Happy Holidays!!!

From everyone at Ocean Homes OC, we hope you all have a happy holiday season. Check back soon for more blog posts in the new year!

HAPPY HOLIDAYS!!!

UCLA Sees 16% Home-Price Gain In 2010

As seen in the Orange County Register:

Double-digit housing appreciation will return to Orange County next year, with the median home price rising somewhere from 15.9% to 16.6%, UCLA economists forecast in a report released today.

That compares to a projected 8.8% gain in California next year and a 2.4% increase nationwide.

It also differs sharply from Cal State Fullerton’s outlook. An economist there said Tuesday that Orange County home prices will rise 2% to 3% next year – at most.

But Mark Schniepp, author of UCLA Anderson Forecast for Orange County, said he’s not predicting the return of the housing bubble.

Even after six years of appreciation, UCLA economists still don’t expect home prices to reach the 2006 peak. In fact, home prices likely won’t get back to that level again until 2016 or 2017, Schniepp said.

“We’re already at 16% (appreciation) from March. That’s just six months, and I’m talking about a year-over-year (change),” said Schniepp, chief economist with the California Economic Forecast. “When you have a cycle where you’ve over-corrected, you can go up 16%. It doesn’t really mean much.”

The gist of the forecast, Schniepp said, is that the Orange County housing market is in recovery.

“The train has left the station. It’s going down the track. This isn’t a head fake,” he said.

He added: “Now is the time to buy. (Actually), the time to buy was the spring and early summer.”

The UCLA housing forecast is part of an outlook that projects a jobs turnaround in O.C. in 2011.

In addition, the Orange County housing forecast states:

• That from 2011 to 2015, O.C. home prices will increase by 2.5% to 8.7% a year. The median home price, at $406,481 this year, is projected to top $500,000 by 2011 and to be above $600,000 in 2015.
• That foreclosures are expected to rise again early next year, but won’t derail the recovery.
• That homebuilding this year will fall to 1,912 units, the lowest number in records dating back to 1946.
• That homebuilding will pick up by 2012, rising above 11,000 units a year — levels not seen since 2002. In 2013, UCLA projects that housing starts will total 12,537.
• That mortgage interest rates will remain low. Southern California rates likely will be below 6% through 2015, the forecast said.
• That commercial real estate will be hampered by high unemployment through 2010, with recovery not expected until around 2011.
• Office vacancies — currently at 18% to 20% — will start to drop in 2010, but lease rates won’t resume going up until 2011.
• Retail sales are expected to start picking up in late 2010, aided by the recovery in the housing market.

“We do look for a much more robust recovery, certainly by 2011 and for homebuilding by 2012,” Schniepp said.

Recovery More Rapid Than Expected

As seen in the Orange County Register:

Another economist has said that he thinks the economy is bottoming out.

“Institutions are coming back. Things are starting to flow again,” Kerry Vandell, head of UC Irvine’s Center for Real Estate, told an industry group Monday. “The economy is recovering more rapidly than I would have guessed.”

The gross domestic product will be positive again either by winter or spring, he said.

When will the residential market begin to recover?

“In my opinion, it already has,” Vandell told local members of Lambda Alpha International, a society devoted to land economics.

But lest you think that happy days are here again, note that Vandell’s outlook comes with a lot of gloomy caveats. Among the hairy obstacles still in recovery’s path:

• A massive wave of foreclosures is yet to come.
• Banks are delaying “taking the hit” on those devalued properties.
• Credit still very tight.
• Unemployment is still increasing.
• State spending cuts will offset federal stimulus in California.
• Prices and rents are still high.

Vandell told Lambda Alpha members that there are a number of myths about the cause of the economic meltdown.

The usual suspects – subprime loans, credit rating agencies, Freddie Mac, Fannie Mae, the housing market and real estate — were not the main culprits, he said . The subprime meltdown and bursting housing bubble were just the first canaries in the coal mine, just the first symptoms of an economic catastrophe.

