The O.C. Mortgage Blog

Bidding Wars on So Cal Homes?

The O.C. Mortgage and Real Estate Blog,  a.k.a.  Tom's Blog

Two weeks ago, an agent at Redfin, a residential real estate brokerage, entered a bid of $420,000 for a three-bedroom, 1,625-square-foot La Crescenta home outside of L.A., listed at $299,000.

When she lost the bid, she wasn't surprised. In July of 2008, this same agent had bid $559,000 for a two-bedroom Arcadia house, also outside L.A., listed by Wells Fargo for $459,900. That one received 105 bids, driving the price up to $628,000, according to Los Angeles County records.

"Sellers want to generate a bidding war, and it's working," according to recent statistics!

Even with the bidding wars, prices aren't nearly as high as they were at the peak of the real estate boom. Values plummeted 31% in the L.A. metro area in 2008, according to the National Association of Realtors.

So does this mean Southern California prices have reached bottom? Maybe, but probably not quite just yet, in this one person's opinion from 25 years in the industry. On the bright side; Recent Market Activity in and of itself is showing very good signs that Californian's still believe buying a home Is The American Dream!! That ideal right there will help lead us to a stronger economy moving forward in '09 and the next decade!

Rising Mortgage Applications Give Further Evidence Housing is Stabilizing

The weekly index of Mortgage Applications, which measure loan application volume as compiled by the Mortgage Bankers Association, rose 2% in the week ending May 1st   

Refinance loans made up 74.4% of total applications, a decrease from 75.3% in the previous week. Adjustable-rate mortgages once again made up 2.1% of total applications.

The seasonally adjusted index of applications is now at 979.7.

The increase occurred even as mortgage costs had risen to their highest levels since mid-March. The average interest rate on a 30-year fixed-rate mortgage averaged 4.79%, up 0.17 percentage points from the prior week.

The weekly release from the MBA covers about half of all U.S. retail residential mortgage applications, and has been conducted since 1990. Respondents include mortgage bankers, commercial banks and thrifts. The base period and value for all indexes is March 16, 1990.

The advance in applications is consistent with Ben Bernanke’s testimony on Tuesday. The Federal Reserve chairman said a shrinking supply of housing starts, increased demand from consumers, and generally lower mortgage rates were helping the housing market to stabilize.

“Although some of the boost to sales in the market for existing homes is likely coming from foreclosure-related transactions, the increased affordability of homes appears to be contributing more broadly to the steadying in the demand for housing,” he said.

Despite the weekly advance in loan applications, the four-week moving average is down 6.0%.

Please Post your Comments and Thoughts on whether or not you feel Now is a good time to buy or Refinance a Home in your area