Prices of Foreclosure Listings Still Down in California
Except in some California areas where home prices are seen to be slowly climbing up, many homeowners in the state are still seeing their houses being turned into foreclosure listings because of continued decline in home prices.
In Richmond, Matt Bording is one of homeowners who have decided to voluntarily give their house keys to their lenders because values have gone down by 60 percent from their 2005 price levels.
Bording explained that he cannot realistically overcome the 60-percent decline in the price of his home.
But some analysts said the pace of home price decline in California is slowing down.
Alan Nevin, a research director at market research firm MarketPointe Realty Advisors, said that the number of foreclosed new homes is declining in many areas of California.
The median price across California for a pre-owned single family home increased in April to $256,700, an increase of 1.4 percent from the median price in March.
Compared to the median price in April last year, the median price in April this year fell by 36.5 percent, but analysts said the significant point is that the year-over-year decrease is no longer above 40 percent.
In addition, analysts cite the drop in the number of months needed to sell the inventory of foreclosed new homes and other unsold homes in the $300,000 price range. In April, it would take only 2 and a half months to empty the housing inventory, representing a significant improvement from the 11.1 months needed to empty the inventory in April 2008.
Leslie Appleton-Young, top economist of the California Association of Realtors, said that a rising demand for lower-priced foreclosed new homes and other homes is pushing up prices in the market’s lower end. She said she is hoping the median home price is approaching or has reached the bottom.
However, other economists are skeptical. They insist that the decrease in the backlog of number of foreclosed new homes may have stopped the price decline of lower-priced homes temporarily.
Skeptics argue that the impending foreclosures of prime mortgages and properties in upscale neighborhoods will cause significant home price declines.
Avram Goldman, head of San Francisco-based Pacific Union Real Estate, noted that some houses priced at $850,000 in high-end communities in California are now selling at $650,000 because of the rising number of foreclosure listings in their areas.
