Wednesday, July 30, 2008

Manhattan Beach-Beach Cities: Who is buying?

This morning President Bush signed what has become know as the housing rescue bill. I doubt that it will truly rescue many people but it seems to have a little of everything for everybody. Our South Bay-Beach Cities real estate market may benefit slightly as the conforming loan limit has been permanently raised...the bad news is that it's only to $625,000 rather then the $729,750 we had thought would happen. If the financial markets feel the bill makes the housing market more stable then we may see rates be less volatile then in the last few months. So the good news is that it just may bring some stability back to the financial markets... the bad news is that taxpayers could be paying for a long time if things get worse.

Last week I noted that our local real estate market has changed since 2005. Home prices have come down from the high points of 2004-2005. Inventory is up slightly in all the Beach Cities while prices seem to be trending toward small declines or are just flat when checking median prices. We are still not seeing many foreclosures. Redondo Beach has more foreclosures then the other Beach Cities but the numbers are still very low. If you are a seller lower prices will not make you happy but if you want to buy there are deals to be made. This is part of the market cycle... prices go up and they go down...and they go up... and they go down... you get the idea.

Sales volume is low but relatively steady in all the Beach Cities. July closed sales are going to be lower then those in June but a number of homes went into escrow in the last 30 days so August and September might actually post decent numbers. a few potential buyers are waiting in the hopes that the entire market will crash and they will step in at prices last seen in '95. Not all buyers see the market in those terms...which poses the question...who is buying in this market?

The answer is the same people who usually buy a home... the ones who want/need to buy a house because it's what they choose to do. Some buyers are also sellers.. some are not. Some buyers need a larger place... they are expecting another child, have a family member moving in or need space for a business they run out of the house. A few want to be in a specific school district. Some buyers want a yard. Others are getting divorced and want a new place without old memories. Some are getting married and want our home not yours or mine. Some people need to move because their current house is too large or they have a physical problem that makes their home unsuitable. Some buyers are just tired of renting and want a home of their own. Some buyers think the present market is not a bad market.. you can negotiate price and rates are still on the low side so they are willing to take the plunge.

Now not everyone wants to own a home. Not everyone needs to buy a home. As the past few years have proved not everyone should buy a home. Some renters will become homeowners... others won't. There are people who will always rent rather then own a home.. which is good if you happen to own a rental property.

1 comment:

Anonymous said...

Wow. Truly insightful, Kaye. It's amazing how you're able to sum things up so clearly.