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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (13466)	10/15/2004 3:03:36 PM
From: CalculatedRisk	Read Replies (2) \| Respond to of 116555

Housing market continues to cool Number of O.C. home sales in September was fewest for the month since 1996 and was off 28% from year ago. ocregister.com By HANG NGUYEN The Orange County Register The Orange County real-estate market's cool-down continued in September, with sales activity reaching an eight-year low by one measure. Real-estate agents and builders sold 3,585 homes last month, according to data released Thursday by market-tracker DataQuick. The last time Orange County saw a weaker September was in 1996 when 2,933 residences sold. Compared with a year ago, September sales were off by 28percent. It's the sixth month in a row where year-over-year sales dropped. However, September's median local home price was $533,000 - up 24 percent in a year but 2 percent off a record price of $543,000 reached in August. For the first time in more than four years, Orange County's median selling price wasn't the most expensive in Southern California. Ventura County's typical sale was the region's top in September at $540,000. "We have seen things slow down quite a bit," said Bob Schulz, an appraiser in Tustin. Heather Howery is well-versed on the cooling housing market. She put her Rancho Santa Margarita condo up for sale about two months ago. Since then, she has gotten just one phone call from a marginally interested shopper. So she cut her price twice - a total reduction of as much as 8 percent. Her two-bedroom, two-bath condo is now listed at a range from $389,900 to $409,900. "It's upsetting," Howery said. "We bought another house (in Trabuco Canyon) hoping the majority of it would be paid by this house. "Now, we're paying for two mortgages. Things are very tight." She'll soon rent out the Rancho Santa Margarita home while she continues to try to sell it. She says she'll try renting for six more months before she drops the price to a level that shoppers can't walk away from. Howery and other sellers face plenty of competition. The supply of single-family homes for sale has more than doubled since April, reaching 7,036 residences on Oct. 5, according to First Team Real Estate. However, the latest count dipped 4 percent in the past two months. That's partly due to sellers pulling their homes off the market because they're not getting the price they want. The number of condos for sale has risen every month in that same period. The volume has more than tripled to 4,694 abodes. The homes that did sell in September went to buyers using adjustable-rate mortgages, according to DataQuick. Last month, 79 percent of buyers selected an adjustable loan, deals that initially offer lower payments but come with risks of higher payments in the future. September's adjustable-loan usage was the highest in at least 16 years. However, DataQuick analyst John Karevoll said: "I'm not that concerned." These borrowers definitely include people who chose the riskier loan because they couldn't afford the higher mortgage rates of a 30-year fixed loan, Karevoll says. But he also knows of many folks who can afford the costlier loans but go with the adjustable mortgages so they can invest that savings elsewhere. Karevoll says he can't yet guess where the local real-estate market will go. He says he needs a few more months of data before he can do that. Housing consultant John Burns from Irvine says the future of the housing market is in the hands of shoppers. "Ultimately, I think it will be the consumer attitudes that determine whether prices go up or down next year."