It is not all doom and gloom. The National Association of Realtors expects home sales to remain steady for the remainder of 2006 while the housing market continues to stabilize. US home sales are also anticipated to reach the third highest levels on record, according to NAR’s recent forecast.
With that said California foreclosure activity is on the rise. The number of mortgage default notices sent to California homeowners increased during the second quarter of 2006, rising 10.5 percent from first quarter according to a recent DataQuick survey. Lending institutions sent default notices to 20,752 homeowners between April 1 and June 30, up 67.2 percent when compared with the 12,408 default notices sent during the same period one year earlier. While the second quarter’s foreclosure activity hit the highest level since first quarter 2003, default notices still remain below the historical average of 32,762 per quarter. Lending institutions are also seeing a rise in loan applications, showing that there are signs of buyers beginning to capitalize on the massive inventory available to them and the newly reduced prices of smart sellers. This leads us to our next topic…
“Today’s market is slowing as sellers maintain often unrealistic pricing expectations and buyers have more properties to choose from,” said C.A.R. President Vince Malta. “In addition, unlike the slowdown we experienced in the 1990s, homeowners today are not under duress to sell due to job losses. The urgency that characterized the market for the last few years is now gone for all but well-priced properties.”
“With inventory levels double that of a year ago, annual price appreciation for the state slowed from the double-digit rates we experienced throughout all of last year to single digits this year,” he said. “And in some regions of the state prices are down from a year ago. However, with a 7.5-month supply of homes for sale in July, we’re far below the peak of February 1991, when there was an 18-month supply on the market.”
“Many markets in California are mirroring other major metropolitan areas of the nation.—a return to a more sustainable and balanced housing market compared to the frenetic pace of the past several years,” said C.A.R. Chief Economist Leslie Appleton-Young. “We’ve known that double-digit appreciation would eventually change when the underlying fundamentals change, which has been the case with expanded supply and rising interest rates. Affordability concerns prompted by higher prices and interest rate increases also are constraining sales. The monthly home payment has increased by 20 percent for many households in the state compared with last year.”
With all of this said happy home buying to those of you looking. Remember it is now your market.
By Jessica Bailey-Shoot 4 the Moon Properties, Inc.
Source: California Association of REALTORS®