Scheduled Foreclosed Home Auctions Rose in California
The conflicting economic and housing market data coming in at Santa Cruz County, California are causing a debate among industry experts, with some predicting a recovery soon while others are seeing more trouble ahead.
Industry experts who believed that recovery is in the offing, pointed out the steady increase in the median price of single family homes in the county, reaching $520,000 last month from $399,000 in February. Last month’s figures were the highest sales in the state in three years.
Adding to their optimism is the drop in listings for eight consecutive months already. They pointed out that inventory of houses on the market for sale accounted for about six months worth of supply, a precursor that prices are starting to stabilize.
But experts who believe that more trouble is ahead in the county cited the over 50 properties scheduled for foreclosed home auctions this month, which is the highest record in the area. Added to the bleak picture is the over 1,300 homeowners who are behind on their mortgage payments and the increase in the number of default notices issued last month compared with the same period a year ago.
Furthermore, almost 27 percent of mortgages in the country are underwater, meaning that homeowners owe more on their mortgage than what their properties are worth at. And 4 percent of borrowers are nearly underwater. Many borrowers are complaining that their lenders are not willing to modify their troubled loans despite encouragement from the federal government.
Among communities in the county, Watsonville is the hardest hit by the foreclosure crisis. The increase in foreclosures means more listings and more foreclosure properties coming on the market for sale. This means home prices will also go down.
In Watsonville, prices that increased almost twice during the housing boom dropped dramatically, with some for as low as $100,000. However, low property prices attract more buyers which give life to the real estate market in the area.
Industry experts noted that a home priced at $400,000 could receive more than a dozen offers from prospective buyers. They pointed out that foreclosure houses that used to sit unsold on the market are now being purchased. They said that many cash-laden buyers are still out there but are bidding their time hoping to find a low-priced attractive property.
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