• Foreclosures Banks are still holding inventory and delaying completing the foreclosure process.  There are about 60 million mortgages in the US and about 10% of them are delinquent.  We will see an active REO sales market this year. 
• Government interaction to this point has been extremely helpful in preventing an even more dramatic decline in prices.  The current government goals are to push for workouts - this includes short sales and loan modifications.  The current purchase tax break expires on April 30th (must be escrow by this date).
• Short sales (when a seller owes more than the property is worth and the lender must accept a sale to be completed) - are going to be processed faster and better.  New California law effective in April helps this. 
• Inventory   Low inventory has created a sellers market since May 2009.  The bulk of the properties for sale are short sales or foreclosures. 
• FHA loans - are the primary source of loans.  They are typically 3-1/2% down payment and require upfront reserves and mortgage insurance. 
• Interest rates - hover at the lows of the last 40 years.  Rates must stay low to stabilize housing. 
• Great values - There are many values in this market if you are patient and prepared to respond quickly when the right property comes along. 
• State of the economy the overall economy requires a stable housing market. 
• Stratigic Defaults - will be a topic many consider.  Make sure you know your options. 
  Affordability  Individuals or couples can buy a home with good credit, about $20,000+ in the bank and a combined salary in the range of $75,000 to $80,000.  

The Urban Perspective...
    
     What is it about the urban grunge that attracts people?  The grunge is not necessarily the desirable state but simply a bi-product of the diversity and density within the city streets.  I believe it is an acceptable bi-product because it is rooted in a psychosocial comfort zone. Much of the decayed man-made urban artifices tend to evoke the feeling of stripping our everyday environment down into its essential elements, and thus allowing for a freedom to feel artistic inspiration, as well as being unencumbered by all of the modern fluffy barriers that isolate people from each other in suburbia.   It somehow translates to a focus on what is inside rather than on the surface.  If things around us are real then we can be ourselves    

     The suburban ideal of living where the air is fresh and the schools are better doesnt dominate buyer patterns in LA anymore.  Two main reasons are that, Americans are marrying later and delaying parenthood.  Now, even when children arrive many are settling in for the long term and raising their small families in the urban areas. 

     Statistics show that the people moving into urban life are educated, sophisticated young professionals typically between the ages of 25 to 45.    Historically in market downturns the areas most affected are near city centers but this time around the fringes are taking a harder beating.  The desire to live in urban LA is still strongly prevalent.