Posts Tagged ‘contra costa’

Once upon a time it was taken for granted that real estate prices would go up. But reality proved to be contrary. Sellers are being forced to drop prices even at a heavy loss if the unit was bought in 2005 or 2006. The housing bubble, which had been getting bloated since 2002, has suddenly busted. It was a fall out from the foreclosure fiasco. Credit began to slow down and so who would or could buy houses? The confidence of many was shaken. Who knows whether prices would further fall or not? So there is no point in investing now. Rather before things get worse it is better to sell off.

Research shows that some of the worst hit areas are east Contra Costa and Alameda Counties together with Solana County and even San Francisco. The infection seems to be spreading all round the Bay area. San Joaquin County tops the list of affected areas with 1 in every 27 foreclosing during the first half of 2007. This is the highest ratio in the entire country. According to another online survey the Central Valley recorded a drop of 7.7%. It is the high-end houses that are causing the median to rise. The regular homes will not be sold until completing all those in the foreclosure listing. It is the foreclosed units that set the rate. A buyer will look at the foreclosed one down the street and give that offer with a take-it or leave-it attitude. Some are just testing the market and thereby adding to the list.

A lot of difference can be made if owners are willing to cut prices but some are stubbornly not doing so. Neither do they want to initiate any changes in the house. One house on Brighton Drive, which had been bought in 2004 for $430,000, was being offered for $419,000; most probably that would have to cut down to $399,000. This is the general trend and not an exception. The main factor that is affecting the market is escalating interest rate. The entire Bay area is affected. Most probably this is because here the house owners lack long-term experience or cash reserves to tide over the crisis. In other places like Silicon Valley the picture is not so grim because the people have the income and store to tackle the problem.

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In an atmosphere of carnival fun the auction proceeds in a packed room. In a fast and furious pace a three bedroom condo in South San Francisco is snapped up for $425,000. Over 2,300 people had crowded in. ‘Ringmen’ in tuxedos were managing the show. One even did a jig whenever there was a bid. Black and white clad women ‘runners’ clapped and cheered while rushing around with paper and board. Some sold out in two minutes with only four bidders. All the while snack dealers made hay while the accompanying children played around in the sun outside.

That was only one of the 88 properties up for foreclosure mostly in the Counties of Alameda, Contra Costa and Solana. In a decade there had not been the likes of such a large-scale show in the foreclosure field. There was no doubt that the rising tidal waves were lashing the Bay Area also.

The company conducting the auction, had been hibernating for the last ten years. The market was too hot. But now they were hot on the trails of a cooling market and making up for lost time. In the matter of a month they had auctioned off 290 foreclosed properties in Southern California. They were now on a hurricane tour of the county, knee-deep in the foreclosure crisis. Financial institutions are selling off their properties via the auction route on the reasoning that a quick sale is better than a slow one. Losses can be repaired as against time that never comes back.

The game plan was that each property had declared a minimum bid but there was a y secret reserve price. The latter was the minimum acceptable to the banks. Bids below the actual reserve price were given the denial notice within a week. The rates were fine for those who want to live in it but not tempting enough for investors.

Bidders had to bring $5,000 cashier’s cheque. The top bidder was expected to put down 5% of the bid price and sign over the cashier’s cheque together with the personal cheque for the balance. A 5% buyers fee has to be paid to defray costs. The realtors get a seller’s fee. The difference between foreclosure and county auctions is that the latter is out of reach of the common man because it requires all payments in cash. Moreover the title deeds may or may not be clear.

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