Salinas is having gang problem right now. Search about crime / homicide rate in Salinas, and you will find out why people avoid buying a house there. People from nearby cities (including me) avoid going to Salinas at night time.

If you look at the areas that saw the highest growth in the least amount of time (Salinas, Seaside), you'll find the highest number of foreclosures. Many of the people who were foreclosed on, were speculators... hoping to see a quick return on their purchase (not I did not say investment as many of these were 100%+ financed properties so the owners had nothing invested other than that which they put into it after the sale and/or emotional investment).

In recent years, the Monterey Peninsula (Carmel, Pebble Beach, Pacific Grove and Monterey) has had a lot of second home buyers that are purchasing properties as vacation homes. Many of these buyers are paying all cash and have no loans to default on. This area is one of the most desirable areas arguably in the world, which certainly doesn't hurt the home values here.

Salinas houses the bulk of the work force for Monterey County. There is (or was) a huge discrepancy between median income and housing affordability in our county. If I remember correctly, in October of 2005, Monterey County was 1one of the 10 least affordable places to live in the United States! When the market was hot and qualifying for a loan was easy, many working class people in Salinas (as well as Seaside, Marina, North and South County) who never would have been able to qualify for a conventional loan (20% down, 80% financed) bought a house with 100% financing that they ultimately could not afford. I believe many were hoping to be able to flip the house in a year or two and be able to make enough money to afford to buy a home they could afford with a 30 year fixed loan. Unfortunately they were unlucky and the market caught up to them.

As a real estate professional in Monterey, I can tell you the long and short answer.

Property values have held quite steady in Monterey and Pacific Grove. Salinas is deep underwater on value in many areas, but there are areas called "Salinas" like Highway 68 where you don't see much foreclosures. If the economy continues, you will likely see more. I was looking at a graph of subprime loans that were adjustable rate mortgages. The loan "resets" were peaking in July of '08. I think this is reflected in Salinas.

On the other hand, Alt-A loans (good credit but with "stated income" like a business owner would claim) were due to crest at reset in 2010. I suspect that many in Monterey have these type of loans and if the market doesn't appreciate soon, you'll see Monterey and Pacific Grove start to have more foreclosures then.

G White,
Monterey is a destination spot with plenty of employment, not to mention the beautiful landscape!
Salinas has grown a little, but like alot of areas, Salinas has plenty of blue collar jobs with homes that only a white collar salary can handle. Unfortunately as previously stated, residents of Salinas have been caught up in the sub-prime loan mess. I heard a speaker touch on the American Dream of home ownership the other day. She said that we all believe in the American Dream, but not without a downpayment and certainly not without being able to afford the mortgage. Home ownership was made way too easy and now unfortunately we all have to pay for it!

Charles

I believe there were more new homes built in Salinas and likely they were sold with Adjustable Rate Mortgages. Monterey is a highly sought after area and property values remain high for most areas.

There usually are a variety of reasons. Job related, personal financial strains,a variable mortgage that adjusted, etc. You would be shocked at the number of foreclosure in the Inland Empire in CA, 2nd in the nation. There are streets with many homes on the street in Foreclosure.
Thankfully many of the unscrupulous and greedy lenders are gone and the requirements are now back to normal so this should never happen again.
In Monterey many home owners bought prior to the Mid 90s boom

If you are intersted in receiving some detailed reports about Salinas or Monterey please let me know

Kind Regards
Michael Barron
Realtor