Westside and Beach Cities Homeowners 2013 Housing Market Forecast with Updates - Your Westside Homes
Finally, there was good news in the housing market in 2012
with positive forecast in 2013. California housing is expected to show
slow recovery in 2013. Recovery for the second straight year.
Expected sold gains in 2013 are expected at 1.3 percent with 530,000
units compared from 523,000 units in 2012 and 497,000 in 2011. C.A.R.
President Construction Arnold. “Sales would be even higher if inventory
were less constrained in REO-dominated markets, particularly in the
Central Valley and Inland Empire, where there is an extreme shortage of
available homes. Sales will be stronger in higher-priced areas, where
there are more equity properties and a somewhat greater availability of
homes for sale.”C.A.R. Vice President and Chief Economist Leslie
Appleton-Young states, “Pent-up demand from first-time buyers will
compete with investors and all-cash offers on lower-priced properties,
while multiple offers and aggressive bidding will continue to be the
norm in mid- to upper-price range homes.”
UPDATES Housing Markets 2013:Real estate is ever changing. Since 2008 we have seen a bust in the housing market. The real estate market maybe turning the corner. Mid 2012 buyers return to the housing market. Sellers that previously may have had to sale short sale were able to sale traditional and put money in their pocket. Good News for seller home prices are appreciating with Western states leading the appreciation wave. First quarter indications are showing a reduction in short sales and foreclosure properties. There is a scarcity of housing inventory some areas are seeing multiple bids for homes. Interest rates for conventional mortgage loans are still under 04%.
April 2013
UPDATES Housing Markets 2013:Real estate is ever changing. Since 2008 we have seen a bust in the housing market. The real estate market maybe turning the corner. Mid 2012 buyers return to the housing market. Sellers that previously may have had to sale short sale were able to sale traditional and put money in their pocket. Good News for seller home prices are appreciating with Western states leading the appreciation wave. First quarter indications are showing a reduction in short sales and foreclosure properties. There is a scarcity of housing inventory some areas are seeing multiple bids for homes. Interest rates for conventional mortgage loans are still under 04%.
April 2013
- April 4, 2013 Freddie Max 30 year mortgage rate slight change from 3.57% to 3.54%. the 15 year rate dropped from 2.76% to 2.74%.
- Foreclosures nationwide decline lowest since 2007. February 2012 approximately 1.2 million homes were in some stage of foreclosure. February 2013 was a 21% decline. Los Angeles Times Money.
- West Los Angeles lack of inventory. There are several potential buyers for each active listings leading to bidding wars. Short sales and foreclosures have minimized. Buyer’s confidences combined with low mortgage interest rates has captured new buyers into the housing market. Low inventory and mortgage interest rates has resulted in rising prices. There is more demand than supply.
- Housing prices nationally rose more on annual basis in February 2013 than it had in nearly seven years due to sizable price appreciation in Western states. Those states are: California, Nevada, Arizona, Hawaii and Idaho. Inman News
- Good News: California Foreclosure Rate lowest in last 8 years
- Mortgage Interest Rates Above 4%
- California Mortage Rates
- 30 Year Fixed (Current) 4.16% (Last Week) 3.34%
- 15 Year Fixed (Current) 3.20% (Last Week) 2.56%
- 5/1 Adjustable (Current) 3.15% (Last Week) 2.25%
The
summer was a very busy time for Westside real estate. Scarcity of
housing inventory, short sale and foreclosure properties. The majority
of home on the market are standard sale. Properties values in some area
appreciated 10% to 18%. Buyer are regaining confidence in the housing
market and encouraged by low mortgage rates. Summer is always the
busiest time in real estate. The fall is seeing a slight slow down in
the housing market but judging from last year the market is still good
for buyers and sellers. This is a personal option. Today I got a call from CBS news asking my opinion about the "Government Shut Down" effect on the housing market. I do not think I told him what he wants to hear. My humble opinion is that people are tried of " Crisis Government." years of a depressed housing market then stability starting in the end of 2012. Great summer for Westside home values and now the "Government Shut Down" next "the Fiscal Cliff." I do not have a crystal ball but feel people seek financial stability. I do not have a crystal ball but do not feel "Crisis Government" is good for the housing market in the short or long term.
