Tag Archive | "california"

California Housing Market May Finally Be Recovering

It appears that the residential real estate market in California is finally on its way to recovery. According to the most recent sales data, the total amount of foreclosures in the state has fallen to their lowest level since 2007. Sales across the country are also up, giving many economists reason to believe that the market is recovering in more than just a few select cities.

 

Many economists believe that the declining inventory of foreclosures will be a major factor in the recovery of the residential real estate market across the country. Foreclosures are typically sold at heavy discounts, which negatively impacts average home prices. As the number of foreclosures decreases, the average selling price will likely increase.

 

Housing prices are still far below what they were in 2007, though many analysts believe that they will soon rise as recovery becomes even more evident. Many expect true recovery to take place by the year 2013. However, some economists believe that the recovery is already here.

 

While the decline in foreclosures is certainly playing a significant role in the recovery of the housing market, the economy as a whole is definitely doing its part as well. The unemployment rate and overall retail sales have both shown steady signs of improvement in recent months, and are expected to continue improving as the year goes on.

 

The market clearly still has not fully regain its health. There are still some troubling factors that must be resolved in the coming months, and there still exists the fear that more foreclosures will soon surface.

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Rent Prices on the Rise in Southern California

Rent prices continue to increase in just about every Southern California County. Prices are expected to rise another ten percent by the end of next year. The increases in rent prices are expected to positively impact the state of the housing market.

 

The rental market in Southern California has thrived in recent years due to the many doubts that continue to surround the housing market. However, as rental prices grow at unprecedented rates, the housing market may finally start to benefit.

 

With more people gaining employment in the region, the demand for apartment living is on the rise. With a limited number of apartments available for rent, competition has caused prices to jump.

 

Just three years ago, the rental market was generally flat. The improving economy and increase in demand, though, has caused rental prices to surge. Rental affordability has, thus, become a major issue in counties in Southern California.

 

With renters now spending more of their income on their monthly rent, many people are now looking to the housing market to find a more affordable alternative for residency.

 

It is for that reason that analysts believe that recovery in the residential real estate market may come sooner than later in Southern California. Housing affordability is currently at record levels, as prices are depressed and mortgage loan rates are very low. The average rental price in Los Angeles County has already jumped more than six percent in the past year, and is now greater than one thousand six hundred dollars per month.

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Housing Market in Southern California Remains Down

The Southwestern United States continues to see its residential real estate market struggle. Like the city of Las Vegas, Southern California has experienced declines at a greater rate than the rest of the United States in the past year.

Although housing sales are increasing in the region, prices remain at unprecedented lows. Prices are expected to continue their freefall into 2012, as foreclosures continue to dominate the residential property market. Analysts believe that home prices will hit their lowest point of the current drop midway through 2012, and will likely begin to improve again thereafter.

The residential real estate market news is not all terrible in Southern California, as the increase in sales volume indicates that consumers are looking to get back into the housing market. However, the glut of foreclosures that continues to grow within the current inventory will continue to drive prices lower and lower.

Housing prices have dropped between four and eight percent in Southern California, largely depending on the county. The median price of homes within the region currently ranges between two hundred and seventy-five thousand, and three hundred and thirty-five thousand.

Because the inventory of foreclosures continues to grow, the prices of new homes continue to drop as well. In some cases, new homes are selling for less than the cost it took to make them. Aside from the overabundance of foreclosures, the overall lack of consumer confidence has had a detrimental effect on the market as well. With so many current homeowners owing more than their home is worth, many are unable to upgrade to new homes, thus crippling the market even further.

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Southern California Luxury Home Market Sees Big Drop

The number of sales of high-end luxury properties in the Southern California residential real estate market has hit the lowest level in over two years. The setback is being attributed to the reduction in the overall mortgage size that is eligible for government backing.

Loan limits for government-backed mortgages were reduced by more than one hundred thousand dollars, from over seven hundred twenty-nine thousand to six hundred twenty-five thousand dollars. As such, overall sales in both Los Angeles and Orange counties were hit the hardest by the reduction.

