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