Your New Credit Score

Just when you thought you knew about your credit score, it's all changed. The 3 national credit reporting companies got together and developed a new system which they think is more consistent and objective. The current FICO score system was developed by Fair Isaac Company some years ago. The VantageScore will use a score up to 990, and is based on the type of breakdown you probably learned in school, with a score below 600 being an "F", a score above 900 being an "A".

Interest Rate Increase

The trend may be towards yet another rate increase. One-year and five-year adjustable interest rates are looking less attractive when compared wtih the 30-year fixed rate mortgage. The upward pressure on mortgage rates is a downward pressure on home prices. Rates have already edged up, slowing re-fi activity overall.

Southern California Still Sells

In Southern California, sales of new single-family houses and condominiums saw their strongest February since 1988, according to statistics compiled by real estate research firm DataQuick Information Systems. Last month, sales rose 9.5% to 4,980 from January's 4,550, and were up 19% from the year before. (Los Angeles Times, March 25, 2006.)

As we've been saying for some time, the local economy is diverse enough, and the housing supply is tight enough, that in spite of the rising inventory, overall conditions still create a demand for real estate. Condominiums are often the more affordable option for first-time buyers as it's still possible to find a 2-bedroom unit for $450,000-$500,000, or less, depending on the area and size of the unit, but some within blocks of the shoreline may still be found at this price.

California Median Home Price for February

.... was $535,470, with Newport Beach at the highest median home price and Yorba Linda at the lowest. It took longer to sell a single family home this February compared to Feb. 2005. The median price is 13.7 percent higher than last year, but 2.9 percent lower than January 2006's median price. There continues to be the highest home inventory than we've had for several years. It would take over 6 months to deplete the current supply; this time last year there was only 3 months inventory, which buyers felt accutely when they made offers which often turned into competition with other buyers.

The median price for condos statewide is $433,140, an increase in price from January. Follow the link for more info.

Buy Before Really Seeing?

The photos are good, and they do tell a story, but is it the same one you would get after you moved in? The internet is such a useful tool in previewing, but would you actually buy it based on photo previews? That's where this article claims many people are headed are in the future, but in a high priced market that demands the utmost in buyer financial resources, this is just a wait-and-see. California is the most disclosure-oriented of most of the states, but that still hasn't prevented buyer remorse. Hmmm ...

February's Southern California Median Home Price

February's prices set a new record, however the number of homes sold in 6 counties was the lowest number in 5 years. The median price according to Dataquick was $480,000, much lower than the statewide median price, but up from the So Cal median price of $469,000 one year ago. The real estate bubble forecasts are not alive and well at this point, according to this article: foreclosure activity is low, down payment sizes are stable as are property flipping rates.

Inflation Concerns Give Rise to Rate Increase

Gains in manufacturing and service industries and higher labor costs are the reason for the increase in the 30-year fixed rate, up to an average of 6.37 percent. This is the highest rate since 2003. The Los Angeles region average according to Bankrate.com was 6.48 percent at about a half point.

More Real Estate Information - Higher Demand

Back when the internet came on strong, many agents feared that consumers would end up making them an obsolete item as consumers would now use their direct market knowledge to cut out agents as unnecessary to their property transaction. But the opposite has really happened over the years. Instead, as consumers are given more information and more technology to review that information, they have required more specialized professionals to meet their demand for knowledge about properties. Will visits to properties become obsolete because consumers can access more photos and virtual tours online? In spite of what this article suggests, I doubt it. A picture may be worth a thousand words, but it's not the same as being there. But there are "second level effects" stemming from all this new transparent factual information found on the internet, and one of them is that more professionals with higher expertise seem to be required by the consumer. Rather than more answers, there seem to be more questions as consumers gain more knowledge which leads to a higher demand for better service.

Housing Cost Calculator

Here is an buy vs. rent wizard based on 2005 indexes, but still fun to try. Put your area in and how much you think you could invest towards a down payment, and calculate the results between owning vs. renting. Click on the links for further explanations on costs included, but the buyer or renter will see basic comparisons in buying vs. renting in today's market.

Affordability in "The O.C."

If the search is on for a home under $600,000, consider a condo, or a smaller single family residence, in Cypress, La Habra, parts of Fullerton and Garden Grove, Anaheim, Westminster and Buena Park, or even Foothill Ranch. Most are within a short drive time from Long Beach, 20-40 minutes, and well worth considering.