Ahead of the curve… CBS Radio News (KNX-AM) Monday morning featured economists who emphasized the same thing we stated in last week’s blog: we’re at a turning point in our market downturn was carried heavily on. Rest assured, this blog keeps you on top of the market!
Existing-Home Sales Dip 1% in April: Existing-home sales slowed in April, partly because tight lending guidelines hampered home buyers. But there are some things to be happy about: A greater number of market areas are showing sales gains from a year ago, and a recent reversal in mortgage policy means the market is better positioned for a turnaround, according to the NATIONAL ASSOCIATION OF REALTORS®. (5/23)
C.A.R. REPORTS ENTRY-LEVEL HOUSING AFFORDABILITY RISES 18 PERCENTAGE POINTS IN FIRST QUARTER: The percentage of households that could afford to buy an entry-level home in California stood at 44 percent in the first quarter of 2008, compared with 26 percent for the same period a year ago, according to a report released Tuesday by C.A.R. (5/21)
U.S. LEADING INDEX UP 0.1 PERCENT IN APRIL: The U.S. leading index in April grew 0.1 percent, fueled largely by positive contributions from stock prices, favorable interest rates, and housing permits, according to new data from The Conference Board. The six-month rate of decline in the leading index for April slowed to 1.2 percent, down from 2.4 percent for the six-month period between July 2007 and January 2008. (CAR, 5/21)
NEW HOME SALES DOWN 49 PERCENT IN MARCH, BUT PACE OF DECLINE SPARKS OPTIMISM: Total sales for new homes in March were 49 percent below March 2007 levels, however, monthly year-over-year declines are beginning to narrow, according to the latest report from the California Building Industry Association (CBIA). (CAR, 5/21)
Summer Events: LAFD Air Operations Grand Opening (Van Nuys)
Now that summer has unofficially started, you know there are things to do in our Tri-Valley area every week! I expect to feature one or two events in my blog every week. Most of you know I’m an avid supporter of our Emergency Services, volunteering with L.A. City Fire Department, City of Santa Clarita, and L.A. County Sheriff. Come join me this weekend with the grand opening of the new LAFD Air Operations Building at Van Nuys Airport. Shuttles will be provided from 8050 Balboa at the NW corner of VNY airport; it’s just south of the Home Depot.
June 3 Election: Proposition 98 versus 99
With the June 3 election just over a week away, I promised last week to compare the Eminent Domain Propositions 98 and 99.
Generally, Proposition 98 bars state and local governments from condemning or damaging private property for private uses and prohibits rent controls. The fiscal effect on most governments probably would not be significant. Proposition 98 is supported or endorsed by Ventura Daily Press (April 22), California Farm Bureau Federation, California Republican Party, California Libertarian Party, and the California Taxpayer Protection Committee, among others.
Proposition 99 also bars state and local governments from using eminent domain to acquire an owner-occupied residence. The measure also would likely not have a significant fiscal impact on state or local governments. The following organizations support/endorse Proposition 99 (or oppose 98): Gov. Arnold Schwarzenegger, AARP, League of California Cities, San Francisco Chronicle (May 4), and Los Angeles Times (May 12), among others.
The differences are in the details. Prop 98 supporters say Proposition 99 is limited only to owner-occupied residences, while Proposition 98 protects all private property, including small businesses and rental property. The Prop 99 supporters, on the other hand, say that rent control will disappear if Proposition 98 passes once current tenants leave.
An interesting note: If both measures get over 50% of the vote, Proposition 99 invalidates 98. So Proposition 99 goes into law.
Los Angeles Daily News: First-time buyers find silver lining in foreclosure cloud
More than a third of Los Angeles County families had the income needed to purchase a starter home in the first quarter, a 66 percent increase over a year ago, the CALIFORNIA ASSOCIATION OF REALTORS® reported Tuesday. The affordability figure is the highest since 2003 and was heralded as a hopeful sign for the troubled Southern California real estate market.
