The curent state of affairs

Here we are, at the dawning of a new year, and what the heck is going on.
The Real Estate Market continues it's downward slide, and while this is a terrible time for those of us with Option ARM's and Interest Only home loans (loans that are quickly becoming upside dowm), it's a great time to get your first home, or to purchase that investment property.
There are some really great deals to be had, and although the unfortuanate fact is that they come at the misfortune of others, now is the time to buy.
I am asked again and again when will we hit bottom: I wish I knew. It all depends on who you listen to. I've heard that recovery is just around the corner, and we should see a rebound by the end of the year; I've also heard that the recovery is several years away, and that a lot of people still have to lose their homes before all of the mortgage lending fiasco finally corrects itself.
The fact that Federal Reserve Bank President Ben Bernanke stated in his Economic Outlook speach on 1/10/08 that the Fed will aggressively cut interest rates to help slow any economic slowdown is a good sign for all of us.
Indications are that he will again cut the Federal rate .5% at the next meeting on the 30th of this month. This will help all aspects of the economy, specifially anyone with an Equity Line of Credit, who should see an immediate drop in their payment as interset rates adjust downward.
Let's hope that we are bouncing at the bottom of the economic downturn, and mearly slowing as we near the crash landing. I remain an optimist (as foolish as that may be) and I look forward to a better year in 2008 than we had in 2007.

Current facts:
Calif. median home price - November 07: $488,640 (Source: C.A.R.)

Calif. highest median home price by C.A.R. region November 07: Santa Barbara So. Coast $1,075,000 (Source: C.A.R.)

Calif. lowest median home price by C.A.R. region November 07: High Desert $262,650 (Source: C.A.R.)

Calif. First-time Buyer Affordability Index - Third Quarter 07: 24 percent (Source: C.A.R.)

Mortgage rates - week ending 01/03: 30-yr. fixed: 6.07%; Fees/points: 0.5%; 15-yr. fixed: 5.68%; Fees/points: 0.6%; 1-yr. adjustable: 5.47%; Fees/points: 0.5% (Source: Freddie Mac)

Let's make this a better year...

Hi guys,

Time for a little reflecting on what's been happening in the wonderful world of Stephen.

Kathy and I have been blessed with a grandson, Jaiden Andrew Cubias, and he's a real sweetheart. Although at times he thinks that grandpa is just a big teething ring (yes I washed my hands..)

Andrea had a great solo for El Dorado's Vocal Department show "Tinsel", a wonderful rendition of the Christmas Song (chestnuts roasting on an open fire..) As soon as I get the video I'll post it.

Here's Annie, Kayla and Hanna

We've had our share of up's and downs, but life on the whole was really kind to me this year.

I left Tristar and joined SRS, which has me working harder than ever to transition to Real Estate full time. It's not that SRS is a bad company, I'm just so sick of Workers' Compensation.

Kathy was pretty happy with her first Christmas as Grandma, and even got some nice bling from Sasha.

Real Estate Notes and Observations

Greetings friends and neighbors,

As we meet the New Year, many thoughts come to mind, first and foremost, when the heck is the housing market going to pull out of it's nosedive?

I was reminded by my brother of a basic fact; what people perceive as real, is real.

So I can't help but get a bit frustrated when the financial Guru's predict that the market will not get better until 2010, or worse yet, that we are headed into a full scale recession.

Yes times are tough, but here are the facts as of 12/30/07

Gas prices*
National
Current: $2.94 Last Week: $2.96 Last Year: $2.30
California
Current: $3.26 Last Week: $3.29 Last Year: $2.61

*Based on average price per gallon for Regular-grade retail Gasoline, figures released weekly on Monday

Mortgage Rates*
30 Year Fixed
Current 6.17% Last Week: 6.14% Last Year 6.22%
15 Year Fixed
Current 5.79% Last Week: 5.79% Last Year 5.93%
5/1 ARM
Current 5.90% Last Week: 5.90% Last Year 5.98%
1 year ARM
Current 5.53% Last Week: 5.51% Last Year 5.47%

*Based on Freddie Mac national average. Figures released weekly on Thursday.

Financial Markets and Info
US 10 Year Treasury
Current 4.08% Last Week: 4.17% Last Year 4.62%
This index is a good indicator for fixed mortgage rates. Generally, a decrease in bond yield is good for interest rates.
Prime Index
Current 7.25% Last Week: 7.25% Last Year 8.25%
This index is what home equity lines are based on.
Dow Index
Current 13,359.61 Last Week: 13,245.64 Last Year 12,501.52
Nasdaq*
Current 2,676.79 Last Week: 2,640.86 Last Year 2,425.57

*"current" stock index values based on prior day's close

Unemployment*
National
November 2007: 4.5% October 2007: 4.4% November 2006: 4.3%
Orange County
November 2007: 4.2% October 2007: 4.2% November 2006: 3.1%

*Not seasonally adjusted. Figures released monthly. National typically gets released earlier than OC

C.A.R. Home Affordability Index*
California
Q3 2007: 24% Q2 2007: 24% Q3 2006: 24%
Orange County
Q3 2007: 24% Q2 2007: 23% Q3 2006: 22%
Los Angeles County
Q3 2007: 20% Q2 2007: 20% Q3 2006: 19%

*This is the percentage of California households that can afford to purchase an median-priced home.

Real Estate Stats
Median Home Price*
California
October 2007: $424,000 September 2007: $430,000 October 2006: $467,000
Orange County
November 2007: $582,750 October 2007: $573,750 November 2006: $623,000

(thank you to Russell Foster russell@goEMF.com for the information)

What does this all mean? If you are looking to purchase a new home and can qualify for a conforming loan, it is a great time to buy; if you are looking to purchase a second income property, it's a great time; If you are looking to get out of an apartment, now is the time.

On a pessimistic note, if you are thinking of selling your house, and you can't wait the five to eight years for the market to return, do it now: because you are not gong to see the prices you we being quoted only two years ago any time soon, and things will probably get worse before they get better.