Saturday, October 18, 2008

South Bay-Beach Cities: Sold September 2008

Real Estate Information on Listings, Pending and Sold properties in the South Bay-Beach Cities September 2008.....

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.

South Bay-Beach Cities: Sold September 2008(click on graph to enlarge)

** 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: October SOLD 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


Anonymous said...

Hi Kaye,
Can you comment on the auction that will take place
at the end of November on the Steve Legare developed
properties in MB and HB. Is this just a marketing
position or does it speak to a larger issue? I
remember that ad he ran a while back about pricing
in the Beach Cities. Hmm?

Kaye Thomas said...

Anonymous 5:03,
I really don't know a lot about how this particular company works. There have been a number of "auctions" in the last couple of years. Some of the most recent have been townhomes in South Redondo. I don't believe any of the properties listed actually sold at auction... as they popped back in the MLS at a higher price then the "auction" price. I suspect these won't either because the reserve is generally significantly higher then the suggested starting bid.. which is the price that is grabbing attention from buyers. In addition a buyer will pay an additional 7.5% over the sale price as a buyer premium to cover the costs of the purchase. So even if the starting bid is accepted on most of these homes a buyer will be paying about $100,000 over the "price". A number of buyers don't realize that or that the fee is set... no negotiating.

I have no issue with the concept but I am concerned about the fact that if someone did purchase a home in this way it would be without any contingencies as to inspections, loans or other items that are meant to protect a buyer. I don't believe you should purchase a property without the protections of what have been become "normal" contingencies of sale.

The penalty if a buyer doesn't complete the sale is 10% of the purchase price. That is a lot of money to leave on the table in the event you find something wrong with the property. Technically the builder should fix it because of state law but things happen. While I don't believe this builder is going out of business... it could happen.

I think this is a way to stir up interest on properties that haven't sold... and from all the talk around town I would say that so far it has succeeded.

Anonymous said...

5:03 Here. Thank you Kaye. I know Mr. Legare walked
away from 23 units in North Redondo that are up for
bank auction so I would not feel very confident that
he would honor a one year warrantee just because it
was state law. 15 Years ago I purchased a town home
in NRB and the builder did nothing after escrow
closed. Seems like we are coming back around.

Kaye Thomas said...

Anonymous 5:03/7:11,
15 years ago we were in a lot of trouble with layoffs from the shut down in aerospace jobs... who knows if things get much worse we could see a number of builders in trouble once again.