Tag Archives: Orange County

Is Orange County’s Housing Market Turning A Corner?

ImagePerhaps it’s a nervous tic left from the ugly housing collapse, but considering the remarkable Orange County rebound – a surge in homebuying and pricing that literally nobody forecast – I’m perplexed as to why a mild midwinter cooling has heightened anxiety among numerous real estate pros.

Some of the supposed worry spots in the latest Orange County Housing Report by market watcher Steve Thomas don’t concern me at all. For instance, you’ll see that his estimate of the time to sell a home – new listings divided by new escrows – has doubled in a year. But the current “market time” pace of two months is still a sign of a hot market.

As for a 15 percent drop in new escrows, that just shows how last year’s ultra-tight inventory forced many shoppers to act quickly – perhaps foolishly, in hindsight – as they feared missing out on a quickly warming market.

A 67 percent increase in Orange County inventory for sale also isn’t a huge concern to me. It’s actually to be expected when home supply a year ago was essentially nil. Homes to buy were so rare that they were selling as soon, if not before, they hit brokers’ listing services. And a growing supply can actually lure shoppers back to the game. Many frustrated home seekers stopped looking after numerous failures in multiple-bidding wars.

What does worry me some about our move toward more “normal” homebuying conditions is this:

• Orange County homes on the market, as of Feb. 27, were 5,403 – up 2,166 in a year.

• Vacant homes on the Orange County market, typically a marker for sales by a third-party owner or a motivated seller, were 29 percent of all listings this month versus 14 percent a year ago. What could explain the year’s roughly 1,000-residence jump in vacant homes for sale?

• Don’t blame the lenders. Troubled Orange County properties for sale – foreclosures from banks or short sales requiring bank approval – were just 255 at the end of last month. That’s 19 less than a year ago.

• About half of the surge in the supply of Orange County homes for sale is linked to vacant homes not tied to lending issues.

Add that up, and it’s a clear sign that investors, many of whom bought Orange County homes at a deeply discounted prices in recent years, are ready to cash in.

The Orange County real estate agents that analyst Thomas talks to say higher asking prices have put off many local house shoppers. That helps explain the recent slowdown in deal-making.

Sellers were getting away with pricing homes above recent comparable sales, Thomas says. “But buyers no longer want to pay more than what’s fair.”

Thomas adds that this surge in investor listings is more evidence that last year’s jump in prices was a bit overdone, “and says that there’s not a lot of appreciation left.”

To be fair, investor actions should not be seen instantly as a market problem. For example, their buying fever help propel the Orange County recovery to an unforeseen velocity last year.

But an investor rush to cash out might pose a significant hurdle for the market’s progress. If demand remains sluggish, will these owners discount their asking prices to prune their holdings, thus quickening an expected cooling of the appreciation pace?

Even if these absentee owners do sell, what do they do with their profits?

If those dollars leave real estate, or the region, the market doesn’t get the “move up” benefit of a typical homeowner sale – that is, a seller then turns into a new buyer.

Forget eyeballing the Federal Reserve or mortgage rates; any increase in borrowing costs will be offset by lenders’ increased willingness to lend. Don’t worry about the local job market, another creator of new house seekers. It will do swell in 2014.

Keep an eye on what the savvy investors who got in low will do next. If they exert great selling pressure, it could be a losing scenario for Orange County housing.

Contact the writer: 949-777-6727 or

Contact the writer: jlansner@ocregister.com

California Home Values Up 19.7% in 2013


Home prices made double-digit gains in 2013, posting the highest annual rate of increase since 2005, according to CoreLogic’s latest housing report, released Tuesday. Ten states and the District of Columbia reached new all-time price peaks last year.

“We expect the rising prices to attract more sellers, unlocking this pent-up supply, which will have a moderating effect on prices in 2014,” says Mark Fleming, chief economist for CoreLogic.

CoreLogic’s latest report echoed an earlier report from the National Association of REALTORS® that showed a strong gain in home prices in 2013. The median sales price for all of 2013 was $197,100 in December, 11.5 percent above the 2012 median price, according to the National Association of REALTORS®’ December existing-home sales report.

But CoreLogic’s report showed that home prices have eased slightly the last three months. Home prices dropped by 0.1 percent from November to December, and the year-over-year price increase has slowed, the report says. CoreLogic’s report does not adjust for seasonal patterns.

Nevertheless, “the healthy and broad-based gains in home prices in 2013 help set the stage for the continued recovery in the housing sector in 2014,” says Anand Nallathambi, president and CEO of CoreLogic. “After six years of fits and starts, we can now see a clearer path to a durable recovery in single-family residential housing across most of the U.S.”

The following states had the highest home-price appreciation, including distressed sales, according to CoreLogic:

  • Nevada: 23.9%
  • California: 19.7%
  • Michigan: 14%
  • Oregon: 13.7%
  • Georgia: 12.8%

For more information on home values in your specific neighborhood or to get your home’s value click here

Source = Realtor Magazine

Rising Prices Urge Move Up Buyers To Consider Selling Now

Real estate is always a game of knowing when to make your move.


With that in mind, industry experts suggest move-up buyers remain mindful of how quickly home prices appreciate while riding the current market recovery.

For move-up buyers wanting to wait out rising home prices to ensure they can sell their current home at a maximum price, analysts say the value of such a move depends on when the homeowner purchased their current residence.

Daren Blomquist, vice president of RealtyTrac, says homeowners who purchased during the down market of the last two or three years would be wise to move up in 2013.

“Because they bought near the bottom, these homeowners should have built up some good equity that can go toward the purchase of a new home, and waiting longer to build more equity likely won’t provide much advantage given that other homes that they might want to move up to will also be appreciating at roughly the same pace,” said Blomquist.

