Foreclosures are starting to hit the wealthier areas of San Mateo County, according to a new report and real estate agents, decreasing the prices of surrounding homes.
Irvine-based RealtyTrac said the number of foreclosures in the county in July increased 831 percent from July 2007, which is reducing the median prices of other homes on the Peninsula.
Realtors said three cities remain the epicenter of Peninsula foreclosures — Daly City, South San Francisco and East Palo Alto. As the problem increases, “fringe” properties with values between cheaper starter homes and multimillion-dollar houses are beginning to be affected as well, they said.
The Web site Foreclosure.com revealed 25 total active foreclosures in affluent Belmont, Burlingame and San Carlos. About 300 more were designated as being in “preforeclosure” status, indicating the owner is in default.
“It’s starting to creep in … to the hills,” said Geoffrey Craighead, a private broker in San Carlos and 2007 president of the San Mateo County Association of Realtors.
Craighead described how one foreclosure can affect the value of an entire neighborhood: The foreclosed home is listed to sell below market price, causing surrounding homesellers to lower their prices to keep up.
That reduces median prices for a neighborhood, a trend that will likely continue, said Ron Gable, vice president of Alain Pinel Realtors in San Mateo.
Median county home prices have already decreased $130,000 since July, a 16 percent drop from $800,000, according to numbers released Tuesday by DataQuick Information Systems.
“It’s not fun; it’s a very slow market,” said Jim O’Connor, who has been trying to sell his Emerald Hills home for the past four months.
O’Connor said he already lowered his expectations of selling it for $1.7 million and has been unable to sell it for $1.495 million.
“It’s frustrating,” he said.
By the numbers
San Mateo County foreclosures
754 Foreclosures in July
596 Foreclosures in June
81 Foreclosures in July 2007
831% Increase from July 2007 to July 2008
27% Increase from June to July
36 Rank, out of 58, for highest foreclosure rate among California counties