The California foreclosures rate has been one of the highest in the country. Some industry experts even believed that California is the state hardest hit by the foreclosure crisis.
In 2008, the number of homes in foreclosure listings was 237,200, a dramatic increase from 84,600 house foreclosures for sale in 2007.
In December 2007, California reported 21.7 percent riskiest loans. Also in the same year, subprime loan losses and resets increased to its peak.
Meanwhile, data from the California Association of Realtors (CAR) showed that the average single-family property price in February of this year was $247,590, reflecting a decline of 41 percent from the same period last year.
In addition, the National Association of Homebuilders noted that home construction in California was almost non-existent. According to the association, housing permits in December 2008 declined to a low level.
However, industry experts have observed several developments that indicated possible recovery in the housing market and reduction in the number of homes in foreclosure listings.
Experts noted the increase in sales volume, the return of investors’ interest on the California housing market and the reduction in foreclosure listings inventory.
Because of low prices of homes in foreclosure listings, potential homebuyers flocked to California to take advantage of bargain and discounted prices.
In February of this year, homebuyers acquired over 600,000 properties in foreclosure listings, representing a rise of 80 percent from the same time the previous year.
According to CAR, most home buying activities occurred in properties that fell 40 percent to 60 percent in prices from their original market value.
Chuck Whitehead of Coldwell Banker Associated Brokers noted that in Riverside County, home prices decline over 35 percent.
Meanwhile, Leslie Appleton-Young, chief economist at CAR, pointed out that sales increase occurred in areas hardest hit by the subprime crisis.
On the other hand, in some areas in California were few homes went into foreclosure listings, prices did not fall drastically and sales rebounded more slowly. However, Phil Jones of Coldwell Banker Coastal Alliance noted that foreclosure homes were still the dominant sales.
Harvard’s Joint Center for Housing Studies director Nicholas Retsinas said that analyst projections showed that prices of properties in California will continue to decline. However, he added that there will be a significant slowing down of price drops.
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