home selling

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.

The hottest segment of the Orange County housing market is also plagued by ridiculous pricing

Short Sale PricingThe expected market time for short sales is down to 13 days.

Buyers are still climbing into the cars of REALTORS® for the first time with high hopes of getting a “deal.”  As they experience the caravan of cars touring the few homes that pop onto the market in a given week and have to wait at the door of a home to allow the buyer in front of them to finish looking around, buyers are quickly brought up to speed: they are NOT in charge.  It is no longer a buyer’s market, quite the opposite.  Unbelievable competition, multiple offers, offers at or above the asking price, this is the new Orange County housing market reality, a seller’s market. 

Only 6% of all home sales in September were foreclosures, lows not seen since the beginning of the onslaught of foreclosed homes back in 2007.  The number of foreclosures coming on the market is dwindling.  Currently there are only 138 on the active market today.  There just are not enough foreclosures to go around.  For September, the average foreclosure sold for 2% above the asking price.  Below $500,000, the average sold 3% above the list price.  This segment of the housing market is as hot as molten lava.

It is no wonder that buyers looking for a “deal” have veered their attention to short sales.  Even though the short sale process still can take months before closing, there is no other segment of the housing market to find a deal, given the anemic inventory level and pent up buyer demand. There are only 425 short sales on the active market today.  The short sale inventory has been dropping like a rock, faster than any other segment of the OC housing market.  It has dropped 43% since July compared to 23% for the market as a whole and 25% for foreclosures.

For September, short sales, on average, sold 2% below their asking price for all price ranges and at a 1% reduction for homes priced below $500,000.  Incredibly, the expected market time for short sales is a mere 13 days.  Comparatively, the foreclosure inventory is at 21 days and the entire market is at 39 days.  Short sales are the hottest segment of the Orange County housing market.

Given that there are barely 425 on the market and 969 new pending sales within the last month, buyers are tripping over each other in lining up to buy them.  When supply is low and demand is high, these homes should be selling for very close to their market value and should not be subject to major discounting.  It does not matter that short sales take an unknown lengthy amount of time to close due to lender approval requirements and the complexity in closing them.  There simply are not enough short sales to satiate the ferocious appetite of buyers eager to be the winning bidder of a home.

If short sales are the hottest segment, then why are they selling below their asking price?  Short sales are selling for less than their asking prices because sellers are not emotionally tied to the price.  A seller with equity cares about every dollar that they walk away with; whereas, the short sale seller is attempting to market their home for less than what is owed.  They are not going to hold out for an additional $5,000 when they are still going to walk away with nothing.  On the other hand, an additional $5,000 to the homeowner with equity is an extra $5,000 in their bank account.  The short sale seller is not motivated by the amount of money they will net; they are motivated to get out from under their upside down home.

Memo to all short sale sellers:  do the housing market a big favor in helping it heal faster, price your home according to the fair market value.  In the end, you will still achieve your objective in selling, but you will also help your neighbors in strengthening the value of their homes as well.

 Many REALTORS® used to price a short sale listing below the market value, knowing that the chance of the initial buyer sticking with the long process was slim.  It would then require a new buyer to enter the fray several months down the road.  When values were dropping, if they submitted too high of a value initially, inserting a new buyer at that higher value months later proved to be impossible.  The banks expected a similarly priced offer to be resubmitted, an impossible fete given that values had dropped during the lengthy process.  To circumvent not being able to sell down the road, short sales were often sold well below their market value to insure successfully closing even with a replacement buyer.

As values are now rising and demand is scorching hot, it is time to sell short sales very close to their fair market value and be a part of the housing market recovery.  Neighborhoods are counting on short sale homes to do the right thing.

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

FREE $500 Gift Certificate Toward Escrow or Moving Costs

By now if you live in the City of Lake Forest, you should have received a Shop and Dine Passport with coupons for deals all across the city.  I have a Real Estate coupon in the book for a $500 certificate toward escrow or moving costs.  

If you would like the certificate (and a valuable stamp in your  “passport”) this is all you have to do:

1) View one of these four short videos and comment on what you like best about my real estate methods.

Selling SFRS for Top Dollar in One Day

Selling Condos for Top Dollar in One Day

Client Testimonial

Lake Forest Community Video

 

2) Email me at Jenean@JeneanHill.com and give me your name, address and phone number so I can get you your $500 certificate (which will be good for the next year).

