An impossible task, to make an informed decision without commencing with a smart search online of California foreclosure listings. The most populous state in the nation, the state with the highest number of households, is also the state that tops the nation in foreclosure filings. Latest headlines suggest the number of foreclosures is the highest in a decade, and likely to remain so for some time.
Five counties account for more than 60% of the foreclosures filed. Los Angeles county (LA and Long Beach), its neighbor Riverside (Riverside, Moreno Valley),San Bernardino, Sacramento and San Diego (San Diego, Chula Vista, Oceanside) are the five that lead the way. The rate of filing, 1 in every 103 households in San Joaquin is an unimaginable 7 times the nation's rate. California contributes around 24% of the total US foreclosures, every month.
Home sales volumes are well down, house prices are starting to fall, it certainly is all favorable to the buyer, and these are very bad signals for the borrower who will find it ever increasingly difficult to sell in time to cure the default and stop foreclosure. With credit drying up as standards are tightened for mortgage underwriting, as subprime and so called 'liar' loans' become more restricted; expect housing sales volumes, especially those of the lower priced single family homes, to fall even further. Without this source of finance some borrowers in a squeeze will be simply unable to refinance and avoid losing their homes and any equity they may have had.
Expect the listings to swell to bursting with new filings and higher unsold inventories of bank owned property. Expect foreclosed homes to sit vacant for months. Expect that, finally, previous resistance by lenders to be receptive toward short sales in pre foreclosure, and to significant discounts to move REO property along will fall away. The buyer will have his day.
