realestateLately there have been glimmers of hope but continuing foreclosures are wiping out all hope. In south California sale of foreclosed houses have picked up, according to the statistics presented by MDA DataQuick. The median prices of houses across the state have also gone up. The median sale price is calculated to be the point at which half the houses are sold for more and half the houses sold for less.

But clouds of a second foreclosure wave of equal if not greater intensity are gathering in the horizon. It will cause prices to further tumble in the badly hit regions. Jack Kyser is an economist. He said, “They are going to keep coming. You still have a lot of distressed situations out there.” A huge number of mortgages delinquent for over 90 days are piling up. Coupling with us looms the menace of unemployment and the end of moratoriums on foreclosures imposed by the state.

Since 2007 there have been 365,000 foreclosures. There is limit to what the state and federal remedial measures can do. Moratoriums can only postpone the matter but not root out the ailment. By keeping at bay the entry of potential foreclosures into the market artificially keeps up the prices. But ultimately the dam will break causing worse damage. There are so many borrowers who have gone underwater that foreclosures are bound to rush in with intense ferocity in the very near future. The halting of foreclosures by the state will not put a stop to thousands that will ultimately happen. These will continue inevitably and further pull down the real estate market.

In Los Angeles County the prices of real estate have gone down by 30% from the previous year. The prices went up for March to April and then again from April to May. But in other places (San Bernardino/Riverside) the trend was downwards from March to April. It went up however from April to May. The market fluctuations indicates that the bottom has not been reached as yet, commented Kyser. Many however are hopeful that the rise in sales, however slow, indicates good tidings for the future.

Alexis McGee of Foreclosures.com said, “We are definitely stabilizing. Inventory is staying low and prices are staying flat. Higher end homes are selling too.” The wooing of buyers with tax breaks and other incentives seem to be working with increasing property value. The signs of availability of affordable houses are all there to see. She said that banks are preventing the market to be flooded with foreclosed houses but holding back many.

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