Orange and San Diego County Market Trends
February 8, 2007 by Don Murray
62 Expired Listing in Orange County this morning and 157 Expired Listings in San Diego County.
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The market has been moving forward at these numbers for some time now."? We had our anticipated first of the month blips, but things are definitely tightening up."? While things are definitely better for Sellers, escalating interest rates will keep a damper on the market down stream.
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Our current purchase efforts in both San Diego and Orange counties are proving difficult."? There is much less inventory available in the price ranges we are working than there was just a month or two back."? Orange county is tighter than San Diego county, but our agents are having to work hard to find our deals."? In San Diego we lost a few bidding war battles to other buyers.
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It is still a buyer's market, but things appear to be approaching equilibrium in the near future."? The cloud on the horizon is that mortgage rates continue to escalate."? As the national economy continues to strengthen and worker productivity continues to improve, we can expect wage increases that hopefully can exceed the inflation rate without significant price increases."?
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This of course means that employees would likely be able to keep up with the interest rate escalations, but we will need to watch this closely and adjust our strategies to fit the ever changing market.
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It is important for you to remember that real estate prices fluctuate in response to very local trends, but interest rates are dictated by national trends.
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The bottom line is that both prices and interest rates will be escalating and the wonderful buys, while harder to find, are still there and will become more scarce as time moves forward.
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Most of our clients today are what we call "Alt A" buyers -- formerly known as A- or B+.
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While we can still get rates in the mid 6% range for A+ borrowers with no buy down."? Most of our "Alt A" Borrowers are getting mortgage rates over 7% with no buy down.
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We are still doing"?"buy downs" into the high 5% and low 6% range.
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The good news is that while the cost of money is definitely going up."? Competition has kept underwriting standards quite workable."? The A+ investors have maintained their stringent approval criteria, but the "Alt A" investors are willing to work with difficult issues.
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The hot spots today are still investors and renters converting to buyers.
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The luxury condo market remains soft, but "luxury downtown" ownership has expanded greatly over the past 4 years and even though there is considerable overbuilding, the depth of the market appeal should absorb the excess product over the next 2 years."? There are some wonderful buys in the $650,000 price range in the waterfront end of the Gas Lamp district in downtown San Diego.
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The purpose of these writings is to be sure you have the material to have meaningful discussions with your clients.
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