3) For an added bonus, “like” me on my Facebook business page, Jenean Hill’s “Live in Lake Forest” and you will receive a Starbucks gift card, and if you share me with your friends, I will put you in this month’s drawing for 2 SeaWorld Tickets.

Thanks, and I look forward to serving you in the future.

Jenean Hill  – (949) 583-1331
Broker Associate, First Team Real Estate
Director, Orange County Association of Realtors, 2006-2011, 2013-2015
Lic# 01312003

NOT ON MLS: Laguna Niguel SFR w/ wrap-around grassy yard and ocean view DEAL!

Stunning, 3-bedroom, 3-bathroom, end-of-cul-de-sac hilltop home on a large grassy wrap-around 6,300SF+ lot in the heart of Laguna Niguel. Beautiful peak-a-boo ocean and surrounding hills views. Walking distance to award-winning elementary school, shops, theaters and restaurants. Formal living dining room with vaulted ceilings. Eat-in kitchen/great room has marble fireplace. Inside laundry. Master has walk-in closet and oval tub with separate shower. Upgrades include NEW… appliances, custom 2″ white wood window blinds, two-tone decorator paint, neutral carpeting & travertine-like tile. Even the garage is squeaky clean! This home and location are to die for and may even sell before it hits the MLS. This is a standard Equity Sale. The estate wants it sold NOW.

The plan is for it to come on the market in late August after residents have moved out. The price has not been set yet, but it is safe to say that it will be in the mid to upper 500K’s. If you don’t have an agent working hard for you and would like to talk to me about what we can do now to put you in a good position to beat the competition on this home, call me at (949) 583-1331

For more photos, click here

How the Serenity Prayer Applies To Selling a Home

You may believe that selling your home is impossible in today’s market. You may feel powerless to the process. What could YOU possibly do to turn this housing market around? There is no doubt that today’s real estate market is extremely difficult to navigate. However, we want you to know that thousands of homes sold yesterday, thousands will sell today and thousands will sell each and every day from now until the end of the year.

It is totally within your power to guarantee that your house will sell even in the current market.

“How?”, you ask. Let’s look at the simplicity of the famous Serenity Prayer and apply it to selling a home in today’s real estate market.

“Grant me the serenity to accept the things I cannot change; courage to change the things I can; and wisdom to know the difference.”

Accept the things you cannot change

The two main reasons that the housing prices have softened:

http://www.kcmblog.com/2012/02/22/how-the-serenity-prayer-applies-to-selling-a-house/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+KeepingCurrentMatters+%28The+KCM+Blog%29

Moving to Lake Forest, Mission Viejo or Saddleback Valley, Orange County? Here is “What Not to Pack”

If you’ve known anyone who has moved, you have probably heard nightmare stories regarding moving companies – Losing things, taking things, damaging things, charging more than they quoted if you want them to remove the items from the truck to your new home.  After all of the above happened to my family members in their Lake Forest, Orange County and San Diego moves, I learned of a mover who is an affiliate member of the Orange County Association of Realtors.  I met with him and could tell he was a man of integrity.  Rich has now been moving my clients for over a half a decade.  My clients really appreciate his honest service.  If you would like to hear more about them,  just give me a call or click on http://www.themovingdepot.net/

When you’re packing up your belongings for moving day, sometimes it’s best to leave it to the professionals – or leave it behind entirely. These moving/packing tips will help you discern what not to pack.

Items that Require Disassembly or Special Packaging
Items requiring professional disassembly and/or crating (such as slate pool tables, chandeliers, or large glass table tops) are best left to the professionals.

Heat-Sensitive Items
Do not pack heat-sensitive items like candles, CDs, computer peripherals, etc. If you must take these items to your new home, bring them with you in your climate-controlled car or truck.

Irreplaceable Papers and Objects – Read on:
http://rismedia.com/lowes/8355/8568

The “YOU GET WHAT YOU PAY FOR” Real Estate Company

I spoke to a homeowner recently who told me that another agent was willing to list their home for a total of 4%.  I explained that that agent had nothing to offer other than their inability to stand up for the right price for themselves AS WELL AS their client’s home’s value.  I tried to imagine that agent’s ability (or lack thereof) to market the home with professional looking photos that would generate 400 open house guests vying for the property and 48 offers in 48 hours with a sales price 24% over the last model match.  I went to the MLS to see if I could find this cluelesss real estate agent.  I am pretty sure that I found them and here is the one photo (blue bed) included in their listing!

