housing prices

Grand Opening Open House this Sat., Feb. 10th

Come at noon for Outback Steakhouse Luncheon

Have you ever imagined that you could afford to live close to the scenic lakes, woods & hills of the beautiful city of Lake Forest?  Your dream has come true with this seldom on the market attractive & quiet 2-bed, 2-bath, dual master suites, ground level, end-unit, view condo in the desirable community of Tierra Vista off of Peachwood & Trabuco. The sellers are just completing a whole home contemporary remodel that will include fresh paint, wide-plank flooring, 2” white slat custom blinds, G.E. stainless steel appliances, remodeled baths including beautiful double shower & quartz/granite counters.  Anderson/French sliding doors from both masters and living room lead to a ‘grassy’, private back yard perfect for relaxing or entertaining under the drop string lighting that run from tree to tree. There is a walk-in closet in one master and a wall of closets in the other. Full-size inside laundry room w/ storage off leads to direct access garage w/ epoxy floors, storage & newer water heater. Each bedroom has its own linen closet so it is great for roommates. After a long day at work, you can relax your cares away in the nearby pool & spa. This pristine community is situated next to exquisite Serrano Park homes with walking trails, greenbelts and parks all around. Only a few miles from the Irvine Spectrum businesses, entertainment & dining venues!  A short stroll to shopping and eateries. This condo looks like a model and will blow out right after its Outback Steakhouse luncheon!

With very few homes for sale, the market is EXTREMELY challenging

Everybody is frustrated.  Buyers write offer after offer after multiple instances where they did not have the “winning bid.”  Many wonder if they will ever be able to secure a home.  Frustrating. REALTORS® representing buyers have to work ten times harder than a normal, balanced market, showing every home that appears on the market, analyzing the data and writing offers that are one of 20 submitted.  Frustrating. REALTORS representing sel- lers have to keep their clients from getting too far ahead of themselves and grossly overpricing their homes.  Frustrating.

What is going on?  Quite simply demand, the number of homes placed into escrow in the past month, is about equal to the number of homes on the market. The chart below illustrates the issue.  When supply, the housing inventory, is much larger than demand, it takes a lot longer to sell a home.  As they get further apart, it becomes much easier to purchase.  Take a look back in mid-2007 when there were close to 18,000 homes on the market with demand at about 1,200 homes.  Buyers had their choice of homes and it there was no competition.  Last year at this time, the active inventory sat at 7,597 homes and demand was at 3,569.  The lines were much closer, but the difference was still 4,028 homes.  Today, the active listing inventory sits at 3,272 homes and demand is at 2,887, that is a difference of only 385 homes. The last time this occurred in Orange County dates back to 2005.

Demand is much less today than back in 2005 when there were 4,549 pending sales in a month.  But, back then there were 5,146 homes on the market, a lot more than today.  Since demand is based upon the number of recent escrows, it is currently heavily muted because there are simply not enough homes that have entered the fray.  If there was a surge in the inventory tomorrow, there would be a surge in demand as well. There are throngs of buyers waiting in the wings for a fresh supply of homes.

This market will remain extremely frustrating until the supply of homes increases.  It appears as if that is not going to happen soon and the tight inventory will remain a major issue in 2013 and a stumbling block for many buyers to successfully purchase.  The tight inventory will also encourage homeowners to place their homes on the market and aggressively pursue the market by pricing their homes well above the last comparable pending or closed sale.  Unfortunately, many will drastically overprice their homes and they will sit on the market and procure no offers.  Buyers are willing to pay more for a home, but are not willing to absurdly overpay. 

Pricing a home is a delicate balancing act that requires a homeowner to carefully analyze the local market and the rate of appreciation.  Remember, homes may increase in value by as much as 10% in a year, but not in a month.  Carefully selecting a REALTOR® is a must.  Finding one that knows the local data and market dynamics is essential to success.  Hiring somebody solely based upon a projected sales price is foolish.  Instead, look for somebody that understands the market the best and has a strong command of the data.

Active Inventory:  The inventory remained the same.

The inventory started the year at the lowest level since tracking the active listing inventory back in 2004.  Since then the inventory has only added an additional 111 homes.  In the past two weeks it actually dropped by 4 homes and now sits at 3,272 homes.  The inventory sits at an unprecedented anemic level.  For proper perspective, just ask any buyer who has seen the few available homes and written several offers to no avail.  They will tell you how they are watching the market like a hawk, ready to pounce on the next home that hits the market that closely matches their parameters.  The only problem, when there are this few homes, too many other buyers are doing the same thing. 
So far this year, there have been 17% fewer homes placed on the market compared to last year, which represents 918 homes.  The buyer masses waiting in the wings would appreciate an additional 900-plus homes on the market.  The anemic levels are here to stay for the foreseeable future.  Last year at this time there were 7,597 homes on the market, 4,325 more than today.

