Compounding an already impossible problem, some homeowners also have an Option ARM that has reset, or is about to.

The Federal HARP (Home Affordable Refinance Program) was announced in early 2009, but few were able to take advantage of the program and one of the primary challenges were the limitations around loan-to-value requirements.

Simply stated, if your mortgage was more than 125% of your home’s current value, you were simply out of luck.  And, in many places in Orange County’s housing market, we’ve seen as much as 50% of property values simply disappear.

Who Is Eligible for HARP 2.0 Refinance

Reach out to your lender for specific questions, but some of the things you’ll want consider to determine whether or not you might be eligible for a HARP Refinance are the following:

• You cannot have made more than one late payment in the last 12 months, and none in the last 6 months
• The loan amount cannot exceed current conforming loan limits.  California’s upper conforming loan limit is $625,000.  I actually have some comments about these high loan limits….but that’s another post I think.  ;)
• Your existing loan closed prior to May 31, 2009.
• You’ve not done a HARP refinance.  If you took advantage of HARP 1.0, you are not eligible for HARP again.
• Second mortgages are allowed, but the second must approve.
• Second homes and investment properties ARE eligible.
• You may not use HARP if you have an FHA loan.  For those homeowners, try the FHA Streamline Refinance Program.
• There is 105% loan-to-value limit if HARP is used to refinance an adjustable rate mortgage or an Option ARM.
• Loan is guaranteed by Fannie Mae or Freddie Mac.  This is has nothing to do with who you make your mortgage payments to.  To find out if your is guaranteed, check Fannie Mae and check Freddie Mac.

I know this is some downright gripping reading, but I suspect if you are one of the homeowners that can benefit from a HARP refinance, you may very well be on the edge of your seat.  If you have questions, if you are curious about your eligibility,  don’t hesitate to reach out to us.  If we don’t know, we’ll point you in the direction of the lenders we trust to help you get to the bottom of it.

For the Rancho Santa Margarita residents that have been driving to Laguna Hills or Foothill Ranch for that In-N-Out fix, you’ll soon be able to save that gas money and stick around your own stomping grounds.   After two years of discussions,  according to the Orange County Register, today the Planning Commission gave the green light for the popular burger chain to establish a new location near the car dealership and the 241 toll road on Santa Margarita Parkway.

It appears that residents and city officials approached In-N-Out to establish a location in Rancho Santa Margarita.  Much of the delays have been centered around the traffic impact for the city, because anyone driving by those burger joints will consistently see cars lining up around the block.  Sounds like this location will be big enough to handle the demand.

My heart goes out to McDonald’s up the block.

No word on timing just yet, but whether it’s Protein Style, Animal Style, the 3 x 3, or the Double Double you crave, the wait will soon be over.  As for you diet conscious, calorie counting folk…this could be a problem.

Mello Roos has never been a legal tax deduction, however homeowners have routinely been jotting down ‘property taxes’ in a lump amount since the Mello Roos Act of 1982.   And until now, the Franchise Tax Board  has not pursued taxpayers for this, um, indiscretion.

For the 2011 tax year, you’ll want to be mindful of a significant change when filing.  I’d suspect Governor Jerry Brown is looking for funds, and this is clearly an opportunity that has been missed over the last 30 years.  This year, a new computer system will be used to allow the Franchise Tax Board to distinguish between deductible, and non-deductible portions of your property tax bill.   Of course, you will have to consult with your CPA, but if you’re curious about what is generally considered tax deductible and what is not, the Franchise Tax Board has been kind enough to share a sample property tax bill and the breakdown.

But Their May Be Hope Yet…

Assemblymember Jim Silva (R – Huntington Beach) has introduced AB 1552 that would allow one to deduct their Mello Roos.  In his Press Release dated 1/26/12, he stated, “”The state is always looking for ways to capture more and more taxpayer money and this is a new low. By going after Mello-Roos fees, the state is actually taxing a tax. It is another way to go after Californians’ wallets and must be stopped.”   Jury is out just yet, and I’m not that optimistic that our financially challenged state will pass up the opportunity for potential income, but we’ll be watching out for it here.

If you have questions about Mello Roos in Orange County homes, don’t hesitate to reach out.  For tax advise, please reach out to your CPA.  My suspicion is that this won’t be the first time they’ve fielded this question.

My opinions about this discussion continue to evolve.  But, yesterday I had an experience with Zillow that had me fired up, so much so that I’m breaking my blogging silence.

Hey, I’m the Listing Agent!

