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Pimco’s Simon eyes O.C. home price bottom in late 2009

by Ashlie DuCros

Pimco’s Simon eyes O.C. home price bottom in late 2009

Welcome to Eyeball 2009! This is our holiday gift to you: Two weeks of outlooks on local real estate conditions! A new vision every day of the week at noon through Jan. 6! Day 2’s guest is  …

Scott Simon is a managing director at bond-trading giant Pimco in Newport Beach who specializes in mortgage-backed securities. He played an instrumental part in Pimco’s research that three years ago revealed early warning signs about weakness in the the nation’s housing market.

Eyeball: What’s the OC housing outlook for 2009?

Scott: We expect the rate of home price declines to subside and potentially bottom. The financial system has been significantly shored up by Washington — especially the Fed and Treasury programs. Affordability is essentially at all-time highs.

Eyeball: What’s the chance we bottom in 2009? What might it look like?

Scott: With the help of the Treasury and Fed, plus government stimulus possibilities, there is a decent chance housing bottoms late in 2009. We had thought, in the lack of help from Washington, that housing would have bottomed in late 2010. With Washington’s help, the bottom will occur not only sooner, but housing will not go down as much.

Eyeball: What do you fear the most about the real estate market?

"Which way '09 prices?"

• Click to vote on '09 pricing!

Scott: Our biggest fears in real estate revolve around foreclosures and people being “upside down” on their homes. Housing will not stop going down until inventories decline. Foreclosures are simply bad for home prices.

[ More Eyeball '09 HERE | Eyeball '08 | '07 ]

Eyeball: What gives you hope?

Scott: Washington is fully behind stopping home price declines and mortgage rates are the lowest in generations. Affordability is basically its best ever. Additionally, Washington is focused on reducing foreclosures — through rate moves and loan modifications — and increasing affordability.

OC homebuying nears 6th. straight monthly gain

by Ashlie DuCros

Everybody...great news for OC residences!

O.C. homebuying nears 6th straight monthly gain

For 22 business days ending Dec. 19
Slice Price Vs. ‘07 Sales Vs. ‘07
Houses $427,500 -32.1% 1,642 +60.2%
Condos $272,000 -32.5% 717 +77.9%
New $509,500 -29.4% 245 -34.5%
All O.C. $400,000 -30.6% 2,604 +44.5%

For the 22 business days ending Dec. 19 – DataQuick’s latest homebuying report — Orange County saw …

  • $400,000 median selling price that is -30.6% vs. a year ago and -38% below June 2007’s peak of $645,000.
  • Single family homes sell for 42% less than their peak pricing (June ‘07); while condos sell 42% below their peak in March 2006. Builder prices for new homes are 41% below their February ‘05 top.
  • In this most recent period, O.C. shoppers bought 2,604 residences — that is +44.5% vs. year-ago buying activity. (Since ‘88, monthly sales averaged 3,700 per month.)
  • December will likely mark the sixth straight month of sales gains vs. the year-ago period. That follows 33 consecutive months where sales failed to beat the previous year’s pace.

 

 

Will Housing Finally Rebound in 2009?

by Ashlie DuCros

...and away we go into 2009!

 

Will Housing Finally Rebound in 2009?
The housing industry couldn't be happier that 2008 is over.  This past year had many twists and turns that ultimately led to decreased consumer confidence in housing.  Even though financing ended the year at historic lows, many buyers are still sitting on the sidelines because they are concerned that if they purchase a home it will go down in value right away. 

The primary reason home prices declined in 2008 was the culmination of the last several years where we built more homes than necessary.  This has caused an over-supply of homes.  Whenever you have more sellers than buyers, home prices always fall.  But there is light at the end of the tunnel.  Existing home inventories are projected to be below six months worth by the end of this spring.  This will signal the bottoming of the housing market and home prices will start to rise again by this summer.

While this is good news for the housing industry, your clients need to act now and purchase their next home while home prices and interest rates are extremely low.  Remember...you don't make money selling your home...you make money by buying your home right.

What happened to rates last week?
We lost give or take approximately .50% to rate (rates got worse) in another holiday shortened week.

Many consumers have waited too long to lock in their rates - erroneously thinking rates would could continue to decline only to find out that they can't even get the rate they were quoted a week ago.  Friday's stock market surge of 258 points helped to take the wind out of mortgage backed securities which led to higher rates.
Many believe that the stock market is poised for a big run as stocks are at bargain basement prices.  If this occurs it will put additional pressure on rates.
 
What to watch out for this week:
The following are the major economic reports that will hit the market this week.  They each have the ability to affect mortgage rates. I will watch these reports closely for you and let you know if there are any big surprises.
Date         ET           Release                               For
5-Jan       10:00       Construction Spending            Nov
6-Jan       10:00       Factory Order                       Nov
7-Jan       10:35       Crude Inventories                  2-Jan
8-Jan       8:30        Initial Claims                          3-Jan
8-Jan       14:00       Consumer Credit                    Nov
9-Jan       8:30        Average Workweek                 Dec
9-Jan       8:30        Hourly Earnings                      Dec
9-Jan       8:30        Nonfarm payrolls                     Dec
9-Jan       8:30        Unemployment Rate                Dec
9-Jan       10:00       Wholesale Inventories             Nov
 

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Ashlie DuCros & Associates
Coldwell Banker Previews Global Luxury
21580 Yorba Linda Blvd.
Yorba Linda CA 92887
714-743-9778
Fax: 714-849-5489