The glut of foreclosures has changed the real estate market in dramatic ways. For one thing, they have helped drive down prices. The median price for a home in Southern California was $278,000 in December, down from $415,000 in January 2008.
In addition, most of the homes being sold now are foreclosures.
"My guess is that you have a fair amount of speculation going on, which might not be the best thing in the long run," said Conrad Egan, president of the Center for Housing Policy in Washington. "But I'm sure that people in those neighborhoods are glad to have an investor buy a home and stick a renter in there than to see it sit empty and boarded up."
Foreclosures have become so common, in fact, that they are straining the ability of the market to handle them all.
"Probably for most of the state, we've reached the point where the lenders and the market really can't absorb that much more foreclosure activity," DataQuick analyst John Karevoll said. "The operating manual for the real estate market has been thrown out."
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william.heisel@latimes.com
