August Home Sales Hit the SKIDS!!!

Orange County August home sales hit the skids this past month.  We don't have final sales figures out but this could be the worse August in decades.

Why?  The mortgage liquidity crisis affecting JUMBO LOANS (any loan over $417,000). 

With hundreds of lenders out of business or not writing any new loans HOME BUYERS options are being limited by the disappearance of many loan programs that helped fuel the price increases in 2003, 2004 and 2005. 

Ben Bernanke and the Fed don't want to cut interest rates but they do realize the housing market could threaten the US economy.  I am predicting a cut in interest rates at the September Fed meeting.  Some people say .50 basis points and others say .25.  If they do not cut rates in September expect a sell off in the stock market.  The stock market has already priced in a September cut.

What does the market need?  Liquidity for the banks and investors to facilitate the JUMBO LOAN market.  In Orange County the median priced Single Family Home (non-condo) was $720,000.  With a 20% down payment that leaves a Jumbo 1st Trust Deed of $576,000.  Which translates to a higher interest rate, harder qualification and a higher payment!  The buyer pool is being decreased by the changes.  Less buyers = Lower Home Prices!  It really is that simple.

We can only watch and see how this plays out in the Orange County market.  We are fortunate due to the wealth and coastal location.  We are in a highly desirable market.  This will weather us from the most extreme market changes and will shorten our recovery time.

In this type of market you need a proven experienced professional to help give you insight to the current market trends.  I would be happy to discuss your personal situation with you.  Please feel free to contact me 888-877-6062 or email me with any questions at zen@zensellshomes.com.