HIGH END HOUSING UPDATE

Million-dollar home sales plummet in Golden State
February 3, 2009

California million-dollar home sales plunged last year to their lowest level in five years, the result of a bone-dry mortgage market for prestige-home financing, as well as a decline in the value of many homes just over the million-dollar threshold, a real estate information service reported.

A total of 24,436 Golden State homes sold for a million dollars or more last year. That was down 42.5 percent from 42,506 in 2007. It was the lowest sales count since 20,595 were sold in 2003. In 2006 the $1 million-plus total was 50,010, in 2005 it was 54,773, and in 2004 it was 36,990, according to MDA DataQuick.

Total California home sales - including all price levels - increased 2.5 percent last year, to 393,703 from 383,748 in 2007. Of last year's sub-$1 million sales, at least 2,052 homes had previously sold for more than a million. One in sixteen homes sold for a million dollars or more last year; the year before it was one in nine.

"Discretionary spending in the housing market has pretty much been on hold the past fifteen months. The core of last year's distress was clearly in affordable areas that had a lot of turnover in 2005 and 2006. That distress could migrate up the price ladder if this recession proves nasty for high-income households," said John Walsh, DataQuick president. "A lot of home sales in the upper half of the market have been on hold for months, waiting for financing," he said.
While the number of home purchase mortgages below the old $417,000 conforming limit increased by 21 percent last year, the number above decreased by 51 percent, DataQuick reported.

Statewide, there were 608 sales for more than $5 million last year, 386 sales were in the $4-$5 million range, 963 in the $3 million range, 2,899 sales in the $2 million range, and the rest between $1 million and $2 million. The 608 sales for more than $5 million was a record high, up 7.6 percent from 565 in 2007.

The most expensive confirmed purchase was a 11,407 square-foot 6-bedroom, 10-bathroom Bel Air house built in 1926 which went for $38,000,000 in October. The largest home was a 4-bedroom, 8-bathroom 20,000 square-foot house in Corona Del Mar in Orange County. The sales price was unavailable, but the April purchase was financed with a $17.6 million mortgage.

Most $1 million-plus condos were sold in San Diego, Los Angeles and San Francisco.

The median-sized million-dollar home was 2,494 sq.ft. with 4 bedrooms and 3 bathrooms. The median price per square-foot for all million-dollar homes was $569, down 3.3 percent from $588 in 2007.

Around 24 percent of the $1 million-plus buyers paid cash, up from 14 percent in 2007. In the over-$5 million category, more than half of the purchases were cash. Of those who did finance their purchase, the median down payment was 30 percent of the purchase price. Lending institutions most willing to provide mortgage financing were Wells Fargo, Bank of America and Union Bank.

Area Number Sold 2007 Number Sold 2008
90210 Beverly Hills 275, 192
90049 Brentwood 332, 219
90272 Pacific Palisades 303, 214

Inspiring The Nation Would Help-by Connie

CONFIDENCE IS DIFFICULT TO FIX BECAUSE IT IS EMOTIONAL. IF PRESIDENT OBAMA WERE TO AGAIN FOCUS ON INSPIRING THIS NATION, IT MAY CAUSE SOME TO MOVE FORWARD AND INVEST -AND THAT COULD GO A LONG WAY TO HELP THIS STRUGGLING ECONOMY AND HOUSING.

As an citizen of this country, I wanted to share my thoughts:
This is a nation that believes in and supports the power of the INDIVIDUAL to change his or her life, cause change in this nation or influence the world.

President Obama, long before he said to the country “Yes We Can” he probably said to himself- “Yes I Can”. If he can become President of this great nation, then perhaps more of us can find ways to meet our needs and even surpass our goals.

We always have the power to change if we believe that we can.

Let's not forget that this country has always offerred people hope for a better life. And people keep coming to this country because of the unlimited opportunity that exists to those who are willing to work hard. When we start to change our basic principals we will change the ultimate potential our market can offer.

By the way, I lived in Europe for approximately 7 years and although I enjoyed the experience, I would never replace our system with anything I experienced anywhere in the world.

Fed Chairman Bernanke Testifies on TARP Performance and Credit Turmoil

Written by: Ken Sweet FOXBusiness

In his testimony in front of the House Financial Services Committee, Federal Reserve Chairman Ben Bernanke said Tuesday that the central bank’s new lending programs have eased some of the extensive problems in the credit markets, but banks should not be expected to immediately start lending.
The testimony is part of the Congress’ inquiry into the performance of the $700 billion TARP program and sharp decrease in lending since markets froze late last year. Chief executives of major financial houses, including Goldman Sachs (GS: 94.7301, 4.1201, 4.55%), Morgan Stanley (MS: 22.94, 1.84, 8.72%), Bank of America (BAC: 6.08, 0.51, 9.16%) and Citigroup (C: 3.65, 0.25, 7.35%), will testify on Wednesday.
In his testimony, Bernanke the Federal Reserve has been “encouraged” by the response of these newly created programs, including facilities to purchase commercial paper, asset-backed securities, credit card securities and student loans, and said the programs could be expanded to additional classes of investments if warranted.
“The Federal Reserve has responded forcefully to the financial and economic crisis since its emergence in the summer of 2007,” Bernanke said.
Since the passage of the $700 billion TARP rescue program, there has been heightened criticism from both Washington and the general public that banks are not lending enough to keeps the economy going. Consumer credit levels have declined month over month, according to the Fed, and anecdotal evidence has come from small businesses that lending is not available.
Bernanke said that despite many banks’ access to these additional programs, “concerns about capital, asset quality, and credit risk continue to limit the willingness of many intermediaries to extend credit.”
Despite the banks’ alleged unwillingness to lend and the decline in the stock markets, Bernanke said that certain parts of the credit markets -- including mortgage rates and agency debt -- have improved. Money market funds have begun to see “modest inflows” since the government instituted stabilization measures in September.
Bernanke continued to emphasize that the central bank has additional tools available at its disposal now that its key lending rate is now at its “effective floor.”