Now is the time to buy a house

Now is the time to buy a house

The Desert Sun • February 19, 2009

The median price for houses has dropped to a low not seen since 2001

This is good news for potential Coachella Valley homebuyers.

The median price of a house in the desert dropped 47 percent in December to $194,900. The median price hasn't been this low since 2001, following the Sept. 11 terrorist attacks.

Many Realtors say now is the time to buy. Sales in December 2008 were up by 8.3 percent over the same time in 2007, so homebuyers shouldn't wait too long.

Those who have stable jobs and can buy should. Home purchases stimulate the economy. Buying an affordable house leads to other purchases, including furniture, landscaping and a number of services, which provide jobs. The valley needs jobs.

But homebuyers must be realistic about their purchases. Loans must be reasonable, possibly with fixed rates, and made to people who qualify and offer proof that they can pay back a mortgage.

It sounds simple, but such seemingly obvious steps were not taken before. Subprime lending, loans made with adjustable rates to people considered risky borrowers, created the housing crisis — one of the chief reasons this economy has soured.

And while the drop in prices means houses are within reach of more buyers, word has been circulating that banks are keeping a tighter grip on the purse strings. But that's not completely true.

“If you qualify and have a down payment and steady income, you can” buy a house, said Bill Powers, president of Pacific Western Bank's desert region branches. “Others are waiting, but you can't time the bottom, and I think we're close to it, so if you can, you should buy now.”

Meanwhile, a number of lenders are holding off on foreclosing on more properties. Waiting on President Barack Obama's $75 billion plan to prevent more foreclosures, several major banks and government-controlled mortgage finance companies have halted foreclosure procedures until next month. The plan, announced Wednesday, will help homeowners refinance their mortgages.

Nationwide, more than 2.3 million homeowners faced foreclosure last year. That was an 81 percent increase over 2007. Some economists say foreclosures can reach 10 million.

But plenty of foreclosed properties remain on the market.

Again, those who can afford a house, should buy now, and those who can lend the money should also do so now. The valley's economy depends on it.

Desert Area Californai Regional Sales & Price Activities

Regional Sales & Price Activity -
December 2008


Median price fell 41.5% and sales increased 84.9% compared to the same time a year ago for California statewide. Locally, median price fell 53.5% & sales rose by 70.1 % from a year ago. The inventory trending slightly downward along with the rise in sales indicates that the desert market continues to absorb the properties that individual home sellers and banks must sell. A lower price which leads to increased affordability may mean that adult kids living at home are no longer priced out of the housing market.

Statewide the large decreases in the median price also have been the result of a dramatic change in the mix of sales since the onset of the credit/liquidity crunch and the increase in the share of distressed sales. In August 2007 -- just prior to the beginning of the credit crunch -- the under $500,000 price range accounted for 43 percent of sales, the middle segment ($500,000 to $1 million) made up about 42 percent, and the over $1 million segment captured 15 percent of the market. As of December 2008, the shares had shifted to 82 percent, 14 percent, and 4 percent, respectively.



Desert Area MLS Residential For Sale Inventory

2006 2007 2008
Dec: 8,236 9,186 8,250
Nov: 8,598 9,593 8,406
Oct: 8,076 9,170 8,015
Sept: 7,723 8,599 7,740
August: 7,285 8,417 7,504
July: 7,420 8,600 7,935
June: 7,436 8,930 8,314
May: 7,497 9,108 8,469
April: 7,467 9,153 9,214
March: 7,351 9,005 9,300
February: 7,046 8,852 9,476
January: 6,395 8,490 9,134


The typical (median) single family home for sale in the MLS is 3 Bdrm. 2.50 bath 2,101 Sq Ft. listed at 384,400 and has been on the market for 94 days.



Median Price % Change Prior Month % Change Prior Year % Change Sales Prior Month % Change Sales Prior Year
Calif. (sf) 281,100 -2.0% -41.5% 5.9% 84.9%
Calif. (condo) 236,040 -1.9% -39.4% 7.3% 45.9%
Palm Springs Lower Desert (sf) 169,730 -7.5% -53.5% 17.5% 70.1%


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Median Price
Dec 08 Nov 08 Dec 07
United States 175,400p 180,300r 207,000
Calif. (sf) 281,100 286,850r 480,820
Calif. (condo) 236,040 240,520r 389,760
Palm Springs Lower Desert (sf) 169,730 183,590 364,660

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Median Prices By Region - Current Month vs. Year Ago

Dec 08 Nov 08 Dec 07
Calif. (sf) $281,100 $286,850r $480,820
Calif. (condo) $236,040 $240,520r $389,760
Region
Central Valley NA NA NA
High Desert $137,560 $148,580 $244,330
Los Angeles $336,980 $359,240 $498,500
Monterey Region $290,070 $314,370 $659,310
Monterey County $255,000 $275,000 $584,500
Santa Cruz County $455,000 $437,000 $729,000
Northern California $276,060 $289,380r $338,650
Northern Wine Country $344,180 $343,430 $480,510
Orange County $442,640 $453,060 $653,610
Palm Sprs/Lower Desert $169,730 $183,590 $364,660
Riverside/San Bernardino $190,840 $202,740 $325,520
Sacramento $181,660 $184,760 $285,140
San Diego $333,030 $326,770 $495,500
San Francisco Bay $465,640 $473,510 $725,120
San Louis Obispo $374,320 $344,230 $527,780
Santa Barbara County $328,570 $291,070r $500,000
Santa Barbara South Coast $875,000 $$1,112,000r $925,000
North Santa Barbara County $256,450 $240,910r $323,810
Santa Clara $512,450 $515,000 $797,000
Ventura $370,750 $382,590 $604,730


na - not available
r- revised

Source: CALIFORNIA ASSOCIATION OF REALTORS ®