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http://www.cleanmpg.com/photos/data/2/AmericanFlag.jpg The statewide median price fell to $224,000 last month, compared to $383,000 in January of 2008, San Diego-based MDA DataQuick said. (businessweek.com/ap/financialnews/D96EVJUG0.htm)

http://www.cleanmpg.com/photos/data/501/Home_Forclosure.jpgJacob Adelman - AP ( ap.org ) - Feb. 19, 2009

For some, it may be best to turn in keys and simply walk away... -- Ed.

The median home price in California dived a whopping 41.5 percent from a year ago, as deeply discounted foreclosures drove down the market to a level last seen eight years ago, a real estate tracking firm said Thursday...

It was the lowest median price posted since May 2001, when the statewide figure was $220,000.

DataQuick President John Walsh said the plunging prices have motivated many first-time buyers, investors and others to stop trying to predict when prices might hit bottom...

Foreclosures accounted for 54 percent of sales in a nine-county region of Northern California and 58 percent in six Southern California counties last month.

The median home price in the nine-county region of Northern California plunged a remarkable 45.5 percent in January from a year ago. The figure stood at $300,000 last month, compared to $550,000 in January of 2008.

In a six-county region of Southern California, the median price fell nearly 40 percent to $250,000 last month, from $415,000 in the year-ago period… http://www.businessweek.com/ap/financialnews/D96EVJUG0.htm

I may be looking to buy a home in a couple of years so I guess I could view this as good news. I feel very sorry for those who have lost their jobs and are stuck in mortgages however.

That is a mind boggling drop! :eek:

That is a mind boggling drop! :eek:

I don't find it mind boggling. I have been expecting it for years.

I hate that it happened, but the housing prices never should have been that high to begin with.

Why do you think so many of the "house flipping" shows were done in CA? An improvement to a house that, in other locations, would improve the value by $20K instead improved it by $60K.

I shudder to think what my house would have cost out there. Half a million?

It's a big lesson for the people who bought beyond their means, hoping to get rich off their homes. I figure I can still sell my California home and buy two in most of the rest of the country.

CA home values have been overinflated relative to incomes for a long time. Still, a correction like this is awfully painful to a lot of people, and is going to cause just as much hardship and suffering as the overinflated prices did.

Much of the excess was driven by investor greed IMO. I feel bad for the homeowners who had little choice but to buy near the top of the market (hey, when you need a house you need a house) and are now hosed.

The statistical drop may be a little misleading because the composition of home sales changes when economic activity drops dramatically. That is, lately sales of pre-owned homes have dominated over typically more expensive newly built housing. The value of specific homes probably has not dropped so much (unless perhaps they were McMansions which usually lose value anyway once they age and become McWhiteElephants!)

Oh no. The price of individual homes has definitely dropped here in CA. The median home price in my town has dropped to half what it was in 2001, from $500,000-600,000 down to $250,000-300,000 for used homes.

I was considering hauling my shed to Calif and selling it for 200K or so, prices there have been silly for a long time. Watching shows on HGTV for first time home buyers where people walk into a house <1000 square thinking that 500K is a good price...

I was considering hauling my shed to Calif and selling it for 200K or so, prices there have been silly for a long time. Watching shows on HGTV for first time home buyers where people walk into a house <1000 square thinking that 500K is a good price...

The hard part isn't just the land, it's getting the utility hookups too. When I bought my first house (1500 sq ft, built 1919) in the Midwest in '92 it cost less than a friend's utility hookups in the SF Bay Area. I've heard of places in CA where they cost over $50K. Crazy.

I guess they didn't want more people moving into the neighborhood.

For some, it may be best to turn in keys and simply walk away... -- Ed.


I'm not sure about California, but part of the reason many individuals are being ruined is that certain states do not allow you to "walk away" with only the foreclosure. In those jurisdictions, the bank can auction your formerly $330k home for the current value of $220k and then come after you for the remaining $110k that they lost on the transaction. In the world of personal economics, I have a hard time thinking of a more depressing situation. :(

Hi Tim:

___Good point... Let us hope there is a bankruptcy equation to those situations.

___Overall, it is not about the over inflated home prices because they were what they were; it is the deflation from those that purchased within the last 5-years.

___We were looking in Alameda back in 06/07 just across the San Francisco Bay and it was because my wife's work location moved. Prices for a decent house within walking distance of her site cost over $900,000! If we would have moved, we would currently be under water to the tune of maybe $400,000 and it would have had nothing to do with making a quick buck by flipping or speculation, home prices simply were what they were. You either pay or you do not move in.

___All I can say is we got lucky we did not move as the real estate price increases were not nearly as evident in Chicago and neither was the fall. The fall is hurting however.

___Good Luck

___Wayne

... In the world of personal economics, I have a hard time thinking of a more depressing situation. :(

Bankruptcy sucks. I have a cousin in Fla who is in that real estate situation. Two kids in elementary school--he lost his job managing new housing construction just after his company relocated him there a couple years ago--he and his wife can't cover payments with his new part-time job as an exterminator and hers as a nurses aid. He needed help from relatives to travel to his mother's funeral a few weeks ago. God forbid that any of them get ill--his brother and I'll be supporting them. But not everybody has family, so maybe he's lucky? The story could be even more depressing. The sad thing is that a lot of people are in that situation.

Bankruptcy sucks. I have a cousin in Fla who is in that real estate situation. Two kids in elementary school--he lost his job managing new housing construction just after his company relocated him there a couple years ago--he and his wife can't cover payments with his new part-time job as an exterminator and hers as a nurses aid. He needed help from relatives to travel to his mother's funeral a few weeks ago. God forbid that any of them get ill--his brother and I'll be supporting them. But not everybody has family, so maybe he's lucky? The story could be even more depressing. The sad thing is that a lot of people are in that situation.

It is a very sad story, and a widespread one I suspect. If this economic stimulus package doesn't start turning things around soon, we are all in a hell of a mess. Even if we can defend ourselves personally, we all have close friends and family who will get hit. I don't much like the gov stimulus, but I like a depression even worse. This whole thing has a very bad feel to it. As we collectively loose confidence, we start hunkering down and saving money, probably making the situation worse.

Clearly there was a home price bubble. Folks should have refused to buy a long time ago at the prices being demanded. That may have helped, but that is just Monday morning QBacking at this point. The gov should have not encouraged folks to buy beyond their means, but again that's Monday morning stuff. I think that we are going to need to start trying to help our fellow man a lot more - soup kitchens, clothing drives, that sort of thing.

Sad, sad. :(

The hard part isn't just the land, it's getting the utility hookups too. ... I've heard of places in CA where they cost over $50K. Crazy.
I guess they didn't want more people moving into the neighborhood.

If its anything like my community, they do want people moving in. But the government run utility districts need money, and new homes are a captive market -- pay up, or the home or lot is unusable. And who is going to abandon a newly built home just because of a power connection fee.
And a water connection impact fee.
And a sewer connection impact fee.
And a transportation impact fee.
And a fire sprinkler connection fee.
And ....

Of course, there is no one clearinghouse to disclose all these fees in advance and coordinate all the permits. That might scare some potential homeowners away.