Market develops sense of foreboding - OCRegister

For the first half of the year, the housing market settled into an easy-going, ho-hum pace of gently rising home prices and mildly fluctuating home sales. DataQuick figures show that the number of homes entering the foreclosure process and those actually seized through foreclosure are trending downward. For example, the latest figures show that there were just under 1,200 default notices last month and just over 600 foreclosures – both slightly below the two-year average of 1,600 default notices a month and nearly 670 foreclosures. But it's unclear to what extent the robo-signing scandal and foreclosure-prevention programs are holding back the inevitable tide of underwater properties – many of which get sold as "short sales" for less than is owed on the mortgage. While some may enjoy living in a ritzy enclave free from the riff-raff, it makes it a lot harder to attract and retain middle-class workers – think police, nurses, teachers. Home prices were down in the second quarter of the year. Hence the percentage of households able to afford a plain, median-priced house increased to 31 percent from 27 percent a year earlier, the Realtor data show. According to state Realtors, the minimum income needed today is still above six figures: $115,320. July's had the highest rate of ARM usage since August 2008, a month before the global economic meltdown occurred. July's rate was nearly six times greater than in the spring of 2009, when ARM usage sank to a low of 2. Realtors