Tag Archives: Selling

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

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Home Sellers – Is Now The Time To Sell?!

Rising Prices Chip Away at Housing Affordability

Strong year-over-year price gains are starting to take a bite into housing affordability, particularly in the West, according to the National Association of REALTORS®’ latest quarterly report.

The median single-family home price rose in 73 percent of the markets, or 119 out of 164 metro areas, in the fourth quarter of 2013, with 26 percent, or 42 of those metros, posting double-digit gains.

“The vast majority of home owners have seen significant gains in equity over the past two years, which is helping the economy through increased consumer spending,” says Lawrence Yun, NAR’s chief economist. “At the same time, home prices have been rising faster than incomes, while mortgage interest rates are above the record lows of a year ago. This is beginning to hamper housing affordability.”

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The national median existing single-family home price in the fourth quarter was $196,900, up 10.1 percent from $178,900 one year earlier.

NAR’s Housing Affordability Index, calculated on the relationship between median home prices, median family incomes, and the average effective mortgage interest rate, dropped to 175.8 in 2013 from a record high of 196.5 in 2012. The higher the index, the stronger household purchasing power is, according to NAR.

Yun says tight inventories have accounted for most of the double-digit price growth. The average supply of homes for sale in the fourth quarter was 4.9 months – an improvement over the 4.8 months a year ago, but still not what most economists consider healthy of a 6 to 6.5 month supply. Yun says that new home activity needs to increase in fast appreciating markets to help relieve the upward pressure on home prices.

“Added housing supply will help moderate price growth this year, and should help to stem erosion in affordability, but mortgage interest rates are projected to rise above 5 percent by the end of the year,” Yun says.

The five priciest housing markets in the fourth quarter were:

  • San Jose, Calif.: $775,000
  • San Francisco: $682,400
  • Honolulu: $670,800
  • Anaheim-Santa Ana, Calif.: $666,300
  • San Diego: $476,800

On the other hand, according to NAR’s report, the following metro areas had the best housing affordability conditions in 2013:

1.    Toledo, Ohio
2.    Rockford, Ill.
3.    Decatur, Ill.
4.    Lansing-East Lansing, Mich.
5.    Springfield, Ill.

Source = Realtor Magazine

11 Reasons to List Your Home During the Holidays

1. People who look for a home during the Holidays are more serious buyers!
2. Serious buyers have fewer houses to choose from during the Holidays and less competition means more money for you!
3. Since the supply of listings will dramatically increase in January, there will be less demand for your particular home! Less demand means less money for you!
4. Houses show better when decorated for the Holidays!
5. Buyers are more emotional during the Holidays, so they are more likely to pay your price!
6. Buyers have more time to look for a home during the Holidays than they do during a working week!
7. Some people must buy before the end of the year for tax reasons!
8. January is traditionally the month for employees to begin new jobs. Since transferees cannot wait until Spring to buy, you must be on the market now to capture that market!
9. You can still be on the market, but you have the option to restrict showings during the six or seven days during the Holidays!
10. You can sell now for more money and we will provide for a delayed closing or extended occupancy until early next year!
11. By selling now, you may have an opportunity to be a non-contingent buyer during the Spring, when many more houses are on the market. This may allow you to sell high and buy low!

Sold Home For Sale

Dustin Wise “The Wise Team”

Keller Williams Realty

http://www.ILoveSoCalHomes.com

Dustin@TheWiseTeamOC.com

(714)875-3667 call/text

Lic # 01520106

 

Contributed by:

Lance Indes – Prominent Escrow Services

3 Pointed Drive

Brea, CA 92821

(714) 494-2700

Rising Prices Urge Move Up Buyers To Consider Selling Now

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

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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

Inventory of Homes For Sale Lowest Since 1999

The National Association of Realtors reported inventory of homes for sale decreased to 1.74 million units in January 2013, down from 1.83 million in December. This is down 25.3% from January 2012, and down 19% from the inventory level in January 2005(mid-2005 was when inventory started increasing sharply). This is the lowest level of inventory since December 1999.
 
