Looking Hard At How California Foreclosures Could Affect The Rate Of Commercial Property Investment

By Brian Jones

California foreclosures and how they might affect California commercial properties should really be studied by anybody who is either sticking with Golden State real estate or is considering jumping into the California markets. Some may question whether it's a good idea to stay in such a down market but it's a fact that a savvy investor can make money no matter characteristic of the market in question.

Currently, the Golden State has seen a 15% increase in the rate of CA foreclosures and it may not be the best of times to jump into the California market, especially if it hasn't hit bottom. Many experts, though, think that it might have, though many others also think these foreclosure rates are portents of issues to come with the commercial real estate markets that an investor should learn about.

In the commercial property markets, it might be that holders of notes on all those properties have been reluctant so far to begin foreclosing on them, which is one reason why the rate of commercial CA foreclosures has remained lower than the residential rate. They have a great many residential properties to deal with and are trying to get rid of those properties before calling in their commercial notes, perhaps.

Loss, as a term of art, in real estate means different things to different lenders. However, the fact is many lenders would rather deal with some loss rather than a complete loss which is something that may confront them when it comes to commercial properties if the situation remains as it is. Financially-strong investors might be able to get into the current California market and do something with it, truth be told.

Investors of these kinds are sometimes known pejoratively as "vultures" but that's not exactly a fair description of either their value or what they do. Any market will require investors willing to come in and take distressed goods, services or properties and they're often needed as much as so-called prime investors, especially when a market depends on investment to bounce back from a down cycle.

There is, at present, a great deal of debate as to whether the present time is the prime moment to jump into commercial properties or any properties in the California market because some believe that the rate of CA foreclosures might begin to climb again after a short stabilizing. This is known as a double-dip, which is characterized by a decline in rates and then a subsequent increase in them before finally declining for good.

What this basically means for most investors is that they should keep a close eye on the market and look at whether or not it has truly bottomed out and has now begun to climb back up to more stable levels. Investors, therefore, will need to either execute a "buy and hold" strategy or wait out the market until the predicted second dip occurs before beginning a real upward climb.

For an investor who has a lot of guts and a high tolerance for risk when it comes to dealing with CA foreclosures and what can be made of them in the commercial real estate markets, it could be a favorable environment. That's because there's a lot of commercial real estate chasing not a lot of renters or buyers. Supply and demand is on the side of the buyer, it would seem.

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California Luxury Homes In Pauma Valley Country Club

By Hubert Miles

Searching for a California gated community can be taxing. There are so many choices in the market all with various different options and amenities. Are you looking for signature golf courses, luxurious club houses, tennis courts, or resort style swimming pools.

Located in beautiful Pauma Valley in Southern California, the Pauma Valley Country Club is a gated community that provides you with all the luxuries of life. Club membership consists of successful business men and women from a wide array of industries. Although they may not share the same work experience, they do share a love for a peaceful getaway or retirement home.

Members and guests alike have discovered all the beauty that Pauma Valley has to offer. With near perfect weather year round, Pauma Valley offers splendid valley views and a golf course that challenges even the most skilled golfer.

Sporting an award winning golf course designed by the Robert Trent Jones Sr., the course at Pauma Valley Country Club is considered as the gem of the community. The course has earned many awards, been listed in Golf Digests Top 100 list, and selected as one of the best courses in all of Southern California.

Amenities such as a luxurious clubhouse and guest rooms, championship level tennis courts, resort swimming pool, and a private 3,000-foot airstrip for aviation enthusiastic make Pauma Valley Country Club in high demand. Those seeking fine and casual dining and bar experiences find the formal and informal dining services to be top notch. An with 24/7 security and patrol service, Pauma Valley provides security and protection second to none.

It is easy to visit Pauma Valley due to it's close proximity to local airports. Situated a mere 18 miles from the Ontario Airport and only 60 miles from Los Angeles LAX and John Wayne Airports, Pauma Valley Country Club is just a plane ride away from all over the US.

