California freefall: Home prices down 26% in February

Signs of distress are piling up in the California housing market, where prices are falling at three times the national rate of decline.

--Statewide, median sales prices fell by a stunning 26% from year-ago levels in February, with home prices dropping at a rate of nearly $3,000 a week, the California Association of Realtors reports. Further, the CAR says the Fed's interest rate-cutting campaign "will have little near-term direct effect on the housing market."

--In the San Fernando Valley, losing a home to foreclosure is now almost as common for families as buying a home. The L.A. Daily News: "During January and February, there were 1,084 foreclosures and 1,335 sales of houses and condos in Valley communities from Glendale to Calabasas, according to the San Fernando Valley Economic Research Center at California State University, Northridge."

"It's bad. It's really bad," market analyst Nima Nattagh told the Daily News.

The California Association of Realtors  reports median prices fell 27.2% from year-ago levels in the hard-hit Inland Empire east of Los Angeles, 30.9% in Sacramento, and 39.1% in Santa Barbara County.

On a percentage basis, the California price meltdown is more than three times as severe as the national decline of 8.2% in median prices reported this week by the National Association of Realtors. On an absolute basis, the California meltdown is even more severe: Nationally, prices fell over the past year at a rate of $338 per week; in California, prices fell at a rate of $2,788 per week.

According to the CAR, "The median sales price of an existing, single-family detached home in California during February 2008 was $409,240, a 26.2 percent decrease from the revised $554,280 median for February 2007." The February 2008 median price fell 4.8 percent compared with January’s revised $429,790 median price.

"The Federal Reserve Bank’s recent action to reduce the federal funds rate will have little near-term direct effect on the housing market," said CAR Vice President and Chief Economist Leslie Appleton-Young. "However, Fed rate cuts should result in more favorable real estate finance rates as we move through the year."
 

Median home sales prices sometimes exaggerate swings in market activity. A year ago, median home sales prices in California continued to show price gains, even though the market downturn had begun. At the time, the collapse of sub-prime lending had the effect of freezing the lower end of the market. With fewer sales of less expensive homes, the market was dominated by sales at higher price points, and median sales prices showed gains.

The opposite appears to be happening now, as lower-priced foreclosed homes come onto the market, increasing sales at lower price points, while the market for more expensive homes has slowed dramatically.

Thoughts? Comments? E-mail story tips to peter.viles@latimes.com
Photo Credit: Associated Press

Comments

[Santa Barbara Real Estate Voice]

Peter,

Thanks for the post. I just read a few articles about this in the last few days. Here in the Santa Barbara area we are seeing huge reductions in prices in certain areas while others are remaining fairly stable (having reached a bottom seemingly). The problem for us with a lot of these statistics is that they include Lompoc and Santa Maria for Santa Barbara and these markets are very different.

With that said, we are seeing a fair amount of activity in the last 7-8 weeks with a lot of pending sales. No price increases to speak of but a lot of activity. Condos though are still up in the air.

[John]

I am ecstatic to see the collapse of home prices in California...I do feel sorry thought for middle class families that were duped into bad loans.....Yet, it is great to see this collapse in the real estate market happening....

[Joe smith]

More hysterical nonsense.

The drop is related to foreclosures being dumped on the market........skewing the numbers.

Ignore this nonsense

[John]

Let's see some more on the positives to come from the CA housing correction.

Greedy idiots will be punished.

What's left of the intelligent and rational middle class will have a higher likelihood of being able to afford a decent home without moving out of state. (A few months ago, you needed a 6-figure household income to afford a home in L.A.'s worst neighborhoods.)

Our politicians will actually have to show leadership and think and make difficult decisions, since they can't just ride along taking credit for the sunshine and ongoing prosperity. (Business punishing laws and taxes, combined with terrible public schools and a high cost of living IS NOT a recipe for sustainable community and economic development.)

[Mark]

Median prices were half a million..hahha..What a joke. People don't have that kind of rea money. Living way above their means. I hope they are all homeless for years. They have cost people who do it the rigfht way much now in taxes and stoack market collapse.

[Darrell]

The California prices were inflated and overpriced to begin with. Who wants to live in a liberal state where you are taxed to death, gas prices are inflated due to everyone bowing to the extreme environmentalists?

Sell those houses to graduating students from Berkley....oh wait, you have to be productive human being with a job to get a house.

[Jim Roof]

To say that median prices are down 26% does not necessarily mean that every million dollar home is now worth 740K. It could mean that million dollar homes are sitting on the market while 500K homes are selling at a brisk pace. It could mean that there are no more million dollar homes ON the market and all the 500K homes are selling slowly.

The headline alone does not really tell a complete story.

[Tony]

Who could be surprised by the California real estate price meltdown? Many parts of that market have been grossly over priced for years!

[Dan]

"the median sales price of median price of an existing, single-family detached home in California during February 2008 was $409,240..."

That's still very high, something like three times the national average. CA prices are falling far because they had climbed to such ridiculous levels.

It's bad, but it was an inevitable correction.

[Etosamoe]

This isn't a big surprise. Home prices were 3 times higher in CA than the national average, it makes sense that they would fall at 3 times the rate. The CA median home price is still double the national average. I think it still has a ways to fall before normal people will be able to buy a house.

[George]

The first stage of a real estate recovery has to be price capitulation, which we are now entering. While painful for the people who bought at inflated prices, the price adjustment to more realistic levels will help people who are now able to buy or will soon. CA home prices got disconnected from reality. Reality is back in Vogue.

How long will it take for the excess unsold homes to get to "normal" levels in So. CA?

[We Help-U-Buy Guy]

Sales volume is up dramatically at the low end of the market. The banks are putting their inventory of foreclosures on the market at well below market prices and it has spurred sales. It's not uncommon to see 5 to 10 offers on properties.

All the action is on properties under $500,000 that are priced 25% to 40% lower that two years ago. While sales numbers will be up, the median price is going to plummet when it get's reported for March and April sales.

[Cal]

Since the realtors have been utterly unable to manage seller expectations (i.e. list price) in this protracted down market, news like this will help to do so. Volume will start picking up and inventory will start dropping, all signs the real correction has begun.

Prices falling at $2,788 a week, imagine what that does to buyers urgency.. If I dont buy today I will just get tmw for cheaper. This psychology wont change until prices hit a fundamental support level defined by available financing, the local economy and available effective demand (demand backed up by purchase power).

[Steven]

California sucks. Prices are falling because there are too many illegal immigrants there. We should deport them all. Prices drop in neighborhoods where 45 people are sharing a single family home.

[Mike]

The headline is misleading. The fall in prices is a year to year number. The headline implies that the fall took place in Feb. The rise in prices over the past few years was stunning, not surprised by the decline. Maybe the people that could not afford houses can afford them now. Following every foreclosure is a lucky buyer....

