Surge in Foreclosures is One of the Reasons Why 2008 is the Worst Year of All Time for Silicon Valley

The housing market of the Santa Clara district has had the worst year in 2008 due to the biggest yearly percentage dive in the prices of home in no less than two decades, comprising an immobile mortgage market and a rise in foreclosure properties.

Moreover, 2008 also shed several billion dollars in impartiality off the valley's housing stock, as most of the regression came in the inflation of home values in a lower-priced market area.

The mean sale cost of every home from last January to December plummeted to 31.8 percent, which is the biggest decline in their series since 1988, according to MDA DataQuick, a real estate research service.

In addition, because of the decrease in number of sales of high-end houses and a swelling number in low-cost vicinities severely damaged by foreclosures in California, the mean price for resale homes was pulled down to $457,000, something that has not happened since January 2002.

Though foreclosures were popular headlines in the South Bay for 2008, the future of the high-end market remains unknown. Even though the market of more expensive homes has declined and median prices in those vicinities are still indefinite, a different property research service named Marcus & Millichap anticipates higher-end prices to remain stable this year. There will be even less subprime loans and assertive sales tactics, so there will be less foreclosure, which leads to fewer sales.

However, anything is possible in the work market, especially in the mortgage market from senseless lending to senseless no no-lending to a drop in prices of high-end homes, says DataQuick.

As things are quite sluggish on the top end, things are speeding up in the bottom part of the market, thanks to the increasing number of foreclosures sale.

But there is still something to be hopeful about amidst these hard times. There are sales at foreclosure prices, according to Stephen Levy of the Center for Continuing Study of the California Economy.

Half of the homes bought all over the Bay Area last December were actually foreclosures, and 41.2 percent of every single home bought in Santa Clara County were foreclosures, compared with only 8 percent of the previous year. The county surrendered the exceptional profits of the past few years in those sales.