Homeowners in Some Areas of CA Discouraged from Putting Homes on the Market

In some areas of California, there are so many foreclosed homes available for people to purchase cheaply that real estate agents are discouraging prospective sellers from even putting their houses on the market.  
 
The most extreme example of this is perhaps in Stockton, about 85 miles east of San Francisco, where roughly three of every four homes for sale are in or on the path to foreclosure.  
 
The city's resale market is "pretty much gone," said Cameron Pannabecker, owner of Cal-Pro Mortgage.  
 
"I don't know an agent today who would take your listing unless you're a hard-luck case. There is just too much competition," Pannabecker said.  
 
Properties that at the peak of the market two years ago were selling at $500,000, or appraised at $500,000, are now selling for $200,000, he said.  
 
And because foreclosures dot all areas of Stockton, buyers have their pick of properties, said John Knight, a professor of finance and real estate at Stockton's University of the Pacific Eberhardt School of Business.  
 
"Honestly, there isn't a huge amount of difference between a foreclosed home and a regular home than the prices," Knight said.  
 
Worse for people trying to sell their homes, lenders in possession of houses and condominiums may keep their fire-sale in full swing for months to come to attract investors to a market near the top of U.S. surveys of areas hit by foreclosures.  
 
"It's a tough market to be a normal seller," said Stockton real estate agent Michael Blower of Blower Realtors.  
 
"I'll really ask them, 'Do you need to sell?' Because your competition are banks who want to clean it off their books."  
 
Calling up listings on a database, Blower noted just over 3,500 of nearly 5,000 local homes listed for sale are in some stage of foreclosure. "There are more listings coming," he added.  
 
More listings would add pressure on local home prices. But they may only hold prices down rather than drag them lower because investors are slowly coming to Stockton in search of bargains, and in some cases they are in bidding wars, albeit at comparatively low prices.