November 16, 2006
San Diego,CA—-Southern California Home Buyers are being DUPED by those same knuckle heads in the media who showed the consumers how to “Get Rich Quick” through Day Trading. This Day Trader mentality will price many home buyers totally out of the Southern California Market unless they take advantage of this Current Buyers Market!  A quick look at San Diego Home Values will show you what I am talking about…  A total of 35 Zip codes in San Diego County INCREASED in Value over the last 12 months.

All any Potential Home buyer really needs to look at if they are planning on buying a home is will they be living in that area for at least 5 years and if they can afford the payment. Long term Rent will increase, Home Prices Will Increase, and interest rates Can’t stay at 40 year lows forever.  So, if a potential home owner is like 80% of the Southern California Population, they will live here for the rest of their lifes. Does ANYONE really believe that prices will go down long term?

We are currently in a Buyers Market!

Yes, Virginia we are in a Buyers Market and there are a lot of Great Deals out there! Market conditions are ripe to continue expanding says local Real Estate pro, Bob Crain. Last month was the slowest October for Southern California home sales in a decade and most Real estate experts are scratching their heads. Prices continue to remain stable and interest rates are close to 40 year lows. PLUS we have a 6 year low in unemployment rates in Southern California AND a 5 year low in unemployment rates for both the nation and the rest of California.

A total of 22,117 new and resale homes sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month, as reported by DataQuick. Last month’s sales count was the lowest for any October since 1996 when 18,505 homes were sold. Dating back to 1988; the October average is 23,077, only 960 homes more then last month’s sales, yet the media would have most buyers believe there is a major recession going on?!? It should also be noted that in 1996 Southern California had similar unemployment rates, New coverage, AND that was the beginning of the last Major upswing in home prices.

The Media is Distorting the Truth!

Bad News Sells, we have all heard that right. It’s harder to buy a home if you think it might go down in value than it is if you’re convinced it’s going up and the news media has done a good job convincing potential Buyers that first we have a housing bubble and then that that bubble is popping. Many Buyers are trying to wait out the uncertainty in a market that is rebalancing itself. Furthermore, many potential buyers need to sell their current homes to purchase the next one and they are seeing longer market times.

Home Prices NOT going Down!

News Flash! Home prices are NOT going down! The median price paid for a Southern California home was $484,000 last month, the same as in September. The median was UP 2.3 percent from $473,000 for October a year ago. Year-over-year increases have been in the single digits for seven month! While some zip codes have seen decreases in prices over last year almost Every zipcode in Southern California has seen a 100% increase in prices over the last 5 years. In addition, the National average increase in home prices over the last 105 years is just under 6% per year. Once again, if you as a buyer and think you will be living in an area for more then 5 years, it is a GREAT time to buy! In Fact, Buy while you still CAN!

The typical monthly mortgage payment that Southern California buyers committed themselves to paying was $2,287 last month, down from $2,309 the previous month and up from $2,169 a year ago. Adjusted for inflation, current payments are 1.7 percent above typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 6.4 percent below the current cycle’s June peak.

Indicators of market distress are Declining.

Financing with risky adjustable-rate mortgages has dropped from a high of 70% to less then 59%. Prices are not declining across the board and Foreclosure activity is rising but is still below average as reported by DataQuick

Prices will Go up!

No one as a crystal ball but to even the most uneducated observer the population here in Southern California is increasing. With that increased population there is an increased need for housing. Over the last 100 years our national home price appreciation rate has ran just under 6%. So, with interest rates at near 40 year lows, with the knowledge that about 85% of the people who graduate from High School NEVER move more then 50 miles away, with the knowledge that the National unemployment and Southern California unemployment rates are at 5 year lows, and with the knowledge that housing prices almost Never go down when an area has low unemployment rates… Anyone who is predicting a large price drop is an idiot! And it would make sense to buy in the middle of this buyers market!