Headlines Confirm, Slowdown is Here…

The Sunday June 9th headline in a local paper quoted “Reports On Housing” reports that inventory in the 4 county southland of Los Angeles, Orange County, San Bernardino and Riverside, rose substantially to 36,335 as of May 30th, up from the average at this time of year for the past seven years of 31,979. The speculation is that sellers are rushing to list homes and hoping to scrape the bottom of the appreciation barrel. In fact, inventory as of June 14th, for Orange County, was 7,493, which is nearly a 3 month supply. We had gotten ourselves used to little more than a month to 45 day supply, so we are looking at nearly triple the homes available. The market is far from stalled however, as interest rates fell to their lowest rate in 5 years. FHA and Fannie Mae also have lowered some down payment thresholds for certain products as the past 7 years have pressured many local city housing markets. The second headline appeared just July 7th as Jonathan Lasner report a 10-month housing slump, backed by indexes used by CoreLogic among others.

What does all this mean? It means at last we are moving toward a more balanced market, favoring neither buyer nor seller, but neither is going to feel good about their position. One thing to note if you are a serious buyer, is to allow time for your mortgage/loan process. Because of the low rates, refinances are looking very attractive and they are clogging the processing funnel. Don’t bet you can close in less than 25-30 days and undue pressure on your lender won’t change anything. Your loan officer would like nothing better than to close ASAP…but underwriters have strict guidelines and must tediously document your file to sell on the secondary market. More than you wanted to know? Exactly the point. The professionals that serve you do way more than you know.