bottom of the market

Housing demand in Orange County is so low that it cannot be measured

This is a continuation of yesterday’s piece on the status of the market.  The active listing inventory is muted this year because many homeowners are still underwater.  They may have good credit and a stable job, but they do not have the cash necessary to close because they are currently too far underwater.  Also, many homeowners are now sitting on the fence while they recoup their equity.  Everybody is familiar with the term “buy low, sell high.”  It appears as if the bottom of the market was reached last February and now buyers are flooding the market attempting to “buy low.”  Homeowners know it is a low, so they want to wait.  They don’t want to “sell low.”

 DemandThe lack of inventory is cutting into demand.

As discussed above, true demand is much higher than demand based upon the number of new pending sales over the prior month.  In the past two weeks, demand dropped by 470 pending sales, a 16% drop, and now totals 2,543.  Based upon the word on the street, buyers are scrambling around at anything and everything that is placed on the market right now, but there just is not enough coming on the market.  And, that will remain the case throughout the holiday market, which does not end until the second half of January, right after everybody gives up on their New Year’s resolutions.  Buyers are in a rush to buy, but homeowners are not in a rush to sell.  Instead, they are going to enjoy the holidays with the knowledge that as their homes are slowly appreciating.  Last year at this time there were 46 additional pending sales, a 2% difference.  But, there were 8,905 active listings for buyers to choose from. 

The Distressed Market: The distressed inventory dropped by only 16 homes, but that is still a 4% drop.

For buyers looking for a “deal” and looking closely at the distressed inventory, the pickings are slim.  There are only 434 total short sales and foreclosures on the market today.  Distressed homes make up only 12% of the active inventory and 34% of demand.  Last year at this time there were 3,357 distressed homes on the market, 38% of the active listing inventory and 57% of demand, much different than today.  In the past two weeks, the foreclosure inventory decreased by 12 homes, totaling 110, and has an expected market time of 18 days. The short sale inventory decreased by only 4 homes in the past two weeks and now totals 324.  The expected market time is only 14 days and continues to be one of the hottest segments of the housing market.  Both 110 active foreclosures and 324 active short sales are new lows for the year and levels not seen since the beginning of all of the distressed activity back in 2007.

Home values rise for first time in 5 years


Here’s a great CNN article I just read that does a good job spelling out what is happening in the market. Home prices hit a bottom and are finally bouncing back, according to an industry report released Tuesday. Nationwide, home values rose 0.2% year-over-year to a median $149,300 during the second quarter…

Click here to read full article

Weekly Mortgage Watch

Significant amounts of very important economic data are due this week, along with a meeting of the Federal Reserve. Mortgage rates have the potential to fluctuate, in either direction, during the course of this week. Few are expecting the Federal Reserve to make any announcement regarding any new policy direction. Most analysts are expecting the Fed to take a wait-and-see position following the recent extension of Operation Twist. If the Fed does announce a new policy, mortgage rates could be driven downward. Economic data will also influence rates this week. A few experts are expecting a bit of an economic bounce. If the data shows a measurable improvement, then rates could climb…  To read the full story and see today’s interest rates, click the link below: http://ftemerson.wordpress.com/2012/07/16/weekly-mortgage-watch-85/wmw-7-15-12/

Time to Buy or Sell Real Estate – It Couldn’t Be More Obvious!

Compelling reasons on why it’s a good time to buy from Rich Levin through BrokerAgentSocial.  In fact…It Couldn’t Be More Obvious!

Expert Advice

Two questions dominate the minds of Real Estate Buyers and Sellers. Let’s get them both answered honestly, right now.  The questions are obvious. For Buyers, “Is it a good time to buy?” For Sellers, “Is it a good time to sell?”

The billionaire investor that the brightest watch for advice, Warren Buffett, said, “I buy when people are selling and I sell when people are buying.” In Real Estate, at the moment, there are an abundance of homes for sale (people are selling) and a scarcity of Buyers. That means prices are soft which makes it an excellent time to buy for those who are able to finance the purchase of a home.

The Reporters Are Wrong

‘For those who are able to finance,’ regarding mortgage financing most news reporters have this completely wrong. Down payment requirements are still wonderfully low. Interest rates are ridiculously low.

Steve Wynn, billionaire Las Vegas casino developer recently (July 19, 2011) commented publicly that insecurities in business are causing people to not make buying decisions. This is great news for people who have the courage and good sense to make buying decisions.

Bottom line to Real Estate Buyers is to go talk to a lender or get a lender recommendation from a Real Estate Agent. Find out if you can qualify for a mortgage, if you can buy now. If you can help your son, daughter or someone you love buy now, help them now.

If I Had Only Known Then…  Read the rest of the story

http://ftemerson.wordpress.com/2011/08/23/it-couldn%e2%80%99t-be-more-obvious/

A Window of Opportunity for House Sellers

Uncertainty is the word of the hour in real estate but there are several factors  the KCM Crew lay out below that are pointing to the fact that there may be … A Window of Opportunity for House Sellers.

