Sales in August in California were up 86% in August from a year ago. Prices were down about 40%... but at least we have people in the showroom so to speak.
The Housing Bill, which was supposed to fix the real estate market last July, only takes effect now, starting October 1, and authorizing the FHA to start refinancing an enormous number of homes.. Inevitably, we are seeing a bottom now - finally.
So where do we go from here? Do I see a real estate boom coming? Heavens no.. but at least we should see regular movement in the real estate industry again. It doesn't help those that are under water... although we have new programs for that now... but it does end the awful cycle of foreclosures.
Here in Sacramento, we are regularly selling homes for basically under $125,000 that were in foreclosure at the $240,000 level. At $125,000 with your basic FHA or VA loan, the payment works out to be around $750. There isn't much of a reason for the young kids to start moving out of the apartments and into a home of their own.
I personally think we will see this in a tidal wave, and it should absorb everything on the market very quickly.
We will then see prices rise, as the foreclosures are no longer in stock, and the existing home owners won't have an interest in selling.. as the values will still be low compared to what they paid for the home, we should see a period, after the foreclosures, of very, very tight inventory for a year or two.