Considering that Vikash wrote this post three years ago, it was, at that time, just the start of the credit problems in California. We were seeing short sales occurring more often in areas like parts of Southern California and around Sacramento and Stockton. I can say with assurance that, since that time, things have been drastically better for many home buyers. At present, we are looking at some of the lowest interest rates in history and home prices at historic lows. However, in many parts of California home prices have increased as much as 25 percent from their lows of 2008, so housing is finding resurgence as well as strength in today's market.
With all due respect to Peter, the credit crunch, if not over, certainly has found a "level." While I'm certain that interest rates will rise and down payments will be required to go up to at least 10 percent for even the FHA first time home buyers plan (203b), we are still looking at credit being available by many major lenders. What we are not seeing, however, is "free flowing" cash from 2007 and prior that led to the foreclosures of today, and home buyers seeking mortgages must have traceable income as well as documents to prove their credit worthiness. And, in my opinion, that is how it should have worked all along.
It's always easy, if not highly enticing, to incorrectly cite information with the intention of creating panic. We see it so often here on Trulia--home buyers hoping for further housing crashes and supporting those theories with (often) quite impressive mathematical gymnastics and home sellers hoping to "time" an entry into the market--that it's become common to see serious questions often answered with overly encouraging or discouraging information. Unfortunately, again, with a State as large as California and with economies varying greatly by region, each area will have different selling and buying characteristics, so determining how many foreclosures will come on the market is discrete to each location. Loans, statewide, however, are still available.
California is certainly not like other parts of the country and with a state as large as ours, we do have specific regional differences which contribute to healthier economies in the Bay Area and parts of LA and San Diego, while also experiencing far less economically stimulating situations in other pockets of the State. Admittedly, we are experiencing slightly higher unemployment than the rest of the country at--NOT 22 percent unemployment--12.6 percent (as of March 2010) statewide, but there has been great job retention and far less loss (based on percentage of population) than may have been experienced in other states.
So to learn about the market in any part of California, it's best to speak with a trusted real estate professional in the area. If you were to speak to me of Santa Clara County, we'd have to say that the market here is vigorous and that our inventory is down to 1 and1/2 months with shorter selling cycles, multiple offers on many homes, and an increase in prices of about 10 percent from the start of the year, so it is a good market in our area. This is not to say that this same situation is occurring everywhere in California, but certainly many parts of the State are enjoying a robust real estate market now.
Good luck in your home search, Vikash, and I'm hopeful you have sold your old home and purchased a new home by this time!
Grace Morioka, SRES
Area Pro Realty
San Jose, CA