[John Norris]

you fail to mention California real estate was increases at 3 times the rate during the housing boom. therefore California will be hit at a larger scale than the rest of the nation.

[bruce hughes]

The average sales price is not a reliable indicator of much of anything. It just means the more expensive homes are not selling, so the average sales price has declined. It's analygous to presenting the average height of people who stop at starbucks during any given time period. If in a selected time period, the averge height of people at starbucks is 5'0 feet, then the conclusion would be that americans are getting shorter. It's just meaningless information.

[Sarge]

Holy mother of all misleading headlines - - home prices didn't "fall 26% in February;" they fell 26% in ONE YEAR, from February 2007 to February 2008. Based on the numbers in your own story.

I realize LAT reporters are challenged by the hard subjects such as math and statistics, but you would think they could at least manage to read a calendar.

[KiplingsJungle]

They home prices in CA need to keep dropping another 26%, then they might actually flirt with reality, every home in California is significantly overvalued and unaffordable to the average person.

[Earl Lutz]

wow another 400% and most of us in the real world might be able to aford to live there...

No, maybe not.. your taxes are still SKY HIGH

[IToldu2CashOut]

Looks like my broker was wrong when he told me last month it was the perfect time to buy. This is going to take years, but what we are seeing is a good start.

[Frank]

The housing slump is more than just a reaction to immigrants, or bad banking policies but a history of bad credit in our country. The credit bureaus have caused rates to go up for the poor working class Americans and good viable commerce cant be sustained by only groups with good credit. Penalizing the poor with higher interest rates only hurts the general public. Either don't give loans to the poor or expect this to happen every time we have 15 years of stagnant wages in this country. Until companies start paying American's wages that keep up with the cost of lving you are going to have the same problems in the future.

[Chris]

This is really, really good news. We need to flush the fraudsters and the speculators out of the market. Lower prices mean less borrowing and more families can afford to buy a home. Another 50% drop and we should be about right, given the 100% run-up in the bubble and the many new units that were built.

[Condo Sitting in LA]

Thank goodness that the CORRECTION is finally taking place and my wait is over. Maybe now I can, with my $150,000 income, afford to purchase a home.

[yourkillingmelarry]

Peter,

How is the traffic today, you got posted on Drudge. Way to go!

[Arti]

What's frustrating is that some of us Angelenos keep reading about these dramatic 20%, 30% falls supposedly in LA County, and yet there is no hard data showing any such reductions at all in Santa Monica, Brentwood, Palisades, Beverly Hills, and West Los Angeles. Is there any data on these nice areas??

[Cal]

The MBA mortgage application index this week was showed incredible increase in refi applications.

The fed may not really afect long term rates when they cut, but they clearly do affect short term psychology.

Refi apps up 82%, ARM share of all apps 3.8% (by far the lowest since i've followed the index)

http://www.mortgagebankers.org/
NewsandMedia/PressCenter/61128.htm

[Jimmy]

$3k a week in losses? Ha! That'll learn those flippers...

A little off topic, but when is this "crash" going to hit San Francisco?

[Rick]

Yikes!!

[Rich]

The $409K home - in reality, should be selling for $250-275K. Will it get that low??? You bet-- even lower.
"Normal" banks used to use an income ratio of 28% - that would be 28% of your net income can safely go to mortgage and taxes... after you put down 20% of the selling price. What are people's salaries/incomes in a given geographical area? You figure it out - and that's where real estate is going. Back to historical normality.

[howardhofelich]

I think this is just the beginning. Wait till after the election. I predict MASSIVE foreclosures...have not you dummies figured out that a homeowner only makes 1000000 dollars in entire net income in a life time? Then how can a man pay half his income in his life for one of your shoddily made homes..California deserves massive depression...no industry that produces anything tangible, overpriced dwelling cost and skyrocketing costs like food, utilities, transportation, gas. Bankrupt your State treasury first and then elect conservatives to punish your liberal jerks who have ruined the rest of America. You deserve the worst possible retribution.

[Richard]

I've noticed that real estate corrections tend to take California median price back to 1.5-1.75 times the national median. If this again holds true, California has a ways to go, and if California is done correcting, it must mean that it's time to buy in most of the country - but I doubt that is true just yet.

[Slick Barry]

Hillary Clinton wants to put a mortgage crisis team in place? Barack's plan? Please read..........

www.slickbarry.com

[Figueroa Slim]

Hillary is at least trying to make some changes in the mortgage business. McCain doesn't wnat to bail the banks out. Barack "Slick Barry" Obama has nothing. Just more speeches about Hope and Change.
http://slickbarry.com

[romeo]

how do these past 2, 3 or 4 year statistics compare in the Truckee-Tahoe (north east) area of Lake Tahoe?

I would think that BOTH rents and home sales have provided a much more stable - and in the case of rents, perhaps even an increase - due to some potential buyers renting or leasing with option to buy in lieu of buying outright during these recent years.

[kat]

Well, I see some people are finally questioning some of information they are getting from the media. Excellent.

I agree with other posters who are saying that this information is sensationalized. Like other posters have noted, our host doesn't mention that SoCal home prices rose at several times the national average during the madness. Even if they drop another 25% home prices still overall, rose more in So.Cal over the past five years than anywhere else in the country (besides the other hotspots). The rest of us are usually happy with single digit appreciation in any given year. Our host also fails to mentions that this "drop" (return to the real world is more like it) now means that a 1000 sq. ft. starter home with two bedrooms and a bath is now "only" $450,000 or so compared to the $600,00 it was.

This sort of wild headlines gets these stories on Drudge and the national news. Remember that folks before you buy into this hysteria. And remember, as these scrubs are losing their homes, the houses are coming on to the market - it’s supply and demand, prices go down. This is normal folks. What was going on before the bubble burst was not.

[rick]

"More hysterical nonsense.

The drop is related to foreclosures being dumped on the market........skewing the numbers.

Ignore this nonsense"

What a moron....must be a realtor. Because now is a great time to buy a home.

[Robert]

Peter,
Thanks for the article. I find it interesting that when the housing prices were skyrocketing in California, i.e. going up much higher then in other areas of the country, nobody complained at all. Some even felt that it was some kind of entitlement so to speak.

Now that the bubble has popped it makes sense that California's housing prices would plunge more then other areas of the country are simply because California's prices went up faster and further.

So where are we at now? The housing bubble has popped and the prices are coming back down. Sooner or later (probably later) the prices will bottom out. The so called experts claim that another 40-60% of value will have to come out of the market before it levels off. This means California will be down anywhere from 66-80% in value.

Things will then cruise along and the bottom will then become normal pricing. Then in 3-15 years we will have another real estate bubble, the prices will go up again. People will have long forgotten the pain they have gone through now and thus the cycle repeats itself. Much like when the fires of California burn peoples houses down, or earth quakes strike, then everybody rebuilds, then 10-20 years later it happens again.

