Archive for February, 2009
Is This Real Estate Stimulus For Real?
To Schedule a showing for this property, please Click HerePosted: February 14th, 2009
Bart Smith’s
REAL ESTATE UPDATE
February 3, 2009
Do you feel “Stimulated”?….neither do I. We will, most likely, not feel much if any of the stimulation the Administration is hoping for. Everyone seems to be tightening their belts to ride out the economic storm. Even though billions will be spent, the private sector, where most of us live, will see a miniscule portion. So, we’ll just have to stimulate ourselves with good, discerning choices and keep the faith that our country will get through this like it has all the other cycles.
Housing perspective in Orange County….recent number indicate that we have 5.39 months of inventory. Let me explain. Based on the number of active listings and the number of homes that went “pending” (contracts to purchase), they would all be sold in 5.39 months if no new homes came on the market. That measure gives us an idea of the health of the local real estate market. A year ago we had 12.51 months of inventory. So, things have improved dramatically. A big part of the reason is that most home sellers just don’t want to compete with all the bank foreclosures. As the foreclosure market slows down we will see more “normal” properties come onto the market.
Speaking of Bank Foreclosures….during the 30 day period ending Jan. 22, there were 888 homes that went “pending” and 1109 active bank owned listings, for only 1.25 months of inventory. This reflects a “seller’s market” in this segment, a necessary step in the recovery of the housing market. So, even though we will continue to see more foreclosures in the market, they are being absorbed as fast as they become available.
What are “Short Sales”, you ask?….These are properties on the market where the loans are more than the value of the home. The owners have asked the banks to “take the hit”. 541 of these went pending in that same 30 day period against 4004 active listings, for a market time of 7.4 months. This type of listing takes longer for the bank to respond to offers, because they have to perform their due diligence as to price, etc., whereas that function has already taken place on the bank owned properties.
So, where is the housing market headed?….Glad you asked. With the current low interest rates (around 5.25%) and all the “stimulation” talk, buyers are actively seeking properties. Our listings are receiving multiple offers. The spring housing market should be strong, indeed. This is not to say we will see rapidly increasing prices, but we should see the end of the free fall in prices we have had for the last two years. If you don’t have to sell, don’t sell. If you are thinking about buying, this is the most obvious time to be a buyer that I have seen in over 20 years.
Until next time,