Foreclosures.com Sees Signs of CA Correction

Meanwhile, Foreclosures.com is also warning that falling sales volumes in Northern and Southern California "could be a harbinger of a long-awaited price correction in overheated Golden State housing markets."Alexis McGee, president of Foreclosures.com, said declining prices and "nonexistent" real income growth, combined with rising interest rates on adjustable-rate mortgages, will strain many household budgets next year in California and boost mortgage defaults. "The affordability issue is finally coming home to roost," Ms. McGee said. "A survey by the Public Policy Institute of California released on Nov. 18 showed that 24% of residents are considering leaving because of high housing costs, and 31% say that housing costs put a financial strain on their households today." She pointed to a 13.3% year-over-year drop in sales volume in Southern California and a 4.7% decline in the Bay Area as indicators that housing markets are beginning to undergo a correction.