Flips Blamed for California's Housing Decline

California's Inland Empire region is suffering from one of the highest foreclosure rates in the country. The culprit? House flippers, those who purchased properties to resell them for a fast profit. Instead, however, these housing flips are increasingly heading into default. The toll the trend is taking on the area is visually apparent. Many homes now sit vacant and neglected, as their bargain-basement sale prices drag down the value of neighboring properties — many of them still occupied by their owners. And even for those foreclosed properties that do get new residents, if only temporarily, the lack of care and maintenance often is clear. Home owners who purchased their dream properties in developments such as Towne Square in Corona, Calif., are finding themselves "upside down" on their mortgages — meaning they owe more than they could fetch from a sale — as a result of declining property values. Therefore, uprooting and relocating to a better community is out of the question for many. Real estate professionals, however, say California's pattern of high population growth will help the state bounce back from its current woes. "Everything goes in cycles," insists practitioner Patricia Patton. "I think we'll be okay if people don't panic."

Courtesy: http://www.realtor.com