I have been busy lately with both buyers and sellers and some personal activities and have, unfortunately, failed to update this blog as often as I should. I promise to get back on a regular schedule of providing info, even if I have to make it briefer than I like (just so you know that I’m still keeping an eye on the market.)
The market in Lake Forest and all of South Orange County is definitely busier now than we have seen in the last 2 years. Our supply of available homes is very low, and the number of buyers is high resulting in multiple offers being fairly common for properties priced under $550K. The DataQuick and Case-Shiller reports also came out with numbers this week that median prices have stabilized, and in some places are even rising a bit. A lot of the recent activity has probably been generated by the first time buyers trying to find their home and get their $8,000 tax credit before it runs out on November 30th. (The National Association of Realtors is pushing for this to be extended and expanded, but my bet is that it will expire and possibly come back again after a month or two.)
I am currently working with several buyers who qualify as “first timers” who actually sold close to the top of the market in 2005, or early 2006, and have been sitting on the sidelines renting until now. They seem to think now is the time to get back in, and are scouring the market looking for the dream home that they wouldn’t buy in 2006, but can now afford at a much lower price and interest rate!
Prices in Lake Forest are currently about 40% lower than the highs reached in 2005-2006 when loans were easy and nobody worried about making payments in the long term. The simple formula was to get as much house as you could [pretend to] afford, stay for 2 years to avoid capital gains tax, then sell it for $200,000 more than you paid. If you couldn’t really make the payments, it wasn’t a big deal because you could call your friendly lender and get another HELOC loan on it and immediately have enough money to buy a new Hummer, a big screen TV, and money left over for your next 12 months of house payments.
I was busy playing with a lot of housing statistics (nerding out) on Tuesday when I got a call from my friend Erika Ritchie at the Orange County Register. She told me that she heard that Lake Forest was the fastest selling city in the entire Orange County last month, and she wanted to know what I thought about that. I ended up sharing with her some of the statistics that I had been planning to share with you here, so instead of duplicating the info, I decided to simply link to her article and you can read it there.
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