From reading the headlines, it seems there’s some bad news on the national real estate scene. Here’s a sampling of a couple of headlines from CNN Money:
This one is about how home prices have gone up a tiny bit nationwide, but the amount of sales volume is the lowest in four years. Of course, four years ago, the market was going gangbusters, at least in our neck of the woods!
Here’s another cheery article about how Countrywide Home Loans, one of the biggest lenders in the country, is seeing a spike in delinquencies and an accompanying big drop in profits.
What’s alarming about this bit of news is that the problem isn’t with sub-prime borrowers this time – this time it’s with “prime” borrowers. D’oh!
And here’s maybe a couple that you didn’t see – these come straight from the California Association of Realtors:
Interestingly enough, this article does say that the Bay Area sees “leaner inventory levels” than the state as a whole. That’s the strength of the Silicon Valley market there for you – it’s the same strength that underlies the Santa Cruz market as well.
But wait – there’s more! It seems that foreclosures are up – to a 10-year high:
They provide a nice table of data further down in the article. It turns out that in Santa Cruz, Notices of Default are up 112% – that is, from 73 in the 2nd quarter of 2006, to 155 in the 2nd quarter of 2007. A Notice of Default is not an actual foreclosure, though – it just means that the lender has filed a notice with the county that the borrower (owner) is getting behind on the payments. However, when it comes to actual foreclosed properties, Santa Cruz is up 258% year over year – in the 2nd quarter of last year, there were only 13 actual foreclosures by the lenders; in 2007, that has climbed to 46.
What does it all mean? Softness in the housing market, from the looks of it! If you’re buying anything less than a prime property, dig in and go low – you don’t want to buy today and have it worth 10% less next year. If you’re buying in a prime area, be aware that prices may be up over last year – check the latest statistics for the area you are interested in buying in.