The central bank can't be "complacent about inflation,"
Janet Yellen, president of the Fed Bank of San Francisco, said
in a speech yesterday. Recent measures of consumers' outlook for
prices "highlight the risk that our attempts to deal with
problems in the real economy could lead to higher inflation
expectations and an erosion of our credibility," she said.
Yellen also said she anticipates inflation will slow as the
labor market weakens and "commodity prices level off," echoing
comments by other policy makers.
Investors project the Fed will keep the benchmark interest
rate unchanged at its next meeting on June 25. That would be the
first pause since the central bank started cutting rates in
September.
Rising prices from overseas, reflecting the drop in the
dollar, are another source of concern. U.S. businesses have
leeway to boost prices as companies abroad charge more.
The mortgage markets will overreact for the next 5-10 days. Long Beach mortgage rates should shoot up quickly.
Here on our Long Beach Real Estate site I usually write
purely real estate related articles targeted at educating and informing buyers
and sellers of Long Beach Real Estate.
Today I would like to give you a little peek into the business side of
things and explain how they can affect the sale or purchase of your Long Beach homes.
In a recently published post I disclosed the 2008 closed
sales in Long Beach;
674 of them, through 4/30/08. While the
chart shows the sales increasing each month, the sales figures are still very
low. (Includes sales of homes, condos,
lofts, co-ops, Oyos, 2-4 units and 5+ units as recorded on the MLS)
Jan 130
Feb 153
Mar 179
Apr 212
Total: 674
These are difficult times for those of us surviving in the
real estate industry. Going into this
down market there were about 2900 licensed Realtors on record, there are
currently about 1600 licensees active in the Long Beach
area. Every market will support a
certain amount of agents based on the closed sales of that market. Each agent needs a certain amount of closed
sales in order to survive. Lets assume
that 8 to 10 closed sales for the year are required for a Realtor to even
survive this market; 674 closed sales would produce 8 to 10 sales for the year,
for between 200 and 250 Realtors. Those
sales are currently spread across 1600 current licensees, which would equate to
less than ½ of a sale for each Realtor for the first 4 months of 2008.
In the real estate industry we have an 80/20 saying. It states that 20% of the agents do 80% of
the business. 20% of 1600 agents = 320
which would equate to about 2 closed sales for the majority of the 20% still
doing business.
So how are 1600 Realtors surviving a market with sales that
will currently only support 200 to 250?
Some
have other income, or a spouse or significant other with income.
Some
have taken on Part or Full time jobs, while trying to juggle their real
estate.
Some
have anticipated this market and made plans to survive it.
Some
are making enough sales to manage.
What of the 80%? That
is 1280 agents, still active, for the last 4 months. How are they surviving with little or no sales?
Well, they either have spousal support a trust fund or they have accepted
salaried positions. Lets take a look at
that. Real estate is a more than full
time job; it is a commitment which permeates every hour of every day of our
lives. Real estate transactions require
a lot of attention on a daily basis.
Escrow, title, lenders, inspections, appraisers banks and more need to
be attended to, mostly during normal business hours. Buyers need to see
properties around their schedules which often means after work or weekend
showings. Sellers properties often need
tending, flyers run out; keys go missing from a lock box or end up in another
box on the same property. A pipe may
burst on a listing with an out of town owner; anything can happen. How is an agent who has accepted employment
elsewhere, with a set schedule, going to be able to deal with the schedule and
responsibilities of a full time Realtor?
How does that affect the buyer or seller? Has the agent even disclosed to the buyer or
seller that they are not fully available?
Do you know if your agent is available to conduct business, full time on your
behalf?
HR 5830: The FHA Housing Stabilization and Homeowership Retention Act of 2008
, is designed to provide relief for homeowners in trouble by
refinancing their loan to reflect lower housing valuations. If the
current lender 'forgives 10% of the loan balance, it allows a
homeowner to enter into an equity sharing type of arrangement for a
refinanced loan.
The real estate market in Long Beach has begun to shift. We have witnessed a steady rise in homes and condos for sale in Long Beach since the beginning of the year, as is witnessed by the chart provided. Buyers who have been waiting out the real estate market hoping to get that incredible deal are now buying those Long Beach homes and condos they have been wanting.
Interest rates are still great, although lenders are tightening up on lending standards. It is getting more difficult to procure a home loan unless your income and credit scores are high, your credit history is good and your debt ratio is low. As we progress into the summer months lending standards will become even more stringent.
If you are one of the consumers who has been sitting on the sidelines waiting for Long Beach real estate prices to drop before you begin your buying process, you might want to speak to a mortgage lender pretty soon. Run your credit, find out if you qualify for a home loan sufficient to make that purchase. You may also decide to go ahead and buy now while Long Beach prices are low, some concessions are still being granted and home loans are still available to consumers with less than pristine credit.
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