California home prices continue to slide. Eight chiefs of the nation's top banks appeared before Congress yesterday and agreed to hold off on home foreclosures for three weeks while the new administration tries to come up with a plan.
Financial Times story
The three week delay doesn't really hurt the banks because they already have more vacant foreclosed homes than they can sell. It scores them political points for agreeing to work with Congress while at the same time delaying the realized losses from showing up on their first quarter financial reports.
Somewhere around 60% of California's home sales are foreclosure related which is depressing prices. The market can only absorb about 15% of sales as foreclosures before prices begin to be affected. Even with the occasional delays like the three additional weeks agreed to by Chase, Bank of America and Wells Fargo, foreclosures will continue to dominate the market during 2009. I expect home prices will continue to slide in California for a while longer.
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