My New Blog

(05/20/09)

I was talking to a good realtor partner of mine, Hal Schlegel of Re/Max Metro in Anaheim Ca, and we were discussing the current housing inventory for sale. Hal called this lack of saleable (saleable, excluding short sales) inventory a sort of real estate "micro market." This term refers to certain parts of the country that are not subject to weather patterns that others face, and the phrase "It's always sunny in Philadelphia" most closely relates to what I'm talking about.

Hal mentioned the inventory in a certain part of Anaheim, Ca, was showing that there were only 24 active listings in this particular zip code.  This is drastically low compared to the 140+ listings available and active this time last year.  What a difference!!

We attribute this lack of inventory to a couple different factors, and I personally believe that the main factor is affordability.  Affordability has risen from the most notoriously quoted 11% in 2005 (by the Orange County Register) to 48% in the fourth quarter of 2008! (by the California Association of Realtors).

A second factor as to the lack of inventory is attributed to the current interest rate environment- a buyer looking for a primary residence and loan amount up to $417,000 can find an interest rate ranging from 4.5% to 4.875% on a 30 year fixed mortgage. Certain criteria must be met (740+ FICO score, primary residence, full documentation) to obtain these rates, but for the most part this is where the market is at.  Think about this; if you were looking at purchasing a home 6-8 months ago, and your budget was $300,000 at an average interest rate of 6.375%, you could now be searching for a home that is $375,000 with little difference in payment! 

The two reasons mentioned above are why homes are currently flying off the shelves, and why buyers are seizing the opportunity to own. If you've been on the fence, this may be the time to act.

For more information, call Neil @ 714-719-6744.