Quiet Before The Storm!
November 30th, 2008 Categories: Weekly Real Estate Activity In Ventura County
It’s Thanksgiving week and relatively quiet on the residential real estate front.
Storm clouds are forming and the surf is starting to get rough. We know we are in for a good drenching, it is a matter of when and how much.
Various articles addressed the fall of mortgage interest rates but as mentioned in Get In Line and prior articles, interest rates should have been falling for a number of months but banks elected not to pass the cuts down to the consumer.
Banks will continue to play games on the mortgage and appraisal front (see article Desktop Appraisals) which will infuriate many people. This will continue until a number of people refuse to sell at any price and that is starting to take root now.
A lenders business is to make loans. People bulk, loan activity becomes slow, and soon banks begin to recognize that they have to bend with the market. Loan standards will still be tougher so this will eliminate a number of borrowers.
Commercial properties are beginning to tilt to the downside. Similar to residential loans, commercial loans are becoming difficult to get.
In a recent article, Its Not A Pretty Picture, it was noted that the National real estate market, especially in the South, has held up very well. In fact a number of gurus are stating that the bottom has been reached. But be careful where you buy. Location, location, location is still the major consideration in the purchase of a residential or investment property.
It is going to take time for all the pieces to come together as noted in the article uncle-sams-enron- but once they do watch out because the real estate market will explode upward. Needless to say one of the major pieces needed is consumer confidence.
When this occurs there will be a big change in who has real estate property and who doesn’t. Owning real estate will feel heavenly. The only thing that will be more important than real estate itself will be water.
But for the moment, the consumer is going to be very selective in how money is spent. The big sale is going to be scrutinized and the consumers sense of value becomes a premium.
Side Bar: Little is being said but the general population has lost confidence in its major institutions and government (federal, state and local). The feel they have been betrayed and understand that it is they that will have to pay for the financial chaos that was created for them by both Wall Street and Government.
In a recent article in the Wall Street Journal, “Some Consumers Say Wall Street Failed Them”, by Eleanor Laise, it was pointed out that many of safety nets that had been advertised and sold have exploded to the detriment of Main Street. Both Government and Wall Street created risks that are now the responsibility of the consumer.
Ventura County Real Estate.
It is the same story (as has been the case for the last several months).
- Listings are falling.
- Number of properties sold remains stable.
- Days on the market continues to show some decrease.
- Variance between list price and actual sales price is approximately 5%.
- Most property sales are occurring below $ 300,000.
- All of this will continue for a few more weeks before most see a trend change.
Your comments are welcomed.
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