Wednesday, February 11, 2015
THE NUMBERS ARE IN FOR 2014--PRICES WERE UP, VOLUME DOWN--BUT DON'T EXPRECT THAT TREND TO CONTINUE IN 2015
The New Year, that is 2015, has started with a much bigger bang than 2014 did. In fact, it started to pick up at the end of 2014. The total number of sales for November, 2014 (condos, single-family resale and new homes) totaled 15,643 for all of So Cal. (This includes Ventura, LA, OC, San Bernardino, Riverside, and San Diego.) That number jumped an astonishing amount to 19,205 for December 2014, a 22.8% jump. So you can imagine how anemic the numbers were all year as the total for Orange County for 2014 was 33,844, down 8.2% from 2013's total. That number was for all homes as stated above. The median price, meanwhile, hit $585,000 and that was up 9.3% from 2013. This completed two back to back years of fairly rapid appreciation gains, and experts rightly predicted a heavy slowdown, which actually started last winter, with appreciation steadily dropping all last year. There was a total of 20,496 single-family resale, 9,166 condos sold and 4,182 new homes. This year already is showing strong signs of volume recovery as interest rates promise to stay down...for now. But many buyers are getting the message loud and clear from the Fed, that rates will probably rise sometime this summer. This is a strong motivating factor for "fence sitters", who are waiting for that perfect time to buy. The perfect time to buy is when you are financially and emotionally motivated, don't worry about the market, but in particular, inventory is expected to strengthen this spring as more and more sellers are able and willing to sell, having enjoyed two strong years of equity growth. You can expect to see our strongest "move up" market in over 7 years as people who want to do something, as well as those who have to do something, all enter the market.
Most of us have read about or if you were selling a higher end home, may have experienced, the foreign nationals who have been snapping up properties in the US, particularly in So Cal, especially the OC. Now listing inventory of the higher priced homes are starting to pile up as these buyers grapple with the stronger dollar. It is a conundrum. On the one hand, their money doesn't go nearly as far. On the other hand, compared to many foreign currencies, the dollar is the safest haven and hedge against inflation. Even said, listing agents might be compelled to obtain price reductions to move their high end properties. Be patient and be realistic are the watch words for this market. Even with this being the case, these off shore buyers will still bring competition to the high end.
So read the headline of a recent OC Register article. But there was a great chart from Demographia that listed the top 10 cities with the least affordable homes, in terms of the ration of an area's median home price to local median household incomes, from a study of 86 cities. The good news is that greater OC isn't on the list, the bad news LA is, but the good news is that at least it's #10. The cities you ask?: 1) Hong Kong 2) Vancouver, BC 3) Sydney 4) San Francisco 4) tied- San Jose 6) Melbourne 7) London 8) San Diego 9) Auckland, New Zealand 10) Los Angeles
The last complete month is December2014 and the numbers are: Total sales - 2,880, which is down 6.8% for the same month of 2013; The median price for all homes was - $591,000 which rose a mere 3.7% (much more sustainable and will lead to a healthier market for 2015); The total number of resale homes was 1,726, both price hikes and volume nearly flat at less than 1% for both; Condos sold a total of 744 and the price was $390,000 volume down 4.2% and prices up 4.8%.
Rising equity will always have a stabilizing effect, because it allows all segments and price ranges in the market to make independent decisions regarding their home, which ultimately cause more interaction between price ranges and people move up or down in size and price according to their need of growing family, empty nesters, and retirement. Equity is a very liberating quality in homeowner economics. And although credit standards tightened immensely after the recession, there are now emerging more loan programs, the resurgence of some old programs and some revamps even in government lending such as the lowering of the FHA mortgage insurance by almost half a point. On a median priced home, that can be over $200 a month or even more. That increases a buyers, "buying power", tremendously. All who are looking to buy should speak with a lender to find out exactly how much you qualify for...buyers may be surprised by their purchasing powers. Sellers are also in a great position. At last it would seem we may be trending to a totally equitable market. It has been sometime. Surely the results will be an encouraging factor in our economy for the year ahead.
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.