What's in store for Southern California home values?The 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, housing market is not taking the summer off. Home values and sales continue to be on the rise--hitting record-breaking numbers over the last few months with no end in sight. The increased worth of homes has been astounding a·stound tr.v. a·stound·ed, a·stound·ing, a·stounds To astonish and bewilder. See Synonyms at surprise. [From Middle English astoned, past participle of astonen, . The phenomenon can be attributed to the shortage of homes available for sale in the region coupled with the low interest rates (currently at 5.52 percent on a 30-year fixed mortgage for the week ending July 12, 2003). According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. DataQuick, a company that monitors real estate activity nationwide, during the month of May 2003 the median price that Southern California buyers paid for their homes hit an all-time high of $312,000. This amount is up 1.6 percent from the prior month with a median of $307,000 and up a whopping 18.2 percent from May of 2002. Home values in the area are more than double the national median of $133,000. Interestingly, as prices continue to rise, so do the number of home sales across the region. Over 32,000 new and resale homes and condos were sold throughout the Southland in May of this year. This is up 2.3 percent from the previous month. But will this trend continue or should homeowners be on the look out for a sudden downturn in the values of their homes? The outcome is unclear. Some experts are foreseeing the worst and comparing this trend to that of the dot-corn crash just a few years ago, where stocks were overvalued Overvalued A stock whose current price is not justified by the earnings outlook or price/earnings (P/E) ratio and thus, expected to drop in price. Overvaluation may result from an emotional buying spurt, which inflates the market price of the stock or from a deterioration in a and investors lost significant amounts of money. There is the belief that as the economy recovers and interest rates rise, home values will take a dive Verb 1. take a dive - pretend to be knocked out, as of a boxer dissemble, feign, pretend, sham, affect - make believe with the intent to deceive; "He feigned that he was ill"; "He shammed a headache" , leaving homeowners with little to show for their high-priced home investment. Many experts feel its unrealistic to expect housing values to continue to rise at the current rate, but there will not be substantial drop-off in home values. They assert that there are no indicators of market distress and believe that there will only be a moderate leveling-off in home values rather than a huge downslide down·slide n. A downward course; a decline: "a growing concern among . . . board leaders about whether the economy could be headed for a downslide" Andrée Brooks. . For homebuyers throughout Southern California, the rising value of homes has set up two circumstances. Some are looking to buy homes that will increase in worth giving them a large return on their investment. Other homebuyers, because of the higher prices, are finding that they need to look to other outlying areas, where homes are more affordable. One thing is for sure, today's low Today's Low The intra-day low trading price. Notes: In other words, this is the lowest price that a stock traded at during the course of the day. More often than not this is lower than the closing price. See also: Today's High interest rates give homebuyers tremendous buying power Buying Power The money an investor has available to buy securities. In a margin account, the buying power is the total cash held in the brokerage account plus maximum margin available. Also referred to as "Excess Equity. . Many buyers are able to move up without the burden of a significantly higher mortgage payment. Will the market cool and values level off? Only time will tell. Those looking to enter this market should consider utilizing the expertise of an experienced mortgage lender. This article was provided by United Pacific Mortgage. For more information on, call 1-800-400-7166 or visit their site at www.unitedpacificmortgage.com. |
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