Archive for January, 2012
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!
Read Full Post | Make a Comment ( None so far )Orange County Real Estate Investing the Easy Way
- Active Mission Viejo potential investment property listed at 399K
Hi everyone!
Had a great meeting last week with a young investor – he’s decided its time to buy his first investment property! Investing in real estate doesn’t have to be difficult and complicated, especially in this market. This 30-something noticed that he could get a home cheaper now than when he bought his first home 6 years ago, and he also noticed that he may be able to break even on it! Hmmm…that got him thinking about investing in real estate…something his father was always talking about.
To confirm his suspicions, he had me pull the rental rates in Mission Viejo, San Clemente, Aliso Viejo, Lake Forest, and Laguna Niguel. All cities averaged in the $2400-2800/mo range for 3 bed properties 1500-2000 square feet. (Attention renters, that means you can BUY cheaper than leasing right now)
After that, we went back to his lender and confirmed that if he put down 3% on a Fannie Mae loan, his payment for a property around 400K would be approximately $2000-2200/mo. Interest rates are THAT good right now 🙂 Exciting news – he can IMMEDIATELY cover the spread with a tenant, even with a gardener or a small HOA!
To put the plan in action, this week we’ll go looking at detached properties in the above cities under 400K. There are actually a lot of properties for him to choose from right now, believe it or not. 54 if you’d like the exact number. We’re really excited to get such a young investor going in such a sweet market. I asked him if he’s read “The Automatic Millionaire Homeowner” by David Bach, but he hasn’t yet. I let him know he’s already implementing the concepts within the book – what a smart cookie 🙂
Real Estate Investing Can be Easy
Investing doesn’t have to be really complicated or difficult – it just needs to be done with a long term plan and strategy. This investor’s long term plan is to have someone ELSE pay off his 2nd property, and then when he and his fiancee decide to settle down and have children, use some of the ‘extra’ he is making to enjoy an upgrade of his own.
If you have any questions about Orange County real estate investing, don’t hesitate to contact us. Of course, we have the spreadsheets that will do the complicated numbers and math if you want them. But sometimes, its just logical and easy. How do you like to invest? What formulas do you use? Comment below or tweet @weeksteam or @angieweeks and share your strategies!!
Read Full Post | Make a Comment ( 2 so far )Mission Viejo Real Estate Statistics – lots of homes for sale!
Mission Viejo lake from the MissionViejo.org official city blog
Mission Viejo Real Estate is aplenty right now 🙂 How many homes do you think are on the market and available? Here’s the stats!!
Active: 262
Attached: 89
Detached: 171
Backup: 168
Pending: 66
Closed: 86 (in the past 30 days)
Lots of moving going on! We compared this to the same timeframe one year ago, and there were 80 closed sales…meaning the market in Mission Viejo is steady if not a little up.
Since we’ll be doing a more reporting on Mission Viejo Real Estate this year, now is a great time to explain what these ‘status’ labels actually mean.
- Active – indicates the property is on the market and accepting buyer offers.
- Backup – means the home has technically accepted a buyer offer and is sold, but the buyer is still in his/her contingency period of due diligence investigations and full loan approval. California buyers get 17 days after offer acceptance to complete all contingencies and inspections.
- Pending – implies all contingencies have been removed on this listing and its only a matter of time until close.
- Closed – entails the buyer’s loan has funded, and title has officially recorded in the new owner’s name.
There are a few other status’ you may see:
- Hold – property is on hold and not being shown to new buyers for various reasons. (there are 36 of those right now)
- Cancelled – means the property listing was cancelled by the owner before a sale took place.
- Expired – indicates the listing agreement on the home for sale expired before a sale occured.
- Withdrawn – similiar to cancelled status, this property has been withdrawn from the market.
Its interesting to note that comparing the last 30 days to the same period one year ago, the price per square foot has gone DOWN, but the average sales price and days on the market has gone UP:
Average sale price in Mission Viejo 1 year ago: $435,042
Average sale price in MV over the last 30 days: $467,640
Average price per square foot 1 year ago: $262.50
Average price per square foot today: $240.84
Average days on market 1 year ago: 93
Average days on market now: 108
According to the stats, it sounds like buyers are still getting more square feet for their money 🙂 That combined with super low interest rates makes buying a home in Mission Viejo or relocating anywhere in Orange County ideal!
