California Real Estate

The California Real Estate market is one of theremained fairly constant, and buying activity by owners
fastest paced and vibrant in the world. Nowhere elsewho do not occupy the properties in question is on the
is property traded so fiercely and competitively and atrise.
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 insales 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 andincluded-to watch the market closely. While the
houses-both brand new and resale-changed hands innumber of new houses sold in Riverside, Los Angeles,
that month. As impressive as that figure is, it was inSan Diego, San Bernardino, Orange County and
fact virtually unchanged from the house sales figure inVentura went up .5% from the previous month-about
November, and is actually down more than 40% from13,200 from slightly more than 13,100 in November-this
November of 2006, when house sales registered atstill represented a steep 45% decline from the same
43,400. Records show that there has been a steadyperiod the previous year, when houses sold numbered
decline in house sales over the past 27 months, andslightly more than 24,200.
that December's sales were the lowest for thatOne real estate industry analyst has declined to make
particular month ever since records were first kept inany 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 almostpresent instable condition of the market has made it
3%-or to just over $400,000 in December-from aboutimpossible to predict which way things will go. Many
$412,000 in November. This price represents an almostexperts agree however that the real estate market
15% decline from December of 2006, when thewill stabilize soon and that a clearer picture will emerge.
median price of houses was about $472,000. TheUntil then both buyers and sellers are keeping a
peak in median house prices was reached in thewatchful eye on the proceedings.
period of March to May last year, when the price ofWe 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 explainedmortgage 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 thegoes hand in hand with depreciation of home values.
credit industry. 17,500 homes purchased in California inMany homeowners have suddenly found themselves
December 2007 were bought with conforming loansin a position wherein they owe more on the mortgage
amounting to $417,000, which is a huge decline ofthan what the property is actually worth on the
almost 30% from December of 2006, when themarket. A large number of those who have been
number of houses bought with the same loanforced into foreclosure may have felt the pressure of
amounted to almost 25,000. With regard to jumbohigh mortgage rates, the loss of income or even the
loans, 4,600 houses in California were purchased forneed to move to another state.
more than $417,000 in this manner, which is a declineOne factor that can explain this phenomenon is the
of a whopping 70% from December 2006, whendecline 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 thelatter 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 willhouses that were sold, this would have undoubtedly still
discuss this in further detail later on in this article), andhad a significant role to play in the increase of the
both adjustable-rate mortgage and multiple mortgagenumber 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