The news from California is bad for home owners, better for first-time home buyers. But the buyers would be wise to rent a bit longer and shop for a really desperate seller. There will be lots of them.
Home sales rose in February. The increase, year to year, was 8.5%. But to generate these sales, sellers had to offer deals. Media prices fell 2%.
The state still faces high unemployment. Credit is also tight. First-time buyers have trouble qualifying for loans.
The best chance they have is a foreclosure. A bank may be willing to sell for no money down, just to get the house off its books. If the buyers agrees to put money into fixing the house instead of making a down payment, they come out ahead, and the bank gets its security.
The median price is $239,000. That is about $100,000 above the national median. Median: half sold for more; half sold for less.
Absentee buyers purchase about 30% of the homes. They turn them into rentals.
Prices are higher in the Los Angeles area: $265,000. But prices fell more: 3.7%.
In this market, there will be desperate sellers. They will be forced by circumstances to make good offers. Be in the lower half of the median sales price if you want to buy.