VALLEJO (KCBS) – The end may finally be in sight for the Bay Area foreclosure crisis, as some cities that have suffered the most see their home prices stabilize.
Doug Sovern Reports in this KCBS Cover Story:
It has been a rough few years in Vallejo, one of the ten American cities with the highest foreclosure rates since the housing bubble burst. The city is bankrupt and has slashed services to balance its budgets. Its property values have cratered.
“The homes today in Vallejo are worth about what they were in 2000,” suggested Prudential real estate broker Jim Worthen. “This is the lost decade.”
He was confident that Vallejo was finally opening its doors to a brighter future.
“The number of foreclosures about three years ago was about 60% of the market,” explained Worthen. “And right now it’s no more than, say, 25%, 26% of the market.”
Worthen recently walked through a home on Nebraska St., currently listed for $117,000. Five years ago, it was considered worth more than three times that amount.
“There are some wonderful homes out here for very little money,” he summed up the Vallejo real estate market. “It would cost you more to rent than to buy this home.”
That is precisely why some consumers are snapping up these low-priced homes now – some as investment or rental properties, others because the houses cost what they do.
“We got a lot of influx to Vallejo from people moving from San Francisco, the Oakland, Berkeley area,” said Worthen. “Because they come out here, they drive in the neighborhoods and say hey, it looks like where I grew up. It’s $130,000 instead of $500,000, $600,000, $700,000 and that’s very attractive. And so we have a very nice ex-patriot community from those towns.”
Some local retailers are recognizing and are enjoying the turnaround – though they’d be hard-pressed to say that business was booming. Rather, they describe business as “fair,” with a steadily growing increase in consumer traffic.
Some residents, though, were still a bit wary about Vallejo’s turnaround – suggesting crime and poorly-performing schools still plagued the community.
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