STILL EXPECTING MORE CHANGES....
As one might expect, nothing much has changed in the last 30 days. The market is still suffering from the sub-prime debacle and buyers still believe prices are going to continue to drop. In addition, there has been so much tightening in the mortgage industry that many are not able to qualify to buy and this depletes the viewing audience. According to a survey conducted by the Federal Reserve, 41% of banks say they have tightened their lending practices, compared with 15% when last surveyed in July. That's why I am advising all my sellers that there just isn't as many people out there looking, which makes the selling period longer.
I thought you might be interested in some stats I ran on comparisons of price ranges over the past three years. If you look at the table below you will see that days on the market have doubled on homes priced in the $500,000 price range but it is just the opposite if the price is in the $1M range. In addition, the original listing price vs. the selling price tripled in the $500,000 range but is 10 times as high when over $1M. What does this tell us? I would welcome your opinions........
Looking at some price variances over the past three years:
# of Sales DOM OLP vs SP
2005 $500,000 13 56 <2.3%>
2005 $1M 18 110 <0.6%>
2005 All 165 55 <2.8%>
2006 $500,000 9 121 <5.7%>
2006 $1M 25 112 <8.0%>
2006 All 133 96 <12.2%>
2007 $500,000 13 130 <6.7%>
2007 $1M 19 61 <7.3%>
2007 All 105 106 <8.1%>
Sub Prime Bill Amendment: The House Financial Services Committee approved legislation Tuesday addressing the subprime mortgage crisis. The measure, H.R. 3915, sponsored by House Financial Services Chairman Barney Frank, calls for the establishment of minimum standards for home loans nationwide, and holds mortgage lenders more accountable for ensuring borrowers' ability to afford a loan. Among other things, the bill would require lenders to document all borrowers' ability to repay loans at offer and, if adjustable, once rates rise to market levels.
C.A.R. Reports sales decrease 38.9% for September in California compared with the same period a year ago, while the median price of an existing home fell 4.7%. 'While it is typical for the median price to dip seasonally as we move from August to September, this decline -- which was both the largest month-to-month percentage decline on record and the first year-to-year decline in more than 10 years -- was mainly the result of the credit or liquidity crunch, which also drove sales below the 300,000 mark,' said C.A.R. President Colleen Badagliacco.
'California's sales fell more steeply than those of the U.S. as a whole because of its heavy reliance on jumbo loans -- those above the conforming loan limit of $417,000,' she said. 'This speaks to the need to raise the conforming loan limit in higher-cost states like California to more accurately reflect the cost of housing.
Keep an eye on commercial real estate markets in metros that position themselves as 24-hour cities with a global pathway to international markets, says the Urban Land Institute (ULI) in a rating of the top commercial real estate markets for 2008. The hottest commercial real estate market in the country? New York City, where vacancies are in the mid-single digits and rents have skyrocketed. ULI dubs the Big Apple, "America’s 24-hour city."
Seattle, where a concentration of mixed use development draws residents to new downtown neighborhoods, is another standout. A strong and highly diversified economy resulting from a large number of corporate headquarters and the city’s position as an important hub on Asian commerce routes contribute to its top ranking on the commercial markets to watch.
Other top commercial markets to watch, according to ULI, are:
Washington, D. C. "The government never stops and the ever churning Washington real estate market cushions against abrupt downturns," concludes the report.
**Los Angeles. Office markets in Orange Country might be softening but ULI says those in West LA have never been stronger. LA/Long Beach remains the nation’s top port
**San Francisco. A resurgence of technology business is propelling the market in this city. View space commands over $1,000 a square foot.
**Boston. Investors are keeping a close eye on this market, says ULI, even though new industries recycle office spaces left vacant by recent corporate headquarters departures
**San Diego. “A leading indicator for a market correction,” says ULI.
Denver. A retooled downtown has created what ULI calls an “urban burb,” a hip and exciting urban core in the midst of a sprawling suburban area connected to downtown via light rail.
**Smaller markets to watch include: San Jose, Calif.; Honolulu, Hawaii; Austin, Texas; Raleigh-Durham and Charlotte, N.C.; Portland, Ore.; Sacramento, Calif.; Las Vegas, N.V.; Orlando and Tampa, Fla; Salt Lake City, Utah, Jacksonville, Fla.; Nashville, Tenn.; and Minneapolis, Minn.
Here is what is happening in our local Santa Cruz County market:
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October Monthly Statistical Highlights for Single Family Homes:
* Inventory up 4.3% compared to October 2006, but decreased 5.5% from September 2007
* Sales down 21.1% compared to October 2006, but up 22.1% from September 2007
* Days on the market increased ! to 106, month prior 98, one year ago 77
* Median home price increased from the prior month to $710,000, and decreased 5.1% from October 2006
* Sales price vs.listing price ratio increased to 96.67% from September
* Month's worth of inventory County wide equals 11, compared to 9 in October 2006 and 5 months in 2005
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(These statistics are believed to be accurate but not guaranteed)
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