Understanding how California foreclosures are affected by the ongoing recession is necessary if one is going to understand how what happens in California can affect the rest of the country. This is especially so when the time comes to begin getting back into the real estate market out in the Golden State. And though it might not be time as yet, knowing what went on can help one avoid the same problem in the future.
Probably only those who have been living in outer space or in a deep cave haven’t heard that the country — and especially California — has been suffering from one of the deepest recessions since the Great Depression. At the present time, California’s nickname (“the Golden State”) doesn’t seem to be particularly apropos, though most feel that it certainly will be at some point in the future.
This may be a slight miscalculation on the part of many people, though it’s true that the rate of CA foreclosures is tracking slightly above the rate across the rest of the nation. In truth, there are six California cities in the top 10 cities across the country who are leading the nation in the rate of foreclosure. It’s a diverse group, with some in the north and some in the south as well.
There are a great many reasons for why California and its vast real estate markets have found themselves laboring in a windless sea, though. For one, they were too many people out there looking to buy into homes and properties and who were expecting to make quick profits on their turnaround. When an economy is going great, this is a good strategy. However, when the recession kicks in a lot of people can get hurt.
It’s the belief of most experts that California and its real estate markets will straighten out in the future, though it’s true that the present is being hurt by the economy and the recession that it is experiencing. While most experts think the recession has ended in most of the country, they also believe that California may not see any relief until 2012 or later.
This usually means that real estate will continue experiencing a lack of ready, willing and able buyers, and this is especially so out in the Golden State. There are also a number of budget problems that can be out of any state’s control, and California has more than its fair share of them. For one, people have been leaving California over the last decade in numbers greater than have been coming in. Of course, revenues go down when this happens.
When California begins experiencing a consistent out-migration, it’s inevitable that the rate of CA foreclosures would rise, at least in the short term. It hurts right now because there’s little belief that an army of buyers will be arriving to purchase the ocean of foreclosed and on-the-market properties at present. That’s because many of these properties are now worth less than what is owed on them or what the market is commanding for them.
So then; it looks like California foreclosures and the recession out in California and in the rest of the country is forcing many to consider taking strong action to get control of a tough circumstance. Whether anything can happen in 2010, which is an election year, remains to be seen. More likely, action on the rate of California foreclosures stronger than what’s already been taken will have to wait until January, 2011.