One of the themes in the syndication discussion centers around the idea of clearly identifying the listing broker.  I abhor paying Realtor.com to ‘enhance’ my own listings.  I pay them so that I may give them the very content that makes their site worth visiting in the first place.  But, I am unwilling to have a contact form next to my own listing that goes to another agent that may, or may not, know anything about the area.  And, they certainly won’t know enough about my listing to be truly informative when that buyer inquiry rolls in.  As a matter of fact, knowing the stats on REALTORS  responding to internet leads, they may not even respond at all.  THAT does not serve my seller.

Let’s be clear and honest.  Unless you’re the listing agent, a buyer inquiry on a property is a lead.  But, when you are the listing agent, that inquiry is an opportunity to serve your seller and sell their home.

I know, everyone can scream and holler about dual agency.  I’ll let you all work that out in the Facebook Raise the Bar Group.  But, Ken Brand, brilliant guy that he is, noted that you could also avoid the ‘risk’ of dual agency by allowing another broker to put his sign in front of your listings.  Ludicrous, right?  We advertise on and offline to sell our listings.  Handle the dual agency issue how you will, but let’s not say that just because I want my name on my listings in these syndication sites, I’m just looking for dual agency opportunities.  I actually care about serving the seller.

Tsk, Tsk Zillow

A couple days ago, we activated a new listing.  As part of my listing presentation, we always discuss where buyers come from and what we do to reach out to those various segments.  In the 2010 Buyer and Seller Report from the National Association of REALTORs, they reported that 38% of buyers found their home on the internet.  Once I have listed a property, I provide the links to many of the places the seller can now find their property online.  They’ll likely go looking for it anyway, so I’ll save them the trouble and shoot over the links.

While in the course of this little project, I find our listing on Zillow.  Just one problem….someone else is noted as the listing agent.   I know about the ‘premier agents’ that are listed next to my listing.  No big deal.  But someone else is the ‘listing agent’?  I don’t think so.

Zillow was very responsive when I called.  They immediately ‘reclaimed’ the listing for us.  But, of course I wondered, how does this happen?  Who is responsible for policing this?  How often does this go on?  She said that it was being flagged and noted that this gem of a company had claimed 730 listings.  730 listings?!

Zillow sent me a follow up message later in the day, “Thank you for notifying us regarding ReeBroker CA claiming your listing. We have removed the listing from this users account and are handling this issue appropriately.”  I guess I’m wondering what ‘appropriately’ means.  Have 730 listing agents not noticed that someone claimed their listing?  Has anyone else notified Zillow that there is a problem?  How easy is it to claim a listing that is not your own?

The experience made me aware of how much I do care about being the listing agent on MY listings.  I can live with other ‘area specialists’ next to my listing, but this?  Yeah, this is putting your sign in front of my listing buddy, and that’s not happening.

Is IDX Different?  Maybe Just a Little

In many ways, IDX and syndication can be looked at in the same way.  I guess I see one difference.  These heavily trafficked sites are  well known, national channels that buyers visit early in their search.  And really, I think they do offer tremendous exposure for listings.  If 38% of buyers found their home online, then I think it’s fair to say that the seller is reasonable in the expectation that their home is easy found on these sites.

IDX is used on websites that must be promoted locally by that agent or broker.  The work they do to promote that site and generate traffic is to generate buyer and seller leads.  Am I as concerned about making sure that my seller is served in the same way on those sites?  No.  They do get exposure and that agent is generating business from their efforts.  Super.  But in the heavily trafficked national sites, you betcha, I want to have the opportunity to support my seller when a buyer expresses an interest in his home.

Maybe it’s a subtle difference, but to me, it’s significant enough.

The image in this post is from a 2006 ad campaign from N.A.R. stating ‘It’s a great time to buy or sell a home,’  and sadly states that ‘Prices overall have stabilized’.  We all know how that panned out.  In 2006, it was however, a great time to sell.  Is it ever a good time to both buy and sell?  The reality is that it’s one or the other.

It’s Not a Great Time to Sell

Most homeowners certainly are getting this message. In most cases, those that elect to sell are finding themselves with circumstances that force their hand.  Today’s seller find themselves with no alternative other than to sell, whether it’s significant negative equity position, job loss, divorce, job relocation, or some personal set of circumstances.  In very few cases do we find that they elect to sell today if they don’t have to.  With so many hardship sellers on the market, the downward pressure on pricing continues, making it far from an ideal time to sell.  But for the buyer, this is creating the very environment that makes it a good time to buy.

