VIPBazaar’s Monthly LA Real Estate news
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What are real estate professionals saying to homebuyers and sellers about current market conditions? The successful brokers and sales associates are talking about the strengths that exist in the market — not the negative media hype. Below are positive angles that appeared recently in the media and underscore why it is a good time to buy real estate.
Recent Quotes & Excerpts about the Positive Signs in the Real Estate Market:
Statistics Reveal Housing Market Bottom is Close
How close are we to a bottom in the housing market? If The PMI Group is right, we’re closer than you might think. PMI, a mortgage insurance firm, looks at trends in home prices, local wages and employment, and other factors to calculate the likelihood that home prices in a given city will be lower two years from now than they are today. Based on their calculations, about 65% of the nation’s housing markets have less than a 10% chance of falling, and 38 of the top 100 have a less than 1% chance.
* In October 2005, near the peak of the boom, the median sales price for a U.S. home reached 7.3 times per capita income; by this May it had fallen to 5.7, in line with historical norms.
* Nationally, the rate of decline in sales is slowing, and in some regions sales numbers have actually perked up. “The indicators are starting to look better,” says Adam York, an economic analyst with Wachovia.
* The national sales figures that get so much attention … are brought down by boom-and-bust markets like Las Vegas, Miami and Phoenix. If hard-hit states like California, Arizona, Nevada and Florida are taken out of the statistical mix, the picture is much more promising.
* The government’s sweeping bailout of the financial sector could boost the housing market by making borrowing easier for buyers.
– “Home Prices: Now for the Good News,” by Brad Reagan and Elizabeth O’Brien, Smart Money Magazine, Oct. 17, 2008.
Some Forecasts Predict Housing Recovery in 2009
Respected economist and Mercer University professor Roger Tutterow predicts the nation’s housing market will return to near normal conditions by mid-2009. “I think we will move sideways for a couple of more quarters, and hopefully by the time we get into the middle part of 2009, we will have had inventory levels come back down to levels where it starts to make sense to clear land, drive nails and start new home construction again.”
– “Mercer Economist: Housing Market Crisis Over by Mid-’09,” by Marcus E. Howard, Marrietta Daily Journal, Oct. 23, 2008.
Former U.S. Federal Reserve Chairman Alan Greenspan wrote in an article for Emerging Markets newspaper that the U.S. housing market will recover in the first half of 2009.
“The recent slowing in the rate of decline in U.S. home prices is the first positive note in this now year-long trauma. More conclusive signs of pending home price stability are likely to become visible in the first half of 2009.”
– “Greenspan Sees Housing Recovery in First Half of 2009,” by Jake Lee, Bloomberg, Oct. 10, 2008
Mortgage Money Available for Buyers
The country’s top housing official has an urgent message for potential home buyers: You may have heard that the credit markets were “frozen,” but FHA has been open for business throughout the credit squeeze, and so are Fannie Mae and Freddie Mac. In fact, FHA’s volume has tripled and the agency is now insuring well over a hundred thousand new loans a month. “There is no credit crisis for individual home buyers who have at least three percent to put down, documentable employment, and at least a moderately good credit record.”
– Steve Preston, secretary of Housing and Urban Development, “Washington Report: FHA Still Going Strong,” by Kenneth R. Harney, Realty Times, Oct. 20, 2008.
Regional Update: Good News from Markets around the Nation
Salt Lake City, Utah
Home sales in the Salt Lake Valley last month were actually significantly up from September a year ago. Part of the reason seems to be that a fair price today just isn’t what people used to think it was. Coldwell Banker promoted the 10-day, 10 percent drop. Four hundred and thirty sellers took up the suggestion, and about 1 in 10 now have a sales contract on their home. “This brought a lot of folks out of the woodwork, which gave us a lot of encouragement because there are a lot of buyers out there. They’re just a little nervous right now.”
– Dan Christensen, president of Coldwell Banker Residential Brokerage, Utah, “September Numbers Show Optimistic View of Salt Lake Housing Market,” by John Hollenhorst, KSL-TV, Oct. 21, 2008.
San Diego, Calif.
An unusual September jump in home sales, together with the biggest monthly drop yet in prices, could be early signs that San Diego County housing is approaching the bottom of a three-year-old downturn. “When [investors] think prices have reached a point where they can buy stuff and rent it out and sell in three or four years and make money, they’ll move in. This was never an if, it was always a when, and now it’s starting to happen. It’s the beginning of a recovery – it’s not the recovery . . . There’s a bottom ahead, we’re not there yet, but it’s clear we’re coming in for the landing.”
– Christopher Thornberg, economist with Beacon Economics, “Jump in Sales, Price Drop May be Signs,” by Roger Showley, San Diego Union-Tribune, Oct. 21, 2008.
Washington State
“More prospective buyers are getting the message about it being a buyer’s market for real estate. Although it’s a ‘great market’ for the buyer, the seller has to understand the housing market has changed in the past few years.”
– Phil Harlan, South Sound agent, “County Housing Market Strong,” by Rolf Boone, The Olympian, Oct. 22, 2008.
More lookers are turning into buyers. Interest rates remain favorable. Good loan programs are available. And at least some sellers are starting to get realistic about the value of their homes. The local real estate market may be “starting to bounce off the bottom.”