Demand:  Demand continued to rise.

In the past two weeks, despite very few homes entering the market, demand increased by 11%, or 291 pending sales, and now totals 2,887.  It has grown by 33% in the past month, or 715 pending sales.  Compared to last year at this time, there are 682 fewer pending sales today.  In 2012, the market was sizzling forward at a breathtaking speed, fueled by a much larger inventory.  Today’s demand is strongly dependent on the inventory.  As soon as the inventory increases, demand will increase.  Until then, you can expect continued, subdued, muted demand.

The Distressed Market: The distressed inventory dropped by 11 homes, a 3% drop.

The distressed inventory continues to drop, shedding an additional 11 homes, which amazingly represents 3% of all foreclosures and shorts sales on the market.  There are 339 distressed homes within the active listing inventory, just 10% of the total active listing inventory.  There have not been this few distressed listings since April 2007, nearly six years ago. 

In the past two weeks, the foreclosure inventory increased by 24 homes, totaling 117, and has an expected market time of 25 days. The short sale inventory decreased by 35 homes in the past two weeks, totaling 222, and has an expected market time of 11 days.  Short sales continue to be the hottest segment of the Orange County housing market today.

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

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

Fun Fall Events coming up in Lake Forest

The new Fall Leisure Times is out!  If you are one of my Lake Forest homeowners, please check your mailboxes for this handy program guide. The new brochure includes info on new classes, fun fall events and all City recreation programs. After seeing all that Lake Forest has to offer, you may want to give me a call (if you don’t already live here) and I will help you buy a home in Lake Forest.

To view the new Leisure Times online, please click here.

Fall registration will begin on Tuesday, August 14 for all Lake Forest residents. (Non-residents can register beginning Tuesday, August 21.) Be sure to sign up for all of your favorites before they fill up

Haunt at Heritage Hill

Friday, October 19 – Dare to be scared! – Join us for our 5th Annual “Friday Night Fright”, this year from 6 to 10:30 pm. Teens 12 years and older, as well as adults, will enjoy a truly haunted adventure featuring Sleepy Hollow Scare Zone, Fright Maze, Haunted School House, and a viewing of the classic movie “Frankenstein.” Sara Karloff, daughter of Boris Karloff, will be at the event to meet her dad’s fans and give them inside info on this legendary actor. Admission is $5 per person. For the most current info on the Haunt, check out facebook.com/LFhaunt.

Autumn Harvest Festival

Saturday, October 20 – We invite you to our annual Autumn Harvest Festival, to be held again this year from 4 to 9 pm at Heritage Hill Historical Park (25151 Serrano Rd). Kids love this opportunity to show off their costumes and trick-or-treat in a safe, fun environment. We will have a glow party, Princess Pumpkin Patch, Pirate Adventure Maze, costume parade, and so much more. Admission is $4/adults, $3/children 12 and under. Certain attractions and games are an additional fee. For more info, call Community Services at (949) 461-3450.

20th Anniversary Celebration Party

Saturday, September 15 – Come and celebrate our 20th year of Cityhood as we dine and dance under the stars! This special event will be held at Oakley Headquarters (1 Icon in Lake Forest). The celebration will begin with cocktails at 6:30 pm, followed by dinner at 8 pm. Attendees must be 21 and older. Fee for this event is $50 per person and pre-registration is mandatory. (Limit of 4 tickets per person.) To register for this event, please visit our online registration site beginning Tuesday, August 14 at 8 am. Walk-in and mail-in registration is also acceptable. For all the details, see page 4 in the new Fall Leisure Times brochure. For more info, call Community Services at (949) 461-3450.

Hallow’s Eve Bowl Jam at Etnies Skatepark of Lake Forest

Friday, October 26 – This awesome Bowl event returns for its 9th year and is sure to be the best yet! It is consistently a favorite for crowds and skaters alike. Participation is open to all ages. The $20 registration fee includes a contest t-shirt. Registration takes place the day of the event beginning at 3 pm. The event begins at 4 and ends at 10 pm. For more info call the Skatepark at (949) 916-5870 or visit EtniesSkatepark.com.

NEW Teen Music Festival

Saturday, November 3 – This brand new event, to be held from 6 to 10 pm, will allow aspiring teen musicians to showcase their talents at Etnies Skatepark of Lake Forest (20028 Lake Forest Dr). Opportunity prizes will be given, food will be available, and art will be on display during the entire evening. Entry fee is $5 per person (band entries are free). For more info, please call (949) 461-3446 or email charris@lakeforestca.gov.

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/

Buyers Have to Jump through Hoops to Obtain a Home in Orange County.