It’s a Great Time to Buy

Why now?  What makes this particular time to buy attractive?  There are a number of articles talking about the reasons to buy right now but here are a few in particular that I think are worth considering:

• Prices have taken quite the tumble in Orange County and depending on the area have fallen 25 to  50% from the market highs.  There are good deals to be had in every price range.
• If you can manage to get a loan, interest rates are still very attractive, for now.
• Houses love inflation and with a good deal of speculation about the likelihood  for inflationary conditions, we are beginning to see cash purchases are on the rise.  This may be considered an excellent hedge against inflation.

It’s Not Going to Be Easy

The real winner today is clearly the guy with cash.  Cash purchases take out much of the uncertainty in the transaction process.  There is no need for a mandatory appraisal, no underwriters to approve the process, no need to confirm  that the condominium complex complies with FHA guidelines (many don’t), and often cash purchasers have a larger ‘pain threshold’ when it comes to dealing with the cosmetic issues or problems that arise in an inspection.  This puts the cash buyer in an excellent position to negotiate.

Qualifying for a loan today is a far cry from what it was a few years ago.  Buyers will generally have to have great credit, good debt-to-income ratios, documented income, cash reserves, and a solid job history.  While there are still programs for the smaller down payments, like FHA, be prepared to pay for mortgage insurance.  There has never been a more critical time to make sure you are working with a savvy lender.  The documentation required, the tax returns, the bank statements, the investment statements, the verifications of employment and rental history, and potentially the promise of your first born child, will try your patience.

The inventory limited and is often distressed.  Those purchases come with their own hurdles.  Short sales are still a painful and uncertain process.  Bank owned homes currently make up a small portion (2.5 to 10%) of today’s Orange County market. Many homes need some work.

One Last Thing…It’s Not a Good Time to Flip

I wouldn’t plan on buying unless you are willing to own as a long term strategy.  While I think we’ve seen the big fall in prices, there is nothing to say that prices should be considered stable either.  But timing the bottom is tough if you are borrowing money.  If interest rates rise, even if prices decline, the net effect on affordability is a wash.  Find a home that you love, that meets your needs for the long term and get comfy.

No Surprises Here

When I wrote about the upcoming letter yesterday I wondered about the purpose of this outreach given the fact that the difficulties processing short sales are already widely known to those called out in the letter including, ‘regulators, elected officials, nonprofits, business organizations, companies…’ and any individual who has been a party to a short sale transaction since 2006.

Much of the letter paints the well known picture of the crisis, and none of this is new information.

What’s the problem?  For one, no two mortgage agreements are the same, so it can be difficult to standardize short sale processes and procedures.  Many homeowners have second mortgages, which further complicate matters.  Then there’s the challenge of convincing multiple parties to take a financial loss or, in the case of loan servicers, to forego fees they otherwise might earn during the course of the foreclosure process.  Poor and slow service by many banks and servicers has only exacerbated the problem.  Horror stories abound from potential homebuyers and REALTORS® forced to wait 90 or more days for a response to a purchase offer or being required to fax short sale applications or other paperwork as many as 50 times.   These delays discourage potential homebuyers from considering a short sale purchase and undermine the process for those who short sales are intended to benefit – the hundreds of thousands of families facing foreclosure.

We Know the Problems, What’s the Solution?

Yesterday, without knowing what the letter contained, I found it interesting that C.A.R. would need to resort to this course of action to effect change.  Clearly, earlier methods have not created significant impact on the problem since the early stages of this crisis in 2007, so what is the goal of this campaign?  And how are we justifying the use of member dollars?

Many of the loans in question are no longer owned by the original lender.  Many loans when through the securitization process and became a part of residential mortage-backed securities making it incredibly difficult to negotiate.  Servicers, with little vested interest, are left to deal with the processing of payments, collections, and act as the primary points of contact for short sale negotiations.  There is no question that it has become a nightmare for all parties.  So what is the solution?

Given the expenditure by C.A.R. for this campaign, I would have liked to see something significantly less ambiguous than the following that appeared in the closing paragraph of the LA Times:

Increasing the number of closed short sales by speeding up and streamlining the short sale process is one important way we can help California families avoid foreclosure and move our economy closer to recovery. That’s why the California Association of REALTORS® is taking steps to enable more families to arrange a short sale.  Recently, we advocated for improvements to short sale guidelines established under the federal Home Affordable Foreclosure Alternative (HAFA) program.  We’re meeting with major banks, U.S. Treasury officials, government-sponsored entities (including Fannie Mae and Freddie Mac), and others to urge them to standardize processes, comply with federal guidelines, improve communication with other stakeholders and increase staffing with the goal of eliminating service issues.  We’ve also offered our members training in every aspect of the short sale process so they can assist their clients.

