TOPIC: California Housing Picture Improving?

New home sales are up for one reason only.....  3.5% down FHA Loans with $8K Fed and $10K State first time buyer credits.  FHA allows the seller or in this case the builder to provide up to 3% back to the buyer in credits for closing costs.  This ends up being the only 100% LTV loan package on the planet.. 

Problem is, its all going to end later this year.  The FHA lending limit will not stay at the $700K limit and is going back to $417K.  The government continues paying for people to buy these homes, but with increased deficits this to will decline as we continue into the recession, depression, whatever.

Hey John...  What's a steal in the housing industry?  I thought there were steals out there two years ago.  Look at prices now.  People who bought 6 months ago have lost money already as the market continues to slide.  The rental market which impacts investors continues to drop as well. 

Throw in fact that large money investors have been moving their money from the stock market into real estate in hopes of better returns.  As the stock market begins to improve, those investors will move away from real estate chasing those more lucrative returns.  Poor performance on U.S. Treasuries and CD's have caused similar movement to real estate, but as inflation kicks in, those older investors will move back to the security and performance of same...

The smart investors don't chase the market they go after it and make good investments if your have diversified Investments you stand a way better chance of increasing your portfolio in difficult times. All in all with knowledge hard work and lots of luck things can turn out golden...  

Hey John...  What's a steal in the housing industry?  I thought there were steals out there two years ago.  Look at prices now.  People who bought 6 months ago have lost money already as the market continues to slide.  The rental market which impacts investors continues to drop as well. 

I would say in this market, any real estate you can buy between 65-70% of market value is a steal.  In real estate, you make your money when you buy, not when you sell.  I'm not saying its easier to find the deals, I'm just saying there are more out there with the market the way it is.

FYI 65-70% of market value is more along the lines of a flip property that you have to fix up and still have to make a profit on.

Market is the current price point property is selling at, not from four years ago or even four days ago.  That's why banks are accepting the highest cash offer in many cases even when higher price offers have been submitted but involve buyer financing.  Many appraisals are coming up short of the agreed sales price, which stops the transaction dead in its tracks.  The banks are then forced to put the property back on the market as many of the other "Cash" buyers have already moved on to other options.

Think of the big picture, you've got $1M cash in a bank earning 2%, you've already lost your ass in the stock market, here's some rental property you can pay cash for, rent out and earn maybe 7-8% return on investment.  These investors aren't counting on any appreciation, just rental investment return.  When the time is appropriate, they sell the properties and move the money to a better investment when it presents itself.

I hate this rag of a newspaper.  Things must be really bad when the Times start publishing negative news about the economy and housing industry....

alturl.com/bg4i

alturl.com/22pr

Its bad everywhere is the national unemployment rate is almost 10%