And the Survey Said...!

Standard & Poor's announced: Shiller home price index for 20 cities fell a record 2.4 percent between December and January and has dropped a record 10.7 percent from the same period a year ago, according to January figures released Tuesday. Of the 20 cities studied, all posted declines year-over-year except Charlotte, N.C., which rose 1.8 percent. All 20 cities posted month-to-month declines.

What does that mean to you?


National surveys such as these are useful in measuring broad macroeconomic trends but are of marginal value to the individual consumer in the process of buying or selling a home. That’s because real estate prices are set at the local level and can vary dramatically from market to market, neighborhood to neighborhood, and home to home based on a variety of factors.

NAR on Tuesday reported an increase in sales nationally for the first time in seven months. This gain is encouraging because increases in sales were not expected until the second half of the year.

According to a C.A.R. report, February sales volume in California was up 9.5 percent compared with January, marking the fourth month in a row that figure inched higher

In the market here in East County, falling prices have recently stimulated sales as buyers (including us!) take advantage of the downturn. As inventories of homes are drawn down, prices should begin to stabilize.

The California Economy according to Bloomberg

Business reporter Daniel Taub interviewed C.A.R. Chief Economist Leslie Appleton-Young about the California economy on Bloomberg, Thursday March 20, 2008.

What this means for you, the consumer:

• Prospective borrowers worried about the foreclosure crisis should obtain pre-purchase homeownership counseling. A Harvard University analysis found that borrowers who received classroom and individual counseling were, respectively, 23 percent and 41 percent less likely to become 60 days delinquent than equivalent borrowers who did not undergo counseling.
• Calling the market low is a difficult task, and it's most often spotted in the rear-view mirror, according to MSN. While prices in many markets may have not yet hit their lowest point, the bottom may be near. And in other areas, only the pace of sales has been affected; prices have held firm or increased. Waiting for the absolute bottom puts consumers at risk of missing the best prices and getting caught up in a market on the upswing.

Making sense out of the news is just another way I serve East County as Your Personal Realtor!

CNBC Reports: "S&P sees end to subprime mortgage writedowns"

Standard & Poor's said subprime write-downs for large financial institutions are likely past the halfway mark, but they could still hit $285 billion.

What this means for the consumer:

• S&P's statement gave a boost to financial stocks and helped Wall Street indexes pare losses.
• The purging of bad loans in the subprime market through foreclosure or refinancing ultimately will strengthen everyone's ability to obtain mortgages.
• Fewer foreclosures mean fewer vacant homes, which may make a neighborhood a more desirable place in which to live. That, in turn, could increase the demand for housing.

Making sense of the news is another way I serve East County as Your Personal Realtor!

The Wilmers Jump In!

We decided to buy a house for an investment! Sure, prices may inch lower, but the buys out there appeared too good for us to pass up. We have been shopping homes for our children since January in the $300K to $400K range. There are a lot to choose from here in East County, most of which are short sales and a few which are bank owned (i.e., already foreclosed). What we found was that every house - without fail, that the four of us liked and decided to put in an offer to purchase, received multiple offers! Hmmm.... We thought no one was buying real estate? WRONG! The under $400K market is heating up, and the under $350K market is HOT. Now, not every home under $400K is getting snatched up. Buyers are definitely shopping location. If the home is in a good location and is priced below comparables, it is selling.

The catch, of course, is that these properties need help. We were looking for what we called a "screamin' deal." The screamin' deals are, well, messy! The homes need TLC. Paint, flooring and landscape are necessary to appeal to this market's pickier buyer or renter, depending on the investor's plan. We aren't positive what we will do with our investment yet. If we can make a profit, we will resell it after we get it spiffed up. If prices have dropped lower at that time, we know we can rent it and cover our costs because it is in a great neighborhood.

We are excited about this new venture for us! We have been wanting to invest in real estate for many years but prices have kept us from taking the plunge, other than owning our own home. We believe that now is the time. We'll keep you posted on the results.

Has the Market Bottomed Out?

The Crystal Ball Says ...

Buy Low, Sell High We have been taught this for years, and business people like Donald Trump, Warren Buffet and others have become masters at speculation.

How much lower will home prices go before the recovery begins? There is no magic formula, scientific equation, or even a good way of guessing when the market will begin it's upswing.

Please understand this one thing ... There is no Crystal Ball. As a matter of fact, since there is no crystal ball there is absolutely no way of speculating that we are at the bottom or not. This means that when the media announces things like "we are not at the bottom" or "we have another year of this," please understand that there is no way of knowing this.

Here is what we all must realize. We must realize that there is only one way to know that it was the bottom. That way is simply by "missing it" or when it is now behind us.

Let me state a simple fact. When America believes we are at the bottom, we will at that very moment be at the bottom. Because when America believes we are at the bottom and this is the best deal they will receive, they will act. Actions create demand and demand will create an uptrun in the industry.

As long as we pay closer attention to the media than we do our own common sense, we will not be at the bottom. The media preaches that we are not at the bottom and when we listen, we confirm that. We keep waiting, and that keeps the perpetuation of the downturn in motion.

I recently heard of a Real Estate Office that had a big sign outside on its front window that simply said "Smart People Are Buying Real Estate Now." That pretty much says it all.

Here is a great question for any potential buyer out there. Would you rather buy now and have prices go down another 5% before beginning to recover or wait and buy when you have missed the bottom and prices are already on their way back up?

We must understand that the moment we feel we are at the bottom, we will be. When investors think the best deals are now, they will be. However, when we listen to those who keep stating that we are not there yet and believe them, we will make them right.

Action fixes everything. So, if you are a buyer who still feels like the market has lower to go, tell your realtor how much lower you think it will go and then have him "Write An Offer" using that number. Don't wait another minute. Action creates demand and demand creates the upturn we are all waiting for. It will not be magic, but it will be action that begins the recovery.

Take action before the end of this day!

(A special thanks to Dennis Volz, State Farm agent extraordinaire, for this article!)