Foreclosure Rates Continue to Climb Around the Nation and Taking Major Jump in California

07/10/2007 (KFSN) -- According to the most recent "Realty-Trac" survey, foreclosures around the US were up 19% in May, compared to the previous month, that's up 90% compared to May of last year.

Even more disturbing, California showed a jump of 30% in May and an amazing 350% jump in foreclosures compared to last year. The real estate slump has led Merced County to give thousands of homeowners tax breaks this year. But, that may not be good news.

About 6,500 Merced County homeowners have received letters letting them know they will receive tax breaks this year. But, the bad news is it's because their property values have fallen.

Amelia Peterson was surprised to receive a letter from the county assessor over the weekend, but she wasn't surprised by what it said. Peterson says, "My house has taken a drop approximately $50K."

Peterson is a single mom who bought her house just as the real estate boom began about two years ago. At that time, people were lining up to buy homes. Peterson says, "It was interesting because then, every month homes were going up $5 to $10K, so if you wanted to get a house, you had to get in there and get it."

It's a stark contrast from the current housing climate. More than 300 Merced County homeowners have foreclosed so far this year, and property values are still slipping. But, there is a silver lining.

The County has taken the decline into account and thousands of single family homes will be taxed based on the lower values. Kent Christensen, Merced County Assessor, says, "They're gonna get the benefit that we are being reflective of the market and so their taxes will go down, so it will be a little bit of benefit for them in the short term."

Real estate agent Gail McCullough says it won't be long before prices start to rise again. But, in the meantime, she says homeowners should realize the market is just returning to normal levels, and buyers should take advantage.

Gail McCullough says, "It's a wonderful time for buyer's because the rates have come down, the interest rates are excellent, and of course the market values have come down."

Homeowners who think their property values are lower as of January 1st, than their current assessed value can contact the county to see if they qualify for tax breaks.

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