Regardless of the passage of the rescue bill, we will see Foreclosure inventory swell in the coming months. The big question that cannot be answered yet is how long will it take for all of the REO properties to be liquidated. Areas like Huntington Beach and Fountain Valley are fairing much better than areas like Anaheim and Santa Ana, because of their desirability.
Really, two risks exist for you right now If you know you want to purchase a home in the next year. The first risk is if you buy today, you will probably lose some value of that home. How much is open to speculation, but the reality is nobody has the answer. The second risk is that if you don't secure a home loan today, at todays low rates, there is a possibility it will be much harder to qualify for one, and the costs of that loan could be much higer.
Which one of these scenarios would hurt you the most? Regardless of whether you buy today or wait, we know that getting rid of debt, saving up a lot of cash, and having a great credit score are the keys to getting a home loan. If you don't have those now, I would work on that.
Also, find a great lender who has been in the business for more than 10 years. They might be hard to find, but they know whats going on and can give you even better advice.
Century 21 Beachside
Whatever you decide to do - wait or buy now - I would be happy to help you find a property that best suits your needs and help you determine its value when compared to the market as it is today. I wish I had a magic ball and could predict what the market will be like next summer but I don't think anyone can do that.
an article on the OC Register website in regards to Huntington Beach house prices:
On a side note, I was doing some research on home price to income ratios and historically (chart was from 1980 to 2007) homes in the LA area have fluctuated from about 4 to 51/2 times price to income, which is much higher than the national average of about 3, based on the chart that looks like a sine wave. Starting in about 2003, the chart starts going almost straight up and for the first time since 1980, the ratio goes above 6, the line continues past 8 in about 2005, then past 10 in late 2006. The chart stops at the 10 mark (2007), but man does this sure look like the peak of a bell shaped curve. If the chart continued into late 2008, I believe the line would be back down to around 7-8ish, still high I think based on wages and economic conditions. Anyway, thats just my 2 cents fwiw.