Thursday, March 27, 2008

Is The Real Estate Market Improving?

Call me busy or just someone who has his priorities wrong, but I finally made time to update the loan activity charts for February 2008.

I was not in any way thinking that I would see any signs of an improved real estate market especially after seeing how few home sales occurred in February.

You probably don't need to be reminded that lenders have tightened their lending requirements and there have been a number of foreclosures in Santa Barbara County. These foreclosures have had an effect on all the communities but have caused Santa Maria and Lompoc's real estate market to struggle for a number of reason.

The biggest issue is lower home values caused in great part to the lenders doing everything they can to get foreclosed properties off their books. These lower home prices are the reason many people can't refinance out of their existing loans. The properties are under water or don't have any equity.

So, you might ask, when is the good news coming? After looking at the lending activity charts for February we may be seeing a change in our real estate market.

Both the Santa Barbara and Lompoc communities saw the largest number of residential refinances occur since October of last year.

Santa Maria had an upward number as well and was just a couple of refinances away from having its best month since October of 2007. Combine that news with the increase in home sales in that area from January to February and you might surmise things are moving in the right direction.

It's hard to imagine a better situation for all of us than to see the refinance business get moving again. I think with the increased underwriting and the new laws about predatory lending the new loans should be pretty rock solid loans that hopefully are helping homeowners get out of the pinch they found themselves in because of the loans they originally took.

Just the fact that these areas are seeing increased lending activity makes me think that appraisals and property values may be stabilizing to some degree. I think the next sign we should see is an increase in the number of home sales.

I wouldn't expect that to be to far off, but I don't expect it to happen until after the tax man cometh.

I welcome your thoughts.

See You In Escrow!

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