Real estate economist Richard K. Green, director of the USC Lusk Center for Real Estate, was interviewed by Jeff Collins of the OC Register.  For a complete transcript of his interview, just give me a call and I will email to you.  Essentially Green thinks 2

Green also was enthusiastic about the raising of the conforming loan limits and changes with FHA and the positive impact it would have on Southern California in particular.

IMPORTANT!  I ALSO HAVE A GREAT ARTICLE ON HOW NOT TO GET SCAMMED IF YOU ARE FACING FORECLOSURE!  THIS IS A MUST READ IF YOU ARE IN A DISTRESS SITUATION.  Give my office a call and I will email it over to you.   Have a great month and give me a call with any real estate related questions.  It’s my pleasure to serve you and your referrals.

MORE IMPORTANTLY, understand that there are some very good reasons to get into the market now, if you have been waiting.  Here they are: 1) Selection.  You saw it said above, inventory is shrinking.  2) Increased competition.  Right now, you have a good shot at getting the home you want, even though the average number of offers on bank owned properties is 10 to 20, yes you read correctly, 10 to 20.  Most agents who work with bank owned properties will tell you that most of those offers are coming from people who plan to occupy the property, in other words, not investors.  That will not last forever.  Investors do try to time the market and I would plan on them coming back sometime in 2009.  3) Interest rates.  Have you been reading the papers, listening to the news?  Do I really need to harp on that fact that interest rates are still in the 6 to 6 ½ range and that this may not be the case for 2009? Also, there is that amazing FHA package with a $7500 tax credit.   4) Home Ownership.  Can you say tax savings?  Talk to your CPA about the advantages.  It’s just way cooler to own than rent.

The Associated Press ran a similar headline, “Sales of Existing Homes in U.S. rose in July, Realtors Group Says.”  In fact, sales increasing are a national phenomenon of the moment.   At the end of August, according to Jonathan Lansner’ column, who was quoting Steve Thomas’ Market Update, supply, or active listing inventory in SoCalMLS, fell 289 homes in two weeks to 14,059, the lowest level since April 5^th, 2007.  Even though another wave of foreclosed properties is definitely on the way, for the first time in months the number of distressed properties to hit the market fell in July.  Finally, First American CoreLogic reported that prices are not falling as fast as they once were. (Lansner: OC Register)  This may suggest that although prices are likely to continue to drop into 2009, it probably won’t be nearly as fast, as prices are leveling off. 

The Kiplinger Report thought the drop would be 10% in 2009 saying, “Home prices have a ways more to drop before leveling off late next year, then staying flat during most of 2010.  Difficulties will vary by region.  The Inland Empire and Central Valley are sure to have the biggest price drops.  Orange County and San Diego prices won’t fall as much.  Bargain hunters will spur sales, probably by year end.”  We are definitely experiencing that right now.  Sales picked up for the first time from May numbers to June. (The latest numbers that are available for a full month.)

Broker and local economist Tom Moon’s predicted price drop for next year, also 10%.  Obviously these projections are on top of the already 20% to 25% we’ve seen, depending on the location of the property.  So we are looking at a grand total of approximately 35% before we are done.  Is there anyone reading this that doesn’t see what impact this will have on the affordability index and how it will spur sales with old fashioned supply and demand.  Don’t forget we still have people arriving here that need to buy, we still have a lot of people who were left out of the sub-prime run up and if you read on, you will see that we still have decent economic prospects in Orange County.

That is not to say that prices are not poised for a further drop, because they are.  There is more on that in the next section.  But it does mean that when you try to apprise yourself of what the facts are, in order to make a decision as to whether right now, is a good time for you to sell or buy, you should compare apples to apples.  For example, if you have a compelling reason to sell your home, i.e. a job transfer, divorce, a health issue, than now is definitely the right time because experts agree, there is more loss on the way before we are done.  But if selling is optional, consider your benefits.  If you want to sell and capitalize on a move up, then maybe now is good.  You need to talk to an expert and gather all the facts.  If you are looking to buy, what are your financing needs?  Will what you need in a loan program be there in 12 months to make waiting worth while.  Is the price drop of 10% worth waiting for over the need for a place to live, especially if you have found the “right house” as a 25% decrease over its high?  After all, houses are not meant to be day traded.  That was a bad habit that most of the country and certainly Californians partook of for a few years. Read on to see why regional knowledge is good when it comes to real estate.