The end of the 2008 is quickly approaching and while sales are definitely off in the Beach Cities, home values are still holding up better then in many surrounding communities. As Christmas draws near... Sellers are hoping Santa will bring them a better market next year ... while buyers are asking for further price declines and loans at 4.5%.
There continues to be a lot of speculation about the role of foreclosures in the Beach Cities. Compared to other areas of LA County there are still not a lot of NOD's( Notice of Default) or NOT's ( Notice of Trustee Sale) in our local real estate market. Currently there are very few REO's ( bank owned properties) available in the Beach Cities.
While I think we will see more foreclosures next year, I'm not sure we will see the numbers that many are predicting unless we have major job losses in the South Bay. For our market to tank there will have to be a lot more pressure on the market then we have seen so far. That means an increase in unemployment along with an increase in the number of foreclosures and the number of sellers who absolutely must sell. Right now the only sellers who fit this description are builders who have gotten over extended.
I had an interesting chat today with a local business owner. As we talked about how the market was affecting their business they made some interesting points. The people who have stopped buying are those with "money". The owners noted that what is hurting their business is that the people who could afford to spend a bit more are not doing that. They have pulled back and are being very prudent about what they purchase. Another customer in the store joined the conversation and said that most of their friends were pulling back and not spending very much even though they could still afford to do so. It seems that prudence rather then bling is the mantra for most of our neighbors as we venture into a new year.
South Bay-Beach Cities: REO's January-November 2008