Hollywood Hills Homes
Leading consumer analytics group CoreLogic, recently released their MarketPulse report for January. In this report, they examine the current state of the mortgage finance industry and how it compares to what they deem to be “normal”. If you are planning to buy or sell a home in Los Angeles – or anywhere – you should definitely read this report in its entirety. It will be well worth your time.
But in the interest of getting right to the good stuff, let’s examine Housingwire.com’s Trey Garrison’s interpretation of the report and what his conclusions mean for the Los Angeles real estate market.
An analysis of credit availability shows that credit is tight for low credit-score borrowers, those who don’t want to or can’t fully document their loans, and those who would like an ARM product.
This should come as no surprise to anyone. After all, it was loose-lending practices that got many lenders in trouble in the first place. It will be some time before low credit score, high-risk borrowers and those who would like an ARM will qualify for a loan from a traditional lender.
High-LTV (loan-to-value) lending remains modestly loose relative to normal, and high-DTI (debt-to-income) lending is modestly tight relative to normal, and the share of ARM loans originated is much more restricted than normal, as many subprime ARM loan products are no longer available.
When CoreLogic uses the term moderately loose or moderately tight, they generally mean that things are very close to normal. This is great news for those buying or selling real estate in Los Angeles and other parts of the country. It essentially means that lenders are willing to loan money to those with the ability to repay the loan. It’s not quite back to normal, but it is getting very close.
Cash sales comprised 37.4% of total home sales in September 2013, down from the peak in January 2011 when cash sales made up 46.1% of total home sales.
Before the housing crisis, cash sales made up approximately 25 percent of the total sales across the country. That number jumped to 46.1% during the peak of the recession because banks simply were not lending money. The fact that the cash sales percentage is going down means that more people who cannot afford to pay cash for a home are entering the market because they now qualify for financing, and that is great news for sellers in Los Angeles – where the cash sale percentage is an even lower 29%.
These are just a few points of interest that can be found in CoreLogic’s January MarketPulse Report. There are many more, like the fact that home prices in California have increased by 21.3% in the last year. It is definitely worth taking the time to read if you are considering buying or selling a Beverly Hills house or Hollywood Hills home in the near future.
To read the complete report, please click here.
Susan Andrews | Estates Director
BRE License #01425843
Susan Andrews is your ultimate real estate source for Los Angeles, California and surrounding communities.
Photo courtesy of Housingwire.com.