California's Discount Foreclosure Sales Point to Housing Bottom

Thursday, August 07, 2008
Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS®

Recent economic developments indicate that California may be the first state to find the bottom, based on the increase in sales volume in the previous three months. In June, home sales rose for the third consecutive month, following a 30-month decline. Although approximately 40 percent of the transactions were foreclosure sales, the increase is allowing the market to stabilize by depleting some of the excess inventory. Some experts believe that once a neighborhood's median home price declines to 50 percent from the peak value that the homes in that neighborhood will no longer depreciate.

MAKING SENSE OF THE STORY FOR CONSUMERS
· Although California leads the nation in foreclosures, the state's foreclosure process is more efficient than other states, which likely will lead to a quicker rebound. Foreclosed properties are receiving multiple bids and financial institutions are selling these homes quicker than the market would typically allow.
· The Unsold Inventory Index in June decreased to 7.7 months from 10.2 months a year earlier, demonstrating that the market is improving.