In the fourth quarter of 2007, there were 31,676 residence foreclosures in California. During the same quarter in 2006, the number was 6,078. That is an increase of 421.2 percent and is the most number of foreclosures since DataQuick began tracking foreclosures in 1988.
The main reason for the number of foreclosures is that everyone shut their eyes and held on for the ride during the crazy housing inflation from 2001-2006. If more lenders had been questioning the ridiculous increase in values (especially when compared to incomes), the level of inflation might not have occurred. There is no doubt that housing prices needed to climb (they had been stagnant for about 10 years before that), but 25% a year for 5 years is ridiculous. There is no way the median house value can be $250,000 in an area where the median income is $40,000 ($3,333/mo.), because the majority of those people cannot realistically afford a $2,000/mo. house payment. That is equal to 60% of the gross wages. After taxes are taken out and the mortgage is paid, the family would only have about $800/mo. to live on. There is no way our incomes in the Fresno area could support that.