 

I saw a photo of a listing in Nashville where our daughter lives and had to laugh.  This really spells out where we were in February in Orange County.  I was busy warning my clients that they need to buy immediately or inventory would disappear and home prices would increase.  Nobody tells it better than Steven Thomas who I consider my partner in my business.  See what he is saying this week:

The Buyer PerspectiveIt is no longer a walk in the park for buyers.

Buyers quickly find out the hard way that all of this “hype” surrounding a market recovery is not hype; it is the stark reality in the real estate trenches.  It is tough to be a buyer.  REALTORS® have to sit down with buyers fresh to the market to explain the harsh contrast between their perception of the housing market and what they will actually experience.  There are many that have a hard time believing this new reality.  It is not that real estate professionals are standing on their soap boxes exclaiming that “NOW IS A GREAT TIME TO BUY!”  Instead, buyers have come to their own conclusions that it is smart to buy now.  The only trouble with that is scores of shrewd buyers have figured it out all at the same time.  Thus, there is tremendous competition.  Throw in the fact that there are 15% fewer homes listed this year so far compared to last year and you have what we see today, a hot real estate market.  Values have stopped dropping and are starting to creep up.  Interest rates are at the lows we most likely will never see again.  Combine lower prices with low interest rates and affordability is at levels not seen in well over a decade.  Based upon the median sales price and the average interest rate of the year, payments have not been this low since 1999.  That was the year that the Senate conducted the impeachment trial of President Bill Clinton and both The Matrix and The Sixth Sense were in theaters.  There is a palpable sense that we not only have reached bottom, but that we are starting to recover.  Many have been waiting for somebody to officially ring a bell and call a bottom to the real estate market, and that has sort of occurred.  When enough prognosticators and professionals proclaim a bottom, it ultimately becomes one.  And, consumer confidence is on the rise. 

In the coming months, real estate news is going to be about “surprise” appreciation.  But, it should not come as a surprise.  There are some communities, and especially condominium complexes, that have dropped too much.  They refer to that as “overshooting” where fair market value really should be.  We can all agree that the housing market was overpriced in the mid-2000’s, but a 50% drop in some communities is a bit absurd.  That is too much.  It happens when there are too many short sales and foreclosures competing with each other in close proximity for a small pool of buyers.  Ultimately, it becomes the property with the lowest price that achieves success.  It is no wonder that  I have already heard of pending sales, and even closed sales, that are well above recent comparable sales in those communities that “overshot” their needed correction.  They will experience larger jumps.  The rest of the market is experiencing appreciation at a much more sustainable, slower rate, climbing a few thousand dollars at a time above recent comparable sales.  Appreciation will be inevitable.

So, by year’s end, everybody will hear that real estate has reversed course and that their net worth is increasing.  In turn, consumer confidence will increase.  As more and more homes close, new homeowners are going to jump start the economy by replacing carpet, painting inside and out, changing the landscaping, installing built-ins, making their new home their “home.”  And, with new home sites being graded throughout the county, more jobs will be created.  Typically, housing is what jumpstarts the economic engine during a downturn and this downturn is no different.  As housing heals, so will the overall U.S. economy.  It starts in the trenches of housing.  In Orange County, buyers are experiencing tremendous competition.  They realize that a bottom that has already occurred and they want to take advantage of buying at the start of a recovery.

The Active Listing Inventory and Demand: The listing inventory continued to drop and shed another 2% in the past couple of weeks while demand remained the same.

The descent in the active listing inventory has slowed considerably, but it is still dropping.  The listing inventory shed 106 homes in two weeks and now totals 5,626.  These are lows that we have not seen since June of 2005.  Demand, the number of new pending sales over the past month, remained at a very strong level, 3,684 pendings, a drop of only 3 in the prior two weeks.  For perspective, we haven’t seen demand this high in June since 2005.  With a low, tight inventory and robust demand, the expected market time is at only 46 days.  Last year at this time with the inventory at 11,388, the highest point of the year, demand was at 3,060, and the expected market time was 112 days.  The spread between the active inventory and demand has narrowed considerably and has not been this close since 2005.  When the spread is close, it is a seller’s market.  In this case, with all of the distressed activity, appreciation will not be rampant and unsustainable like it was in the mid-2000’s.  But, it has the look and feel of a seller’s market with multiple, strong offers.  When the spread between demand and the listing inventory is farther apart, it is a buyer’s market.  Buyers have the luxury of taking their time and, often, do not need to compete in purchasing a home.  Offers to purchase ask for a bit more flexibility in price and terms.  As you can see in the chart below, the listing inventory and demand have moved extremely close together, a seller’s market.  It is important to note, that overzealous, unrealistic sellers should not participate in this market and overprice their homes.  They simply will not be successful and they will ultimately waste everybody’s time.  Similarly, unrealistic, overconfident buyers looking for the unbelievable, unavailable, “rock bottom deal” need not apply.  For the buyers and sellers that do their homework and carefully, methodically approach the market, they will find success.

