Foreclosure homes in California continue to rise and have reached levels higher than any recorded in the last fifteen years. Foreclosure homes in Yuba County, California have risen to 136.4%, while other counties such as Sutter County and Colusa County do not have such high foreclosure rates, although these do continue to rise.
Experts have surmised that the reason for the high foreclosure rates is the sharp drop in Californian property values. And with already existent ARM’s continually resetting to higher interest rates, this will result in more foreclosure homes in California.
Despite the fact that Government and the Governor of California himself have taken steps to try and quell the march onwards of the foreclosure rate, this still shows no sign of easing off very soon and experts believe that if you are seeking a home at greatly discounted prices, now is the time to buy. The trend is pointing more towards foreclosures and buyers are taking advantage of this trend.
During the years 2005 and 2006 there was a period of activity, now referred to as “loans gone wild”, in other words lenders were issuing home loans to people that were well outside of their financial capability, and making poor loan choices. Add to this the problem of high gas prices and commuters who wanted to find homes closer to work and we have a marriage made in hell.
Many experts predict that foreclosure homes in California will get much worse before it gets better. However this foreclosure crisis has opened up a whole new avenue for investors and first time home buyers. These are people who have cash at hand and good credit ratings. With the lower value of property and the fact that so many foreclosure homes in California are on the inventories of lender. Many people are now able to afford homes in areas in which they never dreamed of being able to buy in years gone by.
While a third of home owners threatened with foreclosures are able to bring payment current or sell it to pay what is owed. The other two thirds fall by the wayside and find themselves in hot water. A year ago this figure stood at 52%! There has also been an increase in the multi-loan financing used to purchase property and this together with lower home values ensures that there are more foreclosure homes in California available. Multi loan financing can often impede attempts to work out an equitable financial solution.
Lenders and banks have so many foreclosure homes in California on their books that they have actually become motivated sellers. This is what is driving the prices down and bringing a return towards affordability. For example in the Bay area of Contra Costa, Alameda, Marin, San Mateo, Santa Clara and San Fransisco Counties, more starter homes are available and 30% of households can afford the entry level price of around $600 000. This has increased from 24% last year and buying a first home in these areas is no longer as impossible as it once was.
Kevin Simpson, has been studying the foreclosures market, helping buyers on the finer points of California foreclosures for sale.
Kevin Simpson, GM Sales & Marketing, Californiaforeclosuresforsale.com
[tags]Foreclosure, homes in California, lenders, home owners[/tags]
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