Well what do you think? It sounds counter intuitive right. I mean if you see homes defaulting and selling as distressed why would property prices rise in Riverside?

Well, would it depend on what type of loans are defaulting maybe?

First we hit the subprime fall out. These loans were smaller balance. Usually under the conforming limit. So when the distressed loans go to foreclosure and sale, it is lower value homes making up a majority of the sales which will drive the average price downward.

Now, however we are seeing the larger balance Alt-A loans and Pay Option ARMS defaulting. These types of loans secured more expensive homes. So now at default instead of home secured by a $200,000 loan selling for $95,000 at auction you are seeing an original note value of $750,000 selling at a distressed value of $300,000. Couple this with collusion among the banks to keep inventory low and you see you magical rising average home prices.

Keep this in mind the next time you see a news report that the rising home prices are a sign the worst is over.

If you are investing Southern California Real Estate or investing in Riverside right now or you are thinking about it we suggest you attend a seminar this weekend.

It is being held by a company that is being contacted to consult Wall Street tycoons, Hedge Funds and others who have billions invested in the real estate market.

SEMINAR INFO