This recovery is the real deal – Still, some patience is required

Rating: 0 (from 0 votes) California’s economy is finally in the first stages of a true recovery, according to Chapman University’s Inland Empire Economic Forecast. In the Inland Empire in 2012, evidence of the recovery included: a 1.6% annual jobs increase, the greatest increase since the recession; an 8.7% yearly increase in residential construction starts, the greatest since the…

2013 economic forecast

How will California’s economy affect the real estate market in 2013? Here’s the answer, in eight charts. The economy in 2013 California real estate will gradually recover in 2013. This is due to ongoing, modest improvements in: employment; demographics; interest rates; construction starts; negative equity; distressed sales; home sales volume; and home pricing. Each of…

Jobs – not home prices – heal the real estate market

Both the number of California notices of default (NODs) and foreclosure sales were lower in the fourth quarter (Q4) of 2012 than at any time since 2006. This leads experts to conclude the dreaded “second wave” of defaults and foreclosures will not hit the market. Rather, things are looking up for the California real estate market. Positive indicators include:…

The rising trend in California construction starts

Single family residential (SFR) and apartment/condo construction starts increased over the last six months compared to the same period last year. Likewise, the single month of December 2012 experienced an increase in both types of construction starts. This is typical for December, as builders rush to record their starts before the year ends. SFR starts…

Rentals: The future of California real estate?

California’s homeownership rate continues to fall in the fourth quarter (4Q) of 2012. Today’s homeownership rate is 54.1%. That’s down from 54.8% last year. Since non-homeowners still require shelter, the rental vacancy rate decreased to 5.4% in 4Q 2012. This is down from the vacancy rate of 5.9% a year earlier. Homeownership was at its…

Homeowner Mobility Declines

Homeowners are becoming less mobile. The long-term average length of occupancy for homeowners nationwide increased from 12 to 13 years in 2011. Homeowners who sold in 2011 were in their homes an average of 16 years. The average length of occupancy was shortest in 2005 at 10 years, and longest in 2009 at 20 years. First-time homebuyers tend…

Foreclosures fall in California

Foreclosure sales dropped significantly in the fourth quarter of 2012 (4Q 2012). The number of real estate owned property (REO) resales experienced an equally dramatic drop from the prior quarter. Notice of default (NOD) filings decreased as well. REO resales are down 19,000 REO resales took place in 4Q 2012. That is46% fewer REO resales than one year earlier. REO resales accounted…

Redirecting buyers baffled by credit reports

In late 2012, the Consumer Financial Protection Bureau (CFPB) compared credit scoring models used by lenders against those commercially available to the public. The three models put through the fire were FICO, VantageScore and “educational scores” marketed to the public by the credit reporting agencies (TransUnion, Experian, and Equifax). So, did the scores match? No. But for…

Buyer purchasing power determines home prices

0-year fixed rate mortgage (FRM) rates in California averaged 3.38% in January 2013. One year earlier, the rate was 3.9%. This translates to a 6.36% increase in mortgage funds available to today’s buyers. This buyer purchasing power index (BPI) of 6.36 is down from the 11.23 index in January 2012. The BPI will decline to…