Real Estate Market Trends 2010
San Diego, CA
- The Fed met last week and as expected did not raise their rates, more importantly they continued to indicate a willingness to buy treasuries to support lower interest rates it doesn’t have the same effect as when they were purchasing Mortgage backed securities but it gets the job done.
- Building permits increased nationwide 2% in August; this is a good sign that expectations are that by the second quarter inventories will be lower. Actual housing starts (new construction) rose by 11% in August supporting those expectations.
- Existing homes inventory dropped by 1% and is holding at 11.6 months as of August.
- Consumer confidence came in Lower then expected which put a drag on the equity markets but helped the bonds rally so rates dipped a bit early this week.
- Q-2 GDP was adjusted up,1% leaving the growth rate of the economy flat, bad for sales good for rates
And the Crystal Ball Says ..
All in All things are continuing to bump along the bottom. I expect more of the same for the near future low rates and moderate pricing the factors that will change these things are:
- The foreclosure market is beginning to slow I believe the last wave of foreclosures en mass will be completed by Q-1 2011 this will reduce inventories and by next summer we should see a moderate warming in the Sales Market.
- Unemployment remains high primarily due to the fact that businesses don’t know what to plan for. The November elections will settle that for the next 2 years. If the Republicans take control of congress and the current tax rates are extended you will see economic growth pick up steam supporting job growth, remember “Corporate America” is currently sitting on 3 trillion dollars waiting for the correct time to begin expansion. If the Democrats retain control we will see more of the same as businesses will hold their cash until there is clarity on Governmental costs to operations.
- Europe is still in trouble with Sovereign Debt issues and it will be a while till they get it resolved they have had problems raising cash to meet their debt needs and have committed to deep spending cuts but that will slow their economic growth for the short term although this approach will strengthen their economies for the long term. Once the dust settles (12-24 mos) they will begin slow growth and support global recovery.
Well There’s good news and bad news as of 10/1/2010, the up front mortgage fee has been reduced from 2.25% down to 1.75% so the up front costs are lower but the monthly mortgage insurance rate increased to .85% from .55%. This is as a result of the number of loans that Freddie and Fannie are buying these days and the fact that they are by standard terms insolvent causing the Fed to continue to buy treasury notes to support them.
California Association of Realtors says ..
The statewide median home price posted its 10th consecutive year-over-year gain in August, according to C.A.R.’s report. The median price of an existing, single-family detached home sold in California during August 2010 was $318,660, an 8.6 percent increase from the revised $293,400 median price recorded in August 2009. The August 2010 median price was up 1.2 percent compared with July’s $314,850 median price.
The median home price of an existing, single-family home in California rose 1.2 percent compared with July and 8.6 percent from a year ago, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported this week. Following two months of consecutive month-over-month declines, California home sales edged up 1.8 percent in August compared with July, but were down 14.9 percent compared with August 2009.
Foreclosure rates hold steady (CNN)
The foreclosure crisis has entered a new phase: The number of properties entering the foreclosure process has dropped, and now nearly matches the number of repossessions. Read the full story
Gary Giffin, Middleton & Associates Real Estate. If you’d like to learn more about Gary or What your San Diego Homes are For Sale, visit his website, www.SanDiegoHomeSold.com or San Diego Coastal Real Estate at www.SanDiegoMLSHomeSearch.com , email him, firstname.lastname@example.org, or call him for an appointment at 858-401-0204