Sale prices in the region fell nearly five percent as well, as overall demand for residential real estate properties continues to drop. The decline in the loan limit for government-backed loans is not the only factor that has caused the decline in real estate sales. Banks continue to be very stringent with respect to lending, many it difficult for potential homebuyers to qualify for a mortgage loan. Those that do qualify for a mortgage loan are staying away from the housing market due to overall uncertainty and a continuously weak job market.

The combination of factors has created a perfect storm of sorts, and has led to declining housing market that has no bottom in sight. Analysts believe that the loan limit needs to be increased back to its previous rate in order to promote growth in the housing market. Some analysts believe that the size of the loan limit has no real association with overall sales and values, as even with the increased loan limit, the market faced unprecedented struggles in the past year.

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Luxury Homes in the Hamptons Post Strong Price Increases

While the majority of the United States residential real estate market continues to experience declines, the luxury market is performing stronger than ever in most cities. In the case of the Hamptons, a town that has long been the home to the nation’s wealthiest, prices have increased twenty-two percent in the past year.

Prices have increased more than one hundred and fifty thousand dollars for homes in the Hamptons, and the total number of homes that sold with a price tag of over five million dollars hit more than three times the total from last year. High-priced luxury homes have helped offset the rest of the declining real estate market in the United States. They have been considered to be safe investments in a time where the real estate market has been deemed incredibly volatile.

In the last quarter alone, fifty-four homes were sold in the Hamptons. More than half of those homes had a final selling price of over five million dollars. That number is the highest number of sales that the area has had since 2008.

One of the most influential factors in the steadily rising prices and increasing sales in the Hamptons has been the influx of interest among international investors coming from such countries as the United Kingdom, Russia, and Germany. Even with the most recent price and sales volume increases, analysts are calling the current housing market in the Hamptons a buyer’s market.

The highest price paid for a home in the Hamptons during the third quarter amounted to over twenty-four million dollars. The residential property is located in Sagaponack, and features seven bedrooms and four thousand five hundred total square feet.

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Restaurants Help San Francisco’s Retail Property Market Grow

The city of San Francisco has seen its retail real estate market boom thanks in part to an unlikely candidate. With more than three hundred new eating and drinking related establishments having surfaced in the past two years, retail investors are looking to take advantage of increased foot traffic.

The retail vacancy rate in San Francisco has been the lowest in the United States. It is expected to drop even further, as many business view the city as an area of opportunity and growth. Tourism in the city has increased substantially, and as such, opportunities for profit have grown.

The technology industry has also played a strong role in bring San Francisco to the forefront of retail real estate in the United States. Companies such as Twitter Inc. have experienced strong growth. It is the growth of such companies that has not only led to an incredibly low jobless rate in the city, but also an increased demand for restaurant dining startups.

The overall success of San Francisco’s retail market has been absolutely incredible, particularly in compared to the rest of the United States. While the country has an eleven percent vacancy rate among retail properties, San Francisco’s vacancy rate is at an unbelievably low three and a half percent.

San Francisco’s restaurant retail property success is not exactly typical. In fact, most dining establishments carry an enormous amount of risk due to upfront costs that average between two hundred and fifty thousand to five hundred thousand dollars. Many restaurant startups tend to fail, and thus, are usually not an ideal tenant for landlords or commercial mortgage lenders. However, the recent successes experienced by the San Francisco dining retail property market have both landlords and lenders reconsidering their perspective.

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California Residential Property Sales Struggle in September

Overall home sales in California’s residential real estate market fell in comparison to its performance from the previous month. Residential property sales dropped more than five percent month-over-month.

Despite the monthly drop in sales, real estate analysts are not overly pessimistic about the state of the market. Sales typically drop in the month of September as the summer season closes. Furthermore, many of the sales that would’ve happened in September were rushed and finalized in August to beat the anticipated changes in mortgage loan limits.

Sales were up nearly eight percent from one year earlier, marking the fifth straight month during which there was an increase in sale volume of houses compared to one year earlier.

Overall inventory of residential real estate properties remains down, thus attributing to the decline in sales in September. More foreclosures are expected to hit the market in the coming months, which should add to the current inventory. However, an increase in foreclosure properties will likely lead to a decrease in home values in the coming months.

