point that some houses are not reaching the MLS listings, which is in keeping with what the Larsens have experienced in Northern California. According to this agent, there are some exceptions. Properties that are located in highly desirable areas--close to work centers and generally within commuting distance of urban areas--are selling for higher prices than similar properties located in outlying areas. In Southern California, this is the situation between Orange County and the Inland Empire, for example, or between the San Fernando Valley and Santa Clarita (Wood, personal interview, 1 Apr 2004).
When most homebuyers consider purchasing a new residence, they take into account not only the purchase price of the home, but the cost of the mortgage, as well. Interest rates have been low over the past several years, with mortgage interest rates as low as they have been for decades. This makes the monthly payment for homes lower than when interest rates creep higher; a one percent increase in the interest rate
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