The primary villains, he said, included the Federal Reserve under Chairman Alan Greenspan (for keeping interest rates too low), the Securities and Exchange Commission (for being asleep at the switch), and past U.S. presidents, in particular Bill Clinton and George W. Bush, (for their pro-homeownership policy bias).

What are the prospects for O.C. real estate?

“It depends on the market,” he said. “There’s an active market under $400,000-$450,000. … (But) in terms of the upper end, (activity) is pretty thin up there.”

California House Prices Projected To Jump 7.9%

As seen in the Orange County Register:

U.S. house prices will stop falling in March and are projected to be up 4.6% by August 2010, Santa Ana-based data cruncher First American CoreLogic predicted.

State	Aug. ‘10 gain
Maine	12.1%
New Hampshire	11.6%
California	7.9%
Florida	7.3%
New Jersey	6.8%
Idaho	5.8%
Connecticut	5.7%
Rhode Island	5.3%
Hawaii	5.2%
North Dakota	4.9%
U.S.	4.6%

In California, the rate of appreciation will be even higher: up 7.9% from this past August.

If true, California will have the nation’s third-highest appreciation rate, trailing Maine (projected to be up 12.1%) and New Hampshire (up 11.6%).

Florida’s appreciation rate is projected to be number four in the nation at 7.3% next August.

In addition, First American reported:

• U.S. house prices dropped 10.1% in August from a year earlier.
• California ranked fourth in price drops with a year-over-year decline of 12.9% in August.
• The biggest drops occurred in Nevada (-24.4%), Arizona (-19.5%) and Florida (-16.8%).
• Excluding the sale of bank-owned homes and short sales (homes selling for less than their debt), price drops were less severe. U.S. prices for non-distressed homes were down just 6.2%.
• In California non-distressed home prices were down 7.9% from August 2008.

CSUF sees tiny O.C. home-price gain in 2010

As seen in the Orange County Register:

Cal State Fullerton’s dean of business forecasts that Orange County home prices will continue dropping until mid-2010, then will climb no more than 2% to 3% by the end of the year.

Appreciation likely will remain in the 3% to 5% range for several years after that, added Anil Puri, dean of the CSUF Mihaylo College of Business and Economics.

The rapid, double-digit gains of the recent past are just that: a thing of the past, he said.

“We don’t expect much of an increase in housing prices, but the decline in housing prices will end in 2010,” Puri said. “We don’t expect housing prices to start increasing until the second part of the year, and (it will be) very little in the second half.”

Demand for housing is tied to employment growth, and the CSUF economic forecast for Orange County, released Tuesday, doesn’t foresee any increases in payroll until the latter half of next year.

A bump in mortgage payment resets in early 2010 also is expected to unleash a new wave of foreclosures that could impact local housing.

“We don’t know how big that will be, but we will see (an increase) in foreclosures,” he said.

In a sense, that’s the good news — or as good as it gets. CSUF’s real estate forecast adds:

“The commercial real estate market, on the other hand, presents a gloomier picture and will be the next troubled spot. According to FDIC, one-sixth of all construction loans were in trouble in the second quarter of this year, placing additional strains on regional and local banks which are the major lenders to small businesses. All indicators suggest that this market is a particular danger zone.”

The forecast predicts that office vacancies will hit 20% in mid-2010; industrial vacancies, 16%; and as much as 13% of retail space will be empty.

O.C. home-price bottom forecast for 2010

As seen in the Orange County Register:

Orange County median home prices are expected to decline an additional 6.9% this year, dropping to 2002 levels before a mild rebound begins sometime next year, a forecast included in a Wells Fargo Bank report says.

But the rebound’s appreciation rates are expected to be in the low-to-mid, single-digit percentage-point gains through 2012.

The forecast by the Rosen Consulting Group is contained in Wells Fargo’s “Special Report on the Outlook for Housing,” released in February. The report projects that nationwide home prices will hit bottom sometime between mid-2009 to early 2010, and that price gains after that will be at or below the rate of inflation.

