Homes sold–up 25.5%. Homes sold–up 17.1 % Homes sold–up 48.6%. Is this happening on Mars? In Russian invaded Georgia? In the Arctic? Would you believe this is happening in, of all places, Southern California!
Well, the figures, as they say, speak for themselves. Apparently, falling home prices over the past year are bringing about a pretty hefty increase in sales for most areas of SoCal, other than Los Angeles itself.
The number of homes sold in Riverside County this July compared with the year before jumped 48.6%;in Orange County, sales rose 17.1% and in San Diego County, the increase came in at 10.5 percent. In LA County, sales continued their downward slide–negative 3.2 %.
Starting to work?
Of course, in some ways, this should be expected. Lower home prices should bring more buyers into the marketplace. But this housing crisis is coupled with a severe credit crunch. So, the prices may be down, but fewer people can get a mortgage to take advantage of the situation.
And yet, some folks clearly are abe to take advantage of the lower prices–the median home price in Southern California last month was $348,000, down from $505,000 just one year ago–more than a 30% drop!
So, it’s over. Right?
Not so fast. The temptation might be to look at what is happening in California and conclude the housing crisis is now finally drawing to a close.
Don’t go there just yet,though.
The mortgage giants Fannie Mae and Freddie Mac are far from robust. To the contrary, an article in Barrons last weekend suggesting the government will have to bail out Mae and Mac after all –which would not go over well with the shareholder crowd–or the taxpayer–caused a dramatic reaction.
Fannie nosedived to a 19 year low and Freddie dropped to its lowest price in 17 years because of the report.
The health of both Fannie and Freddie —directly related to whether this housing crisis will end sooner or later. And, that is still up in the air.
Taking just one part of the country and trying to draw conclusions about the rest of the country would be an enormous mistake it seems to me. We need to see further evidence of increased housing sales, from different regions of the nation, before proclaiming victory.
Didn’t Bush do something like that a few years back with Iraq?
Related posts:
- Breaking News: Existing Home Sales Fall by Largest Amount Ever!
- Renters Driven From Foreclosed Homes; While Cars Sales Skid
- Existing Home Sales Hit 2nd Highest Level Ever
- Declining Home Value + Increased Cost Of Gas = Major Headache
- Sign of the Times: Southern California home sales down 30 pct in September
Article Author: Charles FeldmanCharles has written 179 articles for us.
Visit Charles's Website: http://www.thefeldmanblog.com
Charles is currently reporting for KNX Radio in Los Angeles, is the co-author of the book No Time To Think, and can be found commenting about the news on his blog, The Feldman Blog, as well as on The Huffington Post.
Joshua Dorkin
{ 12 comments… read them below or add one }
It;s good to know that, somewhere in this country, at least, home sales are on the upswing. It gives one cautious optimism regarding the housing market.
I wonder how many were bank owned? That would be interesting to know.
I guess it’s just beginning. RE market needed some stabilisation and now it’s again ready. There will be definitely not such gains in prices as there used to be but still…. at least for brokers it is good sign
We all knew it was a matter of time when the prices would start to drop because people could not buy anything before. I think the prices will continue to go down encouraging more home sales. I am surprised about California though.
You have done a huge amount of research, i really liked your article as it helped me in my thesis, thanks..
Why go with Hard Money or Private Money Lenders?
Many Homeowners and Investors ask them selves this question, but sometimes you need to read more to get some knowledge and than you will understand if Hard Money can really help you.
First of all we understand that Hard Money Lenders are privately owned by a person or a small entity, basically it can be someone that have some money in the bank and he understands that to loan his money will be a much faster way to make more of it.
Example: You have $100,000 in your bank
Option 1- you will put the money in a CD account and make 4.75% APR.
Option 2- You will loan your money and make 12% APR and charge 5- 10 points on the loan.
So that’s what private Money Lenders do, they go with the second option- Smart.
So why go with a Hard Money Lender?
1. Faster funding time, 5-7 days
2. Less documentation to show.
3. No credit is OK.
4. Large Loan amounts are OK too, up to $500,000,000
5. Some Hard Money Lenders will fund deals out of the country as well.
As you can tell today it is a much better, faster and easier way to go.
You’re probably asking your selves about the costs for this loan?
The Interest rates are not more than 12%, while with a Bank it will be probably 8.5% if they can do the Loan at all.
The points will be not than 10 while Banks will charge up to 3.
Now that you understand the difference you can make a decision, to approach a Hard money Lender or just go with your Bank.
I was wondering about borrowing from a hard money lender for a duplex. We have quite a bit of money in a 401k but would rather not touch it. Is it a smart thing to do?
I was wondering about borrowing from a hard money lender for a duplex. We have quite a bit of money in a 401k but would rather not touch it. Is it a smart thing to do?
Not from the poster above you who is spamming message boards.
My sister was actually thinking about buying her first home now, because she thinks prices won’t be this low again for a long time. I think she is right and other people are seeing the writing on the wall.
i think much of the pain in residential mortgages has been had. what is not so developed is the effect on the commercial mortgage sector. once this effect kicks in jobs will go and there’ll be more pain in thhe residential mortgage sector.
My husband and I are planning to buy a new house since prices are very low this time. Thank you so much because your ideas helps a lot to decide.
It is the same story over here in UK. Yesterday’s published Nationwide house price index stated that the house prices have dropped 10.5% since Aug last year. This is the first annual double digit price drop since 1990. And the signs are that it is not over yet.
There is no shortage of sellers trying to sell their houses and there is hardly any shortage of investors interested in buying either. However it is the finance that is in short supply.
Peter