California foreclosure crisis appears to be on decline

April 24, 2010 6:05:01 PM PDT
There are signs of recovery in the housing market. This week, the government announced the biggest monthly jump in new home sales in nearly half a century.

Optimistic home buyers are shopping in earnest this weekend while others are still feeling a bit vulnerable. Buyers are again looking at backyard swings and kitchen counters as they stalk open houses this weekend. Some are motivated by the federal tax credit that expires next Friday.

Ultimately, it comes down to taking advantage of the lower prices.

Home buyer Salahuddin Kamran says, "One thing that I am surprised, is that a lot of the owners still have unrealistic expectations."

But, in pockets of Central Contra Costa County, a lack of inventory is really driving prices up.

"From a seller's standpoint, there's not a lot of inventory and we are seeing competition," says.

"We are seeing multiple offers," says Steve Maurer with Keller Williams Realty. "The last two listings I had, I had seven offers on one and eight on another."

Some real estate experts say overly-cautious appraisals are also holding prices down. Say a home was appraised for $600,000, but a bidding war pushed the price up to $700,000. The lender would only lend the appraised value, meaning buyers will have to cough up a lot of extra cash.

Even though the Commerce Department announced that sales of new homes in March took the biggest monthly jump in 47 years, plenty of people are still feeling the pain. So, state and local agencies are staging foreclosure prevention fairs like one held in Richmond Saturday.

"The way the economy is, three's always a chance that you might lose your home or even if you just lose your job," Voneciel Gaines says. "So, I'm trying to get as much info as possible."

State Controller John Chiang says, "We're going to have foreseeable struggles for the state of California, but it is encouraging that we have better news for both new home sales and existing home sales."


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