easywriter

Foreclosures Still On the Rise in California

I attended a foreclosure auction in San Mateo, (northern) CA last weekend, and was amazed that prices of homes in Seaside, and long the inner coast came in 60% and more below what appraised value had been at the peak. But interestingly when they got to San Jose (Silicon Valley), prices were discounted much less, maybe 25% (and 10% to 20% below current value). Auctions are distorted pictures in a way in that prices are lower than the "real market" but still an indicator. One reason is Silicon valley still has one of the strongest industrial bases in the country with high tech, and annual earnings are probably twice what they are in other states. Some areas like Los Altos are actually still rising slightly (my neighborhood is down about %5/yr), and SF has held up too. Compare that to cities like san diego and stockton, where prices plummeted. These are towns where prices inflated far too fast and they are paying the price. Short term, prices will fall--20% maybe?--but not 50% or 70% as the doomsdayers might wish. Calif has gone through this before and this will provide good opportunities for home buyers with cash and credit to get in. Long term the economy is healthy and is still one of the choice regions to live in with an international influx of people;prices will rise again,faster than the national average. This is just another cycle, perhaps deeper, but another cycle still.