So What Was The Real Purpose?

None of those suggestions are particularly new and after 4 years with little improvement, it might be time for some more aggressive suggestions if we are really intent on creating some significant impact.  Given that we didn’t see that here, I’m left wondering what the real intent was for the campaign.  Was it PR for C.A.R. to say, ‘hey, we’re doing all we can and it’s not working’?  Is it to call more attention to the crisis and put pressure on those that have influence?  But without some real concrete suggestions, I’m at a loss as to see how this sheds any new light on this long-standing problem that is certainly at the center of the national housing crisis.

March 9, 2011

Dear Linsey,

As you may know, C.A.R. has been working on numerous efforts to address your concerns about the difficulty of working with short sales.

To that end, I want to give you advance notice of perhaps one of our most visible activities to date, and one that may be a first in C.A.R.’s 100-plus-year history.

Tomorrow, C.A.R. is placing an open letter advertisement in California’s seven largest daily newspapers, calling on lenders and industry regulators to streamline and improve the short sale process.  C.A.R. is taking a leadership role in this effort by getting this letter published and pointing out lenders’ and servicers’ unworkable short sale processes.  We’re also appealing to various constituencies, such as regulators, elected officials, nonprofits, business organizations, companies, and individuals to join us so that more families are able to arrange a short sale, rather than lose their homes.

In the letter, I write, “With the number of homeowners who owe more than their mortgage is worth hovering at 30 percent, experts predict there will be many more foreclosures in 2011 and 2012.  Unless we take immediate, aggressive action to assist these homeowners, any meaningful recovery in the housing market and overall economy will continue to be delayed.”

The open letter will appear in a full-page advertisement in tomorrow’s Los Angeles Times, San Francisco Chronicle, San Jose Mercury News, Sacramento Bee, San Diego Union-Tribune, Bakersfield Californian, and Fresno Bee.  If you live in one of those areas, I hope you can pick up a copy of one of those newspapers tomorrow and read the open letter.  If not, we’ll be sure to post it on car.org.

Help us spread the word further by leveraging your relationships with your local paper and asking them to publish it.  Or post it on your website, if you have one, to reach your clients and other consumers.

Sincerely,

Beth L. Peerce
2011 President
CALIFORNIA ASSOCIATION OF REALTORS®

 

Later I received another email from C.A.R. Newsline that goes to members stating,

“The open letter addresses the following topics: The benefits of doing a short sale rather than a foreclosure; the inconsistencies with short sale processes at banks; the challenges of working with multiple lien holders; and the slow and/or nonexistent communication by banks and servicers to REALTORS®, homeowners, and buyers.”

Scratching My Head

While I applaud the effort to address the issue, there are a few things that leave me a little perplexed.

First, the negative equity situations, and need to negotiate short sales for sellers, began in 2006 and certainly began in earnest in 2007.  We have seen four years of sellers, buyers, and the real estate community suffering through long, painstaking processes that have seen very little improvement during that time.  After four years, the fact that C.A.R. has resorted to taking ads out in major newspaper publications implies that C.A.R. is finding that they are out of alternatives to influence significant change.

Secondly, it’s interesting to me that the Orange County Register has been omitted from the newspapers they chose to utilize for this outcry.  Given the fact that 30 to 50% of the active listings (depending on city and price point) are short sales, this sizable market seems be a place to have had such a discussion.

I’ll be interested to see the piece when it comes out tomorrow.   Ms. Peerce says that the attempt is to appeal to ‘various constituencies, such as regulators, elected officials, nonprofits, business organizations, companies, and individuals’, as well as banking institutions and servicers.  But this problem has been well known by all of these folks for a very long time.  If earlier attempts to streamline haven’t made any headway, I’m not sure how this will improve things.

But, there’s no question, I’d be happy to see it.

The Sale Price Tells a Story

I decided to pull up some individual tracts to find foreclosed homes, short sales, and traditional or equity sellers to compare the sold pricing.  In an effort to make the comparisons meaningful, all of the following examples have closed in the last 90 days and are close to, if not exact model matches.  The tracts were selected solely on my ability to pull up enough properties for a full comparison.  All provided sale data comes from Socal MLS.