Thus we will see the cycle repeat itself over and over again.

Cheers,

Robert

[Bill Goodman]

If I had a house in California worth a half million, I would sell it and buy the same thing in Georgia for $150,000.
I have a 3 bedroom, 3 full bath house on a one acre wooded lot that lists for 150K. This California problem started long ago and the rest of the nation does not need to bail them out. This is nothing more than a long overdo correction and a problem that exists only in over inflated markets.

[Real Estate Guru]

These figures are vastly distorted due to the median prices....MEDIAN prices! What is selling(forced to sell) are the foreclosures. Those figures get reported, and hence you get a fear-based article like this one is that California is falling into the sea. Most people are selling as needed, or staying put right now. The interior of California is taking a huge hit due to demographics. Need I say more? The coasts are still holding fairly well in terms of prices. We have seen this before. The winners are the people who just relax and stay put.

[TC]

Huh... So some people on the board want to ignore the bank owned properties coming on to the market. I thought a seller was a seller. It doesn't matter if the seller is a bank scared to death to see these slightly used homes build up on thier balance sheet or a shell shocked homeowner still holding on to unrealistic selling prices. Everyone should know that prices are coming down everywhere (even downtown Santa Barbara). If you are looking for a home, get a membership to realtytrac and take a look at all the fine homes in the best communities that will be going to auction. You will be shocked. Good luck

[Dennis]

Too many people spewing misinformation on this thread!
e.g. Dan wrote that the $409k is 3x the national average.
Obviously he does not know the national average. So why spit something out if you don't know?

California averages should always be above the national average. California locations will for the forseeable future be some of the most desirable locations to live in the USA.

So what is the current national average?
Announced Feb 14, 2008 its at $206,200

3x that price means $618,000...

So actually CA median prices are only about 2x the national average.

CA homes should be at minimum 1.75x the national average.

Some professionals are probably already determining that CA prices are too low now! This market is over-reacting/over-correcting!

Which means that the bottom in prices will not be at fair value, but will end up at severely undervalued..this is called over shoot.

If a market that was traded speculatively like homes were in the last 5+ yrs..then it should price like a speculative mkt.

We're all at fault here for letting our homes trade in the mkt like some sort of stock market. We should have never allowed homes to be flipped, never have allowed apps with bogus information to be unchecked and unverified, never allowed to take out 100+% home equity loans (I heard of 120% in Colorado), never have allowed adjustable rate mortgages to exist in the first place.

Its our fault for turning our homes into a leveraged speculative investment rather than a solid asset that should be protected and revered.

Homes should never be flipped and they should never be speculated upon. Since in speculative markets more than 90% of the participants are always wrong!

Do we really want to turn our homes into some sort of futures market like cattle futures,,with huge rises and declines ..which that the only people that make money are people like Hillary Clinton?

[Jerry S.]

Anti-growth, anti-business policies of the state are finally catching up. Our esteemed legislators I'm afraid have finally killed the goose that laid the golden egg. Taxes regardless of the class they target are in the end paid by everyone. It's like removing a species from an ecosystem. Eventually the whole ecosystem is endangered. Taxes can be either direct or in a more nefarious way indiect through over regulation--all of which are a cost that we all must pay. In essence, the wealth generators have been driven from the state leaving behind a big vacuum where real estate prices have been sucked down the pipe. What's really amazing is the fact the people in this state continue to elect a democratic controlled legislature that persists in over taxing and regulating our economy--and hence our lives as well. But markets are bigger than anyone, including the most crafty legislators, and in the end they will have the last say--or laugh.

[ILoveCal]

"Prices are falling because there are too many illegal immigrants there. We should deport them all. Prices drop in neighborhoods where 45 people are sharing a single family home." ... Hmm, I thought prices are dropping because of a bursting of the housing bubble (i.e., a rapid increase in prices unsupported by underlying economics). Did those 45 people cause the bubble, too?

[Dr. Joseph Thomas]

I have absolutely no compassion or sympathy for the individuals who bought homes that sell all over the country for ½ to 1/3 the California prices. Californians somehow believe their state is Nirvana, and as such feel the economic conditions of the rest of the USA do not affect them. High property taxes, high income taxes, high sales taxes, high licensing fees for business are just a few of the things wrong with that state, and then add their willingness to support millions of illegal immigrants. Add to that mix hundred of thousands of fools buying homes with poor credit and getting a 110% loan on top of it all, then as the “value” of their home went up, taking out a second home equity mortgage. How anyone has the nerve to call these fools victims is beyond anyone with even a rudimentary understanding of economics.

[John]

It's good to see that home prices in California have begun their trip back to the normal, affordable range. Affordable. That means to level where the typical person can actually afford to buy one.

Did people really think that the prices would continue to go up forever? Anyway, if you have a house for sale and want to sell it, lower the price. Really lower the price. Look for a 50% decline from here over the next few years.

[Stephen]

Great News! Housing prices are finally coming back down to earth. The ridiculous bubble has finally burst.

[Mr. 909]

One week ago a 3200 sq.ft. house in Beaumont sold at an Ontario foreclosure auctiion for $84/sq.ft. Banks have to liquidate this garbage to stay afloat.

It's only just begun.

[Mike]

Prices didn't fall 26% in February. They fell 26% over a period of one year, measured from February 2007.

Does the LAT have editors anymore? Or is the subscription rate falling so fast that any headline, no matter how misleading or sensational, is ok if gets someone, anyone, to read their product?

Just another reason that I canceled my subscription to the LA Dog Trainer years ago.

[Bob]

But, not everywhere -
See http://www.car.org/index.php?id=MzgzNzM
Ridgecrest $186,000.00 $186,000.00 0.0%
Alhambra $481,500.00 $490,000.00 -1.7%
El Monte $444,000.00 $451,000.00 -1.6%
Los Angeles $548,000.00 $540,000.00 1.5%
Santa Clarita $560,000.00 $555,000.00 0.9%
Santa Monica $787,000.00 $775,000.00 1.5%
Westside $1,210,000.00 $732,750.00 65.1%
West LA $752,000.00 $759,000.00 -0.9%
Downtown LA/Central City $663,000.00 $710,000.00 -6.6%
SE San Fernando Valley $549,500.00 600,000.00 -8.4%
Beach Cities $1,180,500.00 $963,500.00 +22.5%
Palos Verdes Peninsula Area $1,150,000.00 $1,155,000.00 -0.4%

[DFS]

Wow, a link to Drudge and a flood of comments from conservative idiots! Coincidence?

[chuck]

Some of us in CA did quite well - we bought ,traded cashed out on rentals, and moved the money out of state into commercial buildings and industrial investments..

A price fall will only start the cycle again! I can't wait........ ...:)

[Dean]

I have never heard such nasty diatribe -- delighting in the hardship of fellow humans. Not being fond of CA, and the people who live there, is one thing -- to gloat over the dreadful plight of someone is another. Next time you watch a movie think of CA - chances are it was produced there. Stupid people.

