In Palmdale and Lancaster, among the state's cities with the highest percentages of foreclosed homes, Realtor Joe Mayol at Keller Williams said he's selling foreclosed homes at the rate of five a week.
"One comes on the market, and it's gone seven days later," Mayol said.
June sales in the Antelope Valley were up 214% from the number in January.
"Things are starting to turn around," said Pamela Vose, chief executive of the Greater Antelope Valley Assn. of Realtors.
"I think if the government had wanted to buy homes a few months ago, maybe it would have helped, but if they're going to start six months from now or later, it can only hurt."
Vose and others are concerned that the government will be negotiating to buy homes in bulk from banks that own properties in multiple states, further weakening prices and providing competition to homeowners trying to sell in a down market.
The new law mandates that local governments demand a price cut, and that could mean that new appraisals on all the properties near a government-purchased home would be dropped by a similar amount.
Median home prices in Southern California have fallen about 30% from their peak last year. Further price drops also could make it more difficult for people who are teetering on the edge of foreclosure to refinance their loans. And, with governments acting as buyers, they could shove aside renters who have been waiting for prices to drop and are just now deciding to buy a home.
"The truth of the matter is, any time the government gets involved, they distort the market," said Rep. Tom Feeney (R-Fla.).
Feeney also wonders which local agencies are in a position to buy homes and oversee their redevelopment on a large scale. Typically, housing authorities help homeowners with loans and down payments, particularly in smaller, more recently established communities like the ones that have seen the most foreclosures.
"Who from these cities is in a position to do this work?" asked John Burns, an Irvine-based consultant who works with home builders.
"On the surface it sounds like a good thing, but the logistics of it make it almost impossible."
Kern County's Pelz said that's a good question. Had they taken more time, he said, legislators might have found one key stumbling block in the bill: the requirement that 25% of the money be spent helping families that earn 50% of the median income. Most housing programs work with families that earn 80% or more.
The reason? When a low-income family moves into a home, it needs to have enough income to maintain it and thrive in the neighborhood.
"Once you get to 50% of the median income, home ownership becomes difficult to stretch to. Even rentals can be exorbitant," said Eva Yakutis, the city of Riverside's housing director.
"Your water pipes break and you need to have the wherewithal to get them fixed. If you have a really low income, that could be tough."
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william.heisel@latimes.com
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Hit hardest
California counties with highest percentage of homes foreclosed in second quarter of 2008.
*--* County Pctg. Merced 2.26% San Joaquin 2.01 Stanislaus 1.79 Riverside 1.56 Yuba 1.52 San Benito 1.40 Madera 1.28 Solano 1.24 San Bernardino 1.24 Sacramento 1.22 Kern 1.09 Monterey 1.08 *--*
Source: MDA Dataquick
