After an extraordinary 6 months in California which saw house prices plummet, many are now asking: ‘Are we at the bottom?’.
Many Californian’s are now walking away from homes that are simply not worth waiting around for, and default figures are surging. In many places, prices have dropped over 50%. Whilst some reports are claiming that foreclosures are going down, as bargains are scooped up, many feel that this is just a brief moment of respite before the next storm. Have the ‘For Sale’ signs in your neighbourhood, been up long? Maybe they’ve come down because they couldn’t sell…
No More Foreclosures?
Many commentators are now bravely proclaiming that the californian market at least, has hit its bottom and from here things can only get better. In San Diego, they’re running out of foreclosure units to sell. A sign that the market can move on from here?
California’s median house price rose again for the 2nd straight month, exciting reports of real estate recovery, and april’s inventory shrank as bargain properties were snapped up. There is a returning demand for lower-end properties too - always a good sign.
Prime Mortgages in Trouble
There is still doubt out there about the ‘upturn’ in house sales - and they say there’s more to come, this time from a different sector - it’s the more upmarket parts of town. There is a new wave of defaults coming, in the form of ‘prime’ mortgages, fixed rate products more akin to the nicer parts of your city. These have doubled in the last year, and now incredibly account for the largest share of foreclosures across the U.S. Now that the ’sub-prime’ mortgage default monster has lost some of its fire, it’s now moved onto a better part of town. Previously, neighbourhoods where foreclosures were rare, have now been affected by the threat of lack of credit, forcing many into dire financial straights.
With the tightenting of lending across the board, people looking for larger loans, on more expensive properties are struggling to ‘move up’ into the desired properties. Without this crucial section of the market active, it’s now forcing prices down in the ‘prime’ property market. Larger property loans were down almost 40% from this time last year. Sellers in the high-properties in California are noticing too - houses that previously sold for $850,000 6 months ago are now on the market for $600,000.
Find the latest homes for sale in California here: http://www.sell-my-house-quick.com/search