Pacific Coast Slowing; Defaults Rising

ForeclosureS.com reports that the Pacific Coast is beginning to shift to a buyer's market:

"We're seeing reduced price appreciation in the Pacific Northwest, and Alaska although population growth and job growth there remain strong," said ForeclosureS.com president Alexis McGee. She added that while the pace of home price increase in Hawaii had slowed slightly, annualized price appreciation year over year was still above 20%.

Also, defaults are on the rise:

She said that several overheated California markets were beginning to correct with prices declining slightly in the North, and slowing sales and less price appreciation in the South and that defaults were rising.

"A great many risky loans were issued in California as home prices reached the stratosphere," Ms. McGee pointed out. "Interest only and option ARMs were used by many buyers to qualify for homes they could not otherwise afford. That means trouble in the near and intermediate future."