Real Estate Trends March 2008
Bob Weurding, Broker Associate
Team Weurding Realty
Pick up any newspaper, turn on the TV or radio, and it is pretty hard to avoid the topic of real estate, and its negative impact on the economy. The subject is being covered almost to adnauseam, and apparently bad news earns higher ratings or sells more papers, so that is what we are inundated with. I’m not about to tell you that the real estate market in San Diego is without its problems. However, I do believe that some of the daily dose of statistics that we are constantly receiving through the media is extremely misleading, and is in fact a major part of the overall problem. In my opinion, the main issue that needs to be fixed is the lack of investor confidence when it comes to purchasing real estate portfolios from the lenders. Not all that unreasonable, especially when we consider all the recent mistakes in judgment that were being made during the lending process. In short, all too many loans were made that should never have been approved. Yes, short sales and foreclosures are up, but up from what? They are up mostly because of all those crazy loans that were issued over the past couple of years. In spite of all the bad news, there is actually a lot of good news to report on if we only look for it. We should begin to see a positive impact from all the recent Fed cuts on the Nation’s prime rate. Combine this with the increase to the conforming loan rate from $417,000 to $697,000 in San Diego County , and the benefit from these changes alone could result in as much as a 1 % reduction in the interest charged on these former jumbo loans. And, if you are a buyer, for the first time in quite awhile you are finding a nice selection of homes to choose from. You may remember awhile back I introduced you tothe concept of Market Velocity. It is a formula that takes the current listing count and factors in the number of sales for the past 30 days and generates the number of days it will take to sell off that inventory using the current rate of sales. This number will obviously vary from month to month as the ratio changes. For example, in San Diego County the low point for the past year was March, 2007 with 188 days and the high point was reached in September, 2007 with 436 days. Currently that number is 387 days. As a point of comparison Poway ’s low was in June, 2007 at 103 days and the high was also in September, 2007 at 406 days. It is currently at 194 days or 6.5 months. RB92127’s low point was in July, 2007 at 141 and the high was in February, 2008 at 401 days. RB92128’s low was reached in March, 2007 with 91 days and also peaked in February, 2008 with 284 days of inventory. Rounding out our marketplace PQ92129 hit their low in June, 2007 with 77 days and like 92127 & 92128 peaked in February, 2008 with 231 days. Source: Sandicor, MLS, and Dataquick
Team Weurding Realty
Pick up any newspaper, turn on the TV or radio, and it is pretty hard to avoid the topic of real estate, and its negative impact on the economy. The subject is being covered almost to adnauseam, and apparently bad news earns higher ratings or sells more papers, so that is what we are inundated with. I’m not about to tell you that the real estate market in San Diego is without its problems. However, I do believe that some of the daily dose of statistics that we are constantly receiving through the media is extremely misleading, and is in fact a major part of the overall problem. In my opinion, the main issue that needs to be fixed is the lack of investor confidence when it comes to purchasing real estate portfolios from the lenders. Not all that unreasonable, especially when we consider all the recent mistakes in judgment that were being made during the lending process. In short, all too many loans were made that should never have been approved. Yes, short sales and foreclosures are up, but up from what? They are up mostly because of all those crazy loans that were issued over the past couple of years. In spite of all the bad news, there is actually a lot of good news to report on if we only look for it. We should begin to see a positive impact from all the recent Fed cuts on the Nation’s prime rate. Combine this with the increase to the conforming loan rate from $417,000 to $697,000 in San Diego County , and the benefit from these changes alone could result in as much as a 1 % reduction in the interest charged on these former jumbo loans. And, if you are a buyer, for the first time in quite awhile you are finding a nice selection of homes to choose from. You may remember awhile back I introduced you tothe concept of Market Velocity. It is a formula that takes the current listing count and factors in the number of sales for the past 30 days and generates the number of days it will take to sell off that inventory using the current rate of sales. This number will obviously vary from month to month as the ratio changes. For example, in San Diego County the low point for the past year was March, 2007 with 188 days and the high point was reached in September, 2007 with 436 days. Currently that number is 387 days. As a point of comparison Poway ’s low was in June, 2007 at 103 days and the high was also in September, 2007 at 406 days. It is currently at 194 days or 6.5 months. RB92127’s low point was in July, 2007 at 141 and the high was in February, 2008 at 401 days. RB92128’s low was reached in March, 2007 with 91 days and also peaked in February, 2008 with 284 days of inventory. Rounding out our marketplace PQ92129 hit their low in June, 2007 with 77 days and like 92127 & 92128 peaked in February, 2008 with 231 days. Source: Sandicor, MLS, and Dataquick
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at
18:49:48
It’s a great article.
Thanks, stay in touch.