From today’s U-T on the underwatered:
In the meantime, many owners refinanced when interest rates hit historic lows earlier this year, and others with problem loans will increasingly work out solutions with their lenders, said David Cabot, who oversees Prudential California Realty offices throughout Southern California.
“Most people, if they still have a job — and 88 percent do — and can afford to make the payment .?.?. aren’t going to move” just because their home has lost value, he said.
Cabot added that if they do, countless investors are standing in the wings to pick up the heavily discounted properties.
“We have lists and lists of people that, if we could give them 100 short sales, they would buy them all with cash,” he said.
David and I go back to the 1980s when we worked in the same office, and we’re on friendly terms. But even if I didn’t know him, I’d back him up on his quote in bold, at least to his point of there being a lot of big money in play.
We’ve seen it all year that today’s buyers are using all-cash, or big down payments to fund their purchases. Here is a summary of the down payment amounts used by the 73 buyers who bought a house in Carlsbad or Carmel Valley since August 1, 2009:
|DP Amt.||# of Buyers|
Almost half of the buyers used a down payment of 30% or more, which I think most people would consider a well-capitalized purchase, and hopefully a sign of people planning to stay a while. If it continues, it would bring real stability to the market, once we get cleared out.
The all-cash buyers bought houses for $245,000, $525,000, $1.4, $1.75, and $2.3. There were nine FHA loans.