Housing Update

I am often asked, “Have we hit bottom in the housing market”?

The answer is that you don’t know until well after the fact, but I can say that you are not seeing as many bargains we saw 8-12 months ago. The deeper questions are how long will this recession last and how hard will the jobs market get hit here in Burbank and the San Fernando Valley?

I came across an interesting chart that depicts how challenging this recession has been:

Chart: Post World War II Recessions

Source: National Bureau of Economic Research

As you can see, this one’s a tough one. The Fed left rates unchanged this week, but there is continuing pressure on bond prices and when bond prices go down, rates go up. This dynamic will continue to add pressure to mortgage rates.

Here are some quick facts:

• Calif. median home price - October 09: $297,500 (Source: C.A.R.)
• Calif. highest median home price by C.A.R. region October 09: Santa Barbara So. Coast $970,000 (Source: C.A.R.)
• Calif. lowest median home price by C.A.R. region October 09: High Desert $118,580 (Source: C.A.R.)
• Calif. First-time Buyer Affordability Index - Third Quarter 2009: 64 percent (Source: C.A.R.)
• Mortgage rates - week ending 12/10/09 30-yr. fixed: 4.81% Fees/points: 0.7% 15-yr. fixed: 4.32% Fees/points: 0.6% 1-yr. adjustable: 4.24% Fees/points: 0.7% (Source: Freddie Mac)

• Foreclosures decline 13% in California, 8% nationwide

Tagged as: California, San Fernando Valley, U.S. Housing Market