Final Thoughts

For those looking at California gate communities, Pauma Valley Country Club has a lot to offer in luxury amenities and activities for active adults. So next time you are in sunny Southern California, visit Pauma Valley Country Club to see for yourself what they have to offer.

About the Author:

Hubert Miles is the founder of Gated Communities USA which features the best Gated Communities in the USA and Internationally. Find information on Pauma Valley.

Understanding California Foreclosures And How They Can Hurt California's Economy

By Ben Johnson

When considering California foreclosures and how they affect California, consider how many different things had to have gone wrong for the Golden State to have ended up with the foreclosure issues it now is facing. Rampant speculation and unbridled exuberance masked the fact that the good times could not possibly have lasted forever, though many thought they would.

For around 10 years, from the mid-90s to about 2005, the Golden State had some of the most vigorous and exuberant real estate markets in the country. Prior to 1995, most people everywhere considered that a home would be something one would purchase and then live in for quite some time. As a result, home values remained fairly steady and prices rose at a very measured pace, for the most part.

And this is where the first issue with the increasing rate of CA foreclosures began to show itself; in the fact that home buyers were expecting to take profits from a home not soon after they purchased it. What this means is that they were loading more debt onto the home in the form of second mortgages and home equity lines of credit (HELOCs) as well as expecting a large profit from a sale in the future.

It wasn't uncommon during the 1995 to 2005 run-up in real estate prices in California to see buyers get into a home and get out a year or two later with a 30% return on their investment. Any person with economic savvy would have said that this wouldn't have been able to last forever, but unbridled exuberance convinced many that it could, unfortunately.

Put all of the excessive enthusiasm for California real estate together with the fact that many people were getting into this real estate by purchasing more home than they actually could afford and it's easy to see how real problems would soon begin to develop. Many people sitting in homes that they'd purchased at low initial monthly payments saw those payments rise and, as a result, any hope of profit disappear.

There's a basic weakness in a formula, when it comes to a house, that presupposes the ever-increasing rise of property values and that's that the market cannot remain on an upswing forever and especially when a recession hits, which it finally did in 2007. California actually began to feel a softening its own markets, though, in 2005 but many missed the early warning signs, unfortunately.

Once Golden State property values started on a downward swing, that drop was only intensified by the fact that financial markets themselves tanked in late 2008. At that point, California foreclosures really began to increase as many home owners found themselves in even more dire fiscal straits than could have been foreseen at the time many of these homes were purchased, shortly before the recession.

As to what the rate of CA foreclosures might mean for California, most would say that a period of decline and a shakeout accompanied by a solution to California's budget woes and structural defects in its real estate markets is necessary. With so many homes sitting in foreclosure or unsold, California is going to have to work hard to improve itself, which is something most hope it does soon.

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Getting To The Crux Of How California Foreclosures Are Affected By The Current Recession

By Sterling Sliver

The current recession and California foreclosures in the Golden State should be studied in order to understand how what happens out in California can eventually spill over to the rest of the nation. It's especially important to study this issue if the time is coming when getting back into California real estate markets it's going to happen. This can help one to avoid repeating the same mistakes, at least.

Probably only those who have been living in outer space or in a deep cave haven't heard that the country -- and especially California -- has been suffering from one of the deepest recessions since the Great Depression. At the present time, California's nickname ("the Golden State") doesn't seem to be particularly apropos, though most feel that it certainly will be at some point in the future.

This may be a slight miscalculation on the part of many people, though it's true that the rate of CA foreclosures is tracking slightly above the rate across the rest of the nation. In truth, there are six California cities in the top 10 cities across the country who are leading the nation in the rate of foreclosure. It's a diverse group, with some in the north and some in the south as well.

There are many different reasons for why the Golden State and its housing market has found itself in the doldrums, including that too many people were out there chasing properties that they thought they could make a quick buck off of, relatively speaking. In good times, there's nothing wrong with this, but when the recession kicks in it can hurt people caught on the short end of the market timing strategy.

The possibility that the state could pull itself and its housing inventory out of this issue isn't helped by the fact that there seems to be little prospect that the current recession will ease off in any appreciable way for the foreseeable future. Some economists believe that significant hiring and new employment won't begin to occur for several years, as a matter of fact.