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What does this mean for buyers and sellers?

Many buyers have entered the market due to historically low interest rates and low down payment requirements. Often times this means that buying a home is less expensive than renting in many cities. The sheer demand combined with the lack of inventory has driven prices up and caused multiple offers on just about every house on the market. 

Sellers are once again in the drivers seat due to low inventory levels and are often able to dictate their terms, price and choose the offer they feel is the best out of the multiple they receive.
 
Whether you are a buyer or seller feel free to call us today to discuss your real estate options and we can put a personalized plan together for your specific needs. No obligation, just information! 
 
The Wise Team
(714)698-9473 call/text
Dustin@TheWiseTeamOC.com 

Can Your Neighbor Effect Your Appraisal?

Can Your Neighbor Effect Your Appraisal?

You may be able to ignore the knee-high grass in your neighbor’s yard, but a home appraiser won’t.
 
When calculating the value of a property, an appraiser also factors in surrounding conditions. Neighborhood nuisances like an overgrown yard or a persistent odor could in some cases bring down the value of adjacent homes by 5 to 10 percent, said Richard L. Borges II, the president of the Appraisal Institute.

What a homeowner might refer to as a bad neighbor, the appraisal industry calls “external obsolescence” — depreciation caused by factors off the property and beyond the homeowner’s control.

“There are a number of different things that can be going on, from a nasty, cranky neighbor to a sloppy neighbor to lots of barking dogs,” said Diane Saatchi, a real estate broker at Saunders & Associates in Bridgehampton, N.Y.

Some issues are not always apparent, “and you can kind of get away with them,” she said. But an obvious eyesore like a yard cluttered with old boats may be enough to prevent a neighboring property from selling.

Of course, the perception of what’s unsightly varies by neighborhood. The old boats are more likely to be problematic in the Hamptons than in less luxurious coastal communities. It’s possible that even a roof covered with large solar panels might be considered obtrusive in some areas, though the impact on nearby homes would be far less negative than if the property was run-down, Mr. Borges said.

“It’s very much case by case,” he added. “This is why the appraiser should be geographically competent, with a knowledge of how significant the external factors are in that particular market segment and on that particular property.”

Not all nuisances noticed by an appraiser are quantifiable, either. “I’ve never seen a location adjustment because of barking dogs or loud teenagers,” said Richard J. Ward, a certified residential appraiser who works in central and northern New Jersey. “The appraiser has to be able to provide some sort of evidence for that adjustment. The lender requires that we provide them with a comparable property with a similar external obsolescence.”

The external factors that Mr. Ward deals with most frequently have to do with proximity to infrastructure — power lines, commuter rails, highways. But over the last five years, he said, “the ‘bad neighbors’ have tended to be lenders or government agencies that have foreclosed on a property but haven’t maintained it that well.”

Some next-door annoyances may potentially be mitigated with help from the local municipality. Unregistered vehicles in a yard, for instance, or a chicken coop and thumping late-night music, may violate local ordinances.

Then again, what a neighbor finds objectionable may be perfectly legal under local zoning. Mr. Borges, who lives in Indiana, gave the example of a homeowner in a subdivision there who caused a commotion by building a long but officially permitted garage to house a recreational vehicle.

In a co-op or a condominium, noted Neil Garfinkel, a real estate lawyer in Manhattan, house rules are likely to prohibit habits that interfere with neighbors’ quiet enjoyment of their property. In his experience, the habits that most frequently cause disputes in such close surroundings have to do with noise, smoking and other odors.

He advises approaching a neighbor directly before making a complaint to a board. An official complaint can backfire if the complainer later puts his unit on the market. A potential buyer might very well review the board’s meeting minutes — Mr. Garfinkel does this routinely when representing buyers — then learn of the offending neighbor and reconsider.