Stacey Vanek-Smith: Gone are the days when you could land a home loan with less-than-sterling credit and no money down. Mortgage lenders and big banks have gotten very finicky in the last few weeks.
Mitch Ohlbaum is a mortgage broker in Los Angeles. He says if you want to get a decent interest rate now, you'd better have great credit and be prepared to put down a big chunk of change.
Mitch Ohlbaum: For now, the standard is really going to be 10 percent if you want to buy something. Which in the real world's not so bad, it's just a little bit more difficult where we live, where everything's a million dollars. Ohlbaum says 10 percent down is unrealistic for many of his middle-class and working-class clients, even those with steady incomes and good credit. The result? They can't get the loans they need to buy in L.A. where the median home price is well above a half-million dollars.
Dan Arguelles is a real estate agent in Manhattan Beach, California. He says the restrictive lending practices mean homes in his tony area are taking longer to sell.
Dan Arguelles: Now it's getting even tougher, that you have to state your income. It is getting a little harder to find that qualified buyer. The same thing is happening in New York, San Francisco and Washington D.C.
Housing market economist David Lereah is with move.com. He says a couple months ago it was too easy to get a loan, now it's too hard
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By MATHEW PADILLA
The Orange County Register
After home shopping for seven months, Kane and Carrie Johnson found the first new home for sale that they like and can afford in Orange County. They're not whipping out pens to sign sales contracts, however.
They're waiting to see if home prices soften further.
Trying to escape the Labor Day heat, the couple toured air-conditioned model homes in Irvine by John Laing Homes.
They said the big kitchen and dining room areas at the builder's Celadon condominium project would be great for entertaining. Kane Johnson, a Huntington Beach fireman, said he prefers a spacious living area to large bedrooms, which, after all, are for sleeping.
And he said that the more than 1,700 square feet for around $550,000 at one model is a better deal than on resale townhomes he's seen. "It's pretty hard to find," he said.
And yet, he and his wife are content to rent in Anaheim Hills and may not buy until next year.
"With the market the way it is, we are not in a hurry," Carrie Johnson said.
And so goes Orange County's housing market. Real estate agents say spring and summer months, which come to a close around Labor Day, are normally the busiest time of the year. However, this year the hot selling season never arrived.
In July, buyers closed on 2,391 homes, down 19.8 percent from July 2006, reported DataQuick. July marked the 22nd straight month that sales lagged a year ago. This year's slump rivals a similar streak from June 1989 to March 1991.
Experts say that not many buyers can afford Orange County's home prices, and some are waiting to see if the market downturn gets worse. Meanwhile, Wall Street investors are shying away from all but the safest mortgages, and that means home loans are more costly and harder to get for some folks.
Linda Mamet, vice president of sales and marketing in John Laing's Irvine office, is optimistic sales will bounce back somewhat this month as families return from vacation. She said new home sales typically start to drop in October, as the holiday season begins.
The Los Angeles Business Journal. “The expanding mortgage crisis and credit crunch slammed the Los Angeles housing market in August, with home sales plunging 50 percent from the same month last year and 25 percent from July.”
“Similar carnage took place in the condo market with year-over-year sales plummeting 40 percent to 1,168 units. Sales were off 27 percent from July’s 1,601 units.”
“‘These numbers are the first to show the beginning of the impact of the credit crunch that materialized in the last couple months,’ said Robert Kleinhenz, deputy chief economist with the California Association of Realtors.”
“‘Everything was great until about a month ago. Then, on one day – Thursday, Aug. 9 – everything changed as lenders shot up rates on jumbo loans to 9 percent and further tightened guidelines,’ said Syd Leibovitch, owner of Beverly Hills-based Rodeo Realty. ‘It became almost impossible to find a jumbo loan.’”
Does anyone know what's going on with the water that looks like its coming up out of the asphalt in the driveway area in front of the clubhouse?
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