[Gary Baldi]

What great news for us natives who are looking to buy a home. I hope all of the speculators, flippers, builders take it in the shorts and rot in hell. As for those of you who think the median price in California will drop to $250-275K, think again. There is still something known in economic circles as supply and demand. Demand is still there, albeit sequestered presently. Every hillbilly and his brother still wants to move out here. STOP BUILDING IN CALIFORNIA...WE ARE WAY PAST FULL!!!

[Outta SoCal...]

Steven is right. California (almost all of it) does suck. I just got the hell outta there last year. Entire state is being overrun with illegal aliens and the place is getting filthier year by year. Horrible public schools, high crime, gangs everywhere, you name it. The only people moving into the state anymore are from Latin America or Far East Asia. Most American citizens now realize what a third world pit it has become. Find somewhere decent to live and let California collapse as it should. And to think, several decades ago it was the crowned jewel of the USA. Thank you, open borders idiots. Just look around at what you have allowed to happen. You should all be in jail.

[George]

No one can carry the overhead that California's taken on forever. Get rid of the criminal alien invaders (illegal aliens) and watch the recovery. Keep things as they are in "Mexifornia" and watch the continued meltdown as the productive members of society flee for other states. How many teachers are we firing again? This is just the start! Don't believe Bush when he says things will get better. Things happen for a reason, including meltdowns and recovery. If we want recovery, we must change what put us under in the first place, which is the Grand Welfare Giveaway that California has become especially to illegals, criminals all to one degree or other, starting with their very presence here. They are an infestation of our economy that must be terminated like the tumor that it is.

[Richard]

Ha, ha, ha. Remember all the "housing prices never go down" people a couple of years ago. I have been vindicated. People thought I was crazy for suggesting that all these high-priced homes would be in foreclosure. And stop with the "I feel sorry for people being duped into bad loans" garbage. People have to take responsibility for themselves. If they only make $10/hour, they should have been smart enough to figure out that they couldn't afford a $500,000 home. Funny how all the "economists" missed this one when all it took was a bit of common sense. Whatever happened to their "soft landing?"...fools! I'm loving this. TANK BABY TANK!!!

[ehillesum]

Hello California from a friend in Michigan:

My wife and I have watched shows on HGTV over the past years where these dumpy little 1000 sf ranches were listed for 4 and 500,000 dollars and more in CA when you could buy one of them for 80,000 bucks here. Now I know your weather is great, but there is no way that the wages you make in CA can make up for that extra 4 to 500,000 cost for a little bitty house. Heck, for $150,000 here you can get a 1800 to 2000 sf house in a nice neighborhood with a big lot and more (I know, including snow).

Bottom line is that your houses were never really worth what they cost in the last few years--they were simply inflated by very low interest rates and hype. So many of you (the ones who have owned for several years anyway) are not losing anything but the illusory papergains you never really had.

[carl]

Bottom Line: California home prices have fallen from "Insanely High" to merely "Absurdly High."

[Tim]

We saw a very similar situation in the early '90's when an overheated Real Estate market came face to face with the collapse (in California) of the aerospace industry. I intend to do what I did then....wait for the market to bottom out, then go pick up a bargain or two!

See you next cycle (in say...15 years).

[JohnnyB]

Good news is good news.

[Stephen]

I have to agree with Dean, some of these inane comments of "hoping people are homeless for years" and such, are only the product of small minds. But the internet gives a forum to anyone to flaunt their ignorance and insensitivity.

[Philip Taylor]

The chickens have come home to roost. But this will have to turn around. Housing has been at a premium since the dawn of the Industrial Revolution when human population started to skyrocket. This is continuing, unabated. We have way too little housing in LA. Just look at rental figures and the mansionization that is occuring in many neighborhoods, including my own. That says it all.

[Outta Socal]

Yes, ILoveCal, the 45 people did help cause the bubble. I lived in a decent neighborhood and several of the new buyers were multifamily ones (hint, hint) who absolutely had no business getting any kind of loan to purchase a $500,000 house. Chickens are coming home to roost now.

Adios, Norte California...

[Couldn't be happier with my $1M beach cottage.]

Wow. A lot of angry losers from around the rest of the country laughing at folks in Cal. I guess that's why many of us left your crappy states in the first place. What's wrong with you, ehilisseum, mark, john, et al? Bitter, anger, grrrrrrrrr.... bunch of idiots.

[Brian]

The home prices in CA were climbing at least three times the national average and it makes sense that they are now falling three times the national average. People understand their home can increase or decrease in value and their decision to purchase to begin with. If you do as most and live in your home for 5 or 10 years the real value will come back, but if you were trying to flip houses you most likely got caught. These houses were not at the real value and now everyone in these markets is trying to run. You the individual who knew you could not afford payments should have known this and your financial institution should have know that also. Stop trying to buy more than you can afford and consider moving to another area where you can afford to live. Just because you want, does not mean you deserve and quit trying to take money from those of us who follow the rules and are meeting our financial obligations. It may be a hard lesson, however we the rest of America should not be responsible to "bail" you out when you are the one who made the decision to purchase that house. Since I purchased a truck 4 years ago and did not realize the price of gas would climb so high, can I ask you to start paying my gas bill?

[Jim]

Homes in California were ridiculously overpriced. This is just the west coast coming back down to reality.

[Enlightenment]

Lower Prices!
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[gioconda]

Hallelujah!

I gleefully await the utter financial devastation of the following groups of Californians:

1] Greedy yuppie "second home" SOB's that parade around like they are the Duke of Edinburgh and treat tenants like peons

2] Foreign "flippers" that drive leased $100,000 automobiles while 18 relatives whose names all end in "ian" sit on each other's laps in the back seat, flaunting gold leather accessories and babbling like geese

3] Hysterical Pacific Rim landlords that wail about their mortgages being "in the negative" as an excuse to use unlicensed contractors causing flames to shoot out of electric wall sockets and gas fireplaces, and birds to swoop into your house through screens that are 4 inches too short

Break out the bubbly! The bubble is bursting!

[wally]

I love seeing and reading about peoples misery. :)

[Sally]

I don't know how anyone stands to live in that hellhole of a state. Who wants to raise your children in a state where it is illegal to homeschool your own children unless the parent is a certified teacher, and if you do put your kids in public schools it's now illegal for textbooks to use the words "mom" and "dad" because the words offend the homosexual radical lobby (thanks to a law signed by RINO Arnold S.). A state swarming with crime and illegal aliens.

California sucks. It deserves what it gets when it goes so liberal a conservative can no longer afford a house.

