My Mortgage Blog

This last week was rather gentle, all told. A lot of improvement in relatively subtle areas. I mean, how many of us actually check out what’s happening in Saudi Arabia in order to discern where our interest rates and gasoline prices are going? Lo and behold, though, a Saudi official recently declared that oil prices have gone too high and that, if it felt like it, Saudi Arabia could increase its oil production by 25% rather easily.

This is a bit of Saudi saber-rattling in response to recent warnings from Iran that it could make it very hard for oil shipments to get through the Straits of Hormuz. So watch out, world!

This is the your-mother-wears-combat-boots level of recent world discourse on economic problems, resulting in markets that move on rumors and smoke and mirrors, rather than on fundamentals.

In the meantime, though, Europe—which has had much recent occasion to move on rumors of the Next Big Problem for European Debt—is actually improving because the new head of the European version of the Central Bank has had the wisdom to bathe the region in liquidity (that is, to make money far more available for borrowers) and people are actually talking now about Greece continuing to be a viable country, especially now that a “managed” default has been accomplished without tearing the region apart.

It continues to amaze me that, as an observer of the movement of interest rates, I have had to become somewhat knowledgeable about distant political circuses and foreign currencies and leaders whose skills are largely unpredictable. At this point, for example, we tend to worry about what China’s increasingly hard-line approach to Tibet may mean to the future of the world economy. Sheesh.

With that in mind, it is refreshing to jump back into local real estate news and to notice that—in California, at least—the news is reasonably good. In February, the number of homes selling in Southern California, for example, increased by 8.4%. Indeed, with a little help from the Leap Year’s extra day (February 29), February’s sales were the strongest in five years. Sales were up year-to-year in the Bay Area, meanwhile, by 10.7%.

Prices were declining. A majority of the buyers were investors. The biggest increases in the number of sales were at the bottom of the price scale. In Southern California, that meant the $300,000-and-below price level.

Not, in other words, an incipient real estate boom by any means. But a gradually growing recovery is clearly at hand…and it’s worth participating in.

Remember the words, “multiple offers”? The term describes the sales taking place in much of Northern California, as those who aren’t willing to sell their homes at today’s discounted prices take them off the markets and those who are (willing to accept lower prices) end up entertaining several buyers at once, and watching their price firm a bit.

This is the way it should look in a marketplace that has been battered by a recession that refuses to go away and stay away. We can be grateful we’re not in a Depression—though Paul Krugman has argued that, in many ways, we have been for some time.

But I would add to that an argument that we’re moving out of the swamp and back to relatively solid ground. The market, though continuing to improve quite slowly, is indeed improving—going through the final steps before landing…like an airplane whose crew has just made its way through a rather horrendous storm.

The really good news: Opportunities abound in the market that has developed. Look closely!