There has been much confusion as to where housing prices are headed. We have actually blogged on the issue recently. Today, we want to give our opinion on this subject for the short term. We believe sellers have a window of opportunity for the next 90-120 days in which to sell their homes for maximum price. We believe there will be increased downward pressure on home prices later this year and the first half of 2012.

Why renewed downward pressurehttp://ftemerson.wordpress.com/2011/06/21/a-window-of-opportunity-for-house-sellers/

This is not the only reason why selling before the summer is over may be a very smart thing to do.  Refer to the piece I wrote about the upcoming reduction in the GSE limit on September 30th.  Homes above the new price range will become harder to sell as there will be less buyers who can get financing for them.

Why 2011 May Be the End of the Housing Crash

[27LEDE]There might finally be some good news this year about the nation’s dismal housing market. Or, at least, the bad news could stop.

Either way, it will be welcome relief for current homeowners as well as for potential real-estate investors. Reasons to be optimistic have been sadly lacking since the housing bubble burst in 2006.

For sure, last week we learned the widely watched S&P/Case-Shiller home-price index fell 1% in December, its fifth straight decline. The index tracks 20 major markets.

But that figure belies real reasons to be optimistic, according to some experts. If they are right, it might make sense to jump into real estate. The trick is avoiding getting burned again, and it doesn’t necessarily mean owning a home.

First, let’s recap the economic signs a bottom is close.

Houses Are a Good Deal

Housing is the most affordable it has been in decades, according to analysts at Moody’s Analytics. They don’t just look at house prices. They also look at incomes. 

Read the rest of the story to see how many months of pay it takes to buy a house.

http://online.wsj.com/article/SB10001424052748703796504576168822497423738.html?mod=WSJ_hps_editorsPicks_3

If Your Goal Is to Buy Low, Buy Now!

As we have been pointing out for months – the market is shifting and now is the time to talk to me about running you the Market Trends in your local area so that you can make the best informed decision.  Another great post by our friends at Keeping Current Matters…

There is a very famous saying which asserts “Sell High, Buy Low”. It is obviously great advice no matter what the investment. Below is a graph showing the cycle of investments. It shows the points of maximum risk and maximum opportunity when purchasing. We want to sell high (point of maximum risk) and buy low (point of maximum opportunity).

The challenge is how to determine when we have hit bottom if you are a purchaser. The only time you can guarantee a bottom is after you pass it. 

However, there is more and more evidence that the COST of a home has in fact hit bottom. Notice we have used the word COST. Unless you are an all cash buyer, you must take into consideration the expense of financing a property to determine the true cost of purchasing the home. Interest rates have increased over the last quarter; and the rise in rates has counteracted any fall in prices.

Let’s look at an example:  http://ftemerson.wordpress.com/2011/03/01/612/

Get in while the Getting’s Good – Why Buyers and Sellers Should Take Advantage of Today’s Real Estate Market

The Case-Shiller Index is one of the country’s most popular ways of measuring the movement of home prices. And in its latest rating, which went out in late December, the verdict was: Prices are down. The Case-Shiller report’s 20-City Composite rating was 0.8% lower than it was one year previously; the first year-on-year decrease since October 2009.

In some markets, sales were the worst ever—as the report noted: “While the composite housing prices are still above their spring 2009 lows, six markets—Atlanta, Charlotte, Miami, Portland (OR), Seattle and Tampa—hit their lowest levels since home prices started to fall in 2006 and 2007, meaning that average home prices in those markets have fallen beyond the recent lows seen in most other markets in the spring of 2009.” This may make buyers complacent, expecting prices to go down further. And if you’re a seller, your immediate reaction might be to hide under the covers.

But all may not be so negative—in fact, quite the contrary…. http://rismedia.com/2011-02-15/get-in-while-the-gettings-good-why-buyers-and-sellers-should-take-advantage-of-todays-real-estate-market/

Quote of the Day:

“Is the glass half full or half empty? It depends on whether you are pouring or drinking.”

In this market, there are two glasses in front of us.  One is pretty full and one is almost empty.  The pretty full class stands for the amount of inventory available for purchase while the almost empty one represents the low home prices and low interest rates.  If you read yesterday’s post you saw how remarkably low interest rates are.  When you pair that with low home prices, homebuying is very affordable – In fact 64% of adults can now afford to purchase a home – compared with 25% a few years ago. 

As people take advantage of this buying opportunity, that action will effectively pour some of the “inventory” water into the “low price” water glass.  This will slowly raise interest rates and housing prices.  In tomorrow’s post, you will see that a 2% gain is expected in 2011.  Nothing big, but a sign that we are now just a tad past the bottom of the market.