[Daniel]

Let's see, in 1991 it went down 28% based off of a 30 year fixed, full doc, 20% down mortage. This time it's based off of a Zero Down, interest only, no doc, stated income, option arm, 2 yr fixed.
LOL, this is just the start. Don't let the year to year 26% drop fool you, thats only one year. add in another 6 months its over 30%.

http://youtube.com/watch?v=JkBjdxKJjQ4

[jim]

greedy real estate people are the real cause

[Steve]

Poor John...it must be difficult to go through life so bitter...

[firesale]

BURN, BABY! BURN!

[Tom]

From www.BayAreaVisit.com, the median price in California as Feb 2008.
San Francisco $870,000 San Jose $620,000 Oakland $530,000 Los Angeles $570,000 San Diego $460, 000

There are 12 cities over 2 millions.
Beverly Hills, Bel Air, Rolling hills, Brentwood, Malibu, Montecito, Rancho Santa Fe.
Atherton, Hillsborough, Ross,Belvedere, Portola Valley

[puckhead]

Congratulations. The prices are coming down and people on this board can now buy in Riverside, Pomona, Lancaster, Palmdale and other scorched earth locations in SoCal. Buy a house, be happy and please stay out of my neighborhood. Thank you.

[Ken]

Congress needs to bite the bullet and vote to kick California out of the union. Let's get rid of these wackos once and for all!

[Tommy T]

Robert: One problem with buying a house in Texas or Georgia. Who in their right mind would want to live in the south. Even with your low taxes and everything else, I would still work just as hard to live in CA. Your states will never even halfway amount to the importance of the Golden State. Thanks for Staying in our Shadow. LEFT COAST!

[JDZ]

Peter -- I've just read the comments and wonder if you could please stay away from the Drudge Report?

[jim andrew]

GREAT...now we can buy a crappy fixer upper for only $565K in Santa Monica....living large!

[edditor]

It's 1979 all over again.

[Rick]

A poster suggested ignoring these numbers because they are related to foreclosures. Try telling that to an appraiser. These are the new "comps," and mortgages will be based on these numbers, not on the fiction of the recent past. How many appraisers do you know who want to be sued or prosecuted?

[James Varela]

I lived in the Palos Verded -Torrance area from 2000-2001. I moved there to accept a job that paid more money than Florida but nowhere near enough to pay the double home prices in the LA area. This has been a bubble driven by land speculators that was going to burst sooner or later. According to Sacramento the vast majority of Californians earn less than $50k a year. You figure how much prices will fall !

[RYAN]

A solution to speculative bubbles is debtor's prison.

[susannah]

"No whining in baseball!" Prices went up almost 100% in some areas from 2003 to 2006. So, when your property value goes down 26%, you're still ahead 74%. If you re-financed when the prices were up, you took your profit then.

[Billy Bob]

This is the end result of greed and poor financal planning on the part of home owners, and a tough lesson worth remembering in the future. For every home that is forclosed upon, an angel gets it's wings.

[Eric]

I've been scoping around the prices around the inland empire for the last few months and have seen no price drops. I agree with the poster that says foreclosed homes are skewing the numbers.

[Rusty John]

Hmmm, I seem to remember Ron Paul introducing a bill in the House in 2002 to attempt to prevent this but he was dismissed as a kook or a nut- I don't feel sorry for anybody involved- you have homeowners who essentially leased a house for a few years and, in some cases, took out $60-$100k in equity, then stopped paying when the interest rates jacked up and declared bankruptcy- they are now "victims" because they lived in a home paying below market prices for three years and got away with 100k in equity. You have banks and realtors who were stupid enough to approve loans or sell homes that were ridiculously overpriced. The only people I feel sorry for are those of use who didn't have a hand in this who are paying to bail out these crooks and morons through taxes and the Fed printing(inflating) money.

[IToldu2CashOut]

Man when did the white supremacist's join this forum? Yeah house price are way to high here and they are going down, but CA still rocks and will continue to be the best place in the country to live. I've lived in every region in the usa and driven cross country many times and CA is the best in my opinion. We have high taxes but you get what you pay for. All these home school racist morons I'm surprised can even read. As far as democrats go, they are wrong on the bailout but right on most other issues. Certainly I don't want to see you idiots in charge who are blaming immigrants for a housing bubble.

[pokenhorn]

A California Classics home that sold for $20,000 in 1971 had ballooned to $240,000 in 1982 and $400,000 plus in 2000. This was nuts. Hello ??? Speculators ran this scam, which had to shake out at some point. That point is now. Hey, c'mon back to the Rust Belt. You can get 2400 sq. ft. in a gorgeous neighborhood for $215,000. No kidding.

[Rick]

"Prices went up almost 100% in some areas from 2003 to 2006. So, when your property value goes down 26%, you're still ahead 74%."

Actually, this is not accurate. In your example, you're still up, but only by 48%. Percentages are tricky. A 26% drop equates to the loss of a 35% gain. A 50% drop would mean that a gain of 100% was wiped out. Easiest way to work it out is assume $100,000 with a 26% loss. Now you're at $74,000. You'd have to increase the value by 35% (26 divided by 74) to get back to $100,000. If you lost 50%, then you'd have to double the value to get back to $100,000. Sobering.

[Tim]

I own a pretty average home in Corpus Christi, TX--1500 sq ft, 3br, 2bath, 2car, 1/4 acre wooded lot, hot tub in on the deck in the back. Excellent schools, 1 mile to shopping, low/no crime.

At current prices--$120K, no drop in value over the past year.

I have watched with amusement as houses like mine have gone for $500K in California. I used to live in Orange County, very similar area (except for a lot less traffic).

California is a victim of its own greed. I have absolutely no sympathy for ya'll. If you weren't so greedy this whole mess wouldn't be happening.

[Cali NATIVE]

Here is the real story in CA:

In 1999 a house in San Jose/ SF area cost 450k while in Los Angeles it cost 225k, in 2006 a house in San Jose/ SF cost 650k while one in LA cost 500k. In San Jose/SF the median HH income was already in the six figure range and still is, with unemployment about 4%, at the same time in LA, incomes were about 60-80k and unemployment was and is about 8 percent. This is where you have the disparities. In SJ and SF the median home prices have fallen slightly OR NOT AT ALL (Santa Clara county is 3-4% down while San Mateo county is +2-3%) WHY YOU ASK: Because the wage base in the San Francisco/ San Jose Area was already at the level to support such numbers while it was not in other areas like Los angeles or Solano Counties. The outlying counties around the metro areas like Solano, Merced, Sacremento, Modesto, Riverside, Inland Empire have been decimated, but the core urban areas have remained relatively unscathed. This is the effect of too much building 70-80 miles outside of where the jobs are. When gas was cheap it made sense to commute 80 miles each way to save 1200-1500 a month on your house payment. Now with gas prices doubled, it costs more to live in the cheaper house and commute.
Why live in CA over the po-dunk redneck south?
California is where the jobs are, IF it was a seperate country, California would be the 5th largest economy in the world (hmm I wonder where all that wonderful federal tax money we Californians pay goes to support, oh yeah the welfare ridden south- check the facts at the Southern poverty law center). People in Georgia can buy huge properties which they can afford on 60k a year, if they can find work. And what does that state rank as far as economies, 39th in the US and 412th overall ?; The only way to determine a housing market in this state or any other for that matter is the immediate area, lets compare 2 counties in what the US govt like to call the SF BAY Area Metro; Solano and San Mateo.