*worth noting standard sale highly upgraded

So why aren’t the bank owned homes selling for the deep discount that some of the media describes?  With the current inventory in some of our South County cities in the range of 2.5% to 10% for that type of sale, there is hardly a ‘glut of inventory’. It’s interesting to note that two of the 4 bank owned homes in the examples sold for over asking, which may indicated multiple offer circumstances.  The number of foreclosures may increase, but throughout this housing crisis, we have yet to see a significant influx of foreclosed homes on the market in Orange County.

So should short sales be your focus for a good deal?  Possibly.  But be aware of a couple things.  There is a significantly longer process while one waits for bank approval, with no guarantees.  And very often the Homeowner’s Association dues are delinquent and in nearly all cases, it’s the buyer that satisfies those delinquencies in a short sale.

Bottom Line on Finding a Good Deal

Be clear about what you are looking for in a home.  When you find the right fit based on your criteria, try to keep from becoming too emotionally attached so that you can focus on negotiating the best price and terms possible.

Two Ways To Buy a Foreclosure

As noted in the piece, there are two ways one can purchase a foreclosure.  The first is to go to the courthouse on the date of the Trustee Sale and bid on the property.  In the television spot, they imply that you may have trouble getting a loan and you will need at least 5 to 10% down.  I’m not sure about other places in the country, but here you will have to show up with cashiers checks in hand.  These are cash purchases.

Additionally, you will be competing at those sales with professionals who are at those sales everyday.  They spend significant time researching the upcoming properties and the competition for the properties at the courthouse is significant.  You are also not guaranteed clear title and there is a fair amount of risk you will be assuming.  As GMA points out, you buy these properties sight unseen.  Many of the opening bids are well above today’s market value because the bank intends to retain the asset to sell on their own, leading to the second way to purchase a foreclosure.

The properties that the bank retains will generally be sold through a real estate agent and placed on the market.  The piece talks about the significant savings one can find by buying a foreclosure. The national median home price is $160,00 and the median home price of foreclosures is 28% less, or a $45,000 savings.  The fact is that the number of foreclosures in the lower price points is significantly higher.  That lower price point will certainly have a direct impact on the lower median price for foreclosures.It’s important to note that while you may achieve some savings, there is a flaw in implying that the 28% is due entirely to a ‘discount’.

I find the example discussed in the piece highly suspect.  The example property sold in 2005 for $300,000 and was purchased today for $175,000 which is 42% less.  That sounds about right in a lot of markets and is probably not far off market value.  They mention that is $100,000 less than nearby homes (putting them at $275,000).  Either the nearby homes have not seen much of a drop in value (which I doubt) or this home is likely smaller than the nearby homes, making the implied savings of $100,000 discount misleading.

Discounts for Orange County Foreclosures

There is no question, there is significant buyer interest in foreclosures.  Buyers are on the pursuit for a good deal, and rightfully so.  So what does that inventory look like in our South Orange County markets?  As of right now, there is a very limited inventory of foreclosures with Aliso Viejo at only 10% of active listings and as little as 2.5% in Coto de Caza.  With buyer demand for these properties, and very few available, the idea that discounts will be dramatic may be misguided.  And keep in mind, many of these will be in poor condition with cosmetic and/or structural work to be done.

So You Want a Good Deal

The available foreclosures is likely to increase.  But these are the current numbers.  So how do you find a good deal?

Short sales are abundant and in many parts of South County, they make up nearly 50% of the available market.  And don’t count out the equity seller.  Those that are listed today are well aware of market conditions and if they have decided to sell now, it’s because their personal circumstances have forced a move.    Most of them are very motivated and the upside of these transactions, there is no waiting for the bank.

Good Advice

The very last moments of the GMA piece advised buyers to get a Owner’s Title Policy when purchasing a foreclosure “in case someone comes along later claiming it’s theirs”.  Sound advice.

So I buckled myself up, and sat in front of the computer for a few hours to extrapolate some of the data from the Multiple Listing Service (MLS).  For a numbers geek like me, it’s pretty interesting stuff. And if you’re not a numbers geek…you might be surprised to find, it’s not entirely boring.  Work with me here…

The Good

There is no doubt that certain communities have been more resilient over the course of this housing crisis than others.  In my recent post discussing the  product profile for new residential construction in Orange County, I discussed the uniqueness of the Irvine market.  It has some of the lowest distress numbers in South County and a buyer demand that is consistently selling out the newest construction projects.  Year-to-date they have had less than 7% of all closings listed as bank owned (foreclosed) property and 22% short sales.  With less than a combined total of 29% for properties closed that were ‘distress’ so far this year, Irvine is one of the strongest cities in the county.