The Distressed Market: The distressed inventory dropped another 6% in the past two weeks.
In Orange County, the active distressed inventory, both short sales and foreclosures combined, continued to drop, shedding an additional 58 homes, or 6%.  This segment of the housing market is by far the hottest, representing only 18% of the active inventory but 41% of all pending activity.  Thus far in 2012, the distressed inventory has shed 2,179 homes, and now sits below 1,000 for the first time since 2007, totaling 992 total foreclosures and short sales.  In the past two weeks, the foreclosure inventory increased by only 7 homes and has an expected market time of 19 days.  The short sale inventory decreased by 100 homes in the past two weeks and now totals 742.  The expected market time is 20 days.  Yes, short sales may take a very long time to put together with the coordination of the lender(s) approval, the removal of HOA and/or tax liens, and bringing property taxes current.  With so few homes on the market, short sales are being swept up almost as fast as the foreclosure market.

Steven Thomas
Quantitative Economics and Decision Sciences

Lake Forest and Orange County, California Buyers: Tremendous Surge in Home Buying in the Last Two Weeks

Copper Cliff Dement FrontUPDATE—The market is moving at record speed.  In the last news letter, I advertised Dale’s SHORT SALE Country Club Condo across the street from the lake at $225,000.  We had 140 visitors and 10 offers by midnight of the Grand Opening Open House.  The offers went over $250,000.  With that type of demand, I showed my seller that we could probably put the home back on the MLS and specially market it as a STANDARD SALE for over $280,000 and ask the buyer to pay all of the SELLER’s closing costs and marketing fees.   To make a long story…short. We received 2 offers over this amount and entered escrow with one.  The home appraised at $282,000. The buyer got to buy a highly desirable NON-SHORT SALE property that he could close escrow on right away and the seller came away without a blemish on their record!

Copper Cliff Buanno Kitchen toward stoveRight after this home entered escrow I got a call from their neighbor who needed to sell his place as a SHORT SALE.  His lender is Wachovia.  That was the best news I could have heard as this bank has a no-nonsense approach to approving short sales.  I called the bank rep and she said to put it on the market and get an offer.  I priced it at $250,000 and had another Grand Opening Open house. It sold that same day to a couple who missed out on the first Country Club Condo.  We are in escrow now at $265,000.

Sailwind Condo KeithAt that open house, I met Steve —a dad looking to buy a single family residence for his son.  I went over the current dynamics of the market with him so that he would have an understanding that would help him be competitive in writing an acceptable offer.  A few days later we looked at the lowest priced SFR in Mission Viejo and decided against it.  I changed the search to include condos.  The Keiths selected their top three picks and we saw them on Friday.  One was in a community that, like so many others,  banks can no longer write loans on.  They would need an all cash offer.  Out of the two other condos, they decided on one right near the Beach & Tennis Club.  I called the agent and got all the information we would need to write an acceptable offer.  We wrote it up and delivered it to her front porch.  By the end of the day we were in escrow with a home inspection planned for the following day.

Rue de ValoreWhile all of this was going on, I got a call from a homeowner who saw the Country Club Condo (#2) sign and asked about it.  I told him how homes were selling the same day they came on the market.  Although he had the cash to buy a condo in this lake community last month, now, based on my two recent sales, he would need to look in a neighborhood that didn’t have attached garages.  I showed him the last listing in the city under $225,000.  We wrote a cash offer on this REO and are currently waiting for the bank’s response.  Although he wrote it over asking price, it was less than a non-cash offer.  Ask me when we talk what happened with this.

AspanDuring this same week my doctor asked me about a single family residence that he drove past.  I inquired about it and the Realtor told me that there were 5 offers on it and they were going to accept one that night.  This was one of the lowest priced SFRs in the city at $425,000. The doctor wanted to see inside immediately.  I asked the agent if she hold off accepting an offer to give us time to go inside.  Two hours later after viewing the home, I called the agent back.  She said that there were now 8 offers on it.  We put together an offer and had it to her by 9:30pm.  Our offer was accepted the following morning.  We had the home inspection the next business day and found that 45 more agents had taken buyers through the home.  Boy, that was a close call!

Just about everyone one wants to buy before the prices and interest rates increase further. Think what the month of May is going to be like when the $10,000 California Tax Credit takes effect!  If you are a buyer, talk to my lender right away so that your financial package is together.  20% down and higher buyers will have the best chance, so borrow from your folks or kids if you have to!  P.S. I will no longer represent bank robbers. 🙂