Rosewater

"Only one in four California households make enough money to afford a median priced home in this state," said Alexis McGee, president of Foreclosures.com. "In many California communities, the situation is worse." Ms. McGee cited a January California Association of Realtors report that put affordability at 19% or less in several Bay area counties in the north and as low as 15% in Santa Barbara. "California markets have stayed hot longer than anyone thought they would, partly because the state has gained more than 500,000 in population each year for the last four years," said Ms. McGee, "but incomes are just not catching up." She went on to say that the disparity between incomes and prices combined with rising interest rates would put downward pressure on home prices this year, and that, she said, would bring an increase in the number of foreclosures. "We're already seeing a rise in foreclosure activity," said Ms. McGee. "Almost 16,000 California homes went into default in the third quarter of last year, a little over 3% more than in the second quarter." She added that persistent and protracted unemployment was a contributing influence.