Yes there are signs of recovery even if anemic? Pending sales on the increase (especially in North San Diego County), Investors coming off the sidelines, multiple offers on reasonably priced properties and interest rates hitting historical lows. To look at this objectively since part of the increased business is typical in our part of California or San Diego this time of year. There are at least two big factors to put pressure on the 2nd half of the year or from July on. The first but probably less important is buyer confidence is low combined with cyclically the number of buyers start to decrease. The next and more significant is to be seen this April-June, I am told is the period of time one of the largest segments of those crazy low 5/1 arm loans some of us acquired back in 2003 will reset. That leaves those homeowners with the choice of refinancing (if they qualify and more importantly if their home appraises) at a rate that may be as much as twice as their current or sell. Between those new sellers and the bank owned properties we expect to see over the following 3-12 months we can expect to see a larger than normal addition of new and aggressively priced inventory hit the market. The total number of foreclosures and notices of default that have already gone through the system so far are roughly only 20% of the number many analysts say we will see.
Though that may panic some, including our fed, they have stepped up with these latest rate cuts with more potentially on the horizon and more importantly have loosened the reserve requirements which frees up a ton of cash to lend at these already great interest rates. That should most likely take its effect in 3-12 months. So... if I were to bet on when the bottom of this market will hit would be fourth quarter this year and by then you may just be competing with the rest of the speculators trying to jump back in. My 2 cents,
Jeff Cole, The Cole Group
Windermere Exclusive Propeties
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