Live Lake Forest

There are currently 510 properties in the Orange County MLS that are coded as Bank Owned, REO or Foreclosures.  There are probably more that aren’t coded correctly, but I’m not going to sift through all 17,635 properties that are currently on the market to find them.  Most of these are priced very close to “market value” (whatever that is!) for owner-occupied homes, but there are a few that stand out in the crowd as worthy of consideration for bargain hunters.

Unless there are multiple offers, my experience with foreclosed properties in the last real estate downturn (mid-nineties), is that there can be some negotiating room for well-qualified buyers!  Generally, the banks are exempt from providing seller disclosures, like the “Transfer Disclosure Statement”, they are very strict with sticking to contractual deadlines, they won’t accept your offer in writing until they get around to it, and they won’t fix anything discovered during your inspections.  (Other than that, they are swell to work with!)  It takes some courage to deal with them, but many of my clients have successfully completed the process and eventually profited from their efforts.

Here is the list of better valued properties that I published last week on my other blog , and I decided to provide the lastest status of what has happened to them.

Aliso Viejo Single Family – $593,500 – (last sale $735,000)   4 bedroom, 2.5 bath, 2 car garage w/full driveway, 1740 sq ft, built in 1989.  HOA dues $63, Mello Roos approximately $1500/year.  SOLD

Corona Del Mar Condo –  $689,000 – (last sale $780,000)  2 bedroom, 2 bath, 918 sq ft, built 1963.  HOA dues $402, no Mello Roos tax.  SOLD

Dana Point Single Family – $654,900 – (Last sale $995,000)  3 bedroom, 2.5 bath, 1270 sq ft, 4000 foot lot, built 1958, close to Harbor, no HOA.  SOLD

Huntington Beach Single Family – $795,150 – (Last sale $866,000)  3 bedroom, 2.5 bath, 2022 sq ft, 2 car garage, built 1977, only 5 blocks to beach!  STILL AVAILABLE

Irvine Single Family – $674,900 – (Last sale $830,000) – 3 bedroom, 2.5 bath, 2 car garage, 2194 sq ft, built 1969, HOA dues $198, no Mello Roos.   SOLD

Laguna Niguel Condo – $464,900 – 3 bedroom, 3 bath, 1527 sq ft, 2 car garage, HOA dues $350, no Mello Roos.  SOLD

Mission Viejo Condo – $419,900 – 3 bedrooms, 2.5 bath, 1400 sq ft, 2 car garage, built 1987, HOA dues $216, no Mello Roos.  STILL AVAILABLE

Ladera Ranch Single Family – $679,000 – (Last sale $812,000)  4 bedrooms, 3 bath, 2200 sq ft, 2 car garage, built 2001.  HOA dues $207, Mello Roos tax approx $3000/year.   SOLD

Dove Canyon Single Family – $829,000 – (Last sale $975,000)  4 bedroom, 3 bath, 2900 sq ft, 2 car garage.  HOA dues $205, Mello Roos approximately $1800/year.  SOLD

New list of recommendations to consider:

Aliso Viejo Detached Condo - $574,900 – (Last sale $730,000)  4 bedroom, 3 bath, 1600 sq ft, 2 car garage.  Mello-Roos approximately $1500/year.

Lake Forest Condo –  $369,000 - (Last sale $490,000)  4 bedroom, 2.5 bath, 1550 sq ft, 2 car carport.  HOA $330.  No Mello-Roos.

I check the new listings daily, looking for any “diamonds in the rough.”  If any of these properties are of interest, or you would like to be notified of other foreclosure, REO, bank-owned properties, please call me at (949) 457-0281 or send an email to Foreclosures@VickiLloyd.com 

Why isn’t my home selling?Â
It’s fixed up, easy to show, listed in the MLS with photos and a virtual tour, and offers a generous commission to the buyer’s agent.   It has been on the market 90 days and there are no offers!  Well, I haven’t seen your house, but when all else fails, you really have to look at the price!  There is a magic number somewhere between $1 and what you are asking that will make a buyer jump off the fence and offer to buy it.  In our current market, even the CAR (California Association of Realtors) spokesmen are saying that the market is declining – for both the volume and the prices and they are projecting a 4% drop for 2008.   In Orange County the number of sales this year is already off by more than 40% for most areas.  

So what is that “magic number?”  It takes a bit of analysis to find the right one, but you need to start by looking at all the homes that are available up to the price where yours has failed to sell, and also within a reasonable distance of that property.  If your home is in Lake Forest, for instance, I would take a look at all the homes in Lake Forest, and our neighboring communities of Foothill Ranch, Portola Hills, Mission Viejo, Rancho Santa Margarita, and Laguna Hills because these areas may also be considered by the buyer who might want your home.  If you have 4 bedrooms and 2400 square feet, I would look at the total number of homes that have at least 4 bedrooms and 2000 square feet (everybody wants more square feet, but many buyers look more closely at room counts, and general layout.) 

