Live Lake Forest

Superbowl Sunday typically marks the beginning of the spring buying season in Orange County, but I don’t think any serious buyers are willing to wait that long.  While showing property this weekend, my buyers and I almost had to “take a number” to get in to see the newly listed homes!  We viewed 1 short sale, an lightly damaged REO, a traditional sale, and an investor (flipper) home.  The traditional sale property literally had a line of buyers taking turns to go up or down the stairs!

The inventory of homes available in the “active” status in the MLS is extremely low, and the bulk of them are short sales in the more affordable price ranges.  The first time buyer tax credit of $8,000 has been extended to April 30 to get into a contract, and a $6,500 credit is now available to repeat buyers who lived in their previous home for 5 of the last 8 years. 

Steve Thomas of Altera Real Estate provided his view of the market here and does a very good job of explaining how the decrease in pricing, in addition to the very low rates for mortgages have helped the lower price ranges find a probable bottom.  The market time for homes under $1 million is only 2.5 months, and he states that for “under $750,000 the market is sizzling!”   First time buyers, move-down buyers, and investors are all competing for the same homes. 

If you are planning to buy in the next 3 or 4 months, please have patience, be realistic with your expectations, and plan on needing to “sweeten your offer” with either faster closing, more flexibility for possession or more cash!  It’s tough right now, but it can be done!

If you need any help or advice, please call or email me, or leave a comment here!

The 2009 real estate market in Lake Forest (for zip code 92630) finished the year with just a few less home sales (655) than last year (661)!  It felt busier, but maybe that was just me    !  I believe that the government’s first time buyer tax credit program did stimulate some additional sales that probably would have waited a while longer, but it didn’t make a huge difference in the overall volume.

The average price per square foot fell 13% from the 2008 average, but it wasn’t even in all price ranges.  The lower end, one-bedroom condos fell the most, with a 39% decline, while the 5 bedroom homes only fell 3% for the year. 

In total, there were 843 properties that were added to the MLS during the year.  Of those, 264 failed to sell and either cancelled, expired or were withdrawn from the market.  As of the year end, there were 117 unsold properties, but 25 of them were in a “hold” status, leaving only 92 actives and 149 under contract.

The 2010 market will be interesting as we continue to deal with low inventory.  There are a lot of questions now about how long interest rates will stay low (5% range), when and how will the “shadow inventory” be revealed, whether prices have stabilized in the lower ranges, and how the loan modifications and short sales will be handled! 

If you have any comments or opinions to add, please leave a comment! 

Thanks for visiting!

Sales volume is UP!  Median price is increasing!   Inventory is low!  Sellers are receiving multiple offers!  Foreclosures are declining!   These are the headlines I am seeing daily, on television, in newspapers, in on-line discussion forums, and in my email inbox.  Hooray – the real estate meltdown is over!  If you believe all that you hear, and have been wanting to sell your home, you might be breaking out the bubbly right now and thinking about packing. 

The sales volume is up because the prices have now fallen to the point that more people can afford them.  First time buyers are driving the lower end of the market, and  they are also competing with investors who recognize the immediate positive cash flows that are available. 

A 2-bedroom condo bought for $200,000 with a 3.5% down payment and an FHA loan of $193,000 at 5.5% interest would have a mortgage payament of about $1150, including mortgage insurance.  After adding in $300 HOA dues and 1% taxes (no Mello-Roos) the total payment comes to about $1600, which is only a little more than you would pay to rent the same place!  Being able to re-decorate to your own taste, along with some tax advantages, have convinced many first time buyers to jump on these properties!

The median price is up because we are running out of the lowest priced properties.  You could say that the bottom is hitting the bottom!  The first time buyers and investors are keeping the prices at those levels because when they go lower, multiple offers are driving them up.  There are a lot of first time buyers who have been scrambling over the last month to pick their home and get into escrow in time to close by the November 30th deadline for the $8,000 tax credit.  Investors are also joining in the bidding wars (and often winning when they have a lot of cash to put down) because the rental income from these properties make it worthwhile to own them.

The latest numbers came out from DataQuick yesterday and everybody is wanting to know what they really mean.  I’m working on an analysis right now to try to figure out what really counts and what is just a blip.  I have several obligations that will keep me out of the office today, but hopefully I will get it finished and posted this evening.  Please check back soon!

See past posts:

September Sales Report for Lake Forest

The September closed sales number of 47 properties was 19% below the number of sales in September 2008, when 58 were sold.   The good news was that the average price per square foot only fell 4% since then!  There may be a few more closings reported in the next few days, so I may update this to show the late closings.

Bank owned sale $120K

The condos included 17 of the 47 closed sales with a range from $120,000 up to $369,000.  The lowest sale (bank-owned) was originally listed for $109,890 but multiple offers drove it up to the $120K mark with offers being cut off after 7 days.  Last sold in 2001 for $115,000 it had been refinanced to a mortgage amount of $175,000 in 2004.  (The previous owner did quite well on this condo when he sold it for $115,000 because he had bought it for $47,000 as a HUD foreclosure in 1998!  Sometimes these bank-owned homes go back more than once!)

With only one bedroom and 660 square feet, it’s price per square foot came out to $182.  The highest sale at $369,000 was originally listed for $377,000 and took 84 days to find the buyer.  The price per square foot on that one was $274.  The average closed sale price of  $239,005 came in at 103% of list price, and $221 per square foot.

$750,000 in 2006

$350,000 in 2009

The highest sale, a “trophy house location” on the lake front finally closed at $1,140,000 after falling in and out of escrow several times since January 2008!  Listed at $1,395,000 it closed at 82% of list price, and $469 per square foot.  (It had previously sold for $1,500,000 in September 2006.)

The market is being driven by the first time buyers, and they are scrambling to find a home and get closed before the November 30th deadline.  (I am betting that the program will be extended by Congress, but you can’t count on it, so if the $8,000 tax rebate makes a difference to you, you need to pick your house and get into escrow in the next two weeks! )

Wondering what your house is worth?

Check my foreclosure lists by City (updated 4 times per day!)

Search through all the homes on the MLS

If you have any questions or concerns, I’m here to help!

Call me:  (949) 457-0281

Thanks for visiting!

If you find a condo that you like in Lake Forest, you better jump on it fast! The total inventory of condos and townhomes in Lake Forest right now is about a 21 day supply!  In the last 30 days, 38 condos or townhomes have gone into escrow, leaving only 26 available today.

Of the 26 that are in the “Active” status on the MLS, only 4 qualify as normal traditional sales.  (If “normal” is in the minority, maybe it shouldn’t be called normal anymore!)  Of those 4, 2 of  them are significantly over-priced for the market, and would be short sales if they were properly priced.

The rest of them are either short sales (17), bank-owned fixers (2) or investor-owned flips (3.)

So really, there are only 7 condos that could be purchased in the time frame that more first time buyers are needing right now to close before the November 30th deadline.

7 available divided by 38 per month = 0.18 month’s supply (about 5 days!)

Want to know what your house is worth?

Check my foreclosure lists by City (updated 4 times per day!)

Search through all the homes on the MLS

If you have any questions or concerns, I’m here to help!

Call me:  (949) 457-0281

Thanks for visiting!