In some areas of LA, the higher end, prices continue to go up. Los Angeles is not middle America. People are growing tired of urban sprall with gas prices the way they are. Prices in metro areas will go down and will go up but I'll put money that in 10 years they'll be higher. Inflation is inflation. I can't tell you how many times I have come across buyers with cash to buy in Los Angeles. 300k to 12 mil. There continues to be no shortage of people willing to live in Los Angeles. Los Angeles has many micro-climates so I'm sure this agents response was not a blanket answer for all areas of Los Angeles.
The Reavis Group
Keller Williams Wilshire
Realtor and Eco Broker
The point is a lot of people have been trying to cheer lead home buyers along in order to minimize the impacts, like CNBC whose commentators, up until the undeniable realization of the crisis last year, had been vigorously denying any possibility of a housing bubble. The reality is that the International Monetary Fund has estimated total mortgage losses will be around $1 trillion, but so far financial institutions have only declared about half that which you could use as a rough gauge that we're only half way through the crisis which doesn't necessarily say where a bottom will be found.
You can be sure now that mortgage liquidity has dried up and lending practices have tightened there will be less buyers to compete for real estate purchases. Furthermore, the country will not return to the extremely high amount of available mortgage funding that enabled consumers to drive up real estate at phenomenal rates simply because the Fed's lending rate is already down to 2% and they're not about to drop it anymore (if anything they'll raise it within the next 5 or 6 months). Which makes the post by Monique Carrabba about inflation a homeowner's best hope. In other words, continued value erosion of the U.S. dollar is the only thing that will price homes at the values they once were and that's just not a good investment. Everyone should keep in mind that it's the recent legislation allowing the U.S. Treasury to promise your tax money to bail out Fannie Mae and Freddie Mac WITHOUT LIMIT which is what is keeping the whole market (housing and otherwise) from falling off a cliff. If home buyers can hold off on their purchase, they should wait until the data actually shows upward trends and disregard the cheer leaders. No one can call a bottom with definitive accuracy until the data shows upward trends, then we can point to a bottom in retrospect.
Monique is correct, every area has different factors to consider and is in a different place in the RE cycle. I don't know who you are quoting and what area he/she was talking about, but it is true that some areas are trending upward. I personally wouldn't make it a blanket statement to say that the market as a whole is trending up, but I also wouldn't make a blanket statement saying that it is going down. What many people tend to forget is that real estate is very local.
Anyway, I hope you have luck looking for a home and remember that even if prices come down in the market and price range you are looking it, you must consider that interest rates are going up. Unless you are paying all cahs, this can have a huge impact on you and the amount of interest you pay over the life of the loan.
CNN reports Beverly Hills and beach areas are now finally feeling the effect of the recession.....its bad and i agree -
tell the truth or qualify your answers.
Please do not construe this as being offered in defense of a comment made by another but it is important that a point is made to clarify the real estate market.
Yes, the general condition of the national economy and the real estate market are not good. But we feel to make a catagorical assumption that every location is destitute is not an accurate portral. The real estate market is regional with prices and desirability being effected by stability of income, housing demands, education, quality of life etc.
We believe there are two issues here....one of being truthful and the other of representing the facts as they exist in your specific location.
You say "continued value erosion of the U.S. dollar is the only thing that will price homes at the values they once were and that's just not a good investment."
I must say - OUTSTANDING ANSWER.
That is the man who gets out "Walk the walk "and "Talk the talk" award - OUTSTANDING!
Response - anyone please....