- Dramatically lower home prices and a .56 percent drop in interest rates are behind the improvement in the Association’s First-time Housing Affordability Index. A year ago, LA County households needed an income of $100,000 to qualify to buy a home costing $496,120, which is 85 percent of the area’s median home price, assuming a 10 percent downpayment at an interest rate of 5.65 percent. In the first quarter of 2008, entry-level buyers in the county could qualify to buy a home costing $390,450 with an income of $74,320.
- First-time buyers and those seeking homes under $500,000 are behind a 22 percent increase in home sales in the six-county Southern California region between March and April, according to a report issued Monday by DataQuick Information Systems. The report said two-thirds of homes sold were priced at less than $500,000.
- C.A.R. VP and Chief Economist Leslie Appleton-Young said she expects to see the affordability index continue to improve as additional foreclosures coming on the market keep prices at a level where more families can afford to buy.
The Associated Press: SoCal home sales jump in April but still lag year-ago period
Southern California homebuyers stepped off the sidelines in April, snatching up foreclosures and homes priced under $500,000 at a rate that was 22 percent higher than in March but down 19 percent from April 2007 and the lowest level since 1995, according to DataQuick Information Services.
· The median home price for the six-county region was $385,000, unchanged from March but down 24 percent from an April 2007 peak of $505,000. April marked the first time in eight months that the median price did not decline.
· Sales were strongest in areas hit hardest by foreclosures: Riverside County (where sales increased month to month for the first time in two years), Lancaster, Chula Vista, Anaheim, Lake Forest and Victorville experienced the strongest rebounds. Two-thirds of homes sold during the month in Los Angeles, Orange, Ventura, San Bernardino, Riverside and San Diego counties were priced under $500,000. About 38 percent of the homes sold were in foreclosure at some point during the previous year, up only 2 percent from March but sharply higher than the 5 percent reported a year ago. In Riverside County, 53 percent of sales involved troubled properties.
- The credit crunch, potential for a recession, and uncertainty over when foreclosures will peak caused DataQuick analysts to remain cautious. Lack of financing for high-value homes continues to be an issue and could forestall a recovery if the trend persists. In April, only 15 percent of Southern California home loans were above $417,000, down sharply from the same period a year ago.
The Associated Press: Forecasters see weak economy even if housing, credit improve
The worst of the housing downturn and credit crunch may end this year but unemployment will rise and the economy will continue to weaken and fall into a short-lived and shallow recession, according to a survey released by the National Association for Business Economics (NABE).
- 56 percent of economists surveyed believe the U.S. already is in a recession or will enter one this year, up from 45 percent in February. Economic growth also will slow from a projected 1.8 percent in February to 1.4 percent in the current survey – well below last year’s 2.2 percent growth figure and next years projection of 2.3 percent growth. If correct, the new prediction for 2007 will mark the slowest growth since the 2001 recession. Weakness in the housing sector was cited as the most significant factor in the slowing economy.
- The group remains hopeful that the housing downturn will hit bottom in 2008 but predict that prices will continue to fall into 2009. Economists were equally divided in their opinion of which quarter of 2008 would see a bottom for home sales.
- The group said it expects the credit crunch to soften later this year, opening the door to some improvement in the housing sector. They expect the Fed to maintain interest rates through the rest of 2008 but believe it could increase key rates from 2 percent to 3 percent by the end of 2009.
| Fast Facts |
| · * Calif. median home price - March 08: $413,980(Source: C.A.R.) |
| · * Calif. highest median home price by C.A.R. region February 08: Santa Barbara So. Coast $1,140,000 (Source: C.A.R.) |
| · * Calif. lowest median home price by C.A.R. region February 08: High Desert $210,66-(Source: C.A.R.) |
| · * Calif. First-time Buyer Affordability Index - First Quarter 08: 44 percent (Source: C.A.R.) |
| · * Mortgage rates - week ending 05/15/08 30-yr. fixed: 6.01% Fees/points: 0.6% 15-yr. fixed: 5.60% Fees/points: 0.5% 1-yr. adjustable: 5.18 % Fees/points: 0.7% (Source: Freddie Mac) |
Sources: California Secretary of State, California Republican Party, California Democratic Party, Ballotpedia.org, California Association of REALTORS, National Association of REALTORS, LA Daily News, Associated Press, KNX-AM.
No comments:
Post a Comment