For some additional perspectives on business, commerce, and fun in Mission Viejo here is the current State of the City:
Contact The Weeks Team today at 877-230-3211 for more information, or click to start searching right now for your new home in Mission Viejo!
Read Full Post | Make a Comment ( None so far )First Time Buyer Fears – 5 Reasons Renters Hesitate to Buy a Home
As first time buyer specialists, we’re constantly helping buyers address their fears about purchasing real estate. Some are very valid, while others are simply fear of the unknown. If you know someone going through pre-homebuying drama , please share this post with them, so they know they’re not alone, and understand how to overcome! 🙂
1. Fear of getting rejected.
There are WAY too many renters missing out on today’s buyer’s market simply because they are afraid to get qualified. They’re afraid that one bill they forgot to pay 5 years ago or those charged off accounts from college will keep them from buying a home forever. This is NOT true!! Everyone has dings on their credit, it does not mean you’ll be excluded from buying a home. At least talk to a lender and see what steps you need to take next to get qualified. Interest rates are ROCK BOTTOM right now, you owe it to yourself to try 🙂
2. Fear of losing good faith deposit.
A typical California ‘Good faith’ deposit (GFD) is 3% of the purchase price. Buyers write a ‘Good faith’ check and submit it with their offer, and if their offer is selected, the check is cashed and the escrow process begins. We’ve seen lots of buyers hesitate to write this check because they believe once the check clears, they MUST buy that property. In California, this is FAR from the truth. Your GFD is simply funds you as the buyer put forward to show your commitment to the property as you do your due diligence. During this due diligence contingency period, you can decide against the property and have your deposit returned for any reason, so don’t lose a great property because you are in fear of making a deposit!
3. Fear of overpaying.
Even though today’s buyers know the market better than ever with access to the MLS via internet and home value apps everywhere, buyers are still afraid to make a move in fear they will have ‘overpaid’ for a property they fell in love with, and be stuck underwater for years and years. (Sound like any renters you know??) Nothing could be further from the truth. Unless you are paying CASH for a property, it’s impossible for you to overpay, because there are systems of checks and balances in place to ensure this does not happen. During your ‘due diligence’ period, your lender is also doing their due diligence to make sure this is a solid property to loan you money on. The lender will send out an appraiser, and the appraiser’s sole job is to confirm the property is worth the price you offered on it. So rest easy knowing the bank will never loan you more money than the property is worth, even if you wanted to overpay. Plus, having an experienced buyers agent as your Realtor will also help you avoid overpaying, so you’re double covered 🙂
4. Fear of choosing a lemon.
We’ve all seen “The Money Pit” with Tom Hanks….YIKES! There are a lot of people out there who believe sellers will lie, cheat and steal to get their property sold. (and sometimes they may try to!) Fortunately for today’s homebuyers, a property inspection is conducted to ensure the home you love is not a lemon. There are quality home inspectors all over Orange County and they will inspect your property while its in escrow to make sure all the electrical, plumbing, appliances and structure is in working order. After a buyer’s inspection is complete, it is also typical to submit a ‘request for repairs’ to the seller with a list of items you would like addressed before moving into the property. Every property will have its problems, but buyers will always go into the situation with eyes wide open as long as they get a a property inspection with a quality inspector.
5. Fear of overextending.
Another completely valid buyer fear is over extension. “What if I bite off more than I can chew”? “What if I get laid off”? “What if I need to move”? These are all GOOD things to consider, but, they are not reasons why you should rent in fear the rest of your life. Actually, if you rent until you retire, you’re going to have a lot of reasons to worry how you’ll keep the roof over your head. Ideally, you’ll purchase a property, pay down the mortgage, and live in your paid off property after retirement 😉 In order to safeguard your investment, its a really good idea to have 3-6 months worth of reserves in the bank in case you do lose your job or need to move and find a renter for your property. Talk to your financial advisor about how much you should have in reserves so you don’t overextend and have to eat ramen noodles for the rest of your life. Its bad for your health.
What makes you hesitate to buy a home? If you’ve already bought your first property, do you remember your biggest fear when you took the plunge the first time? Please share by commenting below or tweeting @weeksteam or @angieweeks – we’d love to hear your story!!
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Orange County Real Estate Success 