Orange County Real Estate update – Gary Watts speaks to YPN
Gary Watts is one of Orange County’s most well known real estate forecasters, and the Young Professionals Network was lucky enough to have him speak at our Lunch & Learn recently. Gary’s always full of stats – whether we like them or not! It’s no secret 2011 was another tough year in real estate – lots of foreclosures and unemployment loomed over Orange County. 29,451 homes sold in OC during 2011, while 2010 only had 30k homes sold. Long story short, 2011 was Orange County’s 3rd lowest year for volume behind ’92 and 93′.
But wait. Homes are more affordable than ever…Why is this happening?
Its really a combination of things, like:
- weak job market
- tougher loan qualifications
- would be buyers overridden with student loans
- consumer and buyer confidence
- political uncertainty
Did you know 2 million borrowers were turned down for home loans in 2011? That’s quite a few renters forced to continue along the lease property path! Although housing is sluggish, there are still opportunities everywhere, particularly for investors and those with good credit entering into the housing market.
What types of OC homes were the most popular?
- Single Family Residences (SFR) topped the chart – 18k sales
- Condos – 8k sales
- New homes – 2k sales
Of these, 7200 were foreclosures…a smaller number than most expected.
Fun Real Estate Facts:
- 27% of buyers are traditionally looking for condos, while the main majority of homebuyers are looking for a detached SFR property.
- Orange County is still over 50% distressed property sales: 20% were short sales and 30% were foreclosures in 2011.
- Most equity sellers overprice by 7%. Gary says ’Smart sellers accept. Idiots insist.’ Did you know 20% of properties for sale don’t close? At all. Properly pricing your home is crucial!!
- Properties in the under 400k range were up in sales price from 2010 by 6.1%. (this is OC’s sweet spot!)
- Properties in the over 500k range were down in price from 2010 by 15%.
Attention first time home buyers:
Interest rates are the best thing this market has going for it right now. Today’s rates are sooo powerful.
For example, A 3k payment at 4.5% interest will get you a 600k house right now!!!! 2k payments will get you a 400k purchase price. If interest goes up just 2 points, the same payment will get you a 100K LESS in property. If you’ve been on the fence about buying a home, its time to check your own personal scenario so you’re not ‘locked out’ if interest rates climb upwards. And seriously…do they have anywhere to go but up? We haven’t seen rates this low in over a G E N E R A T I O N.
2011 Real Estate Investor update:
Last year’s rental rates in the OC went up by about 5%, and Gary believes we’ll continue to see that trend. Last year, 30% of home sales were purchased by investors. Because they now cash flow, investors are picking up a lot of properties in Orange County. This creates some challenges for new buyers, particularly ones who are looking for condos with FHA financing.
Then, leave it to a YPNer to ask the million dollar question:
Will home appreciation ever come back to Orange County???
YES, of course!! But…don’t bank on it until 5 years or more.. according to Gary’s gut. For more exact info, please see the presentation embedded below:
Ready to take advantage of today’s great rates and buyer’s market? Call 877-230-3211 or tweet @angieweeks for a homebuying consultation!