Active Foreclosures Sales Bringing down California Home Prices

by Donald Hanz on States

An active market for California foreclosures is attracting investors and first-time homebuyers in the golden state. This resulted to a sharp decline in home values and prices across all counties and cities. Most of the available inventories are bank-owned foreclosure homes that are being sold in bargain prices.

With the year-end closing, banks and financial institutions are short-selling these homes to get them off their books. These sales activities are making a big impact in the reduction of home prices as a whole.

In Contra Costa County, home prices dropped 24.2 percent during the third quarter of 2008 as compared to the same period last year. Average home prices are within $397,510. Decline rates are slightly lower in Alameda County running at 18.9 percent with homes rated at an average of $479,668. San Mateo County fell 13.5% percent with an average home price of $698,179.

One of the hardest hit areas in the country for increases in foreclosures and falling home prices is San Joaquin County. Homes dropped up to 35.5% from its previous price, with homes ranging only $210,179. These values are from the median market and include single family houses and condominiums within the same area.

These figures are starting to reflect the impact of the economic turmoil raging across the country. Add to this effect is the steady decline of the stock market plus an increase in unemployment rates compounding this current crisis on foreclosures.

With these figures, experts are predicting the situation to get worse, but are optimistic that it soon about to get better. With a strong home sales activity in these counties, experts are hoping that the market will soon stabilize. They are expecting the declining home values to flatten in the next quarter and the rates of increase in foreclosures to die down.

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