The market seems to be picking up for the traditionally busy summer buying season! In fact, within a recent two week period, I closed on 2 home purchases on the Palos Verdes Peninsula and put 3 of my listings into escrow within 3 days of each other!!
News reports are beginning to mix in some good economic news in addition to the doomsday reports favored by the media. Lower priced homes are moving briskly with buyers taking advantage of significant discounts and record low interest rates. New tax credits are also giving great incentives to new buyers.
PRICE CHANGES Properties, on average, in the South Bay are selling for approx. 95% of list price. The mortgage meltdown and huge volatility in the stock markets has obviously had a significant impact on the sale of homes. The average price per sq. ft. for homes sold in the second quarter 2009 compared to the second quarter 2008, has fallen much less in the South Bay Beach cities, however, than in most markets in Southern California. Recent news reports have indicated that prices may be stabilizing in Southern California. The median price of homes in Los Angeles County has also been increasing lately due to an increase in the number of more expensive homes being sold because of the improving market for jumbo loans. Sales volumes in the beach cities and the Palos Verdes Peninsula continue to be down significantly compared to last year.
| Location |
2009 2nd Qtr. Sales |
% Change 2nd Qtr. 2008 |
Days on Market |
Months Inventory |
| |
Sales Price Per Sq. Ft. |
# of Houses |
Sales Price Per Sq. Ft. |
Sales Volume |
|
|
| Palos Verdes Estates |
$545 |
24 |
(16%) |
( 33%) |
84 |
12 |
| RPV and RHE |
464 |
70 |
(12%) |
( 7%) |
78 |
7 |
| Rolling Hills |
653 |
5 |
( 3%) |
0 % |
170 |
11 |
| Manhattan Beach/Hermosa |
617 |
88 |
(13%) |
(10%) |
65 |
7 |
| Redondo Beach |
434 |
65 |
(14% ) |
( 14% ) |
80 |
4 |
| Torrance |
355 |
159 |
( 12% ) |
14% |
55 |
2 |
| San Pedro |
312 |
53 |
( 20% ) |
4% |
65 |
4 |
Inventory – The total inventory of single family homes for sale in the cities listed above has decreased significantly during the last quarter and has decreased 30% from the prior year. The decrease in inventory has been primarily in the less expensive cities of Torrance and San Pedro, which has decreased 60% compared to last year. The total inventory of single family homes for sale on the Palos Verdes Peninsula, however, is approx. the same as this time last year.
Inventory History –For most of the last two decades, L.A. County has averaged an 8 month inventory, therefore for most of the South Bay; the number of months of inventory is not unusually high. The number of months of inventory of homes in Redondo Beach, Torrance and San Pedro has shrunk significantly in the last 3 quarters. This is indicative of the fact that the lower priced homes are selling faster. Homes in the lower end of the price range in the higher priced market of the Palos Verdes Peninsula and Manhattan Beach are also selling faster than the higher priced homes. The sale of higher priced homes is impacted by the lower availability of jumbo mortgages.
What is a Short Sale?
CDPE – Certified Distressed Property Expert
Short Sales are a sale of a property where the sale proceeds are not adequate to pay off the existing loans, requiring the lender to agree to accept less than full payment of their loan. At this time, the fastest growing segment of the distressed property market is the luxury market. I am a Certified Distressed Property Expert, and those realtors that have this designation have a success rate of 85-90% closing short sales, compared to a national average of 8-10% successful closings. Whether it is caused by relocation, loss of a job or increased mortgage payments, everyone at some point has been touched by the worldwide economic downturn. If you know someone who may need some help lease don’t hesitate to call or refer our services.
IT’S ALL ABOUT THE INTERNET. We invite you to visit our award winning website at www.maureenmegowan.com. Our website achieves extremely high placement on search engine results, such as “Palos Verdes Real Estate” and “South Bay Real Estate” on Google, for people using the internet to buy a home in Palos Verdes or the South Bay beach communities. This has made us a leader in serving relocation clients.
WEB BLOG (http://mmegowan.activerain.com ) My web blog is where I discuss the latest news on the real estate market and other interesting facts about the Palos Verdes Peninsula. I have also posted detailed market reports for each of the neighborhoods on the Palos Verdes Peninsula which lists the homes sold in each neighborhood during the 2nd Quarter of 2009. We appreciate your feedback and comments on my postings. Come join us.
Tax Incentives: New tax incentives have been recently passed by both the State and Federal government for a limited time. The state of California provides for a 5% of the purchase price tax credit (maximum of $10,000) for the purchase of a newly constructed home, however funds allocated for this credit are expected to be exhausted in August of this year. The Federal government also provides for an $8,000 tax credit for first time home buyers, as well as substantial tax credits for qualifying energy saving expenditures. For more info, visit the following link on my website : Income Tax Issues
Maximize your homes best attributes for an optimal selling price and fewer days on the market. Use my website which is filled with ideas to get your home ready, or it can be professionally staged. Email or call me with questions. If you are thinking of selling your home, now may be the best time in the foreseeable future to list your property for sale, while interest rates are low. Qualified buyers are definitely out there and activity has picked up substantially since mid September of last year.
FINANCING (See our web blog for rate updates):
BUYERS AND SELLERS TAKE HEART! There is financing available for well qualified buyers due to the Federal Reserves aggressive action in purchasing Fannie Mae and Freddie Mac securities. Many buyers may have been severely affected by the drop in the stock market which may impact the amount of money they may have available for a down payment. There are new guidelines for Fannie Mae and Freddie Mac loans, and 3.5% down payment loans are available with tight restrictions. Recent passage of the Financing Bail-out bill will help provide additional capital in the market for new mortgage loans, but this will take time to implement. Interest rates have also fallen significantly.
BUYERS with good credit, an adequate down payment and 2 years or more employment history will qualify for Full Documentation loans. There are no Stated Loans ( no documentation) offered now. If the property will be your home, not a speculative investment, you should be buying for the long term. Today’s market gives buyers and sellers the opportunity to negotiate a reasonable deal for both parties.
Conforming Loans (loans of less than $417,000) are at approx. 5.0 %. Rates for loans between $417,000 and $729,750 (conforming jumbos ) are about one-quarter to three-eighths of a percentage point higher. Conforming loans generally require a 10% to 20%down payment (less for FHA or VA loans)
Interest rates on Jumbo 30 year fixed rate mortgages (loans in excess of $729,750) have decreased substantially over the last several quarters to an average rate (as of 7/15/09/) of approx. 5.75-6.25%. The interest rate spread between conforming loans and Jumbo 30 year fixed rate loans has narrowed during the last quarter but still are approx. .75 % to 1.25 % higher than 30 year fixed rate conforming loans. Jumbo loans also require a much higher down payment of 25 to 30%. This large spread between jumbo loans and conforming loans is amazing considering that prior to the mortgage loan melt down, spreads between conforming and jumbo loans were only approx. two-tenths of a percentage point.
All rates quoted above are as of 7/31/09 with usually FICO score of at least 740.
Thanks for reading this. We hope it helps your decision making. Call us for more in depth help for your property.
Your feedback and referrals are greatly appreciated . Referrals are the backbone of our business. If you agree that we are knowledgeable professionals, with your best interest at heart, we would appreciate your referral to friends, family and colleagues. We treat all our clients like family, building lifelong relationships.
