Some areas have reached the â€œbottomâ€ and others not. Foreclosures are still on their way this year.
The Federal Reserve stimulates the economy with low rates. Therefore many buyers take advantage of this now before the rate starts to escalate. Consequently, when there's more buyers, prices start going up in those areas.
It's a good time to buy as a first time buyer or as a short-time or long-time investor for rates are low for 30 year fixed and property values are affordable for those who qualify.
Happy House Hunt!
The good news is there are plenty of buyers in the market because of low interest rates for mortgages and because there has been an uptick in consumer confidence recently, which has prospective buyers feeling more comfortable committing to making a purchase. We also see stronger prices in better neighborhoods and better housing selling faster if they are priced correctly.
My best advice to you is to not try to time the market (no one has a crystal ball) and base your home buying decision on your own situation and what you feel you can comfortably afford based on carrying a mortgage, down payment, closing costs and existing obligations. Considering where the market is should be second to where you are as a buyer and potential home owner.
Coldwell Banker Brentwood
Housing Crisis to End in 2012 as Banks Loosen Credit Standards
Capital Economics expects the housing crisis to end this year, according to a report released Tuesday. One of the reasons: loosening credit.
The analytics firm notes the average credit score required to attain a mortgage loan is 700. While this is higher than scores required prior to the crisis, it is constant with requirements one year ago.
Additionally, a Fed Senior Loan Officer Survey found credit requirements in the fourth quarter were consistent with the past three quarters.
However, other market indicators point not just to a stabilization of mortgage lending standards, but also a loosening of credit availability.
Banks are now lending amounts up to 3.5 times borrower earnings. This is up from a low during the crisis of 3.2 times borrower earnings.
Banks are also loosening loan-to-value ratios (LTV), which Capital Economics denotes â€œthe clearest sign yet of an improvement in mortgage credit conditions.â€
In contrast to a low of 74 percent reached in mid-2010, banks are now lending at 82 percent LTV.
While credit conditions may have loosened slightly, some potential homebuyers are still struggling with credit requirements. In fact, Capital Economics points out that in November 8 percent of contract cancellations were the result of a potential buyer not qualifying for a loan.
Additionally, Capital Economics says â€œany improvement in credit conditions wonâ€™t be significant enough to generate actual house price gains,â€ and potential ramifications from the euro-zone pose a threat to future credit availability.
IMHO, the "real bottom" was in 2008, when the banks stopped loaning money. If you had cash and bought at that time, you were able to clean up. Home owners who absolutely had to sell were forced to slash prices, and they took what they could get.
Buyers are definitely out there today, banks are lending again. The primo properties have multiple offers on them, and the mediocre and/or over priced properties will sit longer. In some west side areas (Santa Monica, Pacific Palisades, Venice, Manhattan Beach, Brentwood), and also in highly desirable east side areas such as Los Feliz and Silver Lake, we're seeing some 2007 prices, but again, only the primo properties are closing at those levels.
Today's buyer is a different animal...most are too busy to want to take on any type of "fixer." They want everything done-done-done, tied up with a bow. BUT...they don't want to pay any extra for it. ;-)