The new sales’ figures for July are out!  I have compiled last one year of history (starting with July 2008 to the left with ending at Aug 2007) for sold homes in the area so that you can see the pattern.  For most areas, records were broken in July.  This is a big indication that we may have hit the bottom.  Normal market usually has an inventory of 3 months.  Most areas today show inventory of 6 months or less.  Last year this time the inventory was double what it is now. 

MARKET STATISTICS-Closed Sales by Month (All Residential)

 Let’s take Antioch for example.  The inventory in July 2007 was nearing 2000 homes.  In May 2008 it was 1300, June 2008 – 1200, July 2008 – 1100, and now August figures show under 1000 homes!!!  The figures also indicate that more homes sold and less new home listings came on the market for past 3 months.  If this continues the experts predict that we should recover from the housing market crash by this time next year, having said that, it does not necessarily mean that the prices will dip any lower. 

All new figures and market activity indicated that prices are stabilizing and slightly on a rise in some of the area.  I am encountering more multiple offer situations as well as more and more offers are being presented at an asking price and above asking price.  Less and less credits are being offered to buyers now since the competition is growing.  So if the market continues to perform in similar fashion for next few months, buyers’ market may be over in next year or so.

On lending front, all new information indicates that the new jumbo-conforming loan limit (temporarily set to $729,750 for Santa Clara & Contra Costa Country) is set to expire on December 31, 2008. The limit will not reset to the old figure of $417,000 but to a new limit of $625,000.  We still don’t have clear understanding of how the interest will be affected with this new limit.  As of today, 30 year – fixed rate loan for loans under $417,000 are at 6.625% and for loans falling between $417,000 and $729,750 are 6.75% which indicates about 1/8 point rate difference.  The gap may go higher next year.

Also, I have some news for my clients who are considering FHA loans.  I just heard that there are some major negative changes coming (such as higher down payment, higher mortgage insurance rate, higher interest rate, no down payment assistance, etc.) as of October 1, 2008.  From what the lenders tell me, the clients would be protected from this changes as long as they are in contract before October 1, 2008.  I will have more information for you next week.  This of course is being put in place because market is correcting itself. All the above listed items (such as down payment assistance and low down payments) were given as incentives to stimulate the housing market which has done just that at least in the Contra Costa County and the power to be thinks it is time to go back to the normal lending policies.  As more and more days passes it seems we are heading toward normal 20% down payment market.

So to sum it up, if you are planning to take advantage of this down housing market cycle you may want to get going.  Less inventory, higher prices, and new lending policies can steal your dream of owning real estate overnight.

Please call me or email me with any question you may have.

I am Sonal Basu.  I live in Walnut Creek, California with my husband and my 13 years old son. I grew up in Katy, Texas.  I came to America at the age of 10.  I studies at University of Houston and achieved a degree in Business Administration.  I worked in banking industry for 15 years climbing the corporate ladder. I move to California about 5 years ago. After acquiring a management job in financial industry in Oakland, California, I realized I was not happy with my profession. After much thought and discussion, I realized my true passion of wanting to help people make their dreams come true.  I always loved meeting and talking to people from different walks of life.  I had knowledge and passion for finances.  What better way to make use of it then to become a Realtor.

So, now I am a Realtor in the San Francisco Bay Area.  I have been lucky unlike many Realtors in California.  I guess it wasn’t just luck but hard work, passion and dedication that made me a successful Realtor in these trying times in my profession.  I love my job and it shows.  I have taken up the technology in my field as fish takes to the water. I like to educate my clients to best of my ability so that they are making a sound decision when it comes to their home purchase. I want to help families become first time homebuyers. Seeing the joy of owning their homes really makes it all worth while.  I have found my true passion and I hope to continue to make hundreds of families’ dream come true. Let me know if I can help or learn more about my work at www.SonalSellsHomes.com.