Home buyers sitting on the fence wondering if now is the
right time to buy should consider five factors when making this
decision: Jobs, recent sales activity, construction, mortgage
availability, and anecdotal evidence.Â Each of these issues can help
consumers make the best choice for their situation and financial
MAKING SENSE OF THE STORY
Although many areas of the country were deeply impacted by the
recession, some areas were less affected by job loss.Â If employment
stability is a concern, prospective buyers should review job-growth data
from the U.S. Bureau of Labor Statistics at www.bls.gov.Â The data
provided by the Bureau is approximately one month old and shows the
direction of the local economy.
Sales Activity: Housing inventory and sales volume should be taken into
consideration while house hunting.Â A large inventory of homes with few
actual transactions can be a negative indicator.Â On the other hand, if
inventory is falling and transactions are rising, that is a good sign.Â
In January, the CALIFORNIA ASSOCIATION OF REALTORSÂ®â€™ Unsold Inventory
Index stood at 6.7 months, up from 5 months in December 2010, but down
from 5.7 months in January 2010.Â The index indicates the number of
months needed to deplete the supply of homes on the market at the
current sales rate.
Staying up-to-date on the number of building permits issued for local
builders is useful for gauging builder sentiment and the future of
housing activity.Â The California Building Industry Association recently
announced that California homebuilders pulled 2,920 total housing
permits in January, registering a 5-percent decline compared with a year
ago and a 56-percent decline compared with December.Â However, the
Construction Industry Research Board is projecting 62,000 total permits
will be pulled in 2011, an increase of 38 percent compared with 2010â€™s
total of 44,893 permits.
Availability: Home buyers hoping to be approved for a mortgage should
monitor local lending patterns.Â Following the financial crisis, most
national banks tightened lending standards; however, some local banks
havenâ€™t been impacted as much as large lenders and are more willing to
lend, even for higher-priced homes.
Evidence: Although buyers can access home listings online, one of the
best ways to monitor the local housing market is to work with a REALTORÂ®
and gather intelligence using their expertise and guidance.
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