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Real Estate From the Front Line – Has the Market Hit Bottom in San Diego

08.07.2009 · Posted in Home and Garden Articles

Has the San Diego housing market hit bottom? The answer is yes and no. The portion of the market that is comprised of first time home buyers and investors looking for a great deal has hit bottom. The segment looking to upsize or is interested in a luxury home has remained a buyers market. If you are looking for a great bargain than it is time to get moving, because your days of the deals may be numbered.nnLet’s take a look at the Carlsbad real estate market as an example. As I write this article there are 468 active homes and 249 pending single family detached and attached properties on market. When I look at the properties priced below $700,000 than there are 198 active listings and 187 pending. This shows us that this particular market looks healthy as a whole, but looks a lot like a seller’s market if we look at mid to lower priced homes.nnSales Numbers are fairly consistent: The number of detached homes put into escrow each month has decreased a bit over the high number of sales in March and April. This slowing in July is in accordance with previous seasonal variation and may also be due to a change in MLS data recording. nnWe now have a new category that we use to define the status of a property which is “contingent”. We used to have just actives, pending and sold, but due to the high number of bank owned homes and short sales we’ve added a new category. This category designates that the property has been accepted but is waiting for lender approval or in the case of a foreclosure they are waiting to have bank paperwork signed. The reason this new category may be important in the stats is because the now contingent properties were previously pending or active depending on how the agent wanted to enter it in the system. Right now they contingent sales are making up around 23-25 percent of the real estate data.nnIncentives: 1. Federal $8,000 tax credit for first time home buyers or home buyers that haven’t owned in 3 years.nn2. California state credit for new home construction, Max of $10,000 limited fundingnnHome Loan Rates Still Low: First off, yes there is plenty of financing available to qualified homebuyers. Home loan rates have bounced from upper 4s to upper 5s in rather volatile fashion. Currently, we are seeing quotes in the 5 ” 5.5% range for the most part. This remains a low-point for home loan rates – it is truly an unprecedented opportunity for home buyers to lock in one of the best rates in history. nnHow Long Will Rates Stay Low?: The big talk from economists these days is looming inflation (or stagflation) in response to the mass printing of new money as a part of the government stimulus package. We fight inflation with higher rates. Home loan rates also typically move in accordance with the stock market. As stocks rise, so do home loan rates. Some of you will remember home loan rates in the high teens during the late 70s and 80s.nnThe tale of two markets – We have a polarized market right now with entry level homes and luxury homes. The lower end homes are selling too fast and the luxury homes aren’t selling fast enough. In order to understand the market you are interested in one must understand the market in your price range and the inventory in you specific area.

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