Foreclosures Continue to Make an Impact on House Costs

The rapid increase in foreclosure properties has greatly affected the house market in Southern California last year. The home price went down to a 5-year low and reached the lowest level of sales in 20 years, said an industry tracker last Monday.

DataQuick said that foreclosures are expected to reach a high record this month after the tally is finalized. It is also to be blamed for the 30%, or maybe more decline in price across a 6-county region in Southern California.

A 50.5% sales pour back in December was not able to recover the gloomy 2008 performance.

The said company, based in San Diego, said that 19,926 pre-owned and new condos and houses changed proprietors last month. The sales went up compared to 13,240 the previous year, but new houses sales were only 1,813. It was the lowest December sales according to the company's records.

Half of the total number of properties cost more, the other half less. Unfortunately, the sales continue to deteriorate because cheaper homes are accountable for the majority of the sales.

Andrew LePage, a DataQuick Analyst, said that nothing is sure for now due to the economic crisis. In addition, no one can tell as to which location foreclosures will take over in the coming weeks or months.

Meanwhile, he also stated that the firm credit market happens to be one of the main causes of the home crisis slowing down these days. It applies to properties that are on the bottom of the price scale.

The more expensive ones are still waiting in line. Lenders are still reluctant to approve loans that are for the quite pricier homes. A report stated that among the participating lenders are Bank of America, Wells Fargo and Countrywide.

Across the nation, over a million homes entered some stage of foreclosure in 2008 and more are expected as a significant percentage of ARMs is about to reset this year.