Vacations Delivered

Source: Washington Post

California’s inventory of unsold, previously owned homes got smaller in December, shrinking to a five-year low and signaling that the state may be coming out of its worst housing slump in decades.

The supply of unsold single-family homes dropped to 3.8 months from 5.6 months a year ago and 16.6 months in January 2008, when inventories were at a peak, according to estimates released Friday by the California Association of Realtors. The inventory levels are now at their lowest level since 2005, resulting in frenzied sales with multiple offers in some cities.

In Northern California’s Santa Clara County, where inventory has dropped to 50 days from 243 a year ago, Amanda Garcia said she and her 62-year-old father Luis Garcia finally gave up a nine-month search for a home last month, after they kept losing out on homes priced in the highly competitive sub-$500,000 market.

“It’s more like an auction nowadays,” said Ms. Garcia, 26, a medical coordinator from Milpitas, Calif. “They shouldn’t call it a house sale.”

California’s housing market is closely watched because it is the nation’s biggest and helps fuel both the state’s economy and the national building industry. With California still weighed down by economic problems, including a 12.4% unemployment rate, higher than the 10% rate nationwide, economists are looking at bellwethers like housing to determine when California will rebound.

Good signage?
The Real Estate market has hammered California’s tourism, not intentionally of course, but with the downturn have come hard economic times for everyone, and that includes those outside the state: folks with a mortgage on the Mississippi delta, homeowners hoping to hold onto their Louisville residential mortgages; workers at Maryland residential cleaning companies; airline travel industry workers; restaurant and service industry employees.  Virtually no corner of the nation’s economy has been left unscathed by the real estate slump, and certainly California’s slow but seeming steady recovery has to be welcome news, even if you faired well as a Palisades real estate agent or cut your losses early and got out of the industry before it hit bottom.

Of course, any long-term revival in housing will depend on California’s ability to shake off its high unemployment and the continuing threat of more foreclosures. Some housing experts cautioned that inventories may be artificially low because many would-be sellers are waiting for the economy to improve before putting their homes on the market.

“I’m convinced that once the general public believes prices have bottomed out and are coming up, more people will put their homes on the market,” said Andrew LePage, an analyst at MDA DataQuick, a housing-data provider in La Jolla, Calif. “And that will probably coincide with the economy and job market improving.”

Although most home prices remain well below their pre-bust highs of three years ago, California’s overall housing market has shown signs of stabilizing since early last year. The median price of an existing, single-family home rose 8.4% from a year ago to $306,820, marking the second consecutive year-over-year increase and the 10th straight month-over-month jump, according to estimates by the state Realtors’ association.

Sales rose at a slower year-over-year rate of 1.7%, compared with double-digit gains in recent months. Sales have been powered, in part, by a federal tax credit of $8,000 for first-time buyers, which Congress extended until the end of April.

Some brokers attributed the sales slowdown to lean inventories. “Right now, we need more listings,” said Lianne Pinkston, a Coldwell Banker broker in Morgan Hill, Calif., south of San Jose. “I have an all-cash investor, and they’ve wanted to buy a duplex or four-plex, and they’ve been making all-cash offers for over the asking price, and they’re still not getting anything.”

The current inventory rate is running well under California’s historical average since the 1980s of about an eight-month supply of existing homes on the market. That’s partly because a once huge supply of foreclosures in the state has dwindled. In November, foreclosed properties accounted for 40% of all single-family sales, new and used, in California, compared with 58% in January, according to the most recent estimates by Zillow.com, a market tracker.

In general, California’s coastal markets performed better than inland markets. In Orange County, for example, Zillow estimates foreclosures dropped by more than one half to 20.6% of all single-family sales in November from 43.5% in January. In inland Merced County, foreclosures were also down, but to 69.9% of sales from 83.4% in January, according to Zillow.

The return to the kind of bidding wars that marked the state’s boom years in some coastal cities hasn’t been welcomed by home buyers. In Orange County, graphics designer Scott Butler put in one of 37 offers on a three-bedroom, two-bath home listed for $350,000 in early September. Mr. Butler bid full price for the home in Mission Viejo, Calif., and offered to put 20% down, but the winning bid went over $430,000, said his agent, Michael Caruso.

Mr. Butler, 39, who has since given up his search, said he was outbid on more than 20 other homes since early 2009. “It’s very discouraging,” he said.

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My Take: California’s have seen the best of times and the worst of times, as home prices skyrocketed to unbelievable levels at the tail end of the housing boom in 2003.  Quarter-million dollar homes started popping up on otherwise up-and-coming streets in neighborhoods that had real estate agents telling their clients in Kentucky to dump their Louisville Kentucky mortgage and head West while the market was hot.

But we know that didn’t last.  Now, reeling from the impact of inflated home pricing and facing resets on loans for mortgages that were offered to inexperienced buyers with a wink and a nod and little more for proof of income than a pay stub, the state is paying for its particular brand of decadence.  Foreclosures are rampant and there is no telling how many more will come in 2010, even with the uptick in home sales. Now that the go-go days of the market are behind the state, rules are stiffer than ever for lenders and rightfully so, and that includes Louisville residential mortgages, mortgages in Montana, and even home mortgages along the coast of Florida.  No state has been left untouched.

Fast-talking lenders and mortgage consultants got folks into houses and mortgages that they could not afford, and that left a glut of homes on the market with no buyers, which led to a glut of inventory, Maple Grove MN homes ror rent, for example, were common, while sales fell to all-time lows. Homeowners across the state either put their homes up for sale, rented them out, or walked away as their payments ballooned out of their control.

Other Resources:

Cleaning Up:
On the east coast, Maryland house cleaning services are widely available for renters and owners alike.  They also will help you prepare your home for sale.  If you own a few Orange County NY Homes, for example, and want to prepare them for the market, you might also look into a professional cleaning service and professional home-staging service for help.

Full Exposure:
Travel related news and real estate are two of the most popular online destinations.  If you are in either of the industries, you might consider ramping up your online visitor and click-through rates by working with a qualified Seo services company who can help increase your visibility.  They are easily found online under Seo company.