“Home prices staying afloat at the beach” is today’s headline in theLos Angeles Times Business Section. They researched 18 zip codes “excluding such spend-happy areas as Malibu, Palos Verdes and Newport Beach” inferring that real estate in those 3 cities are doing even better.
Kudos to the LA Times for writing a balanced article with information that is specific to our South Bay area. We are seeing foreclosures but significantly fewer than other areas of the County. And there is the supply and demand issue. We do not have a lot of new subdivisions (supply) and sellers who do not have to sell are sitting out this market.
I spoke to a lender this morning who thinks interest rates will be up by the end of the year as the foreign markets exert pressure on the Fed’s anti-inflationary “cheap money”. Every 1% increase in mortgage interest rates decreases affordability by 10%.
For buyers, this is a good time to buy as interest rates are low and most properties that are on the market are being priced with the “sold” sign in mind. For the bargain minded, there are REOs and foreclosures to be had. As a long term investment, real estate has has been hard to beat.
