Yesterday I wrote a post about an article in today's LA Times Business section..the title was changed this morning in the paper from Foreclosures Flood the Market to Bargain Hunters Must Wait.
In my post I noted that I had been doing some BPO's (Broker Price Opinions) for Banks in Hawthorne and had been concerned about the large number of homes purchased with 100% financing.
The Redondo Beach townhome market has long been our barometer of affordable housing in the Beach Cities. When this market gets into trouble it usually spills over to the other cities. As an example last year(2006) when the number of townhomes that were for sale in Redondo practically doubled in May it wasn't long before the home and townhome inventory increased in Manhattan Beach, Hermosa Beach and El Segundo.
I decided to check out what was actually happening in the Redondo townhome market. I picked the period of November 1, 2006- December 31, 2006 for two reasons. Interest rates were very low and a lot of property sold in those two months and it was really the last hurrah of the sub prime loan market.
With all the buzz on lenders holding back properties and this huge pool of properties ready to go south any minute I was a little concerned about what I would find. Fortunately I was happily surprised about what I didn't find. After all I've been saying we didn't do a huge number of sub prime loans and that while we would see some problems for the most part the market would not see a massive number of foreclosures in the beach cities. I was ready to eat my words but hoping I didn't have to do so.. after all I'm supposed to have some smarts about the market. Not all 100% loans are sub prime loans... many are made to buyers who have sufficient assets but want the larger payment for tax reasons. Even with that caveat there were not a lot of 100% loans.
So here's the breakdown on financing for townhomes in Redondo...
In my post I noted that I had been doing some BPO's (Broker Price Opinions) for Banks in Hawthorne and had been concerned about the large number of homes purchased with 100% financing.
The Redondo Beach townhome market has long been our barometer of affordable housing in the Beach Cities. When this market gets into trouble it usually spills over to the other cities. As an example last year(2006) when the number of townhomes that were for sale in Redondo practically doubled in May it wasn't long before the home and townhome inventory increased in Manhattan Beach, Hermosa Beach and El Segundo.
I decided to check out what was actually happening in the Redondo townhome market. I picked the period of November 1, 2006- December 31, 2006 for two reasons. Interest rates were very low and a lot of property sold in those two months and it was really the last hurrah of the sub prime loan market.
With all the buzz on lenders holding back properties and this huge pool of properties ready to go south any minute I was a little concerned about what I would find. Fortunately I was happily surprised about what I didn't find. After all I've been saying we didn't do a huge number of sub prime loans and that while we would see some problems for the most part the market would not see a massive number of foreclosures in the beach cities. I was ready to eat my words but hoping I didn't have to do so.. after all I'm supposed to have some smarts about the market. Not all 100% loans are sub prime loans... many are made to buyers who have sufficient assets but want the larger payment for tax reasons. Even with that caveat there were not a lot of 100% loans.
So here's the breakdown on financing for townhomes in Redondo...
54 properties closed escrow between November 1, 2006 and December 31, 2006
All Cash: 5
20%+ down: 26
10% down: 11
5% down: 3
0% down: 9
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