Oak Canyon Ellsworth Bed from right 1

The proactive seller that grasped the new rules of real estate and sold their home for significantly more than it was worth.

Bed in Unstaged Home

The seller that listed with the bargain basement agent and sold their home for less than it was worth

 

Real Estate Year at a Glance

Condo graphic for newsletter

A homeowner in my Lake Forest Tierra Vista condominium community asked me to come over and talk to him about the idea of selling his condo and purchasing a single family residence.  I spent about 20 hours putting together all of the data to give them the most accurate picture of the market so they could make a very well-informed decision.  This first chart shows what has happened in 2009 to the condo market I their area.  Inventory declined by 64%.  That is indicated by the green bars.  Buying activity (red bars) remained constant until October.  I placed a red circle over the months that the first $8,000 Federal Tax Program was in effect.  What is interesting to note is that buying activity did NOT increase in this segment of the market place.  It would be natural to wonder what the Realtors and Media were talking about.  Here is my analysis.  During these summer months there was only about a 2-3 month inventory of condos.  That is considered a seller’s market. It would have been normal for sales activity to have decreased simply because there was not enough attractive homes to meet the demand.  Instead of dropping, the $8K program caused buyers to buy up the less desirable homes and keep the buying activity steady.  There was also something that was going on.  Look at the chart and analysis below:  

SFR graphic for newsletter

This chart represents the activity of entry level single family residences during this same period of time.  Can you see what happened ruing the summer months?  Stead buying activity increased during the same months of the first Federal Tax Credit program.  What happened is that not only did condo owners move up to single family residences, but renters were able to skip the condo stage altogether and move right into a single family residence.  There is now less than a 2 month inventory of single family residences under $500,000.

 What does this mean?  Low inventory has moved entry level SFR pricing upwards.  It may not be as easy for a renter to move straight into a SFR.  I anticipate that condo prices will continue to climb as they will be the best options for first time buyers.  We all know that the end-of-the-falling-market bell rang earlier this year.  If you are extremely happy where you are and can live there for an indefinite period of time, I recommend that you enjoy your home.  What a great place to be. On the other hand, if you know that you want to be in a new housing scenario sometime in the next few years, it is imperative that you get on track immediately so that you can get in just after year that home prices turned back around.

The new government standardized short-sale plan could help troubled homeowners

Help ButtonThe U.S. Dept. of the Treasury recently announced the Home Affordable Foreclosure Alternatives Program (HAFA), which provides instructions for lenders and servicers participating in the Making Home Affordable Program and Home Affordable Modification Program (HAMP).  The purpose of HAFA is to create an alternative to foreclosures for homeowners unable to successfully modify their troubled mortgage under HAMP, and to streamline the short-sale process.

MAKING SENSE OF THE STORY:

  • A short sale is when the lender agrees to accept less than the amount owed on the mortgage instead of foreclosing.  Many homeowners and REALTORS® have expressed their frustrations in the short-sale process, criticizing lenders for the amount of time it takes to process and approve a short sale.  The CALIFORNIA ASSOCIATION OF REALTORS® listened to members’ concerns, worked with other industry groups, and responded by helping to create provisions to streamline the short-sale process.
  • The HAFA program simplifies and encourages short sales and deeds in lieu of foreclosure.  It will permit pre-approved short sale terms before a property is listed; release borrowers from future liability for the debt; and provide financial incentives to borrowers, servicers, and investors.
  •  Under terms of the program, the borrower and/or listing broker have three business days to submit an executed purchase offer and related documents to the servicer on a short sale, and the servicer has 10 business days to respond to an executed purchase offer.
  • The servicer also will determine the minimum net proceeds for a short sale.  If an offer presented to the servicer by the borrower or listing broker meets the net proceeds requirement, then the servicer must accept it.

The program currently is available only for non-Fannie Mae- or Freddie Mac-owned loans up to $729,750 and is scheduled to take effect April 5, 2010.  However, the California Association of Realtors expects that many lenders will choose to implement it before the deadline.

 What this means is that sellers will have less scary ‘unknowns’ during the short sale process and no future liability.  It will also give buyers more hope that their short sale purchase transactions will go more smoothly and they will be in their home sooner.

If you, like so many others have experienced a hardship this year and need to sell your home, please give me a call at (949) 583-1331.  I have a system that takes some of  the pain out of short sales whether you are occupying it or if it is a rental.