California Housing Market News
Pending Homes Sales
In October California’s housing market showed positive growth for the sixth consecutive month.The California Association of Realtors showed that compared to a year ago open escrows increased 11%. This is a 2.9% increase when compared to September.
Closed Real Estate Sales
Sales in 2004, 2005 and 2006 averaged out to seven million. This year 5 million homes where sold which topped last year by 8.5 percent.
Future Projections for California’s housing market
The National Association of Realtors predicted a four to five percent increase in sales for 2012. Although the projected increase in home sales is an encouraging sign the increase in foreclosures is concerning.
After a year long slowdown banks are cracking down on troubled borrowers sending almost 78,000 properties into the foreclosure process this October. This is 7% higher than September.
It is evident that the housing market in California is still hovering at the bottom.
Full recovery in California’s housing market can not be achieved until we get through these foreclosures. This can not be achieved until the job market improves and the cost of living lowers. This directly affects the housing market because homeowners are very concerned about another drop in their debt to income ratio. Market stability will offer reassurance that will promote recovery by giving consumers enough confidence to raise their living expenses.
Lawmakers encouraging growth in California’s real estate market
On Friday Obama signed a bill that will reinstate FHA backed loan limits to $729,750. The limited was hastily reduced to $625,500 in October. This swift action was inspired by a sharp decrease in home sales nationally. Real Estate Sales in Orange and Los Angeles counties between $625,500 and $729,750 dropped last month. That was a 71% reduction when compared to September and 71.5% when compared to sales in October of last year.
It is clear that indecision, scrutiny of Fannie Mae and Freddy Mac, and the fact that the FHA might need a tax payer bail out will quell future growth.