Foreclosures encourage homebuying in California

The housing crisis has hit California particularly hard, with the state experiencing record foreclosures in recent years.

But those repossessed homes have also provided homebuying opportunities for people who were interested in moving to the West Coast. At recent foreclosure auctions in Sacramento and Santa Clara, about 250 homes were sold at greatly reduced prices, according to auction house Real Estate Disposition. So far this year, homebuyers have spent about $100 million on foreclosed homes.

"The auctions are a big boost to the local economy," said REDC CEO Jeff Frieden. "After all, when a house sits vacant, no one is paying a mortgage, property taxes, nor gas, electric and water bills -- all of which hurts the local and national economy."

Homes were auctioned at discounted rates anywhere from 50 percent to 75 percent lower than previous home values, said the company. The top deal of the day came on a Sacramento home that was valued at $223,500 but sold for a discount of 86 percent, at $32,500. Bargains like that have made moving to attractive West Coast neighborhoods affordable for some families.

Before participating in an auction, homeowners should research property records and find out exactly what they're bidding on.


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