Solano Median Home Valuie 3/2006 485k
San Mateo Home Value 3/2006 697k

Solano MHV 03/2008 315k or 35% decrease
San Mateo MHV 03/2008 718k or +2.3%

These are two places in the same metro area according to the national assoc or realitors and the US Govt, but very different in terms of locality to high paying jobs and access (traffic) to other amenities. Solano is an outlying area with a long commute, and San Mateo is in the middle of the pennisula-silicon Valley. if you combine the whole metro area as the govt and so many sensationalistic articles love to you have a drop in the SF Bay Area Metro of 12-15% (Crap) its either way more or way less.

The only things articles like this do is show a macro view of what is essentially a micro problem.

"There are 3 types of lies; Lies, Damn Lies and Statistics"
- Samuel Clemens

[Digitalian]

How pathetic these non-Californians who come slithering in here to do a "brain" dump of their hatred, bigotry, and ignorance. All I can say is I'm glad that you all don't live here. For all this state's faults I gladly pay more to live here than any other place in this country. There are many reasons why homes will always cost more here than elsewhere such as: it has incredible natural beauty, great weather, tolerant people, and high paying jobs in the technology and entertainment industries for which this state is the world capital and which draw people here from all over the world.

[Moi]

We're all paying a high price...The real estate market was overpriced and only 1% of the pop. can afford those ridiculous prices of homes in CA, FL, AZ, or elsewhere! Haha...it's about time to smell the coffee and realise that you fakers should drop it!

[save your ammo]

THANKS, ORIGINAL THINKER. I've pasted your pricing chart on my bathroom mirror.

If buying in 2008 ... offer 2004 prices.
If buying in 2009 ... offer 2003 prices
If buying in 2010 ... offer 2002 prices
If buying in 2011 ... offer 2001 prices
If buying in 2012 ... offer 2000 prices
If buying in 2013 ... offer 1999 prices

This should pretty much keep you in line
with the correction. If you buy this year,
expect to stay in the house until 2020
before you can breakeven on a nominal
basis.

[Winfield J. Abbe]

Who is worse, the seller seeking $700K for a 3 bedroom piece of junk in California or the buyer? The Real Estate Agent got his or hers off the top so they love all this corrupt inflation. But how many buyers have $700K cash to buy a piece of junk in the land of plenty? Virtually no one. Therefore this housing inflation was caused by greedy mortgage companies providing the money for these corrupt transactions to happen. Come to Georgia and see some of the fabulous homes on several acres of land you can buy for about $500K. You could live here in a virtual palace and fly to the cesspool once a week and be better off. California has also benefited from fixed interest rates over the country but "free market" on prices. But those prices would be meaningless unless someone put up the capital to make these outrageous inflated transactions happen. Government loved it all too, didn't they, since they received all that tax money from these inflated, corrupt values that have nothing to do with reality. Some of these homes were likely even on an earthquake fault.
Let nature take its course with corrupt California housing prices. Please, pretty please, Congress, don't lift a finger to help. Let the "free" market do its job and lower these prices to the levels they belong, about another 75% or more down!

[Mike in Nevada]

What I am about to say is speculation on my part. I have no empirical data to support my premise.

In California, mortgages on residential property are by law nonrecourse. That is, the bank cannot hold the borrower personally liable for defaulting on the loan. The bank may look only to the property itself to satisfy the loan.

This misguided legislation, besides manifesting the California philosphy that no one should be held personally responsible for his own acts, makes it much easier to simply walk away from a mortgage. Making it easier to default promotes even more foreclosures. The increase in the number of foreclosures reduces property values, thereby causing even more borrowers to walk away. And, so, a vicious circle is created.

It is estimated that Californians pay at least 25 basis points or more in increased interest expense for this "nonrecourse" provision. However, as usual when our omniscient legislators become involved in regulating the free market, perversions are created with unforeseen results.

This is yet another example of the case where Adam Smith should be left alone and the provisions of the mortgage contract should be negotiated between the bank and the borrower without government interference.

[Get Real]

I see the logic in this correction due to issues of over-valuation, poor lending practices, insufficeint incomes to purchase homes over $500K etc. HOWEVER it is just too easy for some people to jump on the "I hate California" bandwagon. Seriously I travel the country every month and so many areas are over valued beyond belief. Try the D.C. beltway for instance, they have worse traffic, much worse weather, poor urban planning, only slightly higher incomes, and a glut of small older non-family friendly houses. For the American dream I would gladly pay $500k for Southern California weather, recreation, ocean, clean streets, great parks, and generally happy laid back people! Oh wait, I already do!

[Bob the Writer]

I've been reading this blog for almost a year, but this is a first post. Much of the information is great, much is so-so, some is nonsense. On the whole, a great way to witness a major economic event as it unfolds.

However, this morning was disorienting. Talk about angry diatribe from people who don't normally (if ever) read the Times. Then I found out Peter was linked on Drudge .

It's as if someone accidentally opened the cage door to the chimp exhibit and all the inmates began flinging their feces at once. Someone please close the door ....

Where's Lefty when you need him.

[BBob]

Wow, I can see the next article
CALIFORNIA HOUSE PRICES DROP BY 200%

[Darrell]

Tommy T... I am one person who loves living in the south (Texas), 3200 sq ft with a $1500 monthly payment, and my property is actually increasing in value!!!

Please stay in your Nirvana state, youjr right, it probably is better there Moron.

[Richard]

... and still, despite all this, even a six figure income doesn't buy you a home in Silicon Valley! Basically, if you don't have a double six-figure income household, the best you can do is buy a piece-of-crap 1970's 'condo' (read, "formerely apartment") for $350k+.

Northern CA is an insane place for property prices, and in all practicality employers would do better to move their operations elsewhere in the country to create a more stable and sustainable general market in housing and employment for the nation.

[Ben Graham]

"Prices went up almost 100% in some areas from 2003 to 2006. So, when your property value goes down 26%, you're still ahead 74%. "

Uh, not exactly. If prices double, say from $100K to $200K, and then fall 26%, or approximately $52K, you're only ahead 48%. Man, I'm glad I'm an illiterate redneck hillbilly from the south and not an educated Californian.

[manraygun]

"Prices went up almost 100% in some areas from 2003 to 2006. So, when your property value goes down 26%, you're still ahead 74%."

Someone needs a math tutor.

