All posts by TheArcadian

Inventory

Inventory and Market Report – 2/9/08

Zip Codes: 91006, 91007market_icon.jpg

Current Market Listings as of February 9th, 2008
Properties for Sale: 253
Median Listing Price: $749,000

Median sales price for quarter ending Jan. 2008: $650,000

December 2007 Sales Report
Properties Sold: 29
Median Price: $790,000

Foreclosure Updates as of February 9th, 2008
Properties in Foreclosure: 8
Properties in Pre-Foreclosure: 66

Inventory has not changed much this past week and plenty of homes are still for sale. Listing and sales activities have been known to pick up after each year’s Super Bowl party. I’m predicting that more homes will be coming online faster than can be sold this Summer.

If you are not convinced that 2008 will be a bad year to buy, I suggest you read this article on why real estate prices can easily drop another 25% in price. As the article points out,

Shocking though it might seem, a decline of 25% from here would merely reverse the market’s spectacular appreciation during the boom. It would put the national price level right back on its long-term growth trend line, a surprisingly modest 0.4% a year after inflation.

No one can argue against the fact that the U.S. real estate prices have inflated beyond its fundamental values and we have a serious affordability issue.

Property and foreclosure numbers obtained from ZipRealty, Trulia and Foreclosure.com. Monthly sales numbers obtained from DataQuick News.

News

Weekly News Recap 1/31/08

Every Friday I will provide a short list of news headlines that reflect the current state of our housing market; either locally, statewide or nationally. By looking back at these headlines we can analyze the current state of the market and project where it is heading from here.

Just in case you missed it, SavedByGrace had profiled a home that reflects how delusional people in this market currently are.

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1/24/08 – Housing Slump Starts to Hit Stronger Cities (WSJ)

In California’s Orange County, around a quarter of the listings are either foreclosed properties owned by lenders or homes owned by people trying to do “short sales,” or sell for less than the amount they owe the bank…

1/28/08 – Sales of New Homes Fell by 26% in 2007 (NYT)

1/28/08 – Countrywide CEO gives up $37.5MM payoff (MarketWatch)

1/29/08 – Foreclosures up 75% in 2007 (CNN)

1/30/08 – Federal Reserves lowers federal fund rate by 0.50% – down to 3%

Despite 1.25% in interest rate cuts so far, major stock indexes ended in January with heavy losses. Home sales volume is down and foreclosures are up dramatically compared to last year. Although Bush is pushing for his stimulus plan to get the economy moving, everyone seems to have forgotten that the nation still faces an affordability problem.

We don’t need:

  1. Lower interest rates
  2. More cash from the government

We do need:

  1. Reasonably priced homes
News

Weekly News Recap 1/24/08

Every Friday I will provide a short list of news headlines that reflect the current state of our housing market; either locally, statewide or nationally. If you feel that I’m missing one, please leave a comment linking to the article.

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1/17/08 – Median house price tumbles 15% in California

In addition to tumbling home prices, the article also reports that sales volume have “plummeted 41.4 percent… compared to December 2006.”

1/21/08 – A Recession, If It Comes, Could Be Worse Than Those of Recent Past <Wall Street Journal>

Talks of recession will only increase as the market attempts to correct itself. It was only the last two weeks that major media has latched onto this eye-catching headline. Those in the blogosphere already saw this coming since mid-2007 and maybe even earlier.

Housing is in the midst of its worst downturn since at least the 1970s.

1/22/08 – Panic! Fed cuts rates 75 basis points

In a very sudden move between Federal Reserve meetings, the overnight rate was cut down to 3.5%. Terms such as “market meltdown”, “recession” and “panic” are used liberally.

It was the largest cut in the federal funds rate since 1982…

1/23/08 – Prices Expected to Free Fall in 2008 and through 2009

Merrill Lynch has been very critical of the market and for good reason. There needs to be a price correction before the market can pickup again. All the while, the National Association of Realtors (NAR) is quoted saying,

Merrill Lynch’s figures are way too pessimistic… There is so much variation in local housing markets, and we see stable price conditions for 2008.

And the most significant news of the week?
1/24/08 – Congressional leaders reach tentative deal on economic stimulus package

The good news? 95% of tax payers will receive a refund check this year.
The bad news? They want to raise the conforming loan amount so people are encouraged to take on more debt!

Frank said Fannie and Freddie would be able to buy mortgages worth up to 125 pct of the median value of a home in any given region, up to a new limit of 730,000 usd. The current limit on so-called conforming loans is 417,000 usd.