Californian real estate winners and losers

Californian home owners and Californian house buyers receive news this week that could change both their fortunes. report worrying news in the Californian housing market concerning California mortgage defaults. Mortgage arrears and subsequent defaults rose to their highest level in four and a half years. Banks and other mortgage providers sent 26,705 default notices to California homeowners in the third quarter, more than double the 12,606 sent a year earlier and up 28.3 percent from the second quarter, La Jolla, California-based Data Quick Information Systems said today in a statement.
Homeowners are having a harder time getting out of debt by selling, Data Quick said. Home prices in Southern California last month had their smallest year-over-year increase in almost a decade, and San Francisco Bay Area prices dropped for the first time in four and a half years.
“Price appreciation is evaporating,” Andrew LePage, a Data Quick analyst, said in an interview. “That gives people fewer options to get out of a pinch.”
California sales mirror a national trend. U.S. new-house prices will fall this year for the first time since 1991 and existing homes will have the smallest gain ever, the National Association of Realtors said last week.
DQ further report depressing news for Bay Area home owners. Californian Bay Area Sales were at their lowest level in five years, a real estate information service reported.
The median price paid for a home in the nine-county Bay Area was $611,000 in September. That was down 1.5 percent from $620,000 for the month before and down 0.8 percent from $616,000 for September last year, according to Data Quick Information Systems.
Because of a shift in purchase patterns, a decline from August to September is normal for the season. The year-over-year decline was the first since March 2002 when the $381,000 median dropped 1.3 percent from $386,000 a year earlier. Last month’s median was in part tugged down by increased sales of lower-cost condo conversions in the East Bay.
The silver lining is that first time buyers are now in a stronger position to step onto the Californian housing ladder. Those new to the real estate market may now be in a stronger position to bargain with home owners to achieve the best possible price for their new homes.

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