- October 16, 2013 - The Congress reached agreement to end "Government Shut Down"through January 15, 2014. Additionally, increase nation's borrowing authority "Debt Ceiling" through February 7, 2014. This agreement maybe O.K. through the holidays but does not assure national long-term stability.
BUYER OPPORTUNITIES:
The opportunities for buying a home are great. There is housing affordability and record low interest rates. The recession decreased housing prices to lower amounts. Interest rates are at historic lows.
Compare rates in:
2008 @ 6%
2009 @ 5.1%
2010 @ 4.7%
2011 @ 4.5%
2012 under 4%.
2013 interest rates are expected to remain in mid .04%
Expected improved unemployment rates in California:
2011 unemployment 11.7%
2012 unemployment 10.7%
2013 predictions unemployment rates fewer than 10%
- Homeowners underwater on mortgages or owning more than the actual current market home value. Will these homeowners keep their properties or sale at a loss?
- Federal, state and local government housing policies
- Federal money market
- National and state economic fiscal policies
- Full national recovery is partially dependent on housing market recovery.
- Interest rates in 2012 were below 4%. In 2013 rates predicted to remain below 4% or edge up to 4%. Housing market would be effect negatively if rates were to increase dramatically.
- Uncertainty about unemployment rates will they edge up or down? February 2013 California’s unemployment rate 9.8%.
- Americans that are underemployed. Employed but at a lesser percentage than in previous years. Example: in 2006 family annual income $80,000.00. Currently, family income $40,000.00. Regardless, lower housing prices and low interest rates family may not be able to qualify for home in desired community.
- There will be no full housing recovery until oversupply of short sales and foreclosures are cleared in California. Sales values constrained in areas with high concentration of short sales and foreclosures.
- ”Shadow Inventory” pre-foreclosure and foreclosure being held by the banks not put on the market for sale. When these properties are put on the market could overwhelm housing market’s inventory and pricing.
2008
|
2009
|
2010
|
2011
|
2012f
|
2013f
| |
SFH Resales (000s)
|
441.8
|
546.9
|
492.3
|
497.9
|
523.3
|
530.0
|
% Change
|
27.3%
|
23.8%
|
-10.0%
|
1.1%
|
5.1%
|
1.3%
|
Median Price($000)
|
$348.5
|
$275.0
|
$305.0
|
$286.0
|
$317.0
|
$335.0
|
% Change
|
-37.8%
|
-21.1%
|
10.9%
|
-6.2%
|
10.9%
|
5.7%
|
30-Yr FRM
|
6.0%
|
5.1%
|
4.7%
|
4.5%
|
3.8%
|
4.0%
|
1-Yr ARM
|
5.2%
|
4.7%
|
3.5%
|
3.0%
|
2.8%
|
2.8%
|
Chart Provided C.A.R. Oct. 2, 2012
New Project in West Los Angeles and Beach Cities:
Commercial building and renovation projects that had been put on hold because of the economy have restarted. These project are near completion and or completed. New and renovated apartment complexes, shopping centers, condominium projects and public structures. The health of a community is noted by new construction and renovation. Review projects in Westside neighborhoods:
- New Construction Century City Center
Forecast Rental Units:
One of the largest contributor to the Great Depression is the housing market. The housing market is not limited to new construction or resale of single family homes, condominiums and townhouses. Another large contributor is construction of apartment complexes. UCLA’s Anderson economist forecast suggest, “coming out of a severe recession, the bulk of demand will be in rental units.” Baby boomer’s children 20-something extending to thirties are looking to live on their own and will be renting. This post baby boomer generation may have been living at home looking for better a paying job. Or may have been a college student. This generation will be the majority of renters. This generation is demanding rentals close to their employment and entertainment. About 70% of movers are renters. I am not an economist but on the Westside from 2011 to 2013 I have noticed large complexes being constructed. Some are multi-use with receptionist on 1st floor with adjacent restaurants, office centers and commercial shops. This apartment living trend maybe relatively new on the Westside but has been common for the last few years in downtown Los Angeles, CA. Some developers purchased land in 2010 and did not break ground because of the downtown in the economy. Others preceded and there are a modest amount of newly constructed apartment buildings on the Westside. Based on the economy experienced in the last five years no boom is predicted. On the other hand, new construction is a sign there is a modest positive forecast in 2013 for rental units and the housing market.
