Foreclosures exceed sales (in California for the first time ever)

[Liberal_in_LA]

http://www.mercurynews.com/realestatenews/ci_8344134
Foreclosures exceed sales
JAN. DATA REFLECTs STATE'S GRIM MARKET
By Pete Carey and Sue McAllister
Mercury News
Article Launched: 02/23/2008 01:34:20 AM PST

For what one expert thought was the first time, the number of monthly foreclosures exceeded the number of monthly home sales in California in January, according to data compiled by two research companies.

The data is a grim reflection of the worsening housing market, as the number of homeowners who can't or won't make their payments rises and the number of home buyers dwindles.

[NMDemDist2]

1. OMG

:wow:

[Liberal_in_LA]

2. The market is in freefall. I'm seeing homes listed for 100K less than a year ago.

[Systematic Chaos]

3. I'm no economist, and my opinion + $5 will get you a Frappucino from Starbucks...

...but I'm sticking to my core belief that NO middle-class home, NOwhere, under ANY conditions, should cost more than about $200k. And in many places even that's way out of line.

I think back to when my mother, in all her ineffectual cluelessness, moved me around all over the country during the late seventies and early eighties. We lived in some beautiful homes, and not a one of them sold for more than about $60k back then. We'd have been sitting on a gold mine if only the grass wasn't always greener somewhere else after a year or so. But, enough of my bitter rambling.... :(

[Liberal_in_LA]

4. Until recently modest homes went for 700K in Los Angeles. 200K wouldn't get u a garage

Of course, these days 200K will get you a modest condo.

[Systematic Chaos]

5. There's still a long way down, then.

Scary stuff.

[earth mom]

8. In 2000 modest middle class homes in the L.A. area were around $250K.

I grew up in So Cal and lived there most of my adult life. Prices jumped overnight because of greed and now innocent people are paying the price! :grr:

[ConcernedCanuk]

6. Sales drop from 25,500 to 19,000 - Foreclosures up to 19,500 from 12,700 - IN ONE MONTH!

.
.
.

From the posted article:

/snip/

. . . 19,821 California homes went into foreclosure in January, representing about $8 billion in home loans.

Meanwhile, DataQuick reported 19,145 home and condo sales in January.

In December, there were 12,783 foreclosures, according to ForeclosureRadar, and 25,585 home and condo sales . . .

/end/
_____________________________________________________________________

Doesn't look good, at all.

This ain't no "blip".

HANG ON!!

[truedelphi]

7. 2003 to 2005 saw home prices go astronomically high in CA

Investors were buying and flipping and flipping and buying.

The prices have to drop down another 20% to get them anywhere near where they should be.

[girl gone mad]

9. California is in so much trouble.

Prices just went wild over the past 8 years, even during times when they should have been stabilizing or retracting (post tech boom). It seems it was entirely due to bad lending practices, not real demand. Now prices will fall back to pre-bubble levels. CA already runs a deficit, but things are about to get much worse for the state. Jobs have been leaving for a while, in large part due to the overpriced housing and commercial real estate. I hope CA can innovate its way out of this mess, but I think its going to be a tough few years.

[Pale Blue Dot]

10. Kick, because this is atronomically more important than Obama, Clinton, or Nadar. nt

[OmahaBlueDog]

11. And people are raiding retirement savings to make bills

<<Trent Charlton knew the risks when he borrowed $10,000 from his 401(k) and cut his retirement savings in half.
But Charlton, a 40-year-old account executive at an Irvine, Calif., trucking company, said he had little choice because he and his wife could not keep up with monthly expenses after American Express reduced the limits on three credit cards.As home prices fall and banks tighten lending standards, more people are doing the same thing: raiding their retirement savings just to get by and spending their nest eggs to gas up SUVs, pay mortgages or put food on the table.>>

You can find the full article at:

http://biz.yahoo.com/ap/080219/borrowing_against_retirement.html?.v=2&.pf=retirement

[Ichingcarpenter]

12. As goes California so goes the nation

Colorado, which was considered by one private foreclosure marketing company to have the worst foreclosure rate in the nation for most of 2006, was surpassed by other states -- such as Nevada, California and Florida -- in 2007.

This is a nationwide trend not just a California thing.

[girl gone mad]

18. It's worse in "bubble" and economically depressed areas, though.

No-interest and adjustable-rate loans were common in the West for the past 5 years. They didn't really catch on in the South until more recently. Median priced homes were only affordable to something like 10% of the population in California during the bubble, even fewer in some locales. When you have a average homes at 500k in CA compared to 150k in TX and median incomes are virtually identical, CA is going to be hit harder by this negative RE market. Phoenix, Las Vegas, parts of Utah, much of Florida will also see greater declines. Michigan and Ohio didn't participate in the run up, but they've been losing jobs and population for so long that they are in their own recession. Colorado and Texas have historically been high foreclosure states due to poor consumer credit ratings (don't know about CO, but TX is considered a 'debtors paradise').

[Greyhound]

13. K & R,

I had to get to page 2 to find this, why is that? This is disastrous on so many levels, why don't we want to talk about this? The California economy has been limping along on the House as ATM model for nearly a decade and the account is tapped out now. What will the fallout of this be?

The potential for world wide consequences is mind boggling. The US economy, ignoring the fact that many other states are just as unstable, cannot withstand an economic collapse of the single largest economy in our nation just as the world's economy cannot withstand the collapse of the US economy.

There is much more to discuss, but lets see if anyone is interested...
:kick: & R

[devilindisguise]

14. Wild Roller Coaster Ride

I saw an episode of "60 Minutes" a few weeks ago about a city in CA. A real estate guy was taking the "60 minutes" guy around a beautiful neighborhood of large homes. He said it was 40 per cent foreclosures and that was just the beginning of the downward spiral. Words to that effect, I can't of course quote verbatim. I remember the S&L crisis when I sold my home finally for not much more than I had paid for it. So many foreclosures were on the market, it took a couple of years for me to sell my home. But even then, California was not touched by the S&L crisis. Or so I heard.

Another thing is repos on autos have doubled. What's next? Bread is going up again for the 3rd time in 18 months. Yet wheat never goes up in price.

[Manifestor_of_Light]

16. Learn to make your own yeast bread.

I make my own yeast bread in a large Cuisinart food processor.

That mixes and kneads it for me. Put it out in a loaf pan and let it rise for an hour or so, then bake. Pretty simple!

[Greyhound]

15. Kicking again. This is far more important than Nader tilting at windmills.

Yet here we are being good sheep...

[Alcibiades]

17. It's in part due to Californianomics

Used to live there. The thing is that when a place is so nice that everyone wants to live there, then it becomes not so nice anymore. The shortage of affordable homes is probably the number one social problem in California. California is full.

[abelenkpe]

19. Add that to this news

http://www.bubbleinfo.com/journal/2008/2/18/trustees-sales-no-rush.html

suggesting that lenders are holding on to an inventory of homes in the hopes there will be a turnaround in the market and that makes for a pretty frightening scenario.

[mitchtv]

20. $60 K rebate if you buy a loft at Santee Villiage

we looked last year at thses downtown lofts, they could hardly see us looking down their noses at us and our "Ford" now the incentives are extreme and prices are way down. I am now wary of buying a condo where they can't sell all the units,