In the first quarter of this year, three times the number of San Diego County homeowners failed to pay their mortgages as during the first quarter of 2007. According to DataQuick Information Systems, a company that provides real estate data, 8975 homeowners defaulted on their home loans, up from 3931 last year. In the 91913 zip code, in the eastern part of Chula Vista, a high percentage of houses on the market are in foreclosure. For every 1000 homes, an average of 12 to 15 are bank repossessions. Currently, 726 residences in the zip code have been bought back by the lender or are in default or up for auction, and an additional 3 to 4 more houses are added to the market every day.
EastLake, EastLake Greens, and Otay Ranch are among the many large planned communities located in eastern Chula Vista. As new houses in these developments went on the market, subprime loans were becoming popular, a coincidence that has resulted in the high number of foreclosures in Chula Vista. However, brand-new homes in planned communities weren’t the only houses affected by the market downturn. More-established neighborhoods have also witnessed a sharp increase in bank repossessions. The Saint Claire subdivision is one of them.
Saint Claire is a small subdivision at Otay Lakes Road and Saint Claire Drive, adjacent to EastLake. In late April, 21 homes in Saint Claire were in the early stages of foreclosure or had already been taken back by the bank.
The moment you enter the subdivision, you see evidence of foreclosed houses. Up the hill on tree-lined Saint Claire Drive, the first house on the right looks deserted. Brown waist-high weeds are the only plants where the front lawn should be. The slats on the vertical blinds are twisted and askew in upstairs and downstairs windows.
At the small community park on the corner of Saint Claire Drive and Marquette Road, six teenagers throw a football on a 30-yard plot of manicured lawn. The green grass is in stark contrast to many of the lawns in the neighborhood.
Across the street, in front of a large two-story house, a For Sale sign stands amid knee-high weeds. Two garbage cans on the side of the house are carelessly placed on a walkway being overtaken by long, bending blades of grass. Farther down Marquette, three more houses have signs in their yards. The house at the end of Marquette appears to have been abandoned for months.
On Genevieve Avenue, a short cross street with ten houses, a moving truck is parked diagonally in a driveway. A ramp extends from the back of the truck pointing toward the house’s front door. Next to the ramp, an expressionless elderly Asian couple watch with their arms crossed while movers take furniture out of their house and up the ramp.
Two houses down, a For Sale sign is staked into a nicely kept lawn. At the end of Genevieve, at the T-intersection with Chateau Court, another house is for sale. To the left, down Chateau, on the far side of the street are three For Sale signs. The sole For Rent sign at a house across the street looks out of place.
A heavyset man mows his lawn on Chateau Court while his father watches. The man doesn’t want to give his name, but he responds in a thick Iraqi accent to a question as to why so many houses are for sale in his neighborhood. “Too many people buy houses when they have no money. We’ve never had this problem before, but now it’s all over. We’ve had this house almost 11 years, and most of these houses go for sale and they are bought within a month. Right now, it’s not as good. Nobody is buying because of the economy, you know. People are scared to buy a house now. Like that house,” he says as he points across the street to a house for sale. “He bought for $800,000. Now he sells for $500,000. How’s he going to pay to the bank?”
The Saint Claire subdivision was built in the mid-’90s. Homes range in size from 1758-square-foot three-bedroom houses to 3100-square-foot houses with five bedrooms. Houses that once sold for $700,000 are now going for $400,000.
“A lot of people are in the shit here,” says 23-year-old Ryan Swierk. His family rents a house on Chateau Court that’s currently for sale. “I know our house isn’t one of them [a foreclosure], but the owner is in trouble, just like a lot of the other people in this neighborhood. This guy across the street, his house has been on and off the market for months.”
Doug Leeper, a code enforcement manager for the City of Chula Vista, says that he can easily tell which houses are in foreclosure. “Some of these homes sit vacant for 7 months, at least a minimum of 4 months, and in some cases as long as 12 months of sitting vacant before the lender even takes them back. Grass dies, the lenders let it overgrow; the pool goes green, because the lenders say, ‘It’s not our property yet.’ We call it the lender’s black hole.”
Driving through the nine streets that make up Saint Claire subdivision, one sees many homes that appear as if they are about to enter the lender’s black hole. Lawns are overgrown or devoid of grass. While some houses with For Sales signs have well-kept lawns, numerous advertisements and notices hang on their front doorknobs, along with a lockbox, a clear sign of a distressed property.
Because of the high number of bank foreclosures, a feeling of indifference pervades the neighborhood. “This guy over here just cut his lawn,” says Swierk. “It had weeds everywhere — it’s still all brown and ugly looking — but I know he’s in trouble with his house too.”
Although the appearance of lawns might seem insignificant, neglected houses affect property values in the rest of the neighborhood. “One home in that condition,” says Leeper, “with a dead lawn, obviously vacant and abandoned, can diminish marketability and property value — depending on the neighborhood and how many there are — anywhere from 1 to 10 percent of the value.”
Last September, Leeper led the charge to pass an ordinance in Chula Vista that holds lenders accountable for maintaining their vacant properties. “The ordinance says that if you [a lender] have a property that goes into default, you have to inspect it to see if it is occupied. If it is not occupied, you have to register it and start to maintain it to the neighborhood standard. If they don’t do it, we send a notice of violation, and we give them 30 days to bring it into compliance. If nothing is done after that, then we start fining them. The fines range from $100 to $1000 a day, depending on how long it’s in violation and to what extent. Part of the requirement is to post contact information for the lender on each foreclosed home so that the neighbors can contact them if there is any problem, because the City shouldn’t be responsible to be the multinational bank’s property manager, and the taxpayer shouldn’t be responsible either. So far we have over 400 homes registered.”
In the Saint Claire subdivision, many of the properties are neglected. Under the city ordinance, however, it is up to neighbors to notify the City of the problem. “The City can’t go around and search for these houses. We just don’t have the manpower to do that,” explains Leeper. “The people in the neighborhood need to inform us.”