Calif. Town Hit Hard By Housing Slump

Home Sales Have Dropped Nearly 80 Percent

(CBS)  According to a new report, median home prices in hard-hit California were down $65,000 in November compared to a year ago, and many local governments are losing tax revenue because of declining property assessments.

As CBS News correspondent Sandra Hughes reports, home sales in some areas are taking an especially hard hit.

Ernesto Ramos is a real estate agent, but he couldn't have picked a worse time to hang a for sale sign on his own home. "I decide to put the house on the market, but unfortunately we haven't been able to sell the property, you know, here we are still," he says.

Ramos lives in Paramount, Calif., a working class community about 15 miles south of Los Angeles. Home sales there have all but stopped.

In the third quarter of this year, only 30 homes changed hands, down from 134 homes the previous year. That's a 78 percent drop, the largest in the country.

Gary Endo has a real estate office in Paramount, but he will not accept new clients here because homes just aren't moving. "A lot of the things on the market right now is fear. A lot of the buyers are sitting on the sidelines waiting to see what happens," he explains.

While cities across the country have seen home sales slow, the areas with the sharpest drops are clustered in southern California.

The problem for places like Paramount has been building for years. Home prices rocketed far beyond what a middle-class family could afford. For example, in early 2003 a home in Paramount cost around $200,000. Last year, a typical house sold for almost a half a million dollars.

But as prices dropped, many buyers were left holding a loan that far exceeds the home's value. They are left in a bind.

"It's not easy to lower the price of your home, because if you only have 10 percent equity in the home and you lower it 10 percent, that may be all your equity," explains Delores Conway from the USC Lusk Center For Real Estate.

And now loans are re-setting at higher rates so many sellers can't afford to lower their prices and buyers can't secure financing. The result: many of Paramount's homes are ending up in foreclosure.

Ernesto Ramos plans to wait and see if the market will bounce back before he drops his price.

Ramos says he's stuck with this market - a market where buyers and sellers are in a deadlock.

[werchange]

RON PAUL WILL RESTORE U.S. SOVEREIGNTY
All of the trade deals and world government organizations, which all of the presidential candidates support (except Ron Paul), such as the ICC, NAFTA, GATT, WTO, and CAFTA, are all a major threat to our nation''s sovereignty. They transfer power from our government to unelected foreign elites. The ICC wants to try our soldiers as war criminals. Both the WTO and CAFTA could force Americans to get a prescription to take herbs and vitamins. The WTO has forced Congress to change our laws to meet their needs, and not our own. If anything, the WTO makes trade relations worse by giving foreign competitors a new way to attack U.S. jobs. The NAFTA superhighway, being built by a Spanish company, is just one part of a plan to erase our borders and create the North American Union, a single nation State like the EU, out of Canada, the U.S. and Mexico, with a new, unelected bureaucracy and money system. Forget about controlling immigration under the NAU scheme. There won''t be any borders anymore, or a free America. Our limited, constitutional government will be gone forever. Let''s not forget the UN either. It wants to impose a direct Carbon Tax on us. Ron Paul successfully fought this move in Congress last year, but if we are going to stop ongoing attempts of this world government body to rule over us, we need someone in the White House who knows how to say "No." We must withdraw from any organization or treaty that infringes upon our nation''s sovereignty.

[llngcrow68]

Hope its still not too late for the American people to realize their blunders of choosing the same administration for two consecutive term......hope its not too late. Wake up!!! Look around you and see what is really happpening! No jobs, no healthcare and no pension later because all those money has been dumped into the war zone! Third world countries might not be a bad place to live after all. Socialized medicine and free education! What else can you asked for!

[republic1776]

I don''t know who would pay that much money for a home in Paramount. (East LA)
The house market went cary back in the mid-90''s.
Imagine if interest rates went up.
Not good!

[mrbrill]

While it''s true that the buyer has their own responsibility for deciding to purchase the house and taking the loan, the seller (in this case, the banks making the loans) also has responsibility for giving all the facts to the buyer so the buyer can make an informed decision. Unfortunately, the banks thought only of their own greed and didn''t care if the buyer would end up defaulting on their house. The banks thought they were in a win-win situation of getting more profit from each loan plus getting the property in case of a foreclosure. Through their own greed, they have caused this housing mess we are in... but in the end, what kind of idiotic government would allow this type of practice? Ohhhhh, never mind.

Now ALL taxpayers are paying for the bank''s greed. It''s costing all of us, even though of us who didn''t make poor decisions on purchasing a house.

[missingamerica]

Welcome back to the "good old days" of either wealth or grinding poverty.

Herbert Hoover would be delighted.

[mom_o_truth]

Wake up people, as the Pepsi commercial says.

[mom_o_truth]

Right on Chad55555. It is called financial cannibalism. We are 95% serving the 5% who control us in the name of the American dream, sorry for your home equity. THE MOB exported our jobs to India and China. It started in 1991 by laying off workers to boost the share profit per employee by cutting the number of employees in the denominator of the ratio, a cheep accounting trick. THE MOB planned selling SUVs on purpose to suck money at the gas pump, heating bill, ARM loans and spend Half a Billion a day of your tax money on a useless war to benefit Halliburton and the Exxons. There is enough oil but not enough refineries. Recall, no more new refineries built. Our American Dollar lost 80% of its value since 1983 compared to the Swiss Frank and 40% versus the Euro in the past 7 years. How about surviving these dark ages without a job nor health insurance nor social security LIGALLY for over 16 years since the first Iraq war. How far will it hurt before those naove who elected this administration twice will finally realize the gay trick that was used to get their votes ?

