Good news about real estate is always welcome in California. Reports show foreclosures dropping, mortgage rates holding to all time lows, and various area homes were up slightly. A sure sign a spring homes sale spurt is ahead. It couldn’t come at a better time either – for now. Housing and mortgage officials are working overtime to seek out even the smallest sign of any good news about the industry to report to a public starving to hear or read that the bleeding may be stopping or slowing down at best – finally! So what’s the catch? Not a catch per se really, but, we must be realistic about jumping to conclusions that we are out of the woods yet. While at the same time, we look to embrace something positive about housing outlooks while we work our way out of this ‘mess.’ Like information regarding current housing reports. For some time to come we will be getting what looks like mixed messages in the news about the 3-4 year old housing and financial ‘mess’ our country is experiencing. While lower rates are holding for now – ‘for now’ is a key to keeping a healthy perspective in all of this – homes sales are up slightly over last year; as we sell off short sales and foreclosures, and as world financial markets seek some sort of consistency. Good luck on that last one as financial markets in Europe and Asia roller coaster right along with ours. Home sales, as noted, are driven right now by short sales and foreclosures from lenders who are willing to work with real estate professionals, as well as sales from home sellers who do have some sizeable equity.
Most buyers are, either investors who have pooled their funds and are paying all cash on short sales and foreclosures, and, many first time buyers that were shut out because of idiotic escalating home prices. These folks couldn’t qualify for loans of $300,000 for a home really worth $85,000 in a common sense market. Now, those people are buying homes in stable neighborhoods at sensible prices with excellent rates and in many cases, with home buyer credit subsidies from federal and state programs. The federal program, however, expired April 30, and only time will tell what Congress will do now that we are heading into the strongest home buying season of the year. California, for its part, has not only extended the home buyer credits, but, expanded it to include both resale and new home construction. In a state of 34 million people, California has been driven for decades by ‘wait until you see my new home’! Many home buyers will not even look at resale homes. They absolutely will not buy a home someone else has already lived in. For the most part in California, the new home builder drives the bus in the housing industry, not resale homes. Everyone in healthy markets moves up to newer homes and neighborhoods. The last 3 years have been especially ‘messy’ for home builders. While I am not crazy about long-term government subsidies, let’s hope the extended home buyer credits will help jolt the housing industry going into the second half of the year. Let’s get the legitimate and dynamic home builders back in the game, along with the resale market, so the housing bus can get rolling full steam once again.
No comments:
Post a Comment