Inquiring minds are looking at the data for distressed housing and the way people are being laid off now which makes us wonder how home prices are not going to decline much more in The OC.
In California, the discounted percentage difference between average sales price of foreclosure sales vs. average sales price of non-foreclosure sales is 39%. This is much higher than the national average of 28% and ranks California as 3rd nationally. Further, this broke down to 46% for bank-owned properties to 29% for homes sold before lenders seized a property, aka short sales.
Remember that these numbers are the foundation of the market going into 2011 where we are beginning to see layoffs and large budget cuts in local and, eventually, state governments. This will only exacerbate the housing crisis across the all of California.
However, these dry housing statistics mean nothing to what SurvivingCalifornia.com hears of how United Healthcare laid off their Orange County, CA employees on Thursday…
Things stated off regularly as people reported to work as usual and they started in on their schedules. Supervisors came around and told everybody to get on the buses parked outside because they were going somewhere offsite for an important meeting. When they got to the remote location, a speaker came on to tell them their service was no longer needed and they were now laid off.
What effeciency! This explains so much of their insurance claims process, doesn’t it?
Unfortunately, this is vivid proof that housing prices are not only NOT rebounding but are not even stable. We are going to see large declines in the upper scale areas. Orange and San Diego Counties for sure. Look for it to be a double-edged sword as buyers become more scarce just as housing prices decline. Bubbles don’t burst while buyers are still in the market which is what analysts were attempting to convince the public of two years ago. Having many active buyers still in the market just means the bubble was not allowed to fully deflate and is still a bubble.
Hold on because you ain’t seen nothin’ yet. Politically, 2011 looks to be even more crazy then 1968. And SurvivingCalifornia.com is still predicting that the state of California will end up with an apocalyptic 17% rate of foreclosure when everything is said and done. It is what the data shows.
To put this into prespective, the worst foreclosure rate in state history prior to this downturn was in the early 90’s when it was 6%. We are talking almost three times the rate.
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