He added, “In addition, the low interest rates of 2013 are certainly not guaranteed to last forever.”

According to data from the Mortgage Bankers Association, mortgage rates are expected to reach 4.4% in the next 12 months and the 20-year average could possibly hit as high as 6.5%.

Real estate broker Redfin says this is precisely the reason why some homeowners wanting to sell their current home in lieu of finding a nicer one should not wait.

While waiting a few years will most likely mean the selling price of the current home will be higher, it also means the price of the new home will rise as well.

“If you’re selling one house just to move up to another, it does you no good to wait for prices to rise — the price of the move-up home will increase faster than the price of the place you’re leaving behind,” said Redfin CEO Glenn Kelman.

With that being said, Blomquist warns potential homebuyers against rushing to buy a home once they have sold their current home.

According to RealtyTrac data, more foreclosure inventory will become available in the next six to 12 months in markets with rebounding foreclosure activity in 2012. Markets such as Florida, Illinois, Ohio, Pennsylvania, New York and New Jersy will see the strongest growth in foreclosure inventory, according to RealtyTrac.

“Particularly in these markets it might be good for the move-up buyers to sell in the spring when inventories are still tight, rent or stay with family for a few months, and then buy in the fall when that additional foreclosure inventory is listed for sale,” said Blomquist.

However, for homeowners who purchased near the peak of the housing market — in the past five to seven years — it’s probably better to wait for home prices to rise further before they sell and move up, Blomquist advises.

“If these folks need to move because of a job or other reason, it is worth considering renting out the property in the short term to take advantage of the strong rental market,” said Blomquist.

Source = Housing Wire

Choosing a Short Sale Realtor

Choosing a Realtor to work with when contemplating a short sale can be a daunting task. There is so much information (and mis-information) out there it’s hard to know who to trust and what to think. Here are a few key points and questions to ask when interviewing Realtors for help.


What is a short sale and do I have other options?

  • This is a big one! If someone is pushing a short sale on you without knowing all the facts and what your needs are he/she may not be the best choice.
  • The options really depend on many factors. Your current situation will typically dictate which path to take. MakingHomeAffordable.gov is a good place to start looking. For more information Click Here
  • A short sale is a sale of real estate in which the proceeds from selling the property will fall short of the balance of debts secured by liens against the property, and the property owner cannot afford to repay the liens’ full amounts, and whereby the lien holders agree to release their lien on the real estate and accept less than the amount owed on the debt.Any unpaid balance owed to the creditors is known as a deficiency.


Are there tax consequences when short selling a property?

  • When a lender approves a short sale they are forgiving debt. The IRS sees forgiven debt as income. HR 3648 is one exemption but it’s not a blank check. It has helped many people avoid tax liability after a short sale. For more information Click Here
  • It’s imperative you know this upfront so you can prepare in advance and consult with a tax advisor that understands the current tax code pertaining to short sales and debt forgiveness. We can refer you to an excellent tax advisor who specializes in minimizing tax liability for homeowners contemplating a short sale.


Can the lender legally pursue a homeowner if the proceeds from the short sale do not pay off the mortgage in full (deficiency judgment)?

  • No, not in California. In July of 2011 Senate Bill 458 was approved by our Governor. It prohibits a deficiency judgment under a note secured by a first deed of trust for a dwelling of not more than 4 units in any case in which the trustor or mortgagor sells the dwelling for less than the remaining amount of the indebtedness due at the time of sale with the written consent of the holder of the deed of trust or mortgage. For more information Click Here

What is the deal with all these banks paying owners $2,500-$35,000 in relocation assistance at the close of the short sale?

  • Not every bank participates in these programs but it is imperative you have a Realtor that at least knows this money is available. Through HAFA (Home Affordable Foreclosure Alternative) and some of the proprietary short sale programs some banks are offering qualified homeowners thousands of dollars in relocation assistance when a short sale successfully closes. For more information Click Here


Does it matter if the current loan(s) were used to purchase the property or if I refinanced and cashed-out?

  • Every situation is unique. It’s imperative that you speak with a tax advisor and possibly even a real estate attorney in detail about your specific situation. If your current loan(s) was used to purchase the property it’s considered non-recourse debt by the IRS. Meaning you may not be personally liable. However, if the loan(s) was refinanced the loan becomes recourse and you may be personally liable. For more information on recourse and non-recourse debt Click Here.
  • As mentioned above it is IMPERATIVE that you consult with a tax advisor and real estate attorney on your options.


We would be happy to meet in person or speak on the phone in more detail about all of your options…not just short sale. We understand it’s hard to know who to trust. We want to earn that trust one conversation at a time.


Dustin Wise – Realtor

“The Wise Team”

Keller Williams Realty

(714)698-9473 cell/text



*We are not tax specialists or attorneys. This information is not meant to be used as legal or tax advice. Please consult with a licensed tax specialist and/or attorney. 

Payments Based on Interest Rates

Payments Based on Interest Rates

Lately there has been much speculation based on interest rates and home prices. The questions being how low will interest rates go and will home prices keep appreciating? More importantly will a jump in interest rates cause home prices to drop?!

This chart shows that a modest 1% jump in interest rates could reduce a buyers purchasing power by almost 10%.

To put those numbers into reality lets look at the following example. A mortgage payment on a $400,000 loan at 4.0% today costs $1910 per month. If that same home buyer wanted to keep their budget similar and rates rose to 5.0% they would be looking closer to a $360,000 purchase price.

No one knows what the future holds but if it makes sense for you to buy today we would be glad to speak in more detail!

The Wise Team