At the height of it, about 1 in 10 houses fell to foreclosure. Houses that sold for more than $500,000 before the crash were going for $200,000. In some neighborhoods, fixer-uppers can be found for under $20,000.

City officials say they fully expect Stockton to shake the title in 2010 (it’s recently dropped to No. 4 or 5).  But how far away from the top can it go? The population of 290,400 is strapped. Up to two-thirds of homeowners owe more on their properties than the houses are now worth. Housing values have dropped more than 60 percent since the height of the boom four years ago, more than any other city.

The City of Stockton is situated on a beautiful prairie at the head of Stockton Slough, a wide and deep arm of the San Joaquin River, which extends eastward some three miles from the river into the plain.

A German immigrant, Charles M. Weber, who acquired over 49,000 acres of land through a Spanish land grant, founded Stockton in 1849. Several names have been attributed to Stockton, including Tuleburg, Gas City and Mudville. But Captain Weber chose to honor Commodore Robert F. Stockton by bestowing his name on the fledgling community. Stockton was the first community in California to have an American name, all others being of Spanish or Native American origin.

To spend time in Stockton, a plain-jane city of single-family home neighborhoods edged by freeways and lingering farms, is to begin to understand the calamitous effects of the nation’s foreclosure crisis, which has devastated so many once-booming places.

Probably the happiest people are the ones scooping up foreclosures. Speculators are back, of course, but the other bargain hunters include people who only dreamed of being able to afford a house. They’re now living the dream in Stockton.

So I embarked on my tour of foreclosed properties with a very eager buyer.  More than one home we toured showed visible signs that squatters had had their way with the place.  One house had tilted floors, in another, all the fixtures were gone. The bathroom, the kitchen – the whole place – needed a do-over.

The buyer a middle-aged working class man knew what he wanted. He had been looking at real estate listings for years. But when the market was high, he could not afford to buy. Everything was well above his price range.

Then came the housing disaster, and opportunity.
Mr. Buyer soon began scouting houses on the San Joaquin County foreclosure listings. As soon as he saw the one he wanted, a corner property on a nice quiet residential street, he decided to wait for it.
The house had a big front porch that gave it a farmhouse look.  It reminded him of the craftsman style.    Neighbors showed pride of ownership – planting raised gardens, flowering fruit trees, and bougainvillea. It wasn’t as big as other foreclosures in the mid-$200,000 range but Mr. Buyer knew this house had location, location, location, besides its four bedrooms, three baths. This was a place where he could see staking roots, growing a family.

While Mr. buyer waited for the house to come on the market    he   took a real estate class for first-time homebuyers. Their instructor Serena Russell taught them how to research properties, find the right mortgage, make a deal. The very morning the house showed up on the real estate listing site he’d been checking every day, Mr. Buyer called Serena.
He put an offer in the same night.  Sure enough, his offer was accepted.  He bought the house, which had sold for more than $500,000 three years earlier, for $175,000.

Mr. Buyer loves his home.  Everything in it, stainless steel appliances, tile floors, paint, looked brand spanking new.
The family that lost that house had put money into it……….the solar panels – which have cut their utility bills   were appraised at over $100,000.
There are so many other aspects to this market.   This market, can give you the opportunity to live the American dream.”