An article on Bloomberg.com states home prices in California have dropped 32% suggesting the abundance of foreclosure listings is to blame. California had the second-highest U.S. foreclosure rate in April, one for every 204 households, and the most foreclosure filings for the 16th consecutive month, according to RealtyTrac Inc. a foreclosure listing and data provider

This is good news for owner-buyers and investors but it doesn’t really represent bargains galore as much as it signifies the market returning to normal. What I mean is that real estate prices in California increased so high so fast that normal everyday folks couldn’t afford to buy a house and many of the ones that did buy a home are struggling to keep them. How do I know? Well that why they are being foreclosed. The rapid price declines in California as in many parts of the country is evidence of the market finding normalcy, that magic price people can afford and are willing to pay.

Another article at blackenterprise.com I was reading said it best; “May 21–More than one-third of Los Angeles County families could afford to buy an entry-level home in the first quarter — 66 percent more than a year earlier — thanks to an epidemic of foreclosures that depressed prices, a trade group said Tuesday.”

It’s really just basic supply and demand. When the folks can’t afford the supply demand falls.