The number of San Diego properties entering foreclosure hit an all-time high last month, as illustrated by the blue line in the following graph:

In the month of March, 4,260 homes received default notices, which are nastygrams informing delinquent borrowers that they are in foreclosure.

This longer-term graph, which is adjusted for San Diego's population growth, shows just how many more mortgage defaults are taking place now than in the 1990s downturn:

The number of trustee sale notices, in contrast, continues to fall. A trustee sale notice takes place at least 90 days after a default notice and serves to inform the defaulting borrower that home repossession has been scheduled.

Given that 90-day delay (and probably longer, given the glut of foreclosures overwhelming the system), it makes sense to assume that the orange lines in the above charts will soon begin to follow the blue lines upward. And if that happens, it means that more must-sell inventory will be hitting the market fairly soon thereafter.

That, as noted in the prior column, is exactly why the housing market is not as healthy as the improving supply and demand trends on their own would suggest.

— RICH TOSCANO