Why You Should Still Consider Housing in California

Despite the looming news of doom on the state of California’s housing market, a silver lining is up ahead. Amidst the overwhelming rise of unemployment in the golden state in the month of July this year, progress is slowly yet surely coming about, particularly in the sales increase in the housing market.

In a Reuters news article published last August 15, 2008, California Governor Arnold Schwarzenegger said he saw signs of improvement in the state’s housing market that helped make up for a rise in unemployment.

In spite of the catastrophic drop in the housing market and the concurrent rise in unemployment rate—said to be the highest monthly rate in the past 12 years—the California governor that things will turn for the better. This is due to the reports on “recent increases in housing sales and a stabilization of jobs in certain sectors (Reuters).”Nevertheless, there are other reasons to boost this golden state’s housing marketability.

In another report published last July, California housing appears to be in good shape, with home sales increased to 22 percent (Fowlkes). Although the considered flip side of the story is the initiators of this sales boost were mostly “led by bargain hunters who swooped into the market and picked up foreclosed properties (Fowlkes).” Based on reports, 38 percent of the purchased homes in the month of April had “had been involved in foreclosure [proceedings] at some point over the past year (Fowlkes).”

Another reason to be happy about California’s housing market is the passage of a “housing relief bill by a 275 to 152 vote (Mole).” Otherwise known as SB 1185, the bill focuses on stabilizing the nation’s housing market (Mole) which, if approved by Congress, is good news indeed. This broad legislation provides assistance to “$300 billion new loans for struggling homeowners, which will “hinge on their (homeowners) lender’s willingness to take voluntary losses and write down the balance outstanding of troubled loans (Mole).”

One source stated that this is exciting news since there are a lot of foreclosures in the Inland Empire, known as the Southern California market (Mole). California is reportedly fifth in the nation in respect to the number of foreclosures; hence, would probably be more prioritized in being given assistance to (Mole). As a result, rebuilding homes and “rebuilding lives (Mole).”

On June 30 this year, Governor Schwarzenegger signed a bill into law known as AB 1252. This makes another reason to consider housing in California. The approval of this law will expedite the “release of $300 million to voter-passed bond projects, also known as Propositions 1C and 1B bond projects (Faulkner).” The newly released funding “will go to important infrastructure and housing projects” that were already awarded in the “fiscal year 2007-2008 budget (Faulkner).”

During the signing ceremony, Governor Schwarzenegger said, [the] expedited funding will stimulate the economy, create thousands of jobs, and help workers in the construction industry who have been hit especially hard by the mortgage crisis and housing slowdown (Schwarzenegger). He added that the State of California is not waiting for the economy to pick up—it is taking action to keep the state’s economy growing, in order to keep people working hard and continue rebuilding this great state (Schwarzenegger).

Another law, otherwise known as Housing and Economic Recovery Act of 2008, was implemented to ease housing problems (U.S Department of Housing and Urban Development). According to this law, an estimated number of 400,000 borrowers who are facing risks of becoming homeless “will be able to refinance into more affordable government-insured mortgages (U.S. Department of Housing).” Features of this program include government insurance offerings to lenders “who voluntarily reduce mortgages for at-risk homeowners to at least 90 percent of the property’s current value (U.S. Department of Housing).” This program will be operational by October 1, 2008.

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