| The California Real Estate market is one of the | | | | remained fairly constant, and buying activity by owners |
| fastest paced and vibrant in the world. Nowhere else | | | | who do not occupy the properties in question is on the |
| is property traded so fiercely and competitively and at | | | | rise. |
| such high stakes as in this state. | | | | In Southern California, the extremely low level of house |
| A recent report on the number of house sales in | | | | sales in December 2007 has caused many in the real |
| California, which was released in December of 2007, | | | | estate industry-sellers, buyers, and lending institutions |
| showed that more than 25,000 condo units and | | | | included-to watch the market closely. While the |
| houses-both brand new and resale-changed hands in | | | | number of new houses sold in Riverside, Los Angeles, |
| that month. As impressive as that figure is, it was in | | | | San Diego, San Bernardino, Orange County and |
| fact virtually unchanged from the house sales figure in | | | | Ventura went up .5% from the previous month-about |
| November, and is actually down more than 40% from | | | | 13,200 from slightly more than 13,100 in November-this |
| November of 2006, when house sales registered at | | | | still represented a steep 45% decline from the same |
| 43,400. Records show that there has been a steady | | | | period the previous year, when houses sold numbered |
| decline in house sales over the past 27 months, and | | | | slightly more than 24,200. |
| that December's sales were the lowest for that | | | | One real estate industry analyst has declined to make |
| particular month ever since records were first kept in | | | | any forecasts or predications about which way the |
| 1988. | | | | market will go in the next few months, saying that the |
| Median prices for houses also went down almost | | | | present instable condition of the market has made it |
| 3%-or to just over $400,000 in December-from about | | | | impossible to predict which way things will go. Many |
| $412,000 in November. This price represents an almost | | | | experts agree however that the real estate market |
| 15% decline from December of 2006, when the | | | | will stabilize soon and that a clearer picture will emerge. |
| median price of houses was about $472,000. The | | | | Until then both buyers and sellers are keeping a |
| peak in median house prices was reached in the | | | | watchful eye on the proceedings. |
| period of March to May last year, when the price of | | | | We mentioned earlier that foreclosure activity is on the |
| houses averaged around $484,000. | | | | rise, and indeed during the last quarter of 2007, |
| This drop in median house prices can be explained | | | | mortgage default notices were at its highest level in 15 |
| mostly by the slow sales of high priced properties, | | | | years. Much of this increase in foreclosed properties |
| which in itself is the direct result of instability in the | | | | goes hand in hand with depreciation of home values. |
| credit industry. 17,500 homes purchased in California in | | | | Many homeowners have suddenly found themselves |
| December 2007 were bought with conforming loans | | | | in a position wherein they owe more on the mortgage |
| amounting to $417,000, which is a huge decline of | | | | than what the property is actually worth on the |
| almost 30% from December of 2006, when the | | | | market. A large number of those who have been |
| number of houses bought with the same loan | | | | forced into foreclosure may have felt the pressure of |
| amounted to almost 25,000. With regard to jumbo | | | | high mortgage rates, the loss of income or even the |
| loans, 4,600 houses in California were purchased for | | | | need to move to another state. |
| more than $417,000 in this manner, which is a decline | | | | One factor that can explain this phenomenon is the |
| of a whopping 70% from December 2006, when | | | | decline in median house prices from a high of $484,000 |
| houses purchased number more than 15,000. | | | | in March of 2007 to just slightly above $400,000 in the |
| Other signs show that the real estate market in the | | | | latter part of the year. Although this decline was |
| state continues to move in different directions. | | | | perhaps partially caused by the shift in the type of |
| Property foreclosures are at an all time high (we will | | | | houses that were sold, this would have undoubtedly still |
| discuss this in further detail later on in this article), and | | | | had a significant role to play in the increase of the |
| both adjustable-rate mortgage and multiple mortgage | | | | number of homeowners who were forced to default |
| financing has declined drastically. At the same time, | | | | on their mortgage loans. |
| down payment values as well as flipping rates have | | | | |