Gloom over California home prices hard to shake

By Jim Christie
SAN FRANCISCO (Reuters) - Matt Bording doubts many in his financial bind would agree that home prices in California are near a bottom. And there are many in his predicament.
Bording owes more on his mortgage than his Richmond, California house is worth so he is giving up on the loan.
"We're walking away," Bording told Reuters, noting he will soon hand his lender the keys to the three-bedroom house he bought with his wife in 2005 because its value has plunged with his zip-code's median home price over the last year.
"It's down about 60 percent," he said. "I don't see that rebounding in a realistic time frame."
Brisk sales of foreclosures are leading optimistic analysts to forecast an end to the misery of falling home prices in California, a first step to recovery in a key housing market at the epicenter of the U.S. mortgage crisis.
But Bording says his neighborhood is full of for-sale signs for known foreclosures and the disrepair of other houses suggest their owners share his view: "They may want to jump off a sinking ship."
BARGAIN HUNTING IN FORCE
Some analysts say the slide in home values in California has run its course thanks to buyers with government mortgages and investors snapping up foreclosed properties.
"We're running out of foreclosed units in most places," said Alan Nevin of MarketPointe Realty Advisors in San Diego. "It looks like we're straightening things out."
The state's median price for an existing, single-family home rose 1.4 percent in April from March to $256,700, marking two consecutive months of gains.
The median fell 36.5 percent from a year earlier, but that snapped a nine-month run of year-over-year declines in the 40-percent range.
Additionally, April's backlog of homes selling for $300,000 or less, where foreclosures are concentrated, would take 2.5 months to deplete, compared with 11.1 months a year earlier.
Strong demand at the lower-end of the state's housing market is bolstering the segment's home prices, a first step for broader price stability, said Leslie Appleton-Young, chief economist for the California Association of Realtors.
"It appears that the median price is now at or near the bottom," she said.
A LULL, NOT A BOTTOM Continued...
Source: Reuters