgages expires in July 2021, and around that time many banks restart foreclosures on private loans, homeowners who became delinquent before the pandemic may be forced to foreclose. had gone or could not take full advantage of emergency programmes. are rapidly losing their homes.

Epidemic programs for renters are also closing. Final statewide eviction protections expired late last month, though some Bay Area cities and counties have passed their own eviction restrictions that are still in effect.

Despite the increase in foreclosure starts, the 1,707 filings in the Bay Area so far this year still represent a 17 percent drop from the same period in 2019, the year before the pandemic. That’s less than half of the 4,555 starts in the region during the first six months of 2016, when foreclosures were falling from their Great Recession peak in the late 2000s.

Contra Costa County has the highest foreclosure filing rate in the region this year at .12% of all housing units, or one in every 833. This was followed by Alameda County at .08%, Santa Clara County at .06%, San Mateo County at .05%, and San Francisco County at .04%.

Sharga expects the projected increase in the Bay Area and the entire country to return to at least epidemic levels by mid-2023. But he warned that persistent inflation and the recent rise in interest rates could trigger an economic downturn hitting middle-income homeowners. And causes foreclosures to “return a little more quickly to a slightly higher level than normal.”

Jason Estavillo, a foreclosure attorney in Oakland, said another factor may be contributing to the high rate of foreclosures. In recent weeks, he’s been inundated with calls from homeowners saying their forbearance contracts are about to expire.

“Banks are demanding balloon payments against all arrears during the forbearance period,” Estavillo said.

The increase in foreclosure activity comes as the Bay Area housing market enters a cooling phase as rising interest rates squeeze buyers and there is an increased supply of homes for sale. According to the California Association of Realtors, the average sales price of existing single-family homes in the region fell 7 percent from May to June to $1.4 million.

Real estate experts agree that foreclosures have relatively little to do with the recent softening of prices. This is in contrast to the housing crash and recession of 2008, when millions of homeowners across the country defaulted on risky, adjustable-rate mortgages and sank the entire housing market.

But John Hackenberg, a San Mateo-based real estate agent with Compass, said more foreclosure activity could have the effect of discouraging some house hunters as the broader economy appears more volatile.