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