12/15/2010

Is the Southern California Market Stabilizing?

With so many analyses and predictions going on about the direction of the real estate market, the average person is often uncertain about the real truth. Recently, I've heard a few prospective buyers that I've been talking with express the belief that the market is going to drop even more by a certain percent, or just drop in general, all depending on what they've most recently read. But there's one truth that most real estate experts and practitioners agree on, all across the country: All real estate is local. So whether or not a large bank stops foreclosures for a while, or some other wave hits on the financial scene, it may or may not affect your immediate market in your part of the state, county or city, or even your neighborhood, depending on the many economic characteristics and forces that make up your area.
So, having said all real estate is local, in general, the number of Southern California residential sales for November fell, but overall, prices stayed stable. Southern California means the six counties of Los Angeles, Ventura, Orange, San Bernardino, San Diego and Riverside.
For Los Angeles County, the sales volume dipped by 11.5% compared to the prior year, but the median price (lumping new and resale houses and condos all together) for LA County decreased by only 1.2%; Orange County's median increased by .6%; San Diego and Ventura Counties increased price by over 3% and 2%, respectively; San Bernardino, hard hit by foreclosures, decreased another 5% in median price over last year. Per Dataquick,  the overall median price for all six counties increased by .7% even though the sales volume decreased by 15%.
Local cities, per the most recent information for new and existing houses and condos published through October 2010 by California Association of Realtors, show:
  • Long Beach decreased its median price by 4.7% from prior October.
  • Cerritos increased its median price by 5%.
  • Lakewood stayed the same.
  • San Pedro decreased by .1%.
  • Bellflower decreased by 1.7%
  • Gardena increased by 9%
  • Buena Park increased by 3%
  • Huntington Beach stayed the same
  • Westminster increased by 1.1%
  • Newport Beach increased by 17%
  • Downey decreased by .4%.
Breaking down by zip codes in some cities show that certain areas such 90810 and 90813 in Long Beach are showing increases, but the higher priced 90803 zip code is still showing decreases in median price. That's a similar story for other zip codes such as in Newport Beach, when compared to a higher priced section within the same city.
And, to top it off buyers, the past two weeks or so saw the biggest jump in interest rates in the past several months. Many mortgage professionals believe the floor of close to 4% may be permanently gone, and as of today, FHA quotes were at 4.75%, while a 5% down conventional loan for a condo was quoted at 5%. It's easy to take a calculator to check out this would affect your monthly payment. A free calculator download is at Real Data.
Buyers should start making hay while the sun is shining!

Have a wonderful Merry Christmas, Happy New Years, and Happy Holidays.





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