Short Sales, Foreclosures and the Los Angeles Real Estate Market. It doesn't look like a recovery is going to happen in the next two-three years. There are too many homes that are in the foreclosure stage. This will continue to increase inventory. The banks are still not releasing much of their inventory in the Los Angeles area, so the decline will probably only be about a 1-3% drop. This is good news for all those people who got those toxic loans and were left with homes deeply under water. This will give you time to do a short sale on your house and be able to get back on track before the recovery in the real estate market hits.
Doug Duncan, chief economist for Fannie Mae, doesn't expect a real upside change until 2013; whether that happens we will see. He feels that the tax credit helped supply a jump in sales while free money was available, and people took advantage keeping the sales prices from dropping significantly.
In California, we still have the 10,000 dollar tax credit; let's see how long. It is available only as long as the money lasts. It is not something Californians should count on, though. I had someone, a few months, back that was expecting to get 10,000 towards the purchase of a new construction and then was left scrambling to find the money for closing. Think of it as a bonus that you might get.
I am still not sure if we should have taxed the country to pay those tax credits. Maybe the best thing to have done is to let the housing prices correct themselves. Buyers, given time, would have purchased properties at the right time. It just made them jump in faster, however they still would have purchased.
According to the Wall Street Journal, except for two areas in California, San Francisco and San Diego, the housing market has remained weak. There was a jump in optimism because of the increse in jobs. However, with the understanding that the substantial increase was due to the jobs created by the census, confidence has just taken a hit.
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