What’s in store for Orange County Real Estate in 2014?
What’s in store for 2-0-1-4?
Today we had the pleasure of attending a lunch & learn by The Real Estate Focus Group and Steven Thomas, one of Orange County’s best real estate forecasters. Steven’s reports have been published in Forbes, USA today, NY Times, and especially the OC Register because he’s constantly pulling tons of valuable data about what’s going on with the OC housing market.
2013 Real Estate Review
In 2013, short sale volume dropped by 61%, (holla:) we experienced a hot hot hot market with 18% appreciation and then the unrealistic sellers entered the market after June. We saw many more move up sellers, which is a great sign. There was a significant lack of inventory at the beginning of the year, followed by a spike and overpriced inventory in the fall. We also had a refinance bonanza, so hopefully you took advantage of that! Interest rates are still historically low, but tapering is looming, so 2014 is a year to get your financing while financing is still good.
2014 Real Estate Ramp Up
We currently have 5000 homes on the Orange County market, and we have a 49% increase in inventory since this time last year. Our market is healthy because interest rates are still low (but expected to go up), and we are currently at 90% equity (standard) sales.
Only 5% of the mortgaged homes in Orange County are currently underwater. That means 95% of you are back to even or have (gasp!) equity – FABULOUS NEWS – and this makes the perfect formula for a continued move up market. If you’d like to get the house with the yard or the pool, this year is opportunity time for you.
First time buyers who have been squeezed out of the market the last 12 months will come back, even though their rates are a little higher and FHA guidelines have changed. In addition, more luxury buyers are expected to enter the market this year.
Sellers, our expected time for a properly priced home on the market in Orange County is 93 days. Our median sales price is 610K, and buyers, your monthly payment for a 4.5% loan at this price is approximately $2500. Still affordable. Unless you like paying off your landlord’s mortgage instead.
New home construction is going up: Rancho Mission Viejo, Great Park Irvine, and Baker’s Ranch in Foothill Ranch are all big developments underway. Remember it’s still a good idea to have a Realtor represent you even in a new build situation, so be sure to call us if you would like to check out any of the inventory out there.
Some concerns for 2014….. uncertainty, lack of fair market value homes, interest rates, and the circus in Washington DC.
Some expectations for 2014…… buyers will insist on fair market value vs. paying over appraisal, active inventory will continue to rise, interest rates will continue to rise, and we should have a mild appreciation of 0-5%.
If you are interested in MORE geeky data, we have it at our fingertips! Just email angie@askangie.com, tweet @angieweeks or @weeksteam, or call 877-230-3211 to request a copy of this month’s Orange County housing report.
Read Full Post | Make a Comment ( None so far )California Real Estate Market Update from Leslie Appleton Young
What’s in store for Orange County Real Estate and the California market in general in 2014? We had The California Association of Realtors Chief Economist Leslie Appleton Young present a ton of great market data and facts today, so we wanted to share with you!
Here are 8 quick facts about CA Real Estate:
1. REO level is at 5%. There are only 205 bank owned properties for sale in OC right now.
2. There are now only 15.4% underwater homeowners in California.
3. Foreclosure and delinquency rates are now at their historic normal level. (Big WHOOP WHOOP!!)
4. Sept median price in CA for detached homes: $428,810
5. 72% of properties from the beginning of this year had multiple offers. (This is why you need a good Realtor!)
6. 82% of investors bought & HELD. Only 18% flips in 2013.
7. There are 3.6 months of inventory supply in CA as of Sept.
8. Only 28% of buyers were first time buyers because they were outbid by all cash investors 😦 The long running average is 38%.
The big question: Will there be home appreciation or depreciation in 2014????????
Leslie predicts we will have more inventory, and sales volume will be up 3.2%. She is projecting a 6% appreciation, and mortgage rates will RAISE to 5.3%.
What does this mean for you? It’s a great time to seize the opportunity of lower prices while rates are still in the 4’s! Call us at 877-230-3211 for help and to maximize your investments!
Read Full Post | Make a Comment ( None so far )Make the Most of Your Money – DIVERSIFY!
Mission Viejo Book Signing – ‘Making the Most of Your Money’
Last week I visited the Mission Viejo Library to get a copy of what is supposed to be the best personal financial planning book on the market right now. Entitled ‘Making the Most of Your Money’, it was written by Jane Bryant Quinn. Honestly, I had never heard of Jane Bryant Quinn until recently, but she definitely is a highly respected voice in the money management community.
Jane got off to a light start, joking that she almost named her book ‘Making the Most Out of What’s Left of Your Money’. She agrees that the economy is in a bad place, adding that the government needed to step in in order to prevent a full-on depression. But this cloud has a silver lining – the economy is recovering. Nevertheless, we’re still feeling some economic aches and pains, which is why keeping our finances in mind and tightening up our ship is such a good idea.
Jane covered quite a bit of financial planning territory. Regarding our current bull market, she recommended diversifying accordingly. She also touched on inflation, predicting that fortunately this monster won’t go very high.
