Sales Numbers Slightly Up: The number of detached homes put into escrow each month increased a bit over the third quarter. (Please note that the apparent drop in sales seen around June may be due to a change in MLS status categorization – read about contingent short-sale in my last update here). Here are the numbers since January 2008:
|
2008 January: February: March: April: May: June: July: August: September: October: November: December: |
1186 1455 1823 1973 2047 1921 2055 2101 2247 1985 1797 1609 |
2009 January: February: March: April: May: June: July: August: September: October: November: December: |
1992 2110 2408 2406 2254 1999 1922 2037 2045 |
View the current Market Velocity chart displaying the above stats
Government Tax Break Extended &Expanded:
1. $8000 federal tax credit to “first-time buyers” extended till April 30, 2010
2. Income limit raised from $75k to $125k an individual and from $150 to $225 per married couple
3. Move-up buyers having lived in their current home 5 of 8 the last years may receive a $6500 tax credit
Many people have theorized that our recent sales numbers are in part due to those trying to buy before the old deadline of Nov. 30. I’m curious to see how this extension/expansion will continue to affect our market. I’m hoping the expansion to include move-up buyers will help the relatively struggling higher end markets by giving a boost to the mid-market.
Home Loan Rates Still Low: Home loan rates have bounced from upper 4’s to upper 5’s this quarter. Currently, we are seeing quotes in the 5 – 5.5% range for the most part. Home buyers still have an unprecedented opportunity to lock in one of the best rates in history.
How Long Will Rates Stay Low?: The big talk this year has been that printing too much money by governments will cause inflation. With inflation come higher rates.
The US isn’t the only major economic power printing lots of money to counterbalance recession. Many major countries have done it this past year. Oversupply of money is a major, but not the only, cause of inflation. However, I’ve read many historic examples of how printing the right amount of money has proven to be an excellent stimulus to a depressed economy without causing inflation. Did our government(s) print too much money? That’s what I’m concerned about, but we have yet to see the results of our actions. Google “quantitative easing” for more in-depth economic explanations, theories & opinions on printing money. It’s really quite fascinating and way beyond my scope of expertise to give a good analysis/prediction on this.
Most Economists expect rates to stay steady or rise slightly in the very short-term (3-6 months) and start climbing as inflation or stagflation sets in. I tend to agree, but how much and exactly when?????
View a couple historical charts on Home Loan Rates here:
30-year fixed rates from 1971-2006
Home loan rates and Prime Rate from 1991-2008
Home Values on the Rise?: I am now seeing concrete evidence that prices in the more desirable entry level markets have gone up due to a continued shortage of supply in comparison to demand. For example, I listed a home in Poway this month for more than any comp in its area (3/2, 1200 sq ft home for $375k). It sold in 7 days for nearly 10% more than what I listed it at. We had over 30 showings the first 3 days and many offers. I followed the trend of that market over the last 6 months and saw a continued rise in home values for similar sized homes. It seems clear that this market segment hit a bottom around the beginning of this year.
Are the Foreclosures Coming?: We keep hearing about a new wave of foreclosures that are supposed to hit market, but the stats have yet to show this. Realty Trac reports that San Diego saw a 5% decline in foreclosure activity in the 3rd quarter in comparison to the 2nd quarter. Even if we do see more foreclosures, these homes are selling very fast, so I feel that our demand will be able to match a small increase in supply without prices falling again.
What should I do?: I don’t know… Buying or selling a home will always depends on your current situation, your goals and your whims, just as much as the market’s economic indicators…I am happy to offer free consultation to you, your friends and family whenever requested. I continue to appreciate referrals received and look forward to helping a friend of yours buy or sell a home soon.
Thank you for reading – here are a couple resources you might find useful:
Search All listed San Diego County Homes for sale - updated daily. Click "Map Search" at top of page for an interactive map.
Get a current home valuation
I hope you have found this useful and I appreciate any feedback you have for me. I also appreciate your referrals - if you know of anyone thinking of buying or selling real estate in San Diego, I would be happy to work with them.
Warmest regards,
Adam Pascu
Team 73 Degrees
Keller Williams Realty
858-761-1707