Carole Jacoby’s Weblog

Have You Been Waiting For The Bottom of The Market? Your wait may soon be over.

Data Quick Information Systems (which monitors real estate activity nationwide) reports sales are up not only in California but throughout the country. The figures that are being published indicate that the bottom of the market seems to have been reached in many of the nation’s areas.

California, including the Central Valley, is still seeing a decline in homes prices but the rate of decrease per month does seem to be leveling off. Sellers know that they are facing stiff competition in pricing, due to the high rate of foreclosures on the market and the number of buyers in the market place. Sellers know that buyers are going to do what buyers have always done, shop the market for the best value. Existing homes sales are in the sellers favor at this time. Established landscaping and interior décor can save buyers thousand of dollars making pre-existing homes more desirable than new homes. Resale homes sales increased by 40% in April.

A few weeks ago the Fresno Bee reported that sales were up 2% in April from last year. That trend continued through May. Even the hard hit counties of Riverside and San Bernardino have seen sales volume rise.

Buyers are finding that home prices are becoming more attractive as prices roll back to near the same values as four years ago. Selection of homes styles is also a positive for buyers, The excess in current inventory is giving buyers more choices in finding a home which matches their lifestyle.

Another factor in increased sales is the relocation buyer. Home values are so much more attractive here, than in the Bay Area or the Greater Los Angeles area, many people are opting to relocate to the Central Valley.

According to Data Quick, the areas seeing the best increase in sales are the regions where home prices have declined the most. The California Association of Realtors reports that home affordability in Fresno County has risen for 44% in 2007 to a current rate of 56%.

Interest rates are still historically low. In May they began to inch upward but in the last few weeks this trend has reversed. Interest rates are expected to increase by the end of the year. The economy will be playing an important roll in the Federal Reserves position in regards to future rates.

The worst of the mortgage crisis has been worked through and the bottom of that unfortunate debacle has been reached according to many experts. There will still be foreclosures in the high numbers but the flood is beginning to recede, although the flood waters will recede slowing. It will be at least another year before Riverside and San Bernardino Counties will see any recovery in their market.

When a real estate market goes through a downturn, the way back up is always a little shaky. Solid footing may still be a ways off in the future, there is still a high inventory rate and we need to see a decline in the number of foreclosures entering the market each month.  According to historic indicators it does appear that recovery for the real estate market is on the horizon.  The economy, rising fuel prices and the forth-coming elections will all have their influence on what will happen next.

Personally, I believe this is an excellent time to buy, prices are down, inventory for buyers is at its best and interest rates are reasonable. Motivated buyers working with motivated sellers make it a win-win situation for everyone