What this usually means when it comes to real estate is that a shortage of ready and willing buyers will continue, especially out in California. Additionally, the Golden State suffers from a number of budget issues -- some structural and some beyond its control -- which also isn't helped by the fact that more people are moving out and are moving in. This affects revenue collection, for one.

When a state like California starts experiencing consistent out-migration it's just a fact that the rate of CA foreclosures will rise over the short run and maybe over the mid-run. At present, it's hurting because there just isn't a large group of buyers on the market looking to get back into homes in California that probably are more costly than their true market value is at present.

If there's any upside to the fact of the rate of CA foreclosures it's that California will be acting as an example to the rest of the country and its leadership that taking strong action to control uncertain circumstances may be the way to go in the future. Given that 2010 is an election year, it may be that California will not see additional strong action again until January of 2011, it would seem.

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How To Understand California Foreclosures And Their Affect On The Golden State

By Janey Abreu

Understanding how California foreclosures have affected California is actually easy to gain. For the most part, the market in terms of real estate and how it needed a steady supply of willing and able buyers has dried up. It will continue to stay dry until home values have reached a stable equilibrium in the future. While they continue seeking that equilibrium point, foreclosures are going to continue to be around as a phenomenon.

Many real estate experts trace the beginning of the long and steep fall into the currently-high rate of CA foreclosures that the state's experiencing back to the start of the recession. In California, it looks to have actually begun as early as 2005 or 2006 while the nationwide recession began picking up steam in late 2007. The housing boom, though, gave everybody a false sense of security for some time, though.

By late 2008, the housing market bubble had finally burst. California's property inventory began to take a steep dive in terms of median prices and continued to dive for longer than much of the rest of the housing inventory and other parts of the country. Factor in, as well that the Golden State faced serious budget and financial problems and one begins to see how CA foreclosures began to climb in reaction.

Much of this helps to explain why many home owners and other property holders are now in possession of property in homes that are way more costly in terms of ownership than they're actually worth. They'd like to dump these properties but they have no choice or ability because those properties are priced close to market value. With a decline due to the recession, home prices fell accordingly and not surprisingly, it should be said.

Nowadays, in reaction, many present home owners are looking at an option that used to be considered a very last resort just a decade ago. It would seem that these owners are considering going directly into foreclosure or just walking away from their homes, which might make some sense considering they owe much more than the home is worth or will be worth in the future. This may be due in part because people no longer look at homes as purely "homes" anymore.

Now, they see these investment instruments -- which they hoped to draw good profit from over a very short term (usually from 1 to 3 years) -- and wonder why they want to keep fighting to stay in the property. Given that it doesn't look like property values are going to increase appreciably in the short or maybe even the medium-term, they tend to walk.

It was bad luck for many of these homeowners that the markets began to tank just as they were getting into them. As a result, they owe more than the home could fetch in the newly-adjusted markets and they may even have suffered a loss of employment due to the concurrent recession, which was actually strengthened by this housing bubble bursting as it did.

As with any economic cycle over time, it's a sure bet that the rate of CA foreclosures will eventually begin to decline, though it's a very uncertain bet just when that's going to be. A few markets in California are showing a little improvement in median home values and looked to have finally touched bottom. California, resilient as ever, will eventually bounce back, every economist says.

About the Author:

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Coming To Grips With How California Foreclosures Tend To Impact All Real Estate Markets

By Jack Bennington

California's economy and how California foreclosures affect it as well as the broader nationwide economy should be studied, if only to figure out the existing recession and what touched it off. This is important because anything that takes place in California eventually makes its way east, as was demonstrated when California real estate helped to touch off a collapse in real estate markets around the country.

The seeds of the current recession seem to have been planted in two places; California and Wall Street. Whether one could have happened without the other is a discussion for other far more highly trained people such as economists and the like. What's obvious, though, is that California was at least the fabled canary in a coal mine that nobody paid attention to when it finally fell to the ground.

