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Once Red Hot San Fransciso Area Market Crashes

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This one is for those who are still in denial about there being any house price falls in the US:


Mountain House community: From boom to bust on Bay Area's edge
By Katherine Conrad
Mercury News
Article Launched: 08/20/2007 01:31:55 AM PDT
At Mountain House, visionaries carefully planned streets, schools, sewers - everything needed to create a thriving community of 16,000 homes in the middle of San Joaquin County's farmland.
Build it and they will come. And they did.
Starting in 2003, thousands of Silicon Valley residents desperate for a house, two-car garage and back yard made the hour-plus commute from the job-rich Bay Area over the Altamont Pass to Mountain House, where home prices started in the low $300,000s.
But then the real estate boom went bust. Last month, DataQuick reported that San Joaquin County mortgage holders were among the most likely in the state to default on their payments; San Joaquin County has the highest foreclosure rate among the nation's 100 largest metropolitan areas, RealtyTrac recently reported...../
"It is as bad as it looks,"
said Susan Patteson, an agent with Fox Realty and a Mountain House resident since late 2003. "Homes that two years ago sold at the peak of the market now sell for
$200,000 less
. We rode the high; now we're suffering the low."
Just four years into the development, about 6,000 residents live in roughly 2,000 homes. Of those, about 60 are in foreclosure, according to Sean O'Toole, founder of ForeclosureRadar.

California is perhaps the only state in the US that has almost matched UK HPI at around 200% compared with our 300%. These are spectacular drops and it has always been my contention that the "frothy" markets where HPI has been more than 150% over past 7 years or so will see catastrophic falls of at least 40% and as much as 60%.

Meanwhile heavy drops are still being reported on the E Coast:


Short sales increase as housing slump deepens
Lenders helping homeowners get out from under
By Paul Owers | South Florida Sun-Sentinel
August 19, 2007

What this says is, of course, that the banks cannot afford to take 'em back so they sell short to a mug who thinks the bottom has been reached. :lol:

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To put this in a bit of perspective, 60 foreclosures out of 2000 homes works out at 3% and house prices have only been dropping for less than a year. At the height of the last UK crash the repossession rate was 0.7%, how much worse is it going to get over there?

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