| Historically, the real estate trends of | | | | building permits compared to January 2005 |
| California have always been the precursors | | | | figures, according to California Building |
| for the rest of the country. Which is why | | | | Industry Association report. |
| leading players of the real estate market | | | | |
| keep a close watch on the Golden States real | | | | Home Sales |
| estate market conditions. | | | | |
| | | | This key indicator refers to the total number |
| And whether you are a first time homebuyer, | | | | of homes sold. In the law of supply and |
| debating the viability of building your dream | | | | demand, when there are few buyers, real |
| house in San Bernardino, or a real estate | | | | estate prices fall. |
| investor looking to sell condominium units in | | | | |
| Los Angeles, you certainly want to know: When | | | | The January 2006 figures of the California |
| is it the optimum time to buy or sell? | | | | Association of Realtors reveal that the |
| | | | number of existing single-family detached |
| Purchasing a house is a major investment. | | | | homes sold, has gone down by 24.1 percent in |
| With judicious planning, this valuable asset | | | | comparison to sales for the entire year 2005. |
| will appreciate with each year. | | | | |
| | | | Another factor to consider is the growing |
| But how do you get the big picture? | | | | inventory of available houses in certain |
| Fortunately, real estate trends are | | | | counties in California, which is changing the |
| predictable because these develop over a long | | | | market dynamics. What was once a sellers |
| period, unlike the stock market, which is | | | | market is slowly turning into a buyers |
| rather volatile. | | | | market. |
| | | | |
| The first thing you will need to do is to | | | | Loan Defaults |
| read and track real estate articles: the | | | | |
| market reports of the California Association | | | | This refers to the failure of homeowners to |
| of Realtors or the California Building | | | | pay their monthly mortgage fees. One downside |
| Industry Association, and the briefs created | | | | to this is that many Californian homeowners |
| by housing analyst companies. | | | | are choosing to have a bad credit report, |
| | | | rather than to keep paying fees for a home |
| Once you have identified the following key | | | | whose value has been inflated by as much as |
| indicators you will have a better grasp of | | | | 20 percent more. |
| the general trends in Californias real estate | | | | |
| market. | | | | Foreclosure Sales |
| | | | |
| THE FIVE KEY INDICATORS TO WATCH | | | | Figures presented by DataQuick Information |
| | | | Systems, a housing analyst company, indicate |
| Interest Rates | | | | that foreclosure activities in California |
| | | | have gone up by 19 percent in the last |
| When interest rates rise, buyers shy away. | | | | quarter of 2005. This is an increase of 3 |
| Conversely, lowered interest rates attract | | | | percent compared to the third quarter of |
| more buyers. | | | | 2005, and is 4.6 percent higher when compared |
| | | | to 2004s last quarter figures. |
| This year, interest rates in California are | | | | |
| on an upswing. For example, thirty-year fixed | | | | When foreclosure sales are on an upswing, |
| mortgage rates, which averaged 5.71 percent | | | | consumer spending is down and consumer debt |
| in 2005, has risen to 6 percent levels in | | | | levels have risen. In the real estate market, |
| January 2006. And adjustable mortgage | | | | this has meant that many financially strapped |
| interest rates have moved up to 5 percent | | | | homeowners are selling their homes at lower |
| levels compared to 4.12 percent in 2005. | | | | prices. The other contributable factors are |
| | | | inflation, the rising prices of gasoline, |
| Building Permits | | | | federal budget deficit, and interest rates. |
| | | | |
| The higher the number of building permits | | | | Concurrently, these key indicators confirm |
| issued, the higher the demand for houses. | | | | that although home sales levels in California |
| | | | are falling, the demand for houses remains |
| Figures show that number of building permits | | | | strong and steady. Always do your due |
| issued for the year 2006, have fallen by 10 | | | | diligence before undertaking a purchase of |
| percent in comparison to last years figures. | | | | property in California. |
| In terms of houses, thats a decrease of 1,430 | | | | |