“The majority of the country is in a multi-year housing correction. As we suggested in our earlier housing market outlooks, the regions of the country that experienced the greatest price appreciation during the housing boom are already experiencing the largest correction and the most prolonged as prices retreat to more reasonable levels.”

The report provides housing forecasts for regions across the nation, citing the Pacific Northwest, the Rocky Mountain states and Texas as having the strongest housing markets. California, Florida, Arizona and Nevada, meanwhile, lead the nation in foreclosures and declining home prices, the report said.

As for Orange County, the forecast states:

“Recovery is expected to begin in 2010, with prices up 2.7 percent, followed by potential increases of 4.5 percent in 2011 and 6.8 percent in 2012.”

Berkeley-based Rosen Group identified the Inland Empire as “one of the weakest markets in the country,” predicting a 7.7 percent price decline there this year, the report said. Los Angeles home prices are forecast to drop 6.8% this year, while San Diego prices are expected to fall 7.1%.

The report says that federal stimulus plans may help the housing market, but to what extent remains to be seen:

“Intervention by President Obama, Congress and the Federal Reserve, as well as the lenders, including banks, savings & loans, and credit unions, may alleviate the crisis somewhat. The Obama administration has pledged aggressive action, but has yet to decide what strategy or combination of strategies will be deployed.”

Real Estate Market Activity

It appears that available South Orange County Coastal home inventory in many cities decreased, while pending homes sales increased in many of the coastal cities. It appears that properties sold are on the upswing as well as buyers are re-entering the market. Indicators show that the market may be somewhat stabilized, as sellers are getting more realistic with their asking price. It may be a good time for buying a home, as prices are at a low with the entry of Bank Owned, REO and Short Sale properties and interest rates remain very attractive.

Below is the most recent Saddleback Valley Information that consolidates monthly comparisons for Mission Viejo, Ladera Ranch, Rancho Santa Margarita, Canyon Area, Coto de Caza, Lake Forest, Foothill Ranch and Portola Hills . The number of sold properties continue at an upward trend like we have seen for over a year.

Information is from data supplied by Southern California Multiple Listing Service (SoCalMLS) and includes the cities of San Clemente, Dana Point, San Juan Capistrano, Laguna Niguel, Laguna Beach, Corona Del Mar, Newport Beach, Newport Coast and Costa Mesa.

OctMTgraphSBV(2)

Making Homes Affordable Program To Include Short Sales!!!

Recently U.S. Department of the Treasury Secretary Geithner announced details on the expansion of the Making Home Affordable program to include short sales under the new Foreclosure Alternatives Program. One great benefit of this, is that borrowers may receive up to $1,500 to assist with relocation expenses.

Program 3648, a privately owned nationwide initiative, originally based on HR 3648, the Mortgage Forgiveness Debt Relief Act, is leveraging this and other legislation to help as many homeowners as possible avoid foreclosure by completing a short sale.

You can learn more about this company and this exciting program here.

Orange County Housing Report: Top 10 OC Housing Trends

This is a great article on Orange County Housing Trends. Check it out and feel free to leave a comment.

Steven Thomas, President

Quantitative Economics and Decision Sciences, B.A.
Altera Real Estate

September 17th, 2009

Even though the kids have gone back to school, the Orange County housing market has not really changed much over the course of the past several weeks. It is a good time to take a look at the broader market and pinpoint the latest trends. Here’s a breakdown of the top 10 current Orange County housing market trends (in no particular order):

1. Below $750,000 is technically a seller’s market with an expected market time of approximately two months or less. The activity below $500,000 is incredibly hot. However, this is not a conventional seller’s market as values are not appreciating. The sheer numbers of distressed properties, mainly short sales, is keeping a lid on any appreciation. Buyers can expect multiple offers, a tremendous amount of competition, and the need to write offers to purchase on more than one property (often times several).

2. The listing inventory has been dropping all year and is now just above the 8,000 mark at 8,064. We started the year at 11,842 active homes on the market. One year ago there were 5,110 additional homes on the market and two years ago there was more than double today’s numbers. In the lower price ranges there is not a lot of new inventory coming on the market.

