Soaring Foreclosures Pull Down Prices of Properties

September 28th, 2008

In California the soaring foreclosures have pulled down prices of properties since last August. The information was revealed by the MDA DataQuick, which also said that the sale of houses had gone up while prices tumbled drastically due to the foreclosure crisis that was riddling the country for the past two years. Numerically, the state registered sale of 37,988 new and pre-owned houses in August 2008, a rise by 13.6 percent over August 2007, although compared to July figures it had fallen by 3.8 percent.

The startling fact was, 46.9 percent of the overall sale of properties was foreclosed houses. This news sent prices crashing from 35.3 percent to $301,000 during the year ended August 2008, throughout the state.

The worst hit areas during the housing crisis were the inland regions where most of the foreclosed houses were situated. According to DataQuick report the counties have the largest holdings of distressed properties where prices have dropped to rock bottom level and helped to push up year-to year sales of these foreclosed houses. Andrew LePage, spokesman of the company confirmed that the drop in prices in the inland housing market and the rise in the sales of property is a direct contribution of foreclosures of mortgage houses.

Rich Cosner, president of a Prudential California Realty office in inland Southern California disclosed that his foreclosure ridden region, attracted huge number of buyers attributed mainly to the spiraling foreclosure scenario. He was certain that expensive homes were also to experience further decline in the value of their properties while the prices of even the most modest of houses were likely to hit the bottom lines. It had been observed that there were multiple offers on properties with a price tag below $200,000, and Cosner was of opinion that when there were numerous offers on the same property it could probably be the “end of the price-drops.”

California felt that it was not getting its fair share of assistance from the Federal Government in its effort to bail out borrowers likely to face the axe of foreclosure or were in some stage of the foreclosure proceeding. Sen.Barbara Boxer, D-Calif., had said that even though the state during the months January-July 2008 registered more than 25 percent of the nation’s total foreclosure filings it had received only 11% of the more than $130 million released by the Government for mediation between distressed borrowers and the lenders and California had every right to be wistful.