Sunday, November 23, 2014
Having to sell a home can be a very emotional adventure, especially when it is a home that has been treasured by your family for over 50 years, and even more so when it is after the passing of your beloved parents. When it came to finally facing this difficult experience, I was very grateful to call upon Debbie Hall to help with our transaction. In addition to being empathetic and enormously supportive, Debbie handles herself with a positive personality and enthusiasm. She knows her business and the needs of homeowners, she negotiates on their behalf, and she faces challenges and overcomes obstacles with kindness. She conducts herself professionally, always with integrity and honesty. She strives to find answers until all concerns are satisfied, and she carries herself with a warm, caring spirit that makes business a pleasure. She dedicates herself to serving the needs of her clients and enjoys connecting people with places in which to make new memories. Whether you are buying or selling. Debbie is an individual you can trust, you are happy to recommend, and, in my case, who will remain a cherished friend, long after the deal has closed.
– Carolyn G. - Placentia
Monday, August 18, 2014
A "SUSTAINABLE RECOVERY", LOW FORECLOSURES, RENTS AT THEIR HIGHEST, INVENTORY STRUGGLES...A MIXED BAG FOR THE SUMMER HOUSING MARKET
Last month was "the" discussion on slumping prices. Really, what's happened is the large gains from 2013, which are always used in the month over month comparisons, are finally weakening the pricing "stew", as more months of 2014 are thrown into the mix. Simply put, 2013 saw double digit gains, and 2014 has been flat to maybe 4%. Hey, that's not necessarily a bad thing, as 2013's gains were not sustainable and in fact, another year like it would have seriously hurt the long term real estate market. The main reason for the hot market last year, lots of investor flips, willing buyers, and cheap money, have not entirely disappeared. However, buyers are being more discerning, inventory constrictions are being keenly felt, and cheap money is no longer a motivating factor. But what we all want is a sustainable recovery and we are on our way. Foreclosures are at their lowest level since 2006. There are two main reasons for this; a growing economy, more job stability, and rising home prices which are allowing distressed owners who have been under water to exit those properties either breaking even or a small portion of equity. On the other side of the "prices are too high" argument, are the quickly rising rents. In fact, the Orange County Register reported that O.C.'s biggest complexes hit $1,729 for its average asking rental price. That's barely $100 less than San Francisco. Potential buyers that have never done a "Rent vs. Own" comparison, or who think spending nearly $2,000 a month on rent, (figure $2,400 to 3,500 for a house), receiving neither a tax break or equity build is financially prudent, really should reconsider. The direction rents are traveling, purchasing may make the most sense. At least until interest rates rise considerably. Inventory has definitely grown consistently the last 2 months. Nationally, according to the National Association of Realtors, it has hit 5.5 months, the first time in 2 years. Locally, we are at about half that, but much better than the first quarter of 2014. In no way is this market a snap to figure out. The question you ask yourself should be a personal one: "What are my financial goals and my personal desire for my housing needs?" Answer that one and take action, before the market becomes even more unpredictable.
Orange County saw its median price for ALL homes rise to $600,000, up 10% from the same month of 2013. (All figures are from June of 2014, the last complete month available.) The resale median was $650,000, up 6.6% and condo price was $400,000, up just 4.2%. The total number of sales was 3,309, just barely off the 2013 pace (1.2%), showing a strong second quarter gain in volume. The break down was as follows: 1) Resale - 1,963 2) Condos - 893 3) New Homes - 453. Note that the increase in the median price for a condo was substantially less than single-family.
The shift was noticeable--- million dollar sales have been booming relative to the rest of the market. This partially explains the rise in the median price of homes. Remember, median is not the average, but rather half--half the homes sold above this mark and half sold below it. A higher number of homes over a million, will raise that mark. It's important to understand this distinguishment because it dispels the myth that we are in another bubble. We are not in another bubble. Already established by many economists is the belief that this slow down in the number of sales, coupled with growing inventory is a more "normal" market. But conversely, million dollar sales have sped up. In fact, sales of homes for $1 million and up rose 11.5% year over year in O.C. This at a time when overall sales have declined over 8%. This offers an explanation into numbers that seem contrary to what market analysts proclaim.
It is interesting to note when people buy to own and when they buy to invest. It does follow economic times to a tee. from 2003 through 2007, the range of people who owned to occupy was between 60% to 67%. When the housing bust came along and financing tightened, and prices plummeted, that occupied statistic rose to 73% from 2008 through 20112. Investors from 2003 to 2007 were at a high of 21% to 28%. Likewise with the bubble burst the investor purchase from 2008 to 2010 dropped to 17%. Currently, 2013 saw the owner occupied stat at 67% and the investor hovering from 20% to 27%. It is an encouraging footnote that despite any market turbulence, there remains a strong foothold for real estate investment as a pathway to building wealth. Good luck to you all this next month in charting your financial and real estate course for the future.
Monday, July 28, 2014
No economic recovery is perfect, in any sector; jobs, manufacturing, import/export, tourism, restaurants/services, and housing. There will be recovery and sputter, ebb and flow. Let’s concentrate on housing. There has been much positive news that relates to housing, primarily jobs and construction. New homes are still off a full 50% from a “normal” market, but the housing projects and construction starts by America’s biggest builders are definitely making a comeback. In fact, they are the highest they’ve been since 2008. In fact, new home sales jumped 18.6% last month, even as sales for single-family resale slowed. The volume of sales for existing homes fell for 8 consecutive months. Before anyone starts screaming that the sky is falling again, must remember that we are reporting a decline in sales for 2014 compared with 2013, which had been the hottest year since 2006 with double digit appreciation. For the volume to flatten out and prices to stabilize, southern California needed inventory. It appears that at last this is happening. The problem now...watch out sellers. You cannot simply tack on an extra fifty or one hundred thousand to your sales price, because that’s what your neighbor did last year. Prices have softened, you have more competition, and buyers are taking their time. With interest rates staying so low, there is no real outer motivating factor to drive a rapid market. Classic economics would tell you we are far from a neutral market, we still don’t have enough inventory. But it certainly feels that way, as buyers peruse through open houses and are reluctant to make offers. If you are a seller who has a location or floor plan and no competition, you no doubt may still field multiple offers. But don’t expect necessarily an all out bidding war. Part of the reason is that more of the buyers are now millenials. They won’t overspend to get exactly what they want, as the baby boomers did when they were the driving force behind the market. Millenials are pickier, they are conservative about their debt, and a deal must make sense for them. Plus, many have been living in multi-generational family situations, and they are in no hurry to move.
The total number of homes sold, all categories, was 2,981. (This for the last complete month available.) That was off 18.3% compared with the same month of 2013. Resale homes hit 1,855. a decline of 21%. Condos sold at a pace of 786 and lost 22.4% year over year. New homes hit that high of 340 and rose in volume by 18.1%. The median price of all types blended was $595,000 and that was up 10% year over year. Prices are definitely diving back down. Appreciation overall is expected to stay around 4% to 6% for 2014. Single-family resale rose 8.3% and condos 11%. Foreclosures continue to hover near an 8 year low. All of So Cal had 10,010 Notices of Default, or NOD’s, for the first quarter of 2014. Orange County had a paltry 1,244 NOD’s.