[johngoodnews]

Blaming the declining US economy on a slumping housing market caused by the poor buying houses AND having people believe that--Priceless!

[gheemaster38]

Obviously you have NEVER signed loan documents before.
At least an inch thick of legal jargon in small print...

USAyesterday

mine looked to be 2 inches thick. My wife was so mad she made the title company and others sit and wait while she read every single page. Sometimes twice. It took about 2 hours and she is a fast reader. How many of people will sit and read through every page. Especially with the "smaller print'' when you finally reach the financing section? Her belief was that the mortgage company felt if they brought all these papers out she woulds skim through them and sing anything. 2 or 3 hours later they knew they were wrong.

[chad55555]

This new world order the universitys and experts said would make the world a better place to live has done nothing but send our jobs overseas,taken God (christian)out of our schools and hearts. It''s starting look like we lost WW 1 & WW 2 when the people that we fought is now in control of our banks,and most every asspect of American live. LOOKS LIKE OUR LEADERS WERE BOUGHT OFF,TO SELL THE AMERICAN PEOPLE OUT TO REST OF THE WORLD. I COULD BE WRONG BUT WE HAVE REACHED A POINT WHERE WE CARE MORE ABOUT OTHERS THEN WE DO THE AMERICAN PEOPLE. IT''S REALITY CHECK TIME IF IT;S NOT TOO LATE FOR US.

[brianbwb-2009]

"...The result: many of Paramount''s homes are ending up in foreclosure."

And so the banks, having effectively collected "rent" will now ask to be bailed out of their "loss" while still holding the property, which they can then sucker another "buyer" into "renting". What a sweet racket...

[brianbwb-2009]

What a great idea, why not target areas for housing boycotts? Don''t buy anything in that area until prices are reasonable, then switch to a new target?, Maybe state by state.

It worked for sugar back in the 60s....

[underdogus]

The most damming indicators of national decline are upon us. We watched an oligarchy rise to take economic and political power. The top one percent of the population has amassed more wealth than the bottom 90 percent combined, creating economic disparities unseen since the depression of 1929....

[underdogus]

easy now USAyesterday the GREAT depression may be round the corner..

[motherhen11]

What a *** shame. That''s just so awful.

[brianbwb-2009]

All these absolutely DUMB "housing-bust" comments are laughable and probably posted by wet-behind-the-ears 30-somethings who don''''t know their elbows from their tonsils.
Posted by Luigi999

Perhaps, but don''t forget that these are the home buyers of the future, and they will still have the same sentiments until the market falls back to more realistic levels. It seems that by ignoring that fact, you yourself are still a little moist, and could also use some remedial anatomy courses.

[dennisd29]

I have been saying for about three years "who can afford to pay that much for a house", obviously no one could. And yes, lets blame the rich for this the haves being greedy and taking more. Forget about the people who obligated themselves for payments they can no longer make and not being responsible borrowers. They are just poor victims of the Bush administration and corp lender greed. Somehow I''m sure VP *** C. and KBR are involved. Now these same people are looking around for a government bail out. Doesn''t look like that is going to happen, made some errors in financial judgment did you? You may just have to accept that responsibility and SUCK IT UP. You can legislate truth in lending, which has already been done, but you can''t make the idiots read what they are signing.

[usayesterday]

The housing market will correct itself to the respective regions of average income levels before we see any solid increases in home values. For over 5 years, homes have skyrocketed past the average income levels of most Americans.

There has been many years of "feast" in the real estate market... now it is the time of "famine". Sadly, the term "famine" will be seen both figuratively and literally in the very near future.

But don''t worry... the "haves" and "have-mores" will be able to snap up those foreclosed homes with cash on hand, and then lease them out at a high monthly rent to people already scraping the bottom of the financial barrel.

[jetranger7]

Looks as if ol'' LUIGI999, is one of those over-optamistic, fools ! First thing thats going to have to happen is stop outsourcing AMERICAN Jobs overseas by these greedy CEOs, and STOP foreign IMPORTS, and create decent liveable wages that put AMERICANS back to work ! The other major event, would be to actually uphold the labor laws that were set forth in this country and stop these Corporate Employers from raping the workers ! Enough is Enough of these Corporate CEOs getting these Ridlicious salaries and really huge bonuses !! Remember the ol'' saying in the late 80s, that was popular, "My Employer can afford a 150ft-15-Million Dollar Mega Yacht, but can''t afford to give their employees HEALTH CARE INSURANCE" ! it used to be on bill boards across the country,,, my how we''ve forgotton !!!!

[luigi999-2009]

I''ve been in real estate for over 30 years and all I can say is that the real estate market will be back - and back big time. All these absolutely DUMB "housing-bust" comments are laughable and probably posted by wet-behind-the-ears 30-somethings who don''t know their elbows from their tonsils.