Bakersfield Foreclosures Offset by Double Tax Credit

by on Foreclosure Crisis

High numbers of Bakersfield foreclosures and foreclosure activities in other cities of California were offset by the double tax credit, resulting in increased value of houses during the second quarter of 2010. This is in contrast to national trends, where most states suffered from declining values of homes despite a similar decline in negative equity.

Although the number of foreclosed homes in California remains high, the state enjoyed its fifth consecutive quarter of property value increase in the 2010 second quarter. According to analysts, this is mainly due to the double state and federal tax incentives offered in the region. The tax credits stimulated demand for residential properties, resulting in the rise of home prices, analysts have explained.

Despite the property value increases, most real estate market observers believe that the high number of home and apartment foreclosures in most cities of California will make it impossible to sustain the property appreciation once the period for the tax credits are over. For now though, California is basking on the temporary benefits of rising values of houses.

Bakersfield foreclosures and rates of foreclosures in other cities and counties of California remain high, but other states are arguably in worse situations. States like Arizona and Florida suffered from huge declines in home prices during the 2010 second quarter, with the Miami-Fort Lauderdale metro recording a price decrease of over 15%, while Phoenix posted an almost 12% drop in home prices.

Several cities of California posted significant value increases, with San Diego recording the highest jump at 7.3%. This was followed by the San Francisco metro area at 5.9%, San Jose at 5.6% and Los Angeles at 5.5%. In terms of resale of properties under listings of foreclosed homes for sale, California areas also posted strong numbers.

Over 55% of the total home sales for June 2010 at El Centro were foreclosure resales, while Madera's is 54.6%. Merced also had a big number of foreclosure resales at 53.6% during the month of June. However, a big percentage of these homes were reportedly sold at prices way below the original price paid by the seller for the property. The problem is largely attributed by analysts to Bakersfield foreclosures and foreclosure activities in other areas of California.

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