The first factor to look at is the number of homes that have sold in the last 90 days.  Then look to see how many are currently in escrow, and finally,  look at how many are currently available on the active market.  The active market is your real competition – the ones in escrow or recent closings are the ones that successfully attracted a buyer and got out of the way. 

I ran a sample of this type research just now for a hypothetical home that is 2400 sq ft, and not selling at $715,000.  Today there are 148 homes for a buyer to choose from that have 2000 square feet or more.  In the last 90 days, 52 properties have sold, there are currently 12 in escrow, and 27 have expired, unsold.  Based on the closed sales of about 4 per week, if all properties are equally desireable, and the pace of sales continues, and no new listings come on the market, the 148 homes will take about 8.5 months to sell.  It looks even worse, when you look at the rate of current escrows of about 2.4 per week, assuming 5 weeks average escrow period.  That calculates out to 62 weeks, or about 14 months to sell them all!  Of course, all 148 properties are not equally desireable, so the list of actual properties needs to be reviewed to determine how many are really in the competition.  Some will be in terrible condition, or have incureable flaws and locational challenges, so they will be easily eliminated by buyers.  But there will still be intense competition among the rest of them, and only the best will sell!

If you live in the home, what is your patience for being on the market – constantly keeping it ready to show on a moment’s notice?  If your home is vacant, how long can you keep spending the monthly carrying cost? ($PITI + $HOA + $utilities)

Our market is very soft right now, and the few real buyers around are extra picky and looking for a home with a price that they can feel good about! Sellers have to let go of their hopes for getting the sales prices that their neighbors got 2 years ago, and just be realistic.  If you don’t have to sell, please take your home off the market right now.  If you do need to sell, get it priced right and move on with your life!

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If you have any questions, comments or need more details on any post I’ve written, please leave your comment here, or send me an email.

The real estate market in Lake Forest, California, is very much like every other part of the country right now – it’s SLOW!

The properties that are listed under $300,000 include 1-bedroom and a few 2-bedroom condos, with the lowest prices offered on the foreclosed listings.  The lowest priced 1-bedroom is $204,900 and the lowest priced 2-bedroom is $236,500.

In the $300K – $400K range, there are 4 (completely unrealistic) sellers of 1-bedroom condos, 68 2-bedroom condos, 16 3-bedroom condos (low price again is a foreclosure @ $327,900) and 1 4-bedroom condo @ $399,900 (short sale).

The detached homes (single family residences) begin in the $400K – $500K range, with the current low price leader @ $479,900 for a 3-bedroom 1144 square foot home that backs up to El Toro Road.  There are also 6 other SFRs priced under $500,000, although one of them is listed at “$499,900-$539,900″ and is another short sale.  With an inventory level of somewhere between 7 and 11 months, this is the fastest moving price range at the moment, although nobody would call this fast. 

The largest glut of homes right now is in the $500,000 to $700,000 range, with a combined total of 174 today (updated 10/3).  This includes 5 2-bedroom homes that range from $530K – $585K, 85 3-bedrooms from $505K, 79 4-bedroom homes from $533K (another short sale) and 5 5-bedroom homes that start at $649K. 

The lowest $/square foot values for both the “active” and “closed” properties are in the $700K – $800K range.  The best price per square foot in this range is $240 for a 3200 square foot home with a pool in the woods.  Of the homes currently under contract, I know that 2 will close near the low end of their “value range,” and the price per square foot will be around $300.  The 3rd one under contract is a unique but smaller home with excellent condition, highly desireable location, newer built (1986), long distance view and an oversized lot of 10,000+ square feet.  My guess is that it will probably close at about $420/sq ft, which will bring up the average.  

The $800K – $1,00,000 homes are generally fairly large, in good condition and most have a 3-car garage.  There are currently several in the Montbury Estates neighborhood, on the Lake II lake front, and in the newer “North Lake Forest” area.  (And then there are some additional unrealistic sellers that are only hoping for a buyer!)

The buyers who are looking at the homes that are listed over $1 million in Lake Forest, are generally very picky.  The price per square foot is almost meaningless because they want a special location and customized features or they won’t buy.  These homes sold at a rate of about 1 per month last year, but in the last 90 days, there was only one sale over $1 million.  There are currently 6 homes listed over $1 million; 5 are on the lake front, and the other is a customized home in Normandale Heights.  The current highest list price @ $1.875 million is a large customized lake front “point home” (a unique location on a corner of the lake) which has been on the market and reduced several times in the last 6 months.