Last week, I attended and economic forecast for both Palos Verdes real estate, the Los Angeles area and the State of California given by Leslie Appleton- Young, Chief Economist for California Association of Realtors. Below are highlights:
- We are finally seeing growth in construction and financial services. Government jobs will continue to decrease.
- California new housing starts bottomed in 2009 and are starting to rise. We usually need 150,000 to 200,000 new units each year to sustain our population.
- 29.7% of mortgages in California are under water but that number has shrunk since 2009.
- Fed Fund Rate (overnight borrowing) has been close to 0 since 2009.
- “Housing affordability is once in a lifetime opportunity.”
- Economy slowly improving with Europe and China being the wildcard.
- In California real estate sales peaked May 2007 and bottomed February 2009.
- Biggest obstacle to real estate sales is low inventory which is currently 4.2 months.
- California projection is 3.7% increase in number of real estate sales and 4.1% increase in median home price.
- California market is doing better than the rest of the United States. We have been moving off the bottom for the last 2 years.
- Investor single family home purchases have been increasing
- April year to year numbers for PalosVerdes real estate 90274 showed 28% increase in number of homes sold and an increase of 33.5% in median price.
- April year to year numbers for RanchoPalosVerdes real estate 90274 showed 48% increase in number of homes sold and an increase of 7.7% in median price.
- May 2012 foreclosure activity for Los Angeles County homes – 2,463 in pre foreclosure, 3,114 scheduled for auction and 659 REO/Bank owned.
- May 2012 foreclosure activity for RanchoPalosVerdes homes 90275 – 27 in pre foreclosure, 39 scheduled for auction and 6 REO/Bank owned.
- May 2012 foreclosure activity for Palos Verdes homes 90274 – 11 in pre foreclosure, 13 scheduled for auction and zero REO/Bank owned.
- The worst of the recession is over but recovery will be slow.
- Mortgage rates should remain low through 2014.
Charts courtesy of California Association of Realtors