The decline in sales in California during the month of September is consistent with the overall market on the West Coast. The West Coast of the United States experienced a decline of roughly nine percent in the last quarter, which was the largest drop of any region.

While analysts are not overly concerned about the number of sales during the month of September, there are feelings of uncertainty regarding the anticipated performance of the market in coming months. The banks continue to remain very stringent with respect to the lending of mortgage loans, and with the current limited inventory, the sales numbers may continue to drop in the coming months.

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Defaults on Mortgages Rise Significantly in California

California’s residential real estate market took another step backwards with the release of the most recent housing report. The number of mortgage defaults in the state jumped more than twenty five percent in the third quarter. The increase comes as a result of banks finally reviewing their backlogs of delinquent loans. There had been a nationwide delay, which had led many of the delinquencies to go unnoticed until now.

Defaults on mortgages are generally the first step taken towards foreclosures. California’s default numbers jumped from roughly fifty-five thousand to seventy-one thousand in the past quarter.

The increase in defaults certainly is not a good thing for the fragile housing market in California. Real estate analysts in the state believe that the number of defaults may continue to increase, as lenders continue to grow more aggressive in the identification of delinquent loans.

The largest percentage of defaults took place in homes valued at less than two hundred thousand dollars. The default rate for that category was eleven in every one thousand homes. Those homes that are valued at eight hundred thousand or more only experienced a default rate of roughly three in every one thousand homes.

An increase in foreclosures would likely send residential real estate housing prices into a tailspin. Prices are already significantly depressed, and an increased number of foreclosures on the market will likely drive prices down further. It has yet to be seen as to whether or not all of the reported defaults will wind up in foreclosure. Real estate experts in the state of California are not exactly hopeful regarding the future of the California housing market, though nothing has come to surface as to what the impact of this massive increase in defaults will be.

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California Residential Home Sales Decline

The residential real estate market in the state of California continues to demonstrate instability, as the overall volume of home sales declined slightly from August to September in the state of California. The sales numbers are still up from a year ago, though analysts fear that the decline experienced in the past month may continue into the fourth quarter.

The decrease in the number of residential real estate sales is being attributed to the overall economic and job market uncertainty that continues to plague both the state, and also the country. Many potential homebuyers in the region are choosing not to buy under the current market conditions, as they waiting to see if the overall economy demonstrates more consistency.

Residential real estate analysts in the state believe that the decline was to be expected following the changes in the FHA loan limits, and the overall decline in the stock market that happened this past month.

Single-family home sales dropped by nearly twelve thousand in comparison to the previous month. Despite the large decline in the month-over-month figures, overall sales are still more than four percent higher than they were a year ago. Prices, however, are down by more than eight percent from one year earlier.

While the overall sales numbers were far from impressive in the past month, many analysts believe that the state may soon experience an increase in the overall volume of residential real estate sales. Provided the economic outlook in the state and nation show signs of improvement, sales should again start to improve. They believe that sales numbers should at least be even with where they were last year.

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San Francisco Housing Market Struggles Despite Strong Demand

Although mortgage rates are at record low levels, they are simply not a viable option for many potential homebuyers in cities like San Francisco. With increasingly stringent restrictions as to who can qualify for the incredibly low mortgage rates, many of those that would like to buy a first or second home have had to defer their dreams.

While many buyers wait for low-rate mortgage loans to become less restrictive and more widely available, the housing market in San Francisco continues to suffer. Sales dropped to more than twenty percent below their average levels last month, and the numbers are expected to remain low until there is better financing options across the board.

Residential real estate analysts are reporting that demand among potential homebuyers is actually increasing, but the limited financing options are making it impossible for many potential buyers to make a purchase. As such, those that want to buy are forced to wait. As overall home sales decrease, the average price on homes decreases as well, further damaging the residential real estate market.

The current decline being experienced in the San Francisco housing market comes on the heels of reports that the widely advertised record low mortgage rates are not nearly as beneficial as they have been hyped to be. The reality is that restrictions put in place by the major lenders have made it virtually impossible for the majority of potential homeowners to buy a new home. Many smaller lenders have fled the market, leaving potential homeowners with very limited mortgage financing options.

With that said, residential real estate markets like that in San Francisco are struggling with decreased sales despite increasing demand.

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