Four Expert Opinions On Foreclosures In California

Homeownership as well as buying and sale of homes are an important ingredient of Californias sense of economic well-being

. But the speed of recovery in the states housing market has tottered with falling sales and declining prices despite low interest rates.

Foreclosures in California are at high rates. There is a historic low of new homes sales. The construction sector is faltering. Millions of homeowners are underwater; they owe more than the worth of their homes. $1.73 trillion has been lost by Californians as prices peaked in 2007. Though free fall of Californias housing market came to an end in spring 2009, the steadiness of the recovery is in doubt after a tax credit program ended.

Four experts on California expressed a range of opinions from pessimism to cautious optimism.

According to Richard Green, director of Lusk Centre for Real Estate, home prices in 2011 will stay flat. He says unless there is hyper inflation, prices will never touch the peak. He pointed out that Central Valley markets were much bubblier than Coastal markets, where the people with money were limited. But in Silicon Valley and West Los Angeles, there are many high income people who can easily spend $1 million on a home. He said that the more a property can be substituted for something else, the less is the chance of it coming back to its peak.

According to Leslie Appleton, economist with the California Association of Realtors, home prices in California in 2011 will rise by around 2%. Realtors are a group who eagerly anticipate the return of the housing market to heady days when they used to make a killing when prices soared. She, however, saw little likelihood of the market returning to its former heights in the near future. She said the recovery was very slow moving. But the good news is that California was definitely two years into recovery, she said.

Bruce Norris, head of Norris group, predicts housing prices to fall by 5% in 2011. Norris, who invests in foreclosed homes for sale, has benefited from the slump in Real Estate. But he says government programs are artificially boosting the housing market and is likely to fall more this year. Foreclosed homes are being placed away from the market through attempts at loan modification. He said that what the market needs most is demand for houses, and that is a tough situation.

Emile Haddad, of Five Point Communities Inc., predicts prices of homes to stabilize in 2011. He is of the opinion that recovery is yet to take place in California. Haddad said there was a welcome trend of the market bumping along the bottom. He said the coastal market in California will stage a comeback after the job market improves, which will lift consumer confidence. But inland areas of California will lag behind and builders need to reconsider the type of housing they offer in these places.

by: Dywon Erick Dylon

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