Foreclosures Causing Sharpest Decline In California Real Estate Market

Foreclosures are causing the sharpest decline in real estate markets in California. – a record in 20 years. This is attracting new buyers who were waiting in the sidelines for the opportune moment. In May the average price dropped by 30% - the sharpest fall since 1988 as per records of DataQuick Information Systems. In May 2007 house prices peaked at an average of $484,000.

Elizabeth Trezza deals with legal matters. She comments that suddenly houses are within her range. She has been hunting for foreclosed properties and nosed around ix during the past weeks. Recently she made an offer for a two bed roomed unit having two bathrooms, owned by the bank with a price tag of $234,000. It was within her maximum budget of $250,000. This means that the mortgage amount to be paid would be more or less equal to what is being paid every month as rent.

In California there is activity in the housing market after about two years of year-over-year decline. Nevertheless observers are reluctant to admit that winter of despair is over. Some buyers are coming back to the market but it is too early to be optimistic and say that a turn around is in the offing. It is the Inland Markets that are noticing the first changes of falling prices. New buyers and those who want to move into better houses are hovering around to strike a bargain. The prices have become affordable and in tune with the income of average families. There is a feeling of bonhomie. Sue Ansel of Gables Residential says that this year there is a noticeable move of renters shifting to become house owners.

According to DataQuick reports, 33,024 houses were sold in California calculating to a drop of 11% from the previous year. 38% of the house transactions came from foreclosed properties. Some buyers are vying and competing with each other reported Richard Cosner of Prudential California Realty. Houses that were priced at $400,000 a year and a half ago are now being sold for $200,000 to $250,000. The demand is mainly for those houses that are below $400,000. These were financed with the backing of FHA loans.

Sales of high-end houses along the coast are yet to pick up. Here there are not too many foreclosed units and the sellers are reluctant to offer discounts. In San Francisco County the foreclosure comprised of only 5.8% of the resold units.