California Home Prices Fall 41%

[roadwarrior]

California Home Prices Drop Record 41% in August Amid Defaults

By Dan Levy

Sept. 25 (Bloomberg) -- California home prices tumbled a record

41 percent in August from a year earlier as foreclosure sales pushed

down values in the biggest U.S. state. The median price of an existing,

single-family detached home fell to $350,140 and will likely fall

further, the Los Angeles- based California Association of Realtors

said today in a report.

Sales increased 56.7 percent from August 2007 and 1.8 percent from

July. "While sales appear to have turned the corner, the median will

experience additional downward pressure as we move into the off-

peak season in the coming months, and will continue to face pressure

from distressed sales,'' Leslie Appleton-Young, vice president and

chief economist of the association, said in a statement.

More than 101,000 California households received a default notice,

were warned of a pending auction or foreclosed on last month,

RealtyTrac Inc., a seller of default data, said on Sept. 12. That

was a third of the nation's total and represented one in 130 homes

in the state.

Eight of the 10 metropolitan areas with the highest foreclosure

rates are in California, led by Stockton in first place, according

to RealtyTrac. Merced, Modesto, Vallejo-Fairfield and Riverside-

San Bernardino ranked second through fifth. Bakersfield, Salinas-

Monterey and Sacramento ranked eighth through tenth.

[Redlinerobert]

Lots of people losing their homes here.  I'm in the Salinas/Monterey area.  

On a side note, there are lots of people buying here as well.  We're doing a huge amount of FHA financing now, and have been very busy with selling REO's for many banks in the area.  Prices, in my opinion, have hit bottom here.  The REO's that we are listing are typically selling for $20-40k over asking price.

The market, in my opinion, is much more realistic now.  The easy underwriting practices of banks has now come back to bite them in the you know what.

[Raul]

I don 't  get it why homes are so expensive in Cali, same sq footage in Cali costs 3 times more than in TX.  

[Hoover]

Raul, you are paying for the dirt.  California has been a slow growth state for years which pushes up the prices for development land.  Thus, it is not the actual home that costs that much more, it is the dirt.

[Certified Public Angler]

umm California isn't the largest US state...Alaska is.

[atx_newbie]

Largest by population, I think is what that was coming from.  The good news about this:  the real estate market is more cyclical than fashion.  Like the OP mentioned, home sales have turned the corner.  Prices can only fall for so long before people who still have money say "Hey, real estate is cheap right now!  I could make a killing if I start buying."  And when you start to have demand for something, sooner or later the price will start to go back up.

The real estate market is about to surge back, and probably stronger than ever.  The only thing that could hamper that recovery is if the bailout doesn't go through.  Then no one will be able to get loans, because no one in the secondary mortgage market will be buying any mortgages.

[Raul]

Raul, you are paying for the dirt. California has been a slow growth state for years which pushes up the prices for development land. Thus, it is not the actual home that costs that much more, it is the dirt.

Pretty expensive dirt I may say, when me and my wife discussed the possibility of moving to the States I knew immediately where her thoughts were heading, I understand that she would like us to move to Cali ( all her close relatives are there ), not that I don 't get along with them, on the contrary, one of her uncles is very dear to me and we have a lot in common ( fishing, camping, gardening n 'such ) but the problems I saw were:

1.- It 's in Cali and certainly I wouldn 't want to wake up one morning and find out that my home just slid into the Pacific Ocean and now I 'm living in an island.

2.- Where she 's from it 's too danged cold for me, if it ain 't cold it 's rainy  :, if it ain 't rainy then it 's foggy  :, if it 's sunny then it ain 't warm nuff   :-/ and for a sun/heat loving critter like me that ain 't exactly my kinda climate.

3.- The prices of the homes is just plain obscene, if I sold all my properties here and a house I 've got in MacAllen I couldn 't purchase a room at Cali home prices. The last time I visited her uncle 's house I asked him how much he paid for it ( simple curiosity ) and he told me that over 300 grand  , s*t man, that 's a truckload of money !, ( the only good things I see are:  that it 's close to the sea, close to Lopez Lake and close to Tackle Warehouse ) their home is about the same size of my TX house ( which is Close to Falcon Lake, Sugar Lake, Vicente Guerrero Lake, Padre Island, Academy Sports a stone cast away, etc, etc. ) and I didn 't pay THAT much for it. My idea of progress is to have more, not to have less for the same money.

4.- It 's too far away from anything and everybody ( my family ), the closest airport to travel to Mexico to visit my mom is LA and that is a 7 or 8 hours drive, man I can be at my mom 's house in that time.

So after carefully explaining the situation to her we decided that we gonna stay here in Mexico for the time being.

[Redlinerobert]

Raul,

House prices here are crazy.  If you want something nice, in a decent neighborhood you will pay $500k.  These same houses were selling close to a million 2 years ago.

[Fisher of Men]

40% drop and I still couldn't afford a home there.  

[Raul]

Raul,

House prices here are crazy. If you want something nice, in a decent neighborhood you will pay $500k. These same houses were selling close to a million 2 years ago.

That 's exactly what I explained to her, too much money for the same thing, she didn 't like it very much but what else could I do, she has never worked and doesn 't know how hard it is to earn a buck ( she knows how to spend it .... if done several times even better   ), besides, why would I sell what I 've already got paid in full plus add my other possesions to purchase what I 've already got, it makes no sense, finantial suicide to please her ? no way Jos é; she wants us to live in the States ? no problem with me, but where I say.