Tuesday, September 18, 2007

South Bay-Beach Cities: August SOLD 2007


Redondo Beach: Golden Hills

What a difference a few weeks can make. Overall sales have slowed in all the Beach Cities as buyers adjust to new lending rules and sellers grapple with how those changes will affect potential buyers for their homes. Buyers will continue to find qualifying more difficult then in previous months. Sellers will also have to acknowledge the fact that a smaller buyer pool will translate to lower prices... but that doesn't mean the market is going to crash. Ultimately more sensible lending will translate to a far more stable market which is a good thing for all parties.

The big news today is the FED cutting both the funds rate and the discount rate. It will be interesting to see how Jumbo mortgage rates fare with the cuts over the next few weeks. If the rate cuts do nothing more then calm the credit markets it will be welcome.

The threat of foreclosures seems to occupy most of the media with story after story about the number of problems facing the California home market. However a little article in the Sunday LATimes titled Good Mortgage Statistics paints a slightly different picture. In California it seems that among prime borrowers... which should be most of the Beach Cities borrowers.. delinquency rates are only 1.9%... This might explain why we haven't seen a lot of foreclosures or short sales in the Beach Cities. I know we will have our share but believe we will fare better then other cities as most buyers in our area were not speculators and bought a home for their personal use. Most also had good jobs, decent credit and some money for a down payment.

We are seeing an increase in inventory levels although inventory is lower then at this time last year. There are a lot of buyers in the market but they continue to be very choosy about homes and what they will pay. I think you can expect to see prices continue to dip slightly or remain very flat as buyers who qualify under the current financing rules now seem to be in the drivers seat.


Beach Cities: August Sold 2007





South Bay-Beach Cities: August SOLD 2006

South Bay- Beach Cities: July Sold 2007

South Bay-Beach Cities: Sold June 2007

South Bay-Beach Cities: Sold May 2007

South Bay-Beach Cities: Sold April 2007

South Bay-Beach Cities: Sold March 2007

South Bay-Beach Cities: Sold February 2007

South Bay-Beach Cities: Sold January 2007









2 comments:

Anonymous said...

Ms. Thomas:

I wanted to share this article with you. It's sort of a round up of expert opinions about the likely effects of the Fed rate cut.

One of the most interesting comments came from the former head of the FDIC:

Bill Seidman/Fmr. Head of FDIC, CNBC Chief Commentator: "If credit is bad, rates don’t count. I don’t care if you lower the rate 100 basis points. It may improve some of the profits of those institutions that lost a lot of money due to bad credit, but it does not address itself to the real problem, which is bad lending. And let me emphasize: it’s not just subprime, it’s substandard lending."


http://www.cnbc.com/id/20834638

It seem like none of the experts are too optimistic about getting any real relief from today's Fed action.

Well, let's hope all the experts are wrong, right?

Louise

Kaye Thomas said...

Louise- Thanks for sharing the article.. I always liked Seidman and he is absolutely correct.. The problem has never been the loan product but the abuse of loan products that were meant to be used for specific types of borrowers not the general public.

I think Glaser is right.. the effect of the rate cut will have more to do with soothing the jitters of the credit markets rather then bringing interest rates down to last year' levels ...

The "experts" never seem to agree which may explain why the markets are in such disarray. However if it brings Jumbo loans down a bit that would be helpful in CA and other high priced areas.