If you are confused about where the housing market seems to be headed... you have lots of company! Even the experts can't seem to get a handle on what is happening.. In fact the same story can be seen from different points of view... check out the LA Times and the Daily Breeze headline views of August home sales.
The graph above for home sale volume in Manhattan Beach, Hermosa Beach, Redondo Beach and El Segundo for June, July and August 2007-2011 indicates some very mixed messages. Manhattan Beach, the most expensive of the Beach Cities, had more sales in the summer of 2011 than in 2007 as did El Segundo. South Redondo sales are fairly stable while Hermosa and North Redondo saw sale volume declines.
This is a very interesting time in our local real estate market. Prices are down and in many sub areas are still looking for some sign of stability. Inventory is down across the board with the exception of Hermosa Beach where inventory rose by 4 properties since mid September. Interest rates are still hovering around 4.2% for a 30 year fixed rate loan. 5 year adjustables are 2.75% for conforming loans ( $625,500 or less). Finley Taylor from US Bank reports Jumbo loan rates are slightly higher at 4.875% with 0 points up to a $1,250,000 loan max... significantly below the 7%-8% we thought was amazing just a few years ago.
For buyers at the entry level in the Beach Cities the combination of low rates and falling prices mean it may be cheaper to buy than to rent. I have 2 clients who are closing escrows this month who are paying less on their mortgage than they were paying in rent. This isn't true at all price points but definitely at the entry level.
Beach Cities: Sold June 2011
Beach Cities: Sold July 2011
Beach Cities: Sold August 2011
1 comment:
Well, we thank God for trends but we can never really tell or predict what happens next to the whole real estate market. :D
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