California foreclosures push prices down by 26%

Increasing rates of foreclosures in California helped push sales prices down by 26% in March from a year ago as housing bust continues to unravel. From an AP story:

A glut of foreclosed homes helped prompt a 26 percent plunge in California home prices in March, spotlighting a trend that experts said is likely to keep squeezing the struggling market for at least several more months.

More than 38 percent of California homes sold in March had been foreclosed at some point during the previous year, DataQuick Information Systems said in its survey released Thursday.

That helped drive the state's median home price down to $358,000, from $484,000 in March 2007, when the market peaked, DataQuick said.

In addition, the number of new and resale houses and condos sold last month plummeted 38.3 percent from a year earlier to 24,565...

Foreclosed homes in the state sell for about 15 percent less than non-foreclosed homes in the same neighborhoods, bringing all prices down, he said.

Riverside and San Bernardino counties — a rapidly growing region known as the Inland Empire — were particularly hard hit. Foreclosures accounted for 56 percent of the sales last month in Riverside County, where the median price of a home fell 27 percent to $306,250.

The nationwide foreclosure glut is expected to worsen in May and June as two- and three-year introductory interest rates expire on homes purchased in 2005 and 2006..

The foreclosure glut has hit California especially hard. The state ranks only behind Nevada — and just ahead of Florida, Arizona and Colorado — in the percentage of households in foreclosure, according to RealtyTrac's March rankings.