AFTER ANOTHER YEAR OF UNEXPECTED GROWTH, WHAT'S NEXT?Byline: GREGORY J. WILCOX This year's residential real estate market in Southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, proved as unpredictable as the last five. Home price appreciation was expected to cool into the single digits and sales expected to soften from 2004's especially strong level. Didn't happen. Price records continued to fall, though. For the six-county Southern California region, the median price set a record seven of the first 11 months. That compares favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. with 2004, when price records were set eight of 11 months. Buyers in the San Fernando Valley San Fernando Valley Valley, southern California, U.S. Northwest of central Los Angeles, the valley is bounded by the San Gabriel, Santa Susana, and Santa Monica mountains and the Simi Hills. struggled with the same scenario. The single-family home median price set a record six times and matched the $600,000 level two other months. Consider this: The median price of a Valley home is now closer to $1 million than $100,000. In 2004 the median price hit a record $505,000 here in June. This time last year I wondered if we would have to wait until June to see if the price peak had been reached. The record fell in January. John Karevoll, a market slicer and dicer dic·er n. A device used for dicing food. Noun 1. dicer - a mechanical device used for dicing food mechanical device - mechanism consisting of a device that works on mechanical principles for La Jolla-based DataQuick Information Systems, thinks this month will bring another price record when the numbers are tallied in January. That's because there is typically a rush to close escrows before the end of the year and the sales include the most expensive homes. Karevoll is not going to gaze too far into 2006, either. ``The thing about looking into next year is that the volatility of the market makes it almost impossible to look beyond four to six months,'' he said. So the first part of 2006 will look a lot like the last part of 2005 with sales continuing to soften and price appreciation moderating. There are a couple of knowns, though. ``We know we are nearing the end of the cycle, we know that the rate of appreciation will come down. It's all a question of degree and those degrees look fairly benign for the first half of next year. After that, it's impossible to make any reliable forecast.'' And there are some big unknowns, he points out. They include what happens to mortgage rates, the federal budget deficit and the balance of payments, a method of accounting that helps a country (in this case us) evaluate the strength of the dollar versus foreign currencies. The stock market's direction will impact residential real estate, too. Right now the market is soft and that makes housing a good investment, not just for home buyers but big institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. like pension funds. ``One of the worst things that could happen for the housing market would be if the stock market took off,'' Karevoll said. That would mean money would move from secured mortgages and into stocks and mortgage money would start to dry up. ``That would be a huge impact on the housing market,'' he said. Of course the Valley is not insulated in·su·late tr.v. in·su·lat·ed, in·su·lat·ing, in·su·lates 1. To cause to be in a detached or isolated position. See Synonyms at isolate. 2. from these knowns and unknowns. And this market will likely mirror the region's, said Jim Ezell, president of the Van Nuys-based Southland south·land or South·land n. A region in the south of a country or an area. south  land·er n.Noun 1. Regional Association of Realtors. ``A little more of a return to normal,'' he said. ``So this time next year do I think the median price of a Valley home will he higher than the same time this year?'' ``Of course I do,'' he replied. Reader Richard Rose Richard Rose (March 14, 1917 - July 6, 2005) was an American mystic, esoteric philosopher, author, poet, and investigator of paranormal phenomena. An observer of human psychology, human weakness and human potential, Richard Rose challenged authority in psychology, psychiatry, of Canoga Park sent the following e-mail regarding last week's column about a California Housing Finance Agency loan program for first-time buyers first-time buyer n → persona que compra su primera vivienda first-time buyer n → personne achetant une maison ou un appartement pour la première fois first-time buyer . ``I think that the 'First Time Buyer' program is a good idea, but would you please explain how selling tax-exempt bonds Tax-exempt bond A bond usually issued by municipal, county, or state governments whose interest payments are not subject to federal and, in some cases, state and local income tax. tax-exempt bond See municipal bond. doesn't cost taxpayers any money?'' Good question, and here's the answer according to Jim According to Jim is an American situation comedy television series originally broadcast by ABC. The show premiered with little publicity in October 2001, following the surprise hit comedy My Wife and Kids. Folley, the agency's housing finance chief. The agency sells the bonds to corporations, money market funds and high-wealth individuals. The purchasers don't pay any taxes on their gain. Money from the sale pays for the agency's operation and the home loans, so it's not state funded. Then when someone buys a house he or she also buys stuff to fill it up and pays sales tax sales tax, levy on the sale of goods or services, generally calculated as a percentage of the selling price, and sometimes called a purchase tax. It is usually collected in the form of an extra charge by the retailer, who remits the tax to the government. . Then every year he pays property and other taxes, adding to the revenue stream of the federal, state and local governments. Gregory J. Wilcox, (818) 713-3743 greg.wilcox(at)dailynews.com |
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