This Day In Age, No News Is Good News
It seems like everyday there are new statistics, studies, opinions and news briefs published on the Real Estate market. The conflicting headlines and topics of many of these updates have confused the American public into a state of total disbelief and hesitancy with regard to the timing of their would be acquisition or disposition.
Join me on a literary journey through the news briefs and headlines of the past 48 hours as they relate to the Real Estate market, both Residential and Commercial in Southern California and the rest of the world.
First stop, the good old Single Family Residential Market. It would appear that the Foreclosure boom will continue. Deutsche Bank has reported that per their own Economic and Financial statistics, Orange County home values have approximately 19% left to decrease before the so-called “bottom” is reached. In fact, Orange County ’s decline in prices exceeded the National average of 14%. Los Angeles was below the National average at 11.3%
Find the study published here: http://matrix.millersamuel.com/wp-content/6-2009/US%20Home%20Px%20Outlook%2015%20Jun%2009.pdf
Second, we arrive at data published by Chapman University in Orange , California . Per the study, Orange County values will drop 17.9% all the way through the 3rd quarter of 2010, at which point, home values will rise 1.9%, per a Chapman study published yesterday. Yes, that is what the study says. If you buy a $400,000 house right now, by next year, it will actually be worth $329,000. But the good news is, it will then rise $6,251 and be worth $335,000. The California Association of Realtors has a wealth of data that supported the Chapman study, but then again, is it really prudent to accept the analysis of someone who says that it is always a good time to buy? True, there might always be good reasons to buy: low interest rates, low home values, a buyer’s market, etc., but you get the picture.
Find the study here: http://lansner.freedomblogging.com/2009/06/17/chapman-sees-oc-home-prices-up/26481/
Next we arrive at data provided by the National Association of Realtors. Rejoice, there is finally reason for optimism. Or is there? While nationwide sales were down 3.6%, on the west coast, sales increased 8.6%! An 8.6% increase in sales volume? It must be the great interest rates. Yes, that is an 8.6% increase in sales volume, not sales prices. Sales prices were reported as down by an unsubstantiated percentage. The good news is, 30% of the purchases in May were by First Time Home Buyers, the other 70% by those who have owned before. So there is new blood in the marketplace as well as those who have bought before. The result should encourage more prospective buyers to leave the sidelines.
Find the article here: http://www.latimes.com/business/la-fi-homesales24-2009jun24,0,2595008.story
For our last stop in this journey, we visit an opinion released yesterday by Lawrence Yun, the Chief Economist of the National Association of Realtors. Lawrence declares that while sales are in fact up, the sales numbers would be even higher were it not for flawed appraisals causing deals to fall out of contract and ruin the possibility of buyers obtaining financing.
This statement is in fact an opinion, disguised as fact and predicated on the idea that appraisers are simply kyboshing transactions as though it is their job to dismiss transactions. Perhaps if we would have had this level of attention paid to facts and statistics, the mortgage meltdown would not have occurred. However, hindsight is always 20/20.
Find the article here: http://www.bloomberg.com/apps/news?pid=20601087&sid=aWyCYkxx5W1w
I would like to add my own stop to the 48 hours of confusion. It will read as follows:
NEWSFLASH, Fullerton , CA : Buying and selling Real Estate, specifically as an investment, is comprised of astronomical levels of uncertainty and discomfort. There is never a perfect time to buy, but there is a time in which you can determine what level of uncertainty, discomfort and hesitancy you can tolerate in the marketplace and enter the market in search of your desired return. Be worried when nobody else is worried. Be cautiously optimistic when others are panicking.
Save the dozens of confusing, conflicting and misleading headlines. Unless of course, it has to do with interest rates that were just announced as going unchanged.