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RENEE MONTAGNE, host:

We're talking this week with realtors across the country. The cities of Riverside and San Bernardino, in an area known as the inland empire, 60 miles east of Los Angeles, have some of the highest foreclosure rates in the U.S.

Realtor Bill Santoro says that's partly because few buyers could really afford the houses that were built there.

Mr. BILL SANTORO (Realtor): In the last six years, we've had huge growth in development of homes. The new homes in this last development seem like they forgot about the first-time buyers and the young buyers, and all the homes were huge.

MONTAGNE: Were people able to buy these homes partly because there were loans out there almost just for the asking?

Mr. SANTORO: A lot of the public just wanted a home, and since there's so much publicity on television of mansions and homes and how the rich and famous live, they wanted to emulate that style, and they didn't care how they got it.

MONTAGNE: So right at the moment, give us a thumbnail of the market there. How bad is it?

Mr. SANTORO: Comparing this to the last downturn I was in, all we had was an overabundance of property, but what we have is a double-whammy now because we have this huge amount of build-up, and then they cut out all the loan programs that the public became spoiled and used to.

MONTAGNE: This all sounds like it's pretty bad for your business.

Mr. SANTORO: Well, actually, it just depends on which side of the fence you are on. I've switched over from dealing with what we call live-body sales, which is an owner-occupied property, and I'm working with liquidating assets from seven different banks.

MONTAGNE: I gather that with the foreclosure part of your business, that you are the one that actually has to knock on doors telling people they have to move out, which I think can't be that easy.

Mr. SANTORO: Well, it is hard because, you know, you hear all the stories. In a normal market, why would anybody lose their home? It's very simple. It's death, divorce and a loss of job. Normally if they take a normal, conventional-type loan, then their payment stays consistent.

Most of the payment problems now are because of the negative adjustable-rate loans and also the interest-only loans. In fact, just the other day I went to a gentleman's house. He knew his house had foreclosed, and he told me that his payment jumped up $1,000.

Now, for the average income person, when you get a $1,000 increase within a month, you just can't make that kind of a difference up.

MONTAGNE: Tell us about buyers now. Are those who are buying in a sense shopping for bargains?

Mr. SANTORO: Well, the investors that shop for the bargains, there's a fair amount of them that are out there now because they've seen that the values are dropping 50 percent, but the people that are coming out now that we're looking at the sales that are coming in - many of them are owner-occupied because they were priced out of the market five years ago. Now the prices are pretty much almost back to 1988 pricing.

MONTAGNE: Do you see this current housing really crisis, in a way, having a lasting impact on this part of Southern California? I mean, it was such a boom area.

Mr. SANTORO: Well, real estate has always been a - always cycles. It always goes up and it always goes down, and then what's going to happen is eventually we'll - I'm hoping that by the end of 2009 we'll have a real good leveling-off. All the - my little word for it is called the funky financing will be pretty much extinguished.

Most of the public now that will have bought in these coming years are going to be mostly fixed-rate FHA government-type loans that aren't adjustables. The people have invested a little bit of money on them, and then we'll go back to a more stable market where the only real reason why you should be losing your home is death, divorce and loss of job.

MONTAGNE: Bill Santoro is a real-estate broker with National Realty Group in Moreno Valley, here in Southern California. Thanks very much.

Mr. SANTORO: Thank you.

(Soundbite of music)

MONTAGNE: Tomorrow, a bright spot in real estate: Dallas. This is NPR News.

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