For the U.S. government’s role, Jane pointed out that Congress may soon be restoring the Paygo law, which is intended to control government spending. This, along with a tax increase, could significantly help our budget.
So how do savers and investors pick their way through the current financial wilderness?
First and foremost, according to Jane, get OUT of consumer debt. “Debt is like feeding your dollars to squirrels.” Do NOT make it normal. Debt and credit are not glamorous. Sure, they seem fun at first, but when it’s time to retire and your mortgage is soaring, the debt beast will likely bring you to ruin.
In the Real Estate arena, Jane cautioned that we shouldn’t expect the height of where we were in 2007 for many, many years. OK fine. Thanks for that. In general, home prices follow the inflation rate. Currently, consumers aren’t thinking of their homes as investments. But that’s OK. Because when all is said and done, according to Jane, it STILL PAYS to OWN a HOME!!!!!! But watch those HELOCs. Let’s get back to that concept of paying down our mortgage, people. Jane also advised don’t take a reverse mortgage until you’re in your 80’s, even though you are allowed to in your 60’s.
If you’re underwater on your rental investment, it’s probably a good idea to lower your rent to keep your tenants. You must be prepared for losses for years and years if you are a serious real estate investor. Make sure you have liquid cash flow. You can also consider short sale or foreclosure if the property is a huge drain. Talk to a professional Orange County financial planner and / or consider some by the book investment education.
As for stocks, Jane mentioned that she talked with many of the top financial masterminds all over the nation. Apparently, the majority of them have the bulk of their own funds in a broad market index, something like S&P…
She added that for young people, lifestyle funds are a good idea, even though they’ve received a bit of a bad rap.
Jane also stated a good formula for your retirement fund risk is this: subtract your age from 110. Whatever that number is, that’s the percent you should be investing in stocks. As you get older, this formula helps you safely transition into a majority of bonds and a lower risk portfolio.
There are so many valuable insights in this book, it was THICK! I’m sure ‘Making the Most of Your Money’ is truly a valuable guide to sound financial planning. But seriously, no matter how many books we read someone, who does financial planning for a living will always be better than we are, IMO. You should have a professional on your side. Just like you should in real estate!!
Speaking of property, if you would like your diversification strategy to include owning some Orange County Real Estate, I’m happy to help. Contact me at 949.338.7408 or angie@askangie.com. Or follow me @AngieWeeks or @WeeksTeam. Happy investing – feel free to post what has and has not worked for you here!
Read Full Post | Make a Comment ( None so far )OMG It’s an economical EARTHQUAKE! What to do from a financial planner’s perspective…
Special thanks to William Jordan, our favorite Orange County financial planner, for taking time out from his hectic week to help educate our clients on what is REALLY going on with the economy right now. Mike & I highly encourage all of you to call your financial advisors this week, and if you don’t have a financial advisor, go and talk to William at his Laguna Hills office – he rocks 🙂
It’s an earthquake!
This week, the financial markets were shaken with an earthquake unlike almost anything we have seen in our lifetimes! The one similar example is the infamous “black Monday” on October 19th, 1987. On that one day, the stock market dropped over 500 points for the first time ever. A decline of more than 25% which dwarfs the declines we saw this week.
So what do we do? Panic? Run for the hills? Convert your cash to gold and start buying ammunition? Of course not. But to hear it discussed in some circles, that’s exactly what should happen.
On Monday evening, I was interviewed on CNBC in the midst of the “AIG crisis”. Yet another massive financial firm experiencing financial duress. I was asked what my counsel was to people who have been told to “buy and hold”. The point I made was that this is a call to arms for people to get their financial houses in order. Too many people have been speculating financially, and the results are as we have seen.
For many people, including most of my clients, this was an expected though unwelcome event. We know that bear markets and financial downturns will happen. In fact this bear market has currently been less severe than the average bear markets we have seen in the past! It certainly doesn’t feel like it, but it’s true.
So what do you do? For starters, do a complete financial physical on where you are at. You need to examine your assets as well as your debts. Look in detail at your investment holdings, and decide if you need to make changes. Don’t make changes for just any old reason, but with a practical and well thought out plan.
As I pointed out in a separate CNBC appearance a month ago, this is a great time to sell highly appreciated assets and pay capital gains. Those tax rates are still very low historically, and are likely to rise in the future. You can use the proceeds to pick up some excellent investments that are trading well below their values.
Bottom line is, like in any earthquake, don’t panic! Stop and pick up the pieces. Make new plans moving forward, but make them with a clear mind and well thought out options. It’s a perfect time to meet with your financial planner if you have one, or find a new one if yours isn’t up to the task.
Earthquakes happen. Those who are prepared and don’t panic will be okay.
William Jordan, President of The Sentinel Group, Inc, is a well respected speaker and media resource for quality financial advice. He’s been interviewed by CNBC, Forbes, The Wall Street Journal and was a featured financial expert in Kiplinger’s September cover story. You can reach William Jordan at (949) 380-8600 or visit www.SentinelOC.com.
Orange County Real Estate Success 