Hermosa Beach Strand...
After another wild ride in the stock market last week the weeek ended with the market up slightly by the close on Friday. The good news is that the credit markets actually seem to be loosening up a bit... the bad news is that the current economic malaise is the new concern as the R word is now an accepted reality. Consumers just can't seem to catch a break.
So far the South Bay economy has held up better the other parts of the County and State but there are no guarantees this will continue. If the credit markets do loosen up then we may see a milder recession locally... if they don't things could get bad for us as well. The problem with recession numbers is that you generally don't know how bad they are until after they are over. However we can count on a general slowdown in a number of areas including home sales while the economy sorts itself out.
Interest rates appear to be coming down slowly after rising last week. The LIBOR is showing declines as the global credit market seems to be settling. Declines in the Prime and LIBOR may mean lower rates for loans that will be resetting in the next 2-4 months. Overall I think we can expect to see rates begin to increase.
The days of the 5.5% fixed rate are over. I'm guessing rates for loans under $729,750** will remain around 6.3%-6.6% for the rest of the year. Jumbo fixed rates will continue to be high although they should drop from the 8.25% level. Jumbo 5/1 ARMS will be reasonable at 6.65%-7%. As I've noted before I'm not sure banks really want to make Jumbo 30 year fixed rate loans and will continue to keep rates on these loans high and encourage buyers to move into ARMS. Who wins the election and how the markets respond will determine where rates wind up next year.
September sales held up fairly well in all the Beach Cities compared to sales over the summer. However with what has been happening in the last two weeks we can expect to see October sales remain low. If the markets finally settle we might see a slight increase in sales by the end of the year.
** NOTE: If you have been planning on making use of the $729,750 conforming loan ... banks will probably not fund these loans after December 1, 2008 as the loan limit goes down on January 1, 2009 to $625,000...
Dan Green from the Mortgage Reports offers information on what is and may be happening in the mortgage market over the short term. Lou Barnes also offers some insight into what has been happening in the market.
South Bay-Beach Cities: Sold August 2008
South Bay-Beach Cities: Sold July 2008
South Bay-Beach Cities: Sold June 2008
South Bay-Beach Cities: Sold May 2008
South Bay-Beach Cities: Sold April 2008
South Bay-Beach Cities: SOLD March 2008
South Bay-Beach Cities: Sold February 2008
South Bay-Beach Cities: Sold January 2008
South Bay-Beach Cities: Sold November 2007
South Bay-Beach Cities: September SOLD 2007
South Bay-Beach Cities: August SOLD 2007
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