California Real Estate – Investment Opportunities

The Office of Federal Housing Enterprise Oversight (OFEHO) has released its second quarter data and analysis of the U.S. housing market and California appears to still be the land of opportunity for real estate investing.

Since 1980 house price in the Pacific region has increased more than 431%. California real estate is one of the driving forces behind this real estate appreciation trend.

While the Pacific region is showing a -10% trend for the 12 month period and about a -5% trend for the second quarter, the 5–year trend is still around plus 50%.

California communities represent 12 of the bottom 20 depreciating metro real estate markets nationally. The central valley communities of Merced, Stockton and Modesto lead the list.

For investors looking for real estate deals, California is a land of opportunity. With Germany’s and the United Kingdom’s economies in decline, the U.S. dollar is gaining in value and appeal as a safe haven for investors.

U.S. and California real estate continue to represent good investment opportunities. 

Contact Paul Mees for California real estate (925) 963–4246

Realtor.com is reporting overall home search traffic is up 22% this year. The housing markets with the largest increases in search traffic are the real estate markets hardest hit by falling home prices.

California and Florida continue to be two of hot markets for buyers and investors looking to take advantage of the situation.

Home Search Traffic Increase as Reported by Realtor.com

• Stockton-Lodi, CA 140.9%
• Las Vegas, NV 93.9%
• Riverside-San Bernardino, CA 86.3%
• Oakland, CA 73.6%
• San Jose, CA 71.4%
• Fort Myers-Cape Coral, FL 69.5%
• Naples, FL 66.2%
• Sacramento, CA 65.0%
• Orange County, CA 62.8%
• Miami, FL 56.7%

California Association of Realtors reports that the unsold inventory index for existing, single-family homes in July was 6.7 months, down from 10 months for the same period a year ago. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate. The median number of days it took to sell a single-family home was 47.5 days, compared with 50.7 days for the same period a year ago.

California's Top 10 Cities With The Highest Median Home Prices

   1. Manhattan Beach, $1.77 million
   2. Los Gatos, $1.42 million
   3. Mill Valley, $1.37 million
   4. Burlingame, $1.29 million
   5. Calabasas, $1.18 million
   6. Newport Beach, $1.14 million
   7. Cupertino, $1.04 million
   8. Rancho Palos Verdes, $1 million
   9. San Carlos, $975,000
  10. Danville, $930,000

California's Top 6 Cities With The Highest Median Home Price Increases (July 2008 vs July 2007)

1. Los Gatos - 36.6%
2. Mill Valley - 28.6%
3. Manhattan Beach - 9%
4. Berkeley - 8.2%
5. Mountain View - 6.9%
6. Cupertino - 1.1%

The National Association of Realtors is reporting a record 11.2 months of supply of homes on the market. Inventories in the 680 Corridor are mostly in the 4 to 6 month range.

Existing home sales nationally rose 3.1% in July over June's figure. The pattern of increased home sales suggests that much of the activity is occurring in parts of America where foreclosed homes are flooding the market and buyers are snapping up the deals.

Analysts at UBS are saying they don't expect a recovery in housing until mid-2009 and a Wachovia economist says, "We are not yet ready to call the current levels a bottom but clearly most of the declines are behind us."  Another housing market analyst says he thinks the market could easily sit at the bottom for at least a year.

The NAR reports new-home sales are projected to drop 8.8 percent to 464,000 in 2009 from 509,000 this year.

Homeowners hoping to wait it out until 2009 may have to wait longer. Another 5% drop in values and an interest rate hike of 1% could put a homeowner in a position of having to wait another two years to get what they could get today for the sale of their home.

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First-Time Home Buyers Want More These Days

A recent study by over 150 real estate brokers revealed that affordability is still a concern by first-time homebuyers. The affordability index in the East Bay has risen slightly due to dropping home prices and the large inventory of foreclosures on the market, but first-time home buyers in the East Bay still face significant challenges.

The study revealed that there is a growing trend among first-time home buyers to not settle for a fixer-upper. These days, first-time buyers want homes in move in condition – they don’t want to scrape the ceilings, replace the countertops or remodel the bathrooms.

The first-time buyer survey also showed:

• 71 percent of first-time buyers are looking for larger homes than they were 10 years ago.
• 41 percent noted that proximity to a job is the No. 1 attribute buyers are looking for in a home.
• 35 percent said investment is the No. 1 reason buyers are making their purchase.
• 46 percent reported that buyers look at five to 10 homes, on average, before making a purchase.

Gary Keller, founder of Keller Williams Realty, published a book for first-time buyers this past year. Your First Home outlines the whole home buying process for first-time buyers offering advice and guidance gained from hundreds of thousands of transactions involving first-time buyers.

First-time buyers interested in the communities of Concord, Dublin, Danville, San Ramon, Pleasanton or Walnut Creek, California that would like a copy of the book should contact Craig (925) 984–4910.