So with the financial market turmoil still ongoing, and no end in sight - Lehman Brothers self-destructed yesterday, and AIG is scrambling to borrow over $70B in cash today or will likely follow suit - what's happening to the real estate market in Los Angeles? Or another way to put it is: Have We Hit Bottom Yet??? (If you don't want to read all the stats you can skip to the conclusion at the end of the blog!)
Leslie Appleton-Young, chief economist for the California Association of Realtors just generated a fresh report hot off the press. Most important/notable findings for those of us thinking of buying, selling and/or investing:
1. The number of California sales hit bottom in 2007 at a -44% decline. Now in 2008, the number of California homes sold is on the upswing - an increase of 15% in volume sold over last year - and our year isn't over yet.
2. First-time Buyer Housing Affordability Index has improved from its bottom in 3rd Quarter 2007; due to prices having dropped on California homes, the ability for buyers to qualify has begun to improve.
3. The number of California sales is improving over the U.S. rate (which is still flat-lined) - on the uptick since March of 2008. The fastest selling home category are homes under $500K; homes over $1M are flat and haven't changed much since 2004. The category which has had the biggest decline in sales is the $500k-999K price range.
4. The number of unsold California homes (inventory index) has decreased from its peak in January 2008 - when it would take 16-17 months to sell all the homes sitting in inventory. Currently as of July 2008, the number of months to sell all homes in California is down to 6 months.
How about the number of REOs/Foreclosures/Short Sales in California?
1. In L.A. County, 19% of all home sales are REOs/Short Sales. For April 2008 alone, 29% of all homes sold in L.A. County were REOs/Short Sales.
2. Defaults and ensuing foreclosures are still on the upswing in L.A. County - the less expensive the homes, the greater the number of foreclosures/defaults. Homes most likely to default are in the under $500K price range.
What about Mortgage Rates right now?
Well, due to the continued turbulence in the financial markets, the Federal Reserve has been forced to keep as much cash as liquid as possible in the marketplace to help prevent more firms from cratering. How does this help you and I?
Right now, interest rates are the lowest they have been in over a year:
Under 6% for loans - even for the no-doc loans if you have a FICO of over 700.
Only difference - the amount of cash to put down for no-doc loans has increased to 15-20%.
For qualified borrowers with good credit, rates can be as low as 5.5% -- the lowest in a very long time.
Conclusions
1. There will be more foreclosures/REOs coming down the pike in the under $500K range for the next few months
2. Interest rates are at an historic low
3. Home sales in L.A. County are now on the upswing but there is still a lot of inventory out there which can cause sellers to be more ready to reduce pricing
If you have been "waiting" for the market to bottom, we are at the perfect time now...As inventory decreases, multiple offers are starting to show up...
So wait no more - this is it!
If you're ready call us today - we are hopping at the office - writing offers and landing deals. Single family homes, condos, multi-units - we work both sides of the hill and are ready to rock and roll!
Leslie Appleton-Young, chief economist for the California Association of Realtors just generated a fresh report hot off the press. Most important/notable findings for those of us thinking of buying, selling and/or investing:
1. The number of California sales hit bottom in 2007 at a -44% decline. Now in 2008, the number of California homes sold is on the upswing - an increase of 15% in volume sold over last year - and our year isn't over yet.
2. First-time Buyer Housing Affordability Index has improved from its bottom in 3rd Quarter 2007; due to prices having dropped on California homes, the ability for buyers to qualify has begun to improve.
3. The number of California sales is improving over the U.S. rate (which is still flat-lined) - on the uptick since March of 2008. The fastest selling home category are homes under $500K; homes over $1M are flat and haven't changed much since 2004. The category which has had the biggest decline in sales is the $500k-999K price range.
4. The number of unsold California homes (inventory index) has decreased from its peak in January 2008 - when it would take 16-17 months to sell all the homes sitting in inventory. Currently as of July 2008, the number of months to sell all homes in California is down to 6 months.
How about the number of REOs/Foreclosures/Short Sales in California?
1. In L.A. County, 19% of all home sales are REOs/Short Sales. For April 2008 alone, 29% of all homes sold in L.A. County were REOs/Short Sales.
2. Defaults and ensuing foreclosures are still on the upswing in L.A. County - the less expensive the homes, the greater the number of foreclosures/defaults. Homes most likely to default are in the under $500K price range.
What about Mortgage Rates right now?
Well, due to the continued turbulence in the financial markets, the Federal Reserve has been forced to keep as much cash as liquid as possible in the marketplace to help prevent more firms from cratering. How does this help you and I?
Right now, interest rates are the lowest they have been in over a year:
Under 6% for loans - even for the no-doc loans if you have a FICO of over 700.
Only difference - the amount of cash to put down for no-doc loans has increased to 15-20%.
For qualified borrowers with good credit, rates can be as low as 5.5% -- the lowest in a very long time.
Conclusions
1. There will be more foreclosures/REOs coming down the pike in the under $500K range for the next few months
2. Interest rates are at an historic low
3. Home sales in L.A. County are now on the upswing but there is still a lot of inventory out there which can cause sellers to be more ready to reduce pricing
If you have been "waiting" for the market to bottom, we are at the perfect time now...As inventory decreases, multiple offers are starting to show up...
So wait no more - this is it!
If you're ready call us today - we are hopping at the office - writing offers and landing deals. Single family homes, condos, multi-units - we work both sides of the hill and are ready to rock and roll!
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