California home sales are looking at a 1% increase in 2012 and the sales price may also increase 1.7%. Employment , low interest rates and an increase of affordable homes are going to fuel the sales activity and help get the recovery going. “It will take as long as five years for the state’s inventory of foreclosed properties to be absorbed” according to Leslie Appleton-Young, chief economist for the California Association of Realtors.
As we are getting into the last quarter of the year, San Francisco and the Bay Area have gone through a lot of changes. They could be good or bad depending on how you look at it. As I have mentioned on another post, what will the city be like in the next 5 years? I believe it should be at a point of recovery. We’ll see.
The economy has driven our home values down and there is no end in site. Many areas in the nation has experienced major price reductions. Not all areas have been hit but California has 6 areas that had the largest drop in value out of the top 10 areas nationwide. The prices have decreased more then 60% from 5 years ago. This situation will not get any better anytime soon due to the 1,000,000+ foreclosures that the banks are holding this year and another 1,000.000+ foreclosures in next 2 years. It will take a few years to sell off all of the phantom inventory before any appreciation can be realized in these areas.
Although home sales have increased, the prices have decreased in 118 markets across the country. Prices have declined approx. 7.5% in March from a year ago. This is the eighth straight month of declining prices. So what’s keeping the sales going? I believe that the low interest rates and affordable prices are keeping sales alive.
San Francisco is showing signs of recovery along with San Mateo county. With gas prices continuing to rise, many buyers are moving back to big cities where they don’t have to use their car. This may be one reason why San Francisco has been experiencing a brisk recovery.
The California Housing Finance Agency (CalHFA) is administering $2 billion in federal funds for borrowers who are at risk of losing their homes. Borrowers who took out loans after January 1, 2009 are eligible for 4 different programs as long as the property is a primary resident, meet income requirements, and face a documented financial hardship.
The four programs are the following:
- The Unemployment Mortgage Assistance Program (UMA) which will help homeowners with their mortgage payments.
- The Mortgage Reinstatement Assistance Program (MRAP) which provides funds for homeowners who have fallen behind in their payments
- The Transition Assistance Program which provides relocation assistance
- The Principal Reduction Program (PRP) which provides funds to reduce the outstanding principal balance.
GMAC, Guild Mortgage, CalHFA, and California Dept. of Veterans Affairs are the organization that offers all 4 programs.
With January increase of home sales, it could be a sign that things maybe turning around. Property sales increased 2.7%, nationally, and represents the first time in 7 months that sales were higher then a year ago. 23% of the sales were by investors and there was an increase of all cash purchases representing the highest level ever.
Even though we are having economic problems, it is still a great time to purchase a property. Interest rates are still pretty low and there are plenty of inventory. This will change, but when? Why not get something now and grow with your investment. If you are ready, here are 5 affordable areas and 5 very expensive areas. No matter where you go, the prices are definitely less then the were in 2007.
Sales in San Francisco has been steady and returning to a healthy pace. Sales rose by 20.7% from a year ago, January 2010.
Don’t miss this great opportunity to realize your dream of owning your own home. You might be surprised to know that it could be cheaper or as much as your rent.
Lenders have foreclosed on 78,133 properties in January, which is up by 12% from the previous month but it is 11% less then a year ago. Although there has been an increase in default notices, auctions, and bank repossessions in January, it is encouraging to know that the increase is 17% less then a year ago.
5 states are responsible for more then 50% of the nation’s total foreclosure activity; California, Florida, Michigan, Arizona and Illinois. Nevada was the hardest hit state with the highest foreclosure rate in the nation. Bank repossessions increased 16% from December which is more then 5 times the national average. Even though we are seeing more foreclosures, they are less then what it was a year ago. Let’s hope that this is a good sign that we might be on the right track to recovery.
Wow!! It’s almost the end of January and boy did it fly by. Since the beginning of the year, the rates have been going up. In November of 2010, the 30 year fixed loans were at a 40 year low of 4.17% the 15 year rate was 3.57%. Now it’s at 4.8% and the 15 year rate is 4.09%. I don’t think we will ever see the November rates ever again. There will probably be less borrowing, in 2011, due to the economic conditions.
So what do you think prices of homes will do? Well, most of the country will continue to see declines or stablize in prices except for 10 cities. Unfortunately, Florida and parts of the Western parts of the US will see the largest drops in home values.
Home prices dropped 4.1% annually, in 2010. Although there was an increase in prices, overall 70% of the major market prices experienced a decline and 8 had double digit declines. There were 6 markets in California that managed to have some price gain.
Unfortunately, 2011 will probably be the same, unless unemployment and distressed homes decrease. Until there are more jobs and less people loosing their homes, we will not see too many price gains.
HAPPY HOLIDAYS!! Foreclosures are down 21% of the previous month and 14% below November of last year. This is great news but I think we will see another wave of foreclosures and short sales in 2011. It could be as early as January 2011. We probably will see another wave of distressed properties on the market in the coming year.
If you remember in 2008-2009, the market was flooded with the first wave of distress properties for sale. There are still a lot of people having problems with their loan payments and the banks will have to follow through with their right to foreclose to recuperate the losses.