[chicago]

Prices will continue to decline since thousands of Californians will be hitting 65 every month and retiring from the high taxes and decreased standard of living where they live. I am sorry to say that many areas of the country will have the same problems. california has close to a half a million people selling every month and banks will tighten the appraisal and lending requirements.
Good luck from the midwest!

[joe smith the tard]

Posted by: Joe smith | March 26, 2008 at 10:52 AM

hey dumbass. A drop of 25% is still a drop of 25% and the reason doesn't matter. It's not going to magically go back up. Tard.

[Fred]

Amazing how people in California hate "conservatives" postings, usually because it points out the individuals responsibility.

Also amazing how few people put any responsibility for this on the people that signed the promisary note.

How many of these foreclosures are from illegals who like to say the are 'giving the house back to the bank?"

The reason the problem is worse in CA is because you have more irresponsible borrowers who can't read a contract.

Buying a house is not an impulse buy. You have time to research and understand the financing long before you make the purchase.

There was greed on both sides, but much of the responsibility belongs to the buyer.

[Unimpressed]

i'm a single guy with a well paying job, no debt, a great fico score, and i still can't afford a home in a decent neighborhood in LA. this headline is misleading.

[Mr. Integrity]

As an appraiser and investor for 25 years I have been through numerous peaks and valleys in the market. Real estate values almost double every ten years. In between are market corrections. Buy low and sell high. It is not rocket science. Subprime allowed irresponsible people to buy homes. Many people used their home like an ATM. It doesn't matter if interest rates are 1% or 20%; irresponsible people are always irresponsible. There is a lot of investor money on the side lines waiting to jump in. You can make a lot of money if you have integrity with a long term holding period regardless of when you buy. We are in a recession. We have had 10 recessions since WWII. Recessions last 10-15 months at a time. If you are 45, you probably remember the recessions of the 1970s, 1980s and 1990s. Why are people so surprised to see a pull back after we just had the biggest real estate boom in 120 years in California? Get ready investors and prudent buyers, your time is coming around the corner again. I started with nothing and now I have a portfolio of properties and am a multi-millionare a few times over. You can be one too.

[UpNorth]

Having sold Ca real estate and worked as a loan officer I can tell you this is just the tip of the iceberg. It will take a minimum of 4 years possibly 5 before it bottoms out and you see a stabization. Banks or companies underwriting and selling sub-prime loans deserve to fail. Its survival of the fittest. Laugh all you want about bank bail outs. Just remember it's you, your children and grandchildren that are paying the bill. In other words it's your tax dollars.

Some of us didn' t jump on the refi bandwagon or flip this house. My home purchased in 1994 currently only has $32,000 left to pay and only 4 more years. It's current value estimated at $500K in way northern California. How do you do it? No refi, double payments when you can. It used to be your home was your largest asset. I agree about the illegal situation though. I have heard stories of McDonalds workers buying homes in San Diego in the $500K range. Like sure sleezy lending practices and greedy mortgage loan officers. If you removed the illegals from California the test scores in schools would not only go up, your tax bills and medical bills would go down. Also, it would free up rental housing and lower rents for those who are Americans looking for a place to live. Also, lower auto insurance and less gasoline being pumped. Think about it.

And while some of you are having your laugh....you had better think twice about how safe your bank is. I worked for Lincoln savings in the 90's after the FSLIC came in. Thousands of people lost their life savings, yes your insured, problem is they don't tell you how long it is before you get your money. After all, it takes awhile the government is bankrupt too!

[rob]

Look - in my zip code - 95129, there was ONE fixer upper listed at $100K below market - at $750K. It sold for $760K [$10K above asking] in 4 business days. Yes - it is an entry level 1600 sqft, 3bed 2bath + den home on a 6K sqft lot. It was mostly good, needed a little fixing as it was a rental.

Rob

[alex]

wow, those numbers are terrible, and will only get worse!

Time for Sacramento to raise taxes and keep on the spending frenzy, especially on foreigners here illegally!

Yes, all you silly liberals!

[CA Native]

Hey all you rightwing CA haters,

Go ahead and "kick" this state out of the union. We only get 75 cents on the dollar for our fed taxes anyway. I'm tired of subsidizing you bunch of uneducated rednecks in the rest of the country (excluding NYC, Chicago and the Pacific Northwest). I hope you drive off a cliff on your way to your canned hunt.

I've been to just about every state in the union, and none of them could hold CA's jock. Everything innovative comes from this state, including the movies and t.v. you idiots sit home and watch for 8 hours a day, Apple, Intel, Oracle and Google.
The only thing your redneck states are good for is flying over. That's why your 3,000 sq. ft. house is only worth what I make in a week.

BTW, the areas in CA that are hurting the most are red parts of the state, where no educated person with a job would live anyway - like you redneck states.

Please stay out of our great state.

Regards,
CA Native

[Corntrollio]

Man, post one link on Drudge, and all the crazies come out.

[retro meta]

Down with housing prices. And all you lowlife speculators, illegal aliens, irresponsible borrowers, et al, can cry in your soup.

You people never should have been allowed to buy in the first place.

And the undocumented, illegal aliens should see their homes foreclosed and then should be arrested, incarcerated and deported, in that order

[PAU]

Anyone in LA with any sense wants to live as close to the beach as they can. See how many foreclosures you can find on the West Side including from Malibu to Palos Verdes. I bet not too many. If there are any I'm sure that realtors snap them up before they hit the MLS. Now Palmdale/Riverside/San Bernadino, that's a different story. This is the late 80's deja-vu all over again. Its called Darwinian (or perhaps Malthusian) economics.

[CK]

Hi Susannah - your math is wrong, very common mistake, don't worry about it.

E.g. say a 100k house doubled to 200k. Now take 26% off of 200k. That leaves 148k.

Now look at the original, 100k. 148k is only a 48% gain, not 74% as you said.

BTW a 50% drop will erase a 100% gain. E.g., 100k to 200k, back to 100k. That's what happened in Japan from 1990-2005. Ouch.

[ROBERT]

If major media outlets played a practical joke on everyone and ran headlines that the market has turned the corner, prices are going up, and lots of buyers are out there, this would all change in one day.

[Kevin Knight]

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[Outta SoCal]

IToldu2CashOut, what makes you assume everyone on here telling you the ugly truth about Cali is a white supremacist? I have been all over Cali from Yreka down to SD and El Centro. Place is just getting nasty, especially for what you have to pay. Hard to find more dangerous places than Los Angeles, San Bernardino, Riverside, Fresno or Oakland. And the public schools?Forget about it. Enjoy!

[rob]

Homes were NEVER used as collateral for CDS instruments [Credit Default Swaps]. If indeed they were, then we would never be in the mess we are in - as there is some collateral. Problem with the toxic derivatives [of which Bear Stearns barely scratched the surface] is that there is too much leverage, and no collateral to speak of - except credit ratings and honor...

