Homebuyers find big discounts at auction

December 7, 2008 8:07:35 PM PST
The bad news in the housing industry is not letting up.

A report released late last week shows that one-in-ten American homes are either in foreclosure or at risk of it.

Bad loans combined with rising job losses are continuing to drive the foreclosure rate in the Bay Area and the rest of the state higher every day.

Some people walked away from a home auction in Oakland Sunday with some incredible deals.

One home that was going for $600,000 last year sold Sunday for $275,000. Hundreds of people bid on similar homes offered up for sale.

Some people walked away from a home auction in Oakland Sunday with some incredible deals.

Properties were selling fast at the Oakland Mariott at the Real Estate Disposition Corporation Auction (REDC). The REDC was selling off about 300 foreclosed bank-owned homes, many for less than half the asking price.

"Today was the day and I'm really happy about it, you know? I need to get a lot of work done in the house, but I think this is the only way to own," said John Sabada who bought an Oakland three-bedroom home recently valued at $400,000, for $127,000.

The auction shows that the Bay Area and California are suffering a great deal from the foreclosure crisis. A report out Friday from the Mortgage Bankers Association finds California represents 13 percent of the nation's home loans, but is recording 19 percent of all new foreclosures.

Many investors are taking advantage of this troubled market.

One person's misfortune is fast turning into another's opportunity. That same report finds one-in-ten homes nationwide are either late on payments or in foreclosure.

Jessie and Tonja King were at the auction buying their first home. They bought a foreclosed Oakland home for $275,000. The home sold last year for $661,000.

"We've been waiting to try and get into a home, and if the prices hadn't fallen the way they have I don't think we would've been able to afford one because prices were way too high," said Jessie. "Excited. It's still unreal, kind of," said Tonja.

It is also a shock to the people who live in the East Oakland neighborhoods where these houses have sold. Simon Lau has property where one house just sold.

"On the corner, I own two units there," he said. "I bought it for $575,000 two years ago."

A nearby unit just sold for $225,000.

"This definitely dropped my property down," said Lau.

He is not alone in his concern that property values are taking a dive. James Davis is retired and lives near a home that just sold for $275,000.

"It's pathetic the way our economy is going. It's really pathetic," he said.

REDC says it sold off about $3 billion worth of foreclosed homes this year alone.

Homeowners that spoke with ABC7 say all they can do is wait out this recession and foreclosure storm. They're hoping the future will look a bit more secure.


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