That's good news for home sellers perhaps, but not-so-good news for folks who are looking to buy a home. An economist at the University of California recently said that if a homebuyer financed a house at the median price using conventional financing and putting down 20 percent (which would require some $112,000, excluding closing costs), the annual family income necessary to pay for the mortgage and taxes would need to be at least $120,000.
The rising home prices in Los Angeles County have been offset somewhat by fewer sales, accompanied by few homes going on the market, which are both indicators that although the prices of homes may be rising, the overall market in the area appears to be slowing down.
Nationwide, home prices have continued to rise, and people have been able to tap into their increased equity by taking out home-equity loans and lines of credit. In fact, nearly one third of all homeowners have already done that, according to a national survey conducted by the Gallup Organization. That same survey suggested that nearly half (43%) of the homeowners who tapped into their home equity used that money to improve their homes. The next most cited reason (30%) was for fun stuff like vacations, cars, and boats. Some 14% of the homeowners surveyed said they used their loans to consolidate debt, followed by paying for emergencies (4%), education (3%), and medical expenses (2%).
As home prices continue to rise at double-digit rates in many areas of the country (or double in the past four years, as was the case in Los Angeles County), an Experian-Gallup Poll found that nearly two-thirds of all Americans (60%) expect prices to keep rising. On the other side of that coin, a large majority (85%) of homeowners said that it's not a good idea to take on any more debt in the current economy. That's not good news for those who study things like consumer confidence.
The bottom line: If you're looking for a home in LA, it may cost you twice as much as it would have four years ago, there are fewer homes to choose from, and you'd better have a good family income if you hope to continue to live in your home once you find it.
Homeowners and investors who may be turned off of buying real estate due to the bad press the market has been receiving might do well to reconsider. Despite that the housing market has no doubt suffered an implosion due to over-investment and inflated property values, these very same causes have resulted in a trend that is producing some of the lowest prices on real estate available to home buyers or investors in many years. Los Angeles bank foreclosures, which are at extremely high levels due to the foreclosure surge, are being bought and sold quietly at auctions for staggeringly low prices.
Los Angeles bank foreclosures are not typical types of real estate. Sold by lending banks to regain lost debts, they don't get much press or attention form the general public. But due to the recent surge in their volume, they have been hard to ignore, especially when you consider the incredible potential they offer for investors. Most Los Angeles bank foreclosures are sold for auction at up to 50% off their actual market value, and the fact that the upward trend in foreclosures has made them so readily available has only contributed to falling prices.
Buying for below market values is the only way to make solid, reasonable investments in today's market, and more and more people are becoming aware of it. During the past year between February of 2007 and February of 2008, Los Angeles bank foreclosures have risen over 210%, absolutely flooding the market. Potential buyers who want to take advantage of the historic values should consult BankForeclosuresSale.com, a one-stop for up-to-date listings and insider information on buying these properties for the best possible values.
Both Jeanette Joy Fisher & Smith Philip are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Jeanette Joy Fisher has sinced written about articles on various topics from Real Estate, Network Marketing and Real Estate. Jeanette Fisher teaches beginning real estate investors how to find, finance, fix, and sell houses for top dollar. Find out how to make more money using interior design AND marketing psychology strategies. Free ebook, The Truth about Making Money Flipping. Jeanette Joy Fisher's top article generates over 135000 views. to your Favourites.
Smith Philip has sinced written about articles on various topics from Foreclosure Help, Real Estate and Foreclosure Help. Philip Smith has been educating buyers on the finer points of purchase at. Smith Philip's top article generates over 1300 views. to your Favourites.