It’s now no secret that rising levels of foreclosures have contributed to steadily falling home values across the nation. In many instances, this trend is viewed as alarming and destructive. Falling home values mean homeowners are not earning equity on their purchases, and as a result the foreclosure problem is actually worsened. Many buyers who bought homes during the housing boom are unable to escape foreclosure through refinancing or a sale because they can no longer get the same price on their home.
However, low home values have led to low home prices, and in some areas that’s actually considered a good thing, like California’s San Joaquin Valley. Affordability of homes in that region has doubled during the first quarter of 2008, evidenced by the fact that of new and existing homes sold during the period, 35.5% were bought by households within range of the nation’s median income of $61,000. In the San Joaquin valley, home prices have fallen by roughly one third from the first quarter of 2007 to the first quarter of 2008.
However, almost 80% of the homes being sold in the area are foreclosure homes, and although this is bad news for home sellers in the area, it’s incredible news for homebuyers. The foreclosure surge has created a huge surplus of underpriced homes on the market, and that’s bringing down the price of homes on the open market as well. Homebuyers in San Joaquin however seem to be turning to foreclosure homes just as equally, as the deals they offer are so severely discounted, there’s no better value anywhere on the market these days.
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