Across the state, sales rose for three consecutive months starting in April after 30 straight months of declines, the California Association of Realtors said. About 40 percent of those transactions were foreclosure sales, DataQuick Information Systems reported.
“California is having a wrenching decline in wealth, but this is a cathartic event that will lay the foundation for a recovery,” said Mark Zandi, chief economist at Moody’s Economy.com in West Chester, Pennsylvania, in an interview. “This signals the beginning of the end.”
The not so great news:
Almost $1.3 trillion of homeowner equity was lost in California since home prices peaked in December 2005, Zandi said. Discounts of as much as 50 percent will extend into 2010, helping clear a glut of foreclosures and leading to a more balanced housing market, said Ryan Ratcliff, an economist at the Anderson Forecast at the University of California in Los Angeles, and Christopher Thornberg, principal of Beacon Economics LLC in Los Angeles.
And the question: considering sales volume in San Francisco has actually declined over the past two months, and the number of foreclosures within the city remains rather nominal (but is growing), have we had our “cathartic event” or are we going to be late bloomers?
∙ California’s Discount Foreclosure Sales Point to Housing Bottom [Bloomberg]
∙ San Francisco Recorded Sales Activity In June: Down 9.8% YOY [SocketSite]
∙ One Antithetical Quote To The “Foreclosures Aren’t Comps” Argument [SocketSite]