Zen Ziejewski
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Oh how OC has fallen from the mighty we once were. We are dead last in the jobs game.
This is a shocking reality for a county that not to long ago –second quarter of 2004- that topped the same list as the national champ for job creation. In 2004 homes were appredciating 30%, Ameriquest had the cash and marketing to slap their name on a major league baseball park in
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Mr. Greenspan doesn’t think so. He said that he had little to do with the housing bubble or credit crisis despite criticism that the Fed kept interest rates too low under his watch.
In an interview, Greenspan contended that low interest rates had nothing to do with the run up in housing prices and then collapse of the market. Housing prices, he said, would have gone up anyway whether or not short-term interest rates were low.
What is fairly clear in the case from the data, is that if adjustable rate mortgages weren't available, the purchases (of homes) still would've occurred," he said.
Under Greenspan the Fed cut rates from 6.5 percent in late 2000 to 1.0 percent in mid-2003. Greenspan said the cuts were aimed at increasing liquidity in the financial system and heading off deflation, not boosting the housing market.
“The reason that we were lowering rates wasn’t to spur housing demand,” Greenspan said. “Indeed, it was already being spurred by the fact that long term rates – which is the driver of housing – were low.”
"I have no regrets on any of the Federal Reserve policies that we initiated back then," he said, though he acknowledged that the central bank couldn't always know the full consequences of its policies.
Greenspan summoned up his views on who is to blame for the housing market and credit crunch by writing that the housing bubble, which inflated between 2001 and 2006, had not been unique to the
"The
Most other leading central banks followed suit, although not to such low levels apart from the Bank of Japan.
The Fed has been accused of keeping rates too low for too long as it sought to help the
But Greenspan noted that
It began raising them a year later. But even then, he said, monetary conditions were not bubble-making. Instead, Greenspan placed blame for the
As of April 2nd, 2008 according to the Multiple Listing Service (MLS) the total number of active listings in Laguna Niguel totaled 454 homes (condos, townhomes and single family homes). This is up 7 homes from February 2008 with a total of 447 homes on the market. We have seen a nice pick up in Orange County home sales in February and March of 2008.
The inventory numbers are holding steady which is a good sign for the market. The FED cut interest rates by .75 basis points in March. This will help keep interest rates fairly low as the bond market decides what to do next. The new conforming loan limits were announced in March. The new conforming loan limit is now $729,750. This will definitely help buyers and sellers in the Orange County housing market. The former conforming rate was $417,000 which was well below the median priced home of $530,000.
Mortgages can be confusing and frustrating. So the Federal Housing Department is proposing to change the process from start to close. It will be designed to make it easier to compare mortgage offers, lenders will need to better estimate closing costs and that barrowers know the terms of their loans.
Here are some of the biggest changes:
Good Faith Estimate Changes
v A 4 page estimate for all closing costs, final closing costs could not exceed 10% of estimate so it would have to be somewhat more accurate.
v Show trade off between interest rates and lender’s fee to be more clear
v Broker’s compensation from the lender to be disclosed
v It would be easier to compare the good faith estimate with the final HUD-1 statement of fees.
v Someone would have to read aloud an accurate summary of the loan deal and the settlement charges
v Also, a ban on builders telling clients that if they don’t go through their approved mortgage company then the clients will need to bring in higher deposits and will not receive the a monetary “closing incentive”.
This is the second the Bush administration has tried to make regulation changes but was opposed by the lenders, brokers and title insurers. This time the lenders, brokers and title insurers are warmer to the idea because they had more input.
Last week a lot of people were excited to hear that mortgage application volume had increased by 48%. It does make you want to believe the housing downturn is coming to an end. However, due to lower interest rates, the refinance index rose 82% from the week before. Refinances went from less than half of all mortgage applications to 62% of the total last week. Actual purchases were up 10%. While 10% is a welcomed increased, it is not the numbers usually seen this time of year during spring housing season. It is already the end of March.
We all want to know that the housing market has reached its bottom and maybe it has. We have seen increases in sales for Jan and Feb of this year. In some areas prices are still dropping. The recovery is going to come in small bits and we won’t see the market how it was in 2005, 2006 and the beginning of 2007 for a long time.
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The peak of the Orange County real estate market and home sales was in 2005. According to the SoCal MLS, the dollar value of home sales for the period of March 2007 - February 2008 totaled $14.4 billion. This is down $10 billion from the same period in 2005 - 2006. The $14.4 billion for this year is down $6 billion from the same period in 2006-2007 (which totaled $20.4 billion) in Orange County.
These numbers confirm that the real estate market is still in the process of a correction due to the mortgage meltdown. The facts are that many lenders have gone out of business, the sub prime crisis helped fuel the problem, all lending guidelines have been drastically changed since mid last year and California has seen a foreclosure boom because of all of these reasons and more. What all this has done is make it much more difficult for buyers to purchase homes and therefore lowers demand and prices.
Read more great info and important real estate information at Orange County Real Estate blog. Click on Laguna Niguel real estate for the lastest market trends report, listed homes and sales updates.
As a resident and full time real estate professional in Orange County, I've seen the dry hills, mountains and resevoirs. I have been concerned with the drought situation in Orange County for a while. The recent fires brought to life how dry the conditions are in Southern California and Orange County. Here in Laguna Niguel I have noticed that other parts of Southern California like LA, the Valley and even Northern Orange County have received more rain fall while the rainfall here in South Orange County has been much less.
I was glad to hear that officials have finally declared us temporarily out of the drought condition. Driving around seeing all the wonderful green hills and mountains it really brings everything to life. I hope that we continue to see more rain throughout the year.
Read more about the drought by clicking on Orange County's Drought Delcared Over.
For additional real estate information about Orange County and Laguna Niguel read more of Zen's blogs at Zen’s Orange County Real Estate blogs on active rain.
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Displaying blog entries 401-410 of 510