– Diedre Haines, Snohomish County broker, “Real Estate Market Favors Homebuyers,” by Debra Smith, The Herald, Oct. 19, 2008
SAN FRANCISCO (Reuters) – Southern California home sales soared nearly 65 percent in September from a year earlier as bargain hunters seized on the region’s glut of foreclosures and depressed real estate prices, according to a report released on Monday by MDA DataQuick.
A total of 20,497 new and existing houses and condominiums were sold last month in the most populous region of the most populous U.S. state, marking a 64.6 percent jump from a record low last September, when the credit crunch hammered home financing.
The tally also was 5.8 percent above August levels, the real estate information service said in its report.
The upswing in sales last month underscored that bargain shoppers were out in force over the summer, trolling Southern California for deals on foreclosed homes, which continued to drag the region’s home prices lower, the report said.
Foreclosure resales rose to account for half of all sales in the region last month, which helped cut the region’s September median sale price to $308,500, down 6.5 percent from August and 33.2 percent from a year earlier.
The region’s median sales price in September tumbled to a five-year low, down 38.9 percent from a peak of $505,000 in spring and summer of last year.
Sales were strongest and price declines their most dramatic in Southern California last month in foreclosure-plagued Riverside and San Bernardino counties, east of Los Angeles.
Home sales in Riverside County rose 106.1 percent and home prices fell 36.8 percent from year-earlier levels. Foreclosures accounted for 68.9 percent of homes sold in the county last month.
Sales in San Bernardino County increased 87.6 percent and prices dropped 36.9 percent from a year ago. Of homes sold in the county last month, 63.1 percent were foreclosure resales.
SALES MOMENTUM UNCERTAIN
Recent turmoil in financial markets and forecasts of a sharp economic slowdown may sideline bargain hunters in the near future, setting back efforts to thin a backlog of unsold property and spark a sustained recovery.
“It will depend on the severity of this economic downturn,” said John Walsh, MDA DataQuick president.
“You have to view last month’s sales in the proper context,” Walsh said. “They represent escrow closings, which reflect purchase decisions made in mid-to-late summer. That was before the dramatic worsening of the nation’s economic crisis in recent weeks. Over the next few weeks our sales data will begin to show how the meltdown in financial markets this fall has impacted housing demand.”
Financial strain already was weighing on Southern California’s homes market before the turbulence on Wall Street of recent weeks.
While sales of foreclosed properties were brisk in September, for instance, sales of high-end properties were relatively slow due to a lack of home financing in the form of so-called “jumbo” mortgages, the MDA DataQuick report said.
“Problems in the jumbo mortgage market continue to undermine high-end home sales,” the report said. “Before the credit crunch hit last August, 40 percent of sales were financed with jumbos, then defined as over $417,000. Last month just 13.2 percent of purchase loans were over $417,000.”
—Yahoo.com, Jim Christie, October 20, 2008
Two-thirds of Americans (66%) think buying a home is the best investment most families can make, despite the recent meltdown of the U.S. housing market. Just 19% disagree.
Forty-four percent (44%) also say it’s a good idea for most Americans to invest in stocks, bonds and mutual funds, according to a new Rasmussen Reports national telephone survey. Thirty-one percent (31%) don’t think it’s a good idea, and 24% are undecided (see crosstabs).
Just 18% expect the stock market to go up between now and Election Day in early November. Thirty-four percent (34%) think it will go down, and a similar number (32%) expect it to remain about the same.
The findings ?????? from surveys Sunday and Monday nights ?????? come as Congress is wrestling with a proposed $700 billion taxpayer-financed plan to stabilize the increasingly troubled U.S. economy.
Eighty percent (80%) say they are following news stories about Wall Street’s troubles and the rescue plan at least somewhat closely, with 44% saying they are following Very Closely.
In a separate survey released yesterday, Rasmussen Reports found that opposition to the plan is growing the more voters find out about it. Now 44% oppose it, while 25% support it.
Sixty percent (60%) of Americans also now believe the U.S. economy is not fundamentally sound, and voters are evenly divided on whether any laws passed by Congress will make things better.
Americans nationwide have said consistently all year that economic issues are their number one concern in this election.
Voters trust McCain slightly more than Obama on the economy , but they give Democrats as a group the edge over Republicans in the handling of economic issues.
While Americans across gender, race, income and party lines agree by sizable majorities on the financial wisdom of buying a home, the response to buying into the stock market is far more varied.
Men think investing in the market is a good idea by a 54% to 28% margin. Women are almost evenly divided on whether it’s a good idea or a bad one.
Over half of Republicans (56%) favor investing in the market compared to 46% of unaffiliated voters and just 33% of Democrats.
Women and men under age 40 are more confident about investing than those older than 40. Fifty-five percent (55%) of those age 18-29, for example, think investing is a good idea versus 34% of those 65 and older.
Forty-eight percent (48%) of married adults favor investing, but unmarried adults are evenly divided on the wisdom of investment. Similarly, 48% of whites believe investing in the market is a good idea, but only 29% of African-Americans agree.
This telephone survey of 1,000 Adults was conducted by Rasmussen Reports September 21-22, 2008. The margin of sampling error for the survey is +/- 3 percentage points with a 95% level of confidence.
—Yahoo.com, September 24, 2008
Looking for the best VIP SERVICE realtor in LA to help you with your home purchase?
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Coldwell Banker
23676 Malibu Road
Malibu, CA 90265
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