Category: Housing Market

California has long been considered as bellweather state in real estate as in other areas. If the usually upbeat National Association of Homebuilders (NAHB) newsletter means anything the rest of the nation is in for a long tough time with new home construction.

The following is from the July 1, 2008 issue of the NAHB’s Nation’s Building News.

===========================

While the underlying demographics for housing remain strong in California and are expected to gain even greater strength as its population continues to grow, the immediate outlook is grim and the industry remains in dire straits, representatives from the California Building Industry Association (CBIA) told the media at a June 25 news conference in San Francisco during the annual PCBC conference and tradeshow.

The state’s home building industry will languish well into next year, with some areas performing noticeably better than others, and the marketplace could sustain even more damage if lawmakers fail to move forward with stimulus legislation aimed at propping up the economy by stabilizing housing conditions.

“Without reforms being considered right now in Sacramento and Washington, D.C., I fear many more builders will go out of business and many more jobs will be lost,” said Ray Becker, a Bay Area developer and this year’s chair of CBIA. “Equally important, this attrition will make it even more difficult to ramp up production when the market finally does start to turn.”

Shelter is one of the most important necessities that we need for everyday living. Unfortunately, not all of us have the luxury of buying a mansion. Mortgage is one of the bills that we have to pay. But we often forget them amidst the stack of credit card bills that come in the mail. Home foreclosure is one of the most common problems facing Americas today. Most of us have to pay our debts to live. Fortunately there are tips to avoid this situation.

Secure a home equity line of credit

A home equity line of credit is a type of loan wherein the house is used as collateral. This can delay or prevent a foreclosure from happening by having it as a back up. You will have the money you need if other emergencies arise. Most banks offer great options for customers.

Don’t miss and skip

This may seem like a simple step but it’s the one most often taken for granted. Once you miss one payment it will be easier for you to miss the rest. Lenders also have acceleration clauses wherein they can demand that the customers pay every payment that they’ve missed all at once. Your credit will also take most of the injury and may prevent you from getting a loan in the future.

Know who to pay

The usually optimistic housing sales forecasts and comments from the National Association of Realtors® are beginning to become more realistic under the weight of relentless month after month falling home sales.

What they call a “mix of housing activity” doesn’t address the problem of a credit crunch like this nation has never before experienced. The poison spread from the subprime mortgage market has infected the entire credit market for housing. Even people with good credit are finding it challenging to secure home financing.

Here is the full press release from the NAR about March existing home sales activity.

=======================================================

Existing-home sales edged down in March, remaining within a narrow range of sales activity that has persisted since last September, according to the National Association of Realtors®.

Existing-home sales – including single-family, townhomes, condominiums and co-ops – were down 2.0 percent to a seasonally adjusted annual rate (1) of 4.93 million units in March from a level of 5.03 million in February, and remain 19.3 percent below the 6.11 million-unit pace in March 2007. A rise in condo sales in March was offset by a drop in single-family sales. Regionally, sales rose in the Northeast and West but fell in the Midwest and South.

Lawrence Yun, NAR chief economist, said the market is performing unevenly. “Though mortgage rates are at historically low levels, some borrowers are facing restrictive lending practices in declining markets,” he said. “At the same time, many buyers continue to bide their time with a large number of homes to choose from, while other potential buyers remain on the sidelines.”