3. Cash is king and so are buyers with larger down payments. With so much competition in the lower ranges, buyers with very little down are having a hard time purchasing. They are losing out to buyers that can afford larger down payments. Many first time home buyers who are relying on the low down payments allowed by FHA financing simply cannot compete with more qualified buyers and investors. That’s right. Investors are back and taking away the ability for a lot of buyers to purchase.

4. Foreclosures are EXTREMELY hot. There are currently only 334 active listings that are foreclosures in all of Orange County, representing 4.1% of the total inventory. The expected market time for foreclosures is 0.66 months, or between two and three weeks.

5. The average sale to list price ratio for foreclosures over the past three months is 103%. That means that, on average, foreclosures are selling for 3% above the list price. The sale to list price ratio for short sales and equity sellers is 98%. And, if there weren’t so many appraisal issues, those numbers would be even higher. Buyers in the lower ranges should not expect to offer that much less than the asking price.

6. Prices are not dropping in the lower ranges, but they are in the upper ranges above $1 million. The higher the price range, the higher the expected market time with less and less demand. 30% of the active inventory can be found above $1 million, yet the higher end represents only 7% of demand.

7. The rumors of a foreclosure moratorium have been rampant all year long. There is truth to the moratorium, but it does not look like there will be a substantial increase in the number of foreclosures to hit the market until the first quarter of 2010. Also, there is a tremendous amount of pent up demand where just about every agent has pockets filled with buyers who are actively looking, but, surprisingly, there just is not a lot of fresh inventory. Any increase in foreclosures will most likely be offset by pent up demand.

8. With pressure from the federal government, lenders are moving more and more towards short sales. We can expect within the coming weeks for the Obama administration to announce something along these lines. Currently most short sales, where home owners owe more than their homes are worth, take a very long time to obtain lender approval, delaying the ultimate close of escrow. Lenders are creating procedures to speed up the process. Short sales are a better route than foreclosures because they are in much better condition and save the lenders a lot on repairing and carrying costs. There are currently 2,050 short sales on the market with an expected market time of 1.58 months, much different than just one year ago when there were 4,422 short sales with an expected market time of 6.2 months.

9. There are currently more distressed sales within the upper ranges. Last year only 6.5% of all distressed properties were above $750,000. Today, 11.4% of all distressed properties are above that mark. The upper ranges are not immune to distressed sales. More and more prime borrowers are having trouble paying their mortgages. A contributing factor to this trend is the increase in unemployment and the falling of property values where more and more borrowers are upside down in their homes.

10. The total pending sale count , not just a snapshot of the past month (what I refer to as demand), has steadily increased by 56% over the last year. It is taking longer to close pending sales primarily because there are a large number of short sales that are waiting on lender approval; thus, the count has really blossomed. There are now 6,851 total pending sale versus 4,393 one year ago.

Here’s a breakdown of how the numbers look this week: the active listing inventory dropped by 298 homes in the past two weeks to 8,064, its lowest level since January of 2006. Demand, the number of new pending deals over the prior month, increased by 61 in the past two weeks to 3,464. Last year’s demand was at 2,974, 490 fewer than today, and two years ago, it was at 1,180, 2,284 fewer than today. The expected market time is currently at 2.33 months, a slight change from the 2.46 month mark two weeks ago. The number of distress properties on the market dropped by 132 homes in the past two weeks, now totaling 2,384. 29% of the active inventory is distressed compared to 43% last year. There are currently 2,050 short sales on the active market, a drop of 134 over the past two weeks. The expected market time for short sales is currently at 1.58 months.

Stats For Sales In Laguna Beach

Check out these stats on past sales in Laguna Beach. This information is from the MLS. It may not reflect sales that are private.


LB stats

Great Information On The HomeBuyer Tax Credit

Homebuyer Tax Credit SD

Here Is An Overview On The HomeBuyer Tax Credit

Everyone thinking about buying a house should take a look at this.

Homebuyer Tax Credit Overview_sd

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