AS MORE INVENTORY HITS THE MARKET, JULY SALES JUMP

Southern California home sales surged in July, rising to an eight-year high for that particular month, as there were more properties for sale.  Prices did not increase significantly from the previous month, but for July, year over year, there was a 26% increase in pricing.  This is the seventh month in a row, according to DataQuick, that prices have risen 20% in year over year comparisons.  That being said, housing is just at the 2004 levels, far below the high of 2007, just prior to the pricing crash and housing slump.  What is interesting is that people have already forgotten these encouraging numbers and were noticing the significant slowing of new sales for August.  Let this column be the first to encourage the consumer not to be discouraged.  August has always been notoriously slow compared to the spring season.  June is slow because of the advent of summer; graduations, weddings, early vacationers.  August is slow with heavy vacationing, the coming school year, and families getting ready for one or the other, or both.  Exacerbated this year, by many school districts staggering their start dates, August appeared to be one long back to school month.  Having said that, look for September to be stronger than usual, because so many schools did start earlier, allowing people to return to routine and start to think about the fall selling period.  There are many advantages to selling in the fall.  Less competition for buyers, so they have more selection, and because of the tight inventory this year, sellers should also find themselves in decent position.   There is frequently more flexibility on close of escrow time frames and an easier time getting to see those properties.  Buyers and move up sellers should not wait too long, read on for what may be in store for interest rates...

A COMMON QUESTION CURRENTLY ASKED IS, "WHAT IS HAPPENING WITH INTEREST RATES?...

This question is asked and followed immediately with the comment, "maybe I should wait for them to come back down."  The fact that interest rates have been at historic lows for so long, may cause some to forget that they have been held there artificially.  One mustn't be lulled into the common myth that after a quick hike, they will settle back down.  Although rates will remain fantastic, all agree for at least another year, 3 1/2% is likely not coming back unless you get a 10 year fixed rate loan, or buy it down through escrow.  In fact the following entities all agree rates will rise: 1)The Mortgage Bankers Association  2)Fannie Mae  3)Freddie Mac  4)National Association of Realtors.  How much?  Read on...

FANNIE MAE PUTS TOGETHER SOME PROJECTIONS FOR SALES,PRICE, AND INTEREST RATES (NATIONAL OUTLOOK)...

The following projections are for 4th quarter 2013 versus 2nd quarter 2014.

Housing Sales -- 2013 - (in thousands) 5,592 -- 2014 - (in thousands) 5,794

Prices -- 2013 - $189,000 -- 2014 - $213,000

30 Year Mortgage -- 2013 - 4.6% -- 2014 - 4.8%