New year looks to be good for buying home

first_imgLet’s dub 2008 the “Year of the Home Buying Opportunity.” That’s my glass-half-full take on what’s going to happen with the residential real estate market. But the extent of the opportunity will materialize over time. Perhaps market tracker DataQuick Information Systems and the California Association of Realtors provided a glimpse last week with sales and price statistics for November. Price drops back then for the state generally didn’t exceed 5percent annually, he noted. Kleinhenz traces the pivot point for the current price downturn to August, when the credit crunch exploded. The market for mortgage-backed securities – packaged home loans purchased by big investment concerns – dried up, subprime lenders folded, and credit standards tightened. By October, the state’s median price fell by a record 9.9 percent. “This is truly unique because it happened so fast and the (price) adjustment has been so steep,” Kleinhenz said. “We have to direct the blame at the credit crunch, which has hammered the high end of the market,” he said. The “Home Buying Opportunity,” or HBO, has certainly improved since April, when California’s median house price increased an annual 6.2percent to a record $597,640. By last month, it had fallen $109,000, a drop of 18percent. Further price declines are probably in the offing, but they will vary depending on your market. The California Association of Mortgage Brokers seems to share this HBO view, too. (Hey, sometime you just have to look on the bright side of a dark situation, the latter of which the real estate industry is certainly facing.) According to the Sacramento-based trade association: 47 percent of brokers believe a recession is possible because of the housing crisis. The best time to buy in 2008 will be from April through June. Housing prices should decrease slightly next year. Qualifying for a mortgage will become even more difficult because of the credit crunch and tighter lending standards. This group believes that the price dip will indeed open a window of opportunity for some buyers, even those trying to get that first house. “While home prices will continue to decrease into 2008, more stable loan products will reappear for consumers looking to purchase a home,” Pete Ogilvie, the association’s president, said in a statement. “(Our) members are optimistic that the Federal Housing Administration loan will resurface in popularity with the assistance of the necessary federal reforms that will raise the loan limit to meet the needs of California’s borrowers.” We’ll see about that. So far there is little inclination among the nation’s legislators to help California. And the mortgage brokers also joined the ranks of prognosticators who don’t think that the market will improve until 2009. “There is going to be a lot of wreckage, but hopefully there will be some opportunity for people, and I think that will be a benefit,” said Jack Kyser, vice president and chief economist at the Los Angeles County Economic Development Corp. “This is a very fascinating situation to watch.” Talk about a reality show. [email protected] 818-713-3743160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! AD Quality Auto 360p 720p 1080p Top articles1/5READ MORECoach Doc Rivers a “fan” from way back of Jazz’s Jordan ClarksonDataQuick noted that the median price across the Southern California region stretching from Ventura to San Diego fell a record 10.3 percent from a year earlier, to $435,000. (DataQuick’s stats include new and previously owned houses and condominiums.) The price drop was bigger – 12percent across California and in Los Angeles County – in the state association’s report, which focused just on previously owned single-family houses. Both reports noted that prices have dropped to early 2005 levels. Robert Kleinhenz, the association’s deputy chief economist, recalled that during the market slump of the 1990s, the biggest price decline statewide was 7.2 percent in May 1993. Los Angeles County’s biggest drop was 11.6 percent in March 1993. last_img

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