Today's Real Estate Market vs. The Downturn Of The Late 1980's

We had our last substantial downturn in the Real Estate market back in the late 1980's. USA Today again stated that the National Association of Realtors is still predicting 5,000,000 sales in 2007. This means we are nowhere near the downturn we had in the late 80's and early 90's. If you remember during that Real Estate recession the interest rates went through the roof and buyers wouldn't buy which meant sellers couldn't sell and the sales for the year were under 4,000,000. Today's market is extremely mild in comparison. Money is still cheap by historical standards and there are still great buys out there. If you're a serious buyer looking for a "deal" talk to your agent about softer markets where homes have been on the market for five months. If you're a seller find out where your competition is priced. You can't go off of comps from six months ago and expect to see your house sell for that anymore. If you are truly motivated to sell your home then you'll need to price it below ceilings where there are levels of resistance and seriously think about offering incentives to buyers. To get your home sold quicker you need to attract agents representing buyers by offering a 4% commission to them. They will see that and even if your home doesn't quite fit their buyers needs they're going to make sure it's on the list of homes to show. The industry as a whole is and will continue to go through a steady bleeding of agents, mortgage lenders, escrow offices, title agencies and so on.....so people are hungry to get transactions through and if that means getting their attention by bribing them with an extra percentage point then do it. If you're not willing to price your home competitively and take a few extra steps to get it sold when working with your agent, then you need to seriously consider whether you want to sell right now. I hope you found this informative and happy hunting out there....no matter what side of the fence you're on!

Home Sales Decline - What will happen next?

If you didn't get a chance to take a look at the business section of the la times on Wednesday the 26th of September the article "Home Sales Take Sharp Tumble" gives several reasons why the housing numbers are down and what is happening nationally and locally.

So let's get the good news out there so it doesn't look like all bad news. Despite the fact that the median home price is down in most areas of the country Los Angeles County had a 2.6% increase in the median home value. That's right, despite everything that is going on the median value of homes in Los Angeles County rose. So why is that? Well Los Angeles County continues to have job growth and the Southern California climate and job market tend to be desirable places to be. This is good if you are in Los Angeles County. Let's be clear though that there are some areas of the county that are seeing pricing pressure and it doesn't mean that sellers can ask 2.6% more for their home than their neighbor got last year. It does mean that homes are still selling though. In fact homes continue to sell nation wide.

So the bad news. The amount of inventory of unsold homes continues to grow. The inventory amount is called months of inventory and means how long it would take to sell all the existing homes on the market if no new homes came on. Currently according to the article there is 11.8 months nation wide. At 12 months or more of inventory it is considered a buyers market. This means that at least there is favor to buyers being able to negotiate better terms for themselves. Now this is a nationwide number. In Long Beach there are areas of the city that have 12 months of inventory such as downtown long beach and there are areas of the city such as Belmont Shore that have less than 8 months so it depends on what area you are looking in.

Now the article points out that most groups predict it will more than likely continue to get worse before it gets better. So what does that mean if you are thinking of selling. I believe it means you should consider selling your home sooner rather than later or at least know that when you do sell you may be competing against more properties on the market and there may be pricing pressure on your home as well as it may take longer to sell.

So if you are a buyer should you wait? Well that is where you have to look at where the interest rates are now and where they are likely to be next year. More than likely next year the rates will be up from where they are today. That means even if prices adjust down you will be paying more per month for the same home. Homes or condos with loans at or under $417,000 in southern California can be purchased with conforming loans and will not be affected to a great degree. Right now as a buyer you have the ability to get a great interest rate near a 40 year low as well as nice property. Check out the post on "Getting the Price You Want" to see how you can start negotiating now.

So all of this means that the market will continue to adjust but there is still a great opportunity out there for first time home buyers and sellers who need to move up.

How did May finish in Long Beach, CA for Real Estate?

You know the old saying "It doesn't matter where you start it matters where you finish."? Well that is what hopefully everyone will think by the time 2007 ends in regards to real estate in Long Beach CA. So where did things finish? Well let's take a look at the numbers and see!

All data below comes from the realtor multiple listing service that covers the Long Beach area which is the SoCalMLS. The numbers below will not include any owners that sold their homes without going onto the MLS system.

Activity for May 2007

• Number of Properties that went into a Sold status - 239
• Number of Sold last May - 374
• Number of Properties that went into a Pending status - 221
• Number of Properties that entered into a Backup Status - 90
• Number of Active Properties at the endof the Month - 1,769
• Active as of today is 1,939
• Number of Active Properties at the begining of May - 1,231

So what does this all mean? Well if you take number of properties that are currently available in means Long Beach has a 7.4 months supply of inventory. This is a great thing! Now I am not recommending all sellers in long beach ca increase the prices of their homes but it is certainly not as bad as some media outlets would lead us to believe. Now some might say well 36% fewer properties were sold in May this year as compared to last. I would say you are right! Now last year was a record year. This year isn't necessarily a bad year just not a record year. So we can read into it there are less homes being sold so make sure to price accordingly. Let's here what everyone else has to say!

Is the worse over? - for the housing market

Well as you know we always try and bring the latest information to light. A great article in the Long Beach Business journal appeared in the Real Estate section by Thyda Duong. The article is entitled "The Worst is Over" As Housing Market Begins to Stabilize.

So how are things in Long Beach, CA. Well I can tell you that our average price in December was $514,000 for a single family home. That is up 5% from 2006! Those who don't think 5% isn't a great return please not that the 5% was on rouhgly $500,000 which means the average Long Beach, CA homeowner made $25,000 in appreciation. I am not sure about everyone else but I know these two bloggers think that $25,000 is quite a bit of money!

That also means that at $514,000 we are still below the Los Angeles County Average of $525,000. We believe that this puts Long Beach in a nice position to continue to rise or at the very least maintain value. It is still the most centrally located city for those commuters who have a family where one goes to Orange County and the other to Downtown Los Angeles.

In all the outlook for 2007 looks to maintain at where we were for 2006. The interest rates are still extremely low considering history and there are still quite a few things for buyers to buy.

Let us know what you think!

Housing Downturn Over!

The 4th Real Estate & Development supplement was released in the Long Beach Business Journal at the End of November. In the featured article in that publication Joseph Maggadino, chairman of economics at California State University, Long Beach spoke about the potential housing bubble and stated that "In the nation's economy, I think the worst quarter is behind us". This is refreshing insight compared to what we have been seeing in the media.

In surprising support, Ryan Ratcliff, an economist with the UCLA Anderson Forecast agrees with Joseph Maggadino. He states "The Los Angeles County economy has actually been doing...slightly better than I would have expected". He sites the reason as being "It's the one place in Southern California where job growth hasn't slowed very significantly, even though the residential slowdown has put a damper on construction - which has been one of the big sources of jobs for the past several years."

You Be the Judge of the Real Estate Market!