Conclusion:- In some areas home prices plunged 40-50% from the paramount highs before the recession. The above chart showing from 2008 to 2013 forecast modest stabilization in 2012. Real estate normalization will take another 3-5 years. Exactly, what will define real estate normalization in the next few years? It will be determined by housing price stabilization; fair market dominates (resale), low unemployment rates, and national/state full economic recovery.
- Currently, first-time buyers are getting into the market. Some may be deterred by lenders strict requirements. Lenders are now requiring substantial down payments. Qualifying for a loan includes monthly: housing loan, taxes, insurance including all other personal debts. Honestly, this was the way lending was done before the mid 2000s. Bankers are concerned about lending to a solvent borrower. Lenders ultimate goal is to sell the loan to investors and reduce default risks.
- Buyers may not have the credit rating or down payment amount that they had five years ago. Consider a FHA loan the lending requirements are not as strict as conventional lending requirements.
- Homeowner considering selling at same price or lower that original purchase price. Recently, sold property where owners had owned for 4 years. Decided to sell in 2012 because home was two-levels and needed a one level home. Owner purchased with large down payment. After purchase made some updates totaling $50,000.00. Recent sells price same as purchase price. Yes, sellers sold at a loss but were in position to move on. Lucky sellers in similar positions are deciding to sell and reap benefits of lower prices and interests rates in a new home purchase.
- Low interest rates and reduced housing prices sparked the housing market in 2012. This increase in sells and prices (depending on the area) is expected to continue in 2013. The gains have been modest but adverse to plunging prices and decrease in sales there are gains. At the end of 2012 there was low inventory. Properties saw multiple offers and shorter days on market. Modest higher sells prices are resulting. This is more common in higher values areas with equity as versus to areas with high short sales and foreclosures. Areas with high concentration of short sales and foreclosures are not to be overlooked. My experience has been foreclosures owned by lender are ready to make reasonable deals. Regardless, areas with concentration of regular resells or concentration of short sales and foreclosure the market is slowly moving along.
- Modest increase in construction of new apartment complexes. In California more than 350,000 construction workers lost their jobs in the Great Recession. Modest increase in new apartment complex construction reduces unemployment in construction and other real estate related industries. Toll Brothers and Shea Baker Ranch announced building new construction of 2,000 units in Lake Forest. Apartments will be a significant number of dwelling built. Randall Lewis planning 1,500 new dwelling in western San Bernardino County. New construction is good for the California economy and housing market.
- California is climbing out of the housing slump. It is not a full recovery. Hopefully, a full recovery should occur within 3-5 years. Buyers are purchasing homes today they were not able to purchase five years ago. Homes are now available at lower purchase prices and interest rates. It is a buyer’s market. Seller a positive is that values are not declining but stabilizing. Additionally, in some areas sellers are seeing a slight increase in home values. Of course, the values are not what they were in 2006. Hopefully, the fall is over and stabilization with slight home value increase will be a tend in 2013. Sellers depending on your circumstances will decide to keep their properties or sell.
- Modestly optimism but not out of the recession. There are national financial events that could have a positive or negative effects on the housing market. On the other hand, this is a buyers market. Buyers are gambling thinking housing values will be lower. Additionally, interest rates are at decades low levels. It would be surprising if mortgage rates got any lower. Sellers have to be realistic about current real estate values. A market analysis can tell you if your neighborhoods housing values have stabilized and seeing a slight appreciation.
- October 2013: This year has seen West Los Angeles and Beach cities housing appreciation depending on neighborhood from 10% to 20%. The mortgage interest rates have remained below 05% and there has been a scarcity of homes actively on the market. Buyer's demand has exceeded housing inventory. Short sales and foreclosures are scarce. Average unemployment in California is about 10%. Therefore, standard sales have dominated the market. The result is housing appreciate. Some feared another housing boom. Towards the end of the year prices seemed to level. Toward the end back to Federal Government "Crisis Management." It remains to be seen the effects the "Crisis Management" will have on the housing market.With the encouraging housing market signs in 2013 hopefully the housing market recovery will continue into 2014.
WLA Real Estate Expert
Westside Homes Real Estates
(310) 853-9933
gailmercedes@aol.com
Information deemed reliable but not guaranteed. License #00788828
No comments:
Post a Comment