Are we beginning to see light at the end of the tunnel when it comes to the downward spiral of the real estate market? The answer may well be yes.
Historically low interest rates on mortgages, 4.85 percent this week on a 30 year fixed rate mortgage, have helped spur a surge of 32.2 percent in mortgage applications as of March 20, 2009. Interest rates are well below the 5.74 percent of a year ago.
This week, the National Association of Realtors released figures showing an increase of 5.1 percent in existing home sales from January 2009 to February 2009. It was the largest sales jump since July 2003, according to the National Association of Realtors.
In Los Angeles and Orange counties, the number of sold properties is up from this time last year, while the inventory of properties for sale in months' supply is down from this time last year, as is the Days On Market for properties being sold. All are positive indicators for the real estate market.
One negative indicator remains the sales price of properties. Distressed properties accounted for 40 to 45 percent of transactions in February, according to the National Association of Realtors. Lawrence Yun, chief economist for the National Association of Realtors states in a NAR news release, "Our analysis shows that distressed homes typically are selling for 20 percent less than the normal market price, and this naturally is drawing down the overall median price."
But is that changing, too? Recently I had a Buyer submit several full price Offers on several distressed properties in Los Angeles County and not get his Offers accepted on any of them. I revisited these properties on my MLS at Close of Escrow to discover that many of them had sold for over-asking. One of the properties sold for $20,000 over the Asking Price.
So are we witnessing the stabilization of the real estate market? Unfortunately, I do not have a crystal ball to look into the future. However, if these positive trends continue the answer will be a resounding yes.
