Laguna Niguel Real Estate Blog

This is from a lender at Countrywide, Kevin Budde. I suppose he hasn't yet gotten around to blogging, but just the same this email he sent me an email that would have made a terrific post.

1. The Federal Open Market Committee (FOMC) Will Continue to Lower Interest Rates
This will continue stimulating the economy, keeping unemployment low in addition to helping ARMs reset to lower interest rates

2. The Economy is Creating Jobs and Unemployment is Low
The last two housing downturns were due to recessions in the U.S. economy (80-81, 90-94)

3. Lenders are Helping Homeowners with Loan Modifications on ARM Resets
This will decrease the number of homeowners needing to sell or going into foreclosure

4. Subprime ARM Resets Peak in 1st Quarter 2008 with Minimum Resets by Year-End
The credit markets froze in fear of these resets. Once past, more credit markets will make money available

5. Home Builders are Dumping Standing Inventory to Remove Inventory off the Books by Year-End
The competition to the resale market will be greatly reduced

6. Sellers of Existing Homes Will Take Their Homes Off the Market at Year-End that Don’t Need to be Sold
Combining this with those that need to sell and lowering their sales prices during the holiday slow period, will cause the months
to sell inventory to come down

7. Credit Markets for Jumbo Financing are Opening Up
The spread of interest rates between conforming and jumbo has been greatly reduced. Many programs are still available
making it easy for buyers to qualify

8. Fires in So. California Will Create Construction Jobs and Help Supporting Industries
California has been losing jobs in this area. This in itself will keep a cap on the unemployment rate. Furniture, appliances, landscaping and architects will benefit

9. Real Estate Investors are Stepping Up and Making Offers
Mostly absent in 2007, Real Estate investors are stepping up to take advantage of the foreclosures and lowered prices

10. Buyer Sentiment of Those Waiting Will Change as Foreclosure Reporting Lessens
There are so many buyers just waiting for a sign as they fear prices will continue down. The sign will be decreasing foreclosures and inventory time to sell reduced and reported by the media.

I strongly feel that the best leading indicator of when the market is returning back to full health is when Kevin, and other lenders tell us that they have a trend of funding more loans month after month. For that statistic to matter in Southern California, it would strictly be centered on Jumbo loans.

Posted by Rory on Wednesday, October 31, 2007 at 6:34 AM | Permalink | Comments | links to this post