• home prices are still low and have stabilizing– in most areas prices have held steady for the last few months and they are at 2003 levels - average per square foot prices are moving within a 5% or less range
• we ended the average per quare foot price roughly at the same place we started the year of 2009
• prices in February dipped compared to January but are above 2009 levels - these are not typically high volume sales months - typically April to August are the highest sales volume months - so if you are serious about finding a home than this might be a good time to double your efforts
• market supply in Covina is at 2.2 months - on average a 6 month supply is healthy for any market – our MLS overall has 3.2 month’s worth of supply based on 2009 volumes
• most cities have a market supply of less than 2.5 months
• surprisingly condo sales seem to be increasing - even though getting a loan for a condo purchase seems to be harder
• interest rates spike and sink based on various economic data that is released - rates are still well below historical averages - depending on various criteria, a loan for 5% or less is still possible - if you can afford it you can even buy this rate lower
• when comparing interest rates also compare the fees that it will cost you to get that rate because that is really what you are shopping for (the cost of a particular interest rate)
• most homes are still receiving multiple offers (however the final sales prices are no more than 10% above the last asking price in most areas)
• hames are selling on average at 98% of asking price and many are now selling up to 5% above the asking price
• appraisals are starting to come in at high values again
• many offers are from buyers that are buying with cash
• we are continuing to see a lot more investors buying properties (in many areas buying a home with 15% down will results in positive cash flow)
• nearly all of the homes on the market are either short sales or bank owned
• in the last few months we started to notice an increasing number of regular sales that are homes that were bought by investors at the foreclosure, fixed and then put back on the market
• in our opinion there will be more bank owned properties coming on the market in the near future and for the next few years, however we think the volume will be less than it has been - the high volume of REO properties (the shadow inventory) that the media has been talking about has yet to materialize - we started to see a small trickle in the last month and are hoping the banks will release more soon
• we also heard from a respected source, who attended a meeting of asset managers at the major banks, that the REOs that have been talked about for release in the 4^th quarter of this year may not be released as planned and will most likely be released in the 1^st quarter of next year – this is at the request of the government - we have not yet seen an increase in REO properties available
• short sales are still taking a long time to get approved but more of them are getting approved – unfortunately there are many agents out there who do not know how to properly handle a short sale and those transactions take even longer
• hopefully the new program that is being implemented will help streamline the process and make short sales quicker
• banks are working more with homeowners to modify loans and keep defaults down – unfortunately about 80% of these modified loans end up in default within 6 months and will go back through the foreclosure process
• for most bank owned properties you need to cross qualify with their lender
• a pre qualification is not enough to win most deals, you need to actually have your documentation submitted and verified and have a loan approval to make your offer strong
• patience is vital in this market with homes receiving multiple offers – in some cases as many as 30 or more – supply is low and demand is high - there is a slight seasonal slow down but with spring coming we anticipate demand to heat up
• asking for 3% back for closing costs seems to be the norm now (not asking for this can make your offers stronger as it will net more for the bank - if you can afford it)
• FHA loans are what most people are getting to qualify
• if you can afford a 10% or higher down payment and get a conventional loan you will have a better chance of getting your offer accepted - although conventional loans are getting tougher to get
• with the new $ 8,000 tax credit for first time buyers and $ 6,500 tax credit for move up buyers we expect the market to be brisk until at least May of 2010
• you must be under contract by the end of April to qualify and close in June
• sales by sale type since June 2009

Bottom line:

1. Tax credit is expiring in early 2010

2. Inventories are low

3. Prices are right

4. Interest rates are near historic lows

5. Properties are receiving multiple offers

We work with many clients throughout the greater Los Angeles, San Bernardino, Orange and Riverside Counties and the above observations are true based on our experiences with our clients and talking with other professionals in our business.

IF YOU ARE LOOKING TO SELL, BUY OR NEED SOME ADVICE ABOUT YOUR OPTIONS CALL US (626) 339-0697 OR SEND AN EMAIL WITH YOUR QUESTIONS TO LEHEL@TEAMSZUCS.COM.