According to an exclusive article on Bloomberg.com titled California's Discount Foreclosure Sales Point to Housing Bottom, written by Dan Levy and Daniel Taub, the $1.3 trillion in homeowner equity CA residents lost since housing prices peaked in 2005 (makes me cringe too) means prices have fallen roughly 50%. These new, lower numbers are making previously unaffordable homes realistic for some families, and are helping clear out the massive ranks of foreclosed homes lining CA streets.
A stable market won't be able to gain footing until the inventory of empty homes gets cleared out. Droves of high foreclosure rates across the state pushed down prices and led to "discounted distressed sales" on many properties, which were suddenly valued at under $500,000 for the first time in years. With sales picking up speed, progress toward a stable market is underway.
Make sure you check out the full article (just click the title) for a clear and helpful map to the foreclosure crisis and the stages CA real estate has undergone throughout the past five years or so (it even predicts its future). It covers the subprime crisis, the impact of loan defaulting, and the potentially good repercussions of Bush's new housing bill. It's a must-read for any CA resident looking to buy, sell, or simply understand the story behind their property values.
