California Home Prices Sink 41% on Surging Foreclosures, Double U.S. Drop

[marmar]

California Home Prices Sank 41% Last Month on Foreclosures
By Daniel Taub


March 25 (Bloomberg) -- California home prices dropped 41 percent last month from a year earlier, more than double the U.S. decline, as surging foreclosures drove down values, the state Association of Realtors said today.

The median price for an existing, single-family detached home in California sank to $247,590 in February from $418,260 a year earlier, the Los Angeles-based group said in a statement. The U.S. median price fell 16 percent during the same period, the second-biggest drop on record, according to the National Association of Realtors.

Home prices have been falling since their 2006 peak, pushed down by rising foreclosures blamed for the U.S. credit crisis. California, the most populous state, has one of the highest rates of foreclosure, according to RealtyTrac Inc., an Irvine, California-based seller of real estate data. Lenders usually sell foreclosed properties at a discount, dragging down the median price, so it doesn’t necessarily reflect the value of most homes, the Association of Realtors report said.

“The median, for all its imperfections, tells a really interesting tale right now,” Andrew LePage, an analyst at research firm MDA DataQuick, said in an interview. “It tells you what is and what is not selling. What’s selling right now is foreclosures.”

Foreclosures accounted for 58 percent of existing California home sales in February, compared with 33 percent a year earlier, said MDA DataQuick, based in San Diego. More than half of existing homes sold in both Southern California and the San Francisco Bay Area had been in foreclosure in the past year, the data service said. Inland California, where prices are lower than coastal areas, accounted for half the state’s mortgage defaults in the last three months of 2008, MDA DataQuick said. ............(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=aRhTT4MNBjlM&refer=home

[madaboutharry]

1. This is terrible news.

President Obama is so correct when he says we can not tolerate the cycle of bubbles and bursts. It is destroying the country.

[Lisa0825]

2. I feel bad for the regular people who are hurt in this, but

the housing market was so overpriced that it needed a big correction. In many areas of the country, people with middle class salaries cannot afford homes at all.

[cobalt1999]

3. Didn't California have some of the biggest increases during the boom too.

It makes sense that they have further to fall back.

[denverbill]

4. Wow. That's unbelievable.

Frankly, I don't know how anyone in CA could buy a house the last few years. Houses smaller than mine in Denver were going for triple or more what they were here, and Denver's market was inflated at the time too.

[dkofos]

5. Not good news for those that are now upside down in a mortgage, but

it's great news for those that can now actually afford to buy.

Something needs to change in California's (and many other states) real estate regulatory
system to keep a runaway market from happening again.