Rob

[jason]

Yes, it is well known that prices are falling fast in dangerous areas. But, the safe areas ( Westside, BH, South Bay costal, OC costal ) are showing sky high prices that are not falling. How could this be? As the unsafe areas become even less safe because of all the vacant homes, more will bid up the homes in ths safe areas, and this whole episode is a nightmare for anyone not monied enough to live in a safe area.

[buz]

Next year will get much worse. CA state budget deficit of 16-18 Billion will be addressed with increased fees and taxes which will suck more life out of the local economy. Then the job losses pile up. The consumers have already pulled in their purse strings and will only become more hesitant to spend with 4-5 dollar gas staring them in the face. After the election the FED will be forced to raise interest rates to stave off ridiculous inflation which will really pour water on the housing situation. We are looking at a Depression in CA.

[Mike]

Hey, we're not all fools in California. There are a lot of good families here waiting for our opportunity to buy a home. We make decent wages, pay taxes out the wazoo, and we don't make stupid financial decisions. Yes, there are a lot of problems and illegal residents in this state, but it is a beautiful place to live. People who slam California have probably never been here, but you should care because our prices WILL affect yours. However, I am open to the idea of leveling San Francisco and starting over again there. What a disgusting place. Another good indicator to look at it the amount people are willing to spend to rent a home. Their mortgage payments will not be much more than that. It's funny that landlords require you to make three times your rent payment.

[Patriot]

I'm still trying to figure out how people making around 30k to 35k per year are supposed to make house payments and all the expenses that goes with it on a home over a 100k purchase price. Reality isn't setting in yet. Not everyone is married, working, and filing jointly at tax time. Single buyers are 'sol' and even married couples working for two incomes are going to have a great deal of trouble seeing anything affordable to buy at todays rates for housing costs. The matter is utter insanity. Where do these ridiculous housing costs come from?

This is from a CA resident

[m]

here here IToldu2CashOut! Peter can you please screen for the crazy racists? Thanks

[Rich from Ventura County, cA]

Being on an HOA Condo board we are seeing a lot of delinquencies on HOA payments. This will impact the rest of the owners as we'll have to eat their shortfall. Our fiduciary responsibility is to to force foreclosure in an effort to recover HOA dues. Thus we have to stand in line behind 1st, 2nd and even 3rd mortgages which were 15-20% over the value these condos had at the top of the market. Yes, I feel sorry for the stupidity of the the mortgagees and the mortgagors. However, I don't appreciate having to shoulder the burdens they are leaving us all with as the chickens come home to roost.

[tom g]

Looks like it is getting close to the time to buy a house in CA! Buy low, sell high!

[Paul]

After living in Illinois and Missouri for the last 3 years, I am glad to be back in California. Where I live I am only 2 hours to snowboarding, 30 minutes from two huge lakes, and 1 1/2 to the ocean. Today I can see snow capped mountains off in the distance while sitting out on my patio enjoying 70* weather. The prices may be high, but I think it is worth the price of admission.

So to those who say "why don't you sell your house and move out to ...........?" I ask you this, Do you seriously enjoy the humidity back where you live?? Do enjoy the tornadoes, hail, snow, freezing rain, freezing temps, and backwards ass way of thinking?? Maybe there is a reason people are stretching their budget to live here. Its to get away from the crappy weather, and bible thumpers from the midwest.

[GDC]

What's with all the California bashing?

If you don't like it, leave. If you've already left, shut the hell up and enjoy your new white bred communities in North Dakota, Alabama and West Virginia or wherever. If you don't like illegal aliens or foreigners or liberals, go form a club to share your hostilities. Oh, I guess one already exists.

Please live in the same areas who share your thoughts and don't migrate to other parts of the US where there are foreigners or liberals. Keep to yourselves, enjoy the newfound "whiteness" of your homogenous community and keep voting for the same right wing politicians. Please do not affiliate or associate with others who don't share your belief or your racial heritgage. Please. We beg you.

Then everything will be fine, right? All your big problems will go away, right? Your community will prosper, right? Housing prices in your area will shoot up, right? It'll be your little Utopia, right? Your anger issues will disappear, right? Uh huh. Right.

[kwick release]

It is a good time to buy now!!

[Smarty McMan in Aspen]

People and businesses are fleeing CA for a higher quality of life. All that will be left is illegals and retirees. This is just the tip of the iceberg. In the 70's CA was inline withthe rest of the nation and it was a much nicer place to live. Now it is just a bunch of wanker-rats in a small cage.

But Californians dont know any better as they have no time to travel or enjoy life.

Save me a slice of Carmel for my 2nd home.

[motorman]

Houses are coming down to what they are really worth,that is what is happening

[Rob Poston]

Wow! It seems like all of the crazy loonies who only want to see bad things happen to people in California because we don't vote the same way they do have been sent to us by the drudge report.

One of the reasons that we have higher taxes than the rest of the country is because we do not get back as much money from the federal government as we give to the federal government. Our tax dollars are being used to subsidize road construction, corportate farms, etc in such red states as nebraska. Sounds an awful lot like the liberal socialism that these hateful people are railing against.

[Tim Wavewalker]

90% of CA is awful. Sure SB, Central Coast and Napa are nice, but the idiots near by visit often and ruin it for the locs. All of my buddies who are in their 50's have split--they could afford to live anywhere. Hell, even Gerry Lopez moved to Bend, OR. Most are hard core skiers/boarders now and gave up the dirty, crowded surf.

You only live once, why wast your life in traffic, smog, rage, bad schools, illegals, and malls.

[jag]

WHERE'S LEFTY? Please don't tell me he was evicted from his house in Metro L.A.

[Craig]

The Federal monetary printing press tested positive this week for steroids, Uncle Sam is broke, I can't see major bank withstanding the magnitude of losses much longer, Commercial, Consumer, Automobile, Credit Card delinquency going through the roof, housing is not the only headache. Corporate America will run this Country into the ground with greed and corruption coming from every direction and has completely polluted this Administration.

[Fred Barnes]

"foreclosures are skewing the numbers" has to be one of the most asinine comments around.
It typifies how we got into this mess in the first place.
For the record:
It doesn't matter if you bought the house from a bank, a one eyed fairy or a realtor, the price you pay is the the new market price. Comps are always set on the margins.
Don't let the realtors fool you.
All you need to know about realtors, is if they don't make a sale, they don't get paid.

[DC]

Outstanding, glad to see it. Prices are still way up from ten years ago, well beyond the rate of the decline of the dollar. They need to fall more.

[EX-CALI ROB]

Let's see. Happened back in early 90's. People were buying and flipping in two months time. UP UP UP DOWN DOWN DOWN. Buy a house you can afford to live in with a fixed rate 30 year mortgage. Ride the wave and you will eventually realize a better than inflation capital gain.

Otherwise you may learn why they call it speculation, not investment.