Our Real Estate Blog

Market Condition Update (July 2009)

July 18th, 2009 4:38 PM by Lehel Szucs

7/18/2009 - Our observations of the Covina and surrounding area home prices and activity:

  • there has been a  slight increase in the average price per square foot but home prices are still low - Covina home prices are near what they were in September of 2003
  • market supply in Covina is at 2.1 months - on average they say that a 6 month supply is healthy for any market 
  • interest rates spiked last week due to the economic data that was released, but they are still well below historical averages - depending on various criteria a loan for 5.5% or less is still possible
  • most homes receive more than 10 offers (however the prices are not increasing as they did in the early 2000s)
  • many offers are from buyers that are buying with cash
  • we are seeing 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
  • prices of homes seem to be more stable
  • compared to last year, average prices are still down by over 15% in Covina
  • 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 that the media has been talking about has yet to materialize - but it may later on in the year
  • short sales are still taking a long time to get approved but more of them are getting approved
  • banks are working more with homeowners to modify loans and keep defaults down
  • 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
  • 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 5% down and get a conventional loan you will have a better chance of getting your offer accepted
  • it is not abuyers or sellers market - it is both - whomever can submit the strongest offer in this market typically wins the deal - and that is not always the highest offer in and REO transaction
  • the $ 8,000 tax credit for first time buyers is set to expire at the end of November
  • the $ 10,000 California tax credit for buying a newly constructed home is gone since they ran out of funds

We work with many clients throughout the greater Los Angeles, San Bernardino, Orange and Riverside Counties and the above observations are true for all areas, (the price changes may vary).  Inventories are low, prices are right, and properties are receiving multiple offers.

We believe this is a great time to buy for a number of reasons:

  • home prices are at about 2002 levels - LOW
  • interest rates are low - at about 5.5%
  • $ 8,000 federal tax credit

Call us at (626) 339-0697 if you have any questions or if we can help you find the right home.

Posted in:General
Posted by Lehel Szucs on July 18th, 2009 4:38 PM

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