Housing crisis hits in Bakersfield Story Created: Aug 11, 2007 at 3:00 PM CDT https://www.eyeoutforyou.com/home/91...ef=patrick.net
At a glance, Blue Meadow Court in Oildale looks like your typical suburban neighborhood. But look closer, and you'll notice some of the houses are empty.
The bank foreclosed and the people that lived there were forced to move out- and others might not be far behind. Of the 45 homes on Blue Meadow Court, and neighboring Fern Valley Way, 20 are in some stage of default, with six already foreclosed on
Gary Crabtree has been appraising real estate in Bakersfield for 45 years and says this is rare. He, along with many in the industry, blame the housing crash on banks that gave risky loans to people that couldn't afford them, the so-called subprime borrowers. Now they can't make the payments and the banks are taking back the houses and selling them at auction.
All of the defaulting houses on Blue Meadow Court and Fern Valley Way were bought with subprime mortgages.
Crabtree notes, "Eventually when these properties re-sell on the open market, you can expect that they're going to re-sell at something significantly less than they originally sold for."
And that will bring values down for the entire neighborhood, by as much as 15 percent, according to Crabtree's estimates.
The subprime squeeze is being felt all the way from Oildale to Wall Street and everywhere in between.
The Dow Jones Industrial Average took a 380-point hit on Thursday and was down another 2-hundred on Friday before the federal government stepped in. The feds pumped $38 billion into the system to cover for banks that have stopped making loans because of massive losses due to defaults and foreclosures.
Moneywise Guy Garro Ellis tells Eyewitness News, "I think it's very drastic. In fact, the amount of money they issued today was the most since Sept 14. 2001, right after the terrorist attacks. That's how drastic."
So, when will it end? Not any time soon. Many analysts say it will take until 2009 for the housing market to correct itself.
At a glance, Blue Meadow Court in Oildale looks like your typical suburban neighborhood. But look closer, and you'll notice some of the houses are empty.
The bank foreclosed and the people that lived there were forced to move out- and others might not be far behind. Of the 45 homes on Blue Meadow Court, and neighboring Fern Valley Way, 20 are in some stage of default, with six already foreclosed on
Gary Crabtree has been appraising real estate in Bakersfield for 45 years and says this is rare. He, along with many in the industry, blame the housing crash on banks that gave risky loans to people that couldn't afford them, the so-called subprime borrowers. Now they can't make the payments and the banks are taking back the houses and selling them at auction.
All of the defaulting houses on Blue Meadow Court and Fern Valley Way were bought with subprime mortgages.
Crabtree notes, "Eventually when these properties re-sell on the open market, you can expect that they're going to re-sell at something significantly less than they originally sold for."
And that will bring values down for the entire neighborhood, by as much as 15 percent, according to Crabtree's estimates.
The subprime squeeze is being felt all the way from Oildale to Wall Street and everywhere in between.
The Dow Jones Industrial Average took a 380-point hit on Thursday and was down another 2-hundred on Friday before the federal government stepped in. The feds pumped $38 billion into the system to cover for banks that have stopped making loans because of massive losses due to defaults and foreclosures.
Moneywise Guy Garro Ellis tells Eyewitness News, "I think it's very drastic. In fact, the amount of money they issued today was the most since Sept 14. 2001, right after the terrorist attacks. That's how drastic."
So, when will it end? Not any time soon. Many analysts say it will take until 2009 for the housing market to correct itself.
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