For at least several years before the financial markets suffered their deepest decline in ages back in late 2008, California had been sending out smoke signals (which were actually fires from the economic conflagration the state's deepening budget woes was creating) that were being mostly ignored by real estate speculators, not only in California but also in Florida and Arizona among several states.

It would seem that real estate values had been declining for well over three years prior to the final 2008 descent from which home values in California and elsewhere are only now just finally starting to recover from. Make no mistake, though; this "recovery" is very minor, very fragile and very much in danger of collapsing at the slightest panic in the markets and especially in California.

It might, therefore, be said that CA foreclosures should have continued to serve as warning signs because six of the top 10 cities in terms of the rates of foreclosure are sitting in California. Arizona, Florida and California, in fact, make up 44% of all foreclosures across the country nowadays. These should have been clarion calls that shouldn't have been disregarded, economists now say.

Combine all of that with the structural issues involved with formulating a solid budget for California (the famous Proposition 13 limits on property tax rate increases is thought by some economists to play a large role) and it's easy to see how something like CA foreclosures can affect much of the rest of the country. For one, they tend to scare investors off elsewhere.

The reason this is so is because investors in the broader markets as well as the housing market are very jumpy at present and aren't entirely sure that the country has reached bottom, at least in terms of home prices. They are reluctant to jump back into housing markets without at least an even chance of making back what they've put into it over the long run. This tends to depress markets, truth be told.

The broader economy, then, could be said to be predicted by the issues with the rate of CA foreclosures, possibly. When the rates out in California begin to finally decline over a defined period of time, it just may be that investors in the broader economy may feel more comfortable about jumping back in with any sort of enthusiasm, some economists are beginning to say.

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Taking The Measure Of California Foreclosures And What Might Happen To California

By Ben Stilstein

How will the Golden State deal with California foreclosures at present and in the future? This question is much easier to ask than to answer, of course, especially when it comes to such a diverse state like California. It's been rocked by the recession as well as structural issues with its real estate markets, for sure, and any forecasting will need to take a look back to see how it all began in the first place.

Foreclosures in California, much like foreclosures elsewhere, occur when owners of property or real estate can no longer make the payments on their property or real estate. As with much of the rest of the country, many people bought into California homes with the expectation that they'd soon make a profit from the sale of those homes, and they were right for quite some time.

Soon enough, the effects of the recession put a stop to such speculation and it did so out in California well before the same phenomenon broke out around the rest of the country. Now, many who invested in homes with very low interest rate or low payment mortgages that would readjusted in the future are sitting on properties they can't sell and that they now can't afford.

Equally as unfortunate is the fact that many people began to look at homes as investment instruments rather than places they would live in for quite some time. They bought into properties that usually were increasing greatly in price within just a year so they bought much more of it than they really couldn't afford, expecting they'd be able to get into and out of the market with a nice profit.

They fail to take into account that every boom is eventually followed by a bust and that the trick would be in timing the market. However, the bust happened quite suddenly and many people sitting in the real estate market or living in a home they thought they'd be up to sell for profit were caught out. The rate of CA foreclosures, though, this time is also partly due to the willingness of people to go straight to foreclosure, which is a new phenomenon.

There are also structural issues with the way California housing markets are set up and also with how the state is unable to adequately bank money for a rainy day when it comes to stabilizing its markets, some of which is due to Proposition 13, the anti-property tax law. Without adequate mechanisms, it was inevitable that the rate of CA foreclosures would go up, and it most certainly did.

The first thing that the state probably should try to do is stabilize the foreclosure rate and prevent it from increasing any further, and the federal government has been helping in that regards with a number of innovative programs that might help. Getting the word out to many California property owners, though, has been tough as has been getting them to forestall or put off foreclosure as a first, rather than last, resort.

CA foreclosures and the rate at which they've increased is a natural consequence of a wildly exuberant economic cycle that eventually had to move into a bust period. Add in that California as a state is restricted in what it can do in terms of property taxes on homes and land in California and it's easy to see that the state will really need to put together a comprehensive package to deal with the issue.

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