The strength of the Irvine buyer demand may be attributed to the nationally renowned schools, the proximity to Chapman University and University of Irvine, and the attractive commute to many Orange County employers.

My suspicion is also that the buyer profile may have been stronger.  I’d need to do further research, but given the large amount of new construction sold during the boom years, I’m a little surprised to still see a relatively low default rate, or distress market, as compared to other areas in South County that grew up in the boom.

The Bad…Or At Least ‘Not So Good’

Some of the other cities have seen significantly higher numbers of distress sales – bank owned properties and short sales closed.

Lake Forest has seen some fairly dismal numbers at nearly 60% of their closings either bank owned or short sales, with a slight improvement this year so far at 55.9%.  It’s also interesting to note that while some cities (Mission Viejo and Rancho Santa Margarita) seem to be seeing a slight improvement in the percentage of equity sales (owners can sell for a price that covers mortgages and costs of sale) this year, Laguna Niguel and Aliso Viejo have seen decreases. Why?

We’ve seen that some of the higher price points have been stronger for longer.  In other words, it’s only been more recently that we’ve seen short sales or bank foreclosures to any great extent in the higher price points.  These neighborhoods may now be feeling that pinch.

CLICK TO ENLARGE

The Really Ugly

It’s interesting to examine the nature of the neighborhoods that have the highest number of distress inventories.  Upon examining a couple of the neighborhoods, it’s clear to me there are some very real reasons for the challenges some of these neighborhoods are facing.

CLICK TO ENLARGE

It’s important to know the following about the this chart – Ladera Ranch numbers include their gated community of Covenant Hills, and San Clemente’s overall numbers include their newest addition of Talega in their calculations.  For discussion, I’ve pulled out the specifics for both Covenant Hills and Talega.

It’s hard to ignore, out of the cities I profiled, the only one that didn’t have a lower percentage of bank owned homes (foreclosures) was Lake Forest, and certainly Lake Forest has really struggled with high numbers of distress throughout this market as well.

Growing Up In The Boom

I’m particularly interested in the makeup of Ladera Ranch, Covenant Hills, and Talega in this crisis, however.  These are neighborhoods that experienced unprecedented demand, and in the early years, unprecedented appreciation.  The product was new, architecture was unique, planning was exceptional, and it was highly appealing to the buyer profile of the day.  But the one commonality these neighborhoods also face is the fact that they literally grew up in the boom.

And in the case of Covenant Hills (which I intend to explore further in a future post) you have a community, a luxury one at that, that was just in the beginning stages of it’s launch.  And while the construction of the planned community, high-end tract homes, has nearly completed at this point, the high number of available empty lots slated for luxury custom builds, remains vast.

And when you have entire communities that are built in a boom, the overall impact of that bust can be devastating.    For a small community like Covenant Hills – the high end of Ladera Ranch – to see nearly 64% of it’s year-to-date sales as distress, the impact cannot be overstated. With Talega suffering over 60% of it’s closed inventory year-to-date as distress sales, there can be no question that this has dramatic impact on value.

Is There a ‘Good Deal’ for a Buyer Here?

Without a doubt, there are opportunities to get a ‘good deal’ in these neighborhoods.  In some of the hardest hit neighborhoods, prices have fallen and distress inventory is high.  So if a ‘deal’ is the goal, they are certainly here.

But I’m curious about your perspective as a buyer – and I’m interested in your feedback.  If you find a property that is 50% off it’s peak in Covenant how do you respond to that?  Do you feel like it’s a better deal than the property that is only 30% off the peak in another neighborhood – some parts of Irvine for example.

It’s an interesting concept to consider.  Every buyer I talk to has one request in common – a good deal.  I think that’s an important thing to define in your search for a home.  Is the ‘deal’ the predominant factor, really?  Is the long term value of the community a consideration?  Do the amenities impact your decision?

However, one may consider the long term prospective recovery in Covenant Hills as a real opportunity.

It really begs the question – from a buyer perspective, what do you consider a ‘good deal’ in this environment?

Short Sales and Volume

Some things to note from the above numbers, in 2008 the foreclosed/bank owned homes were the more common distressed property available.  In 2009 the tide shifted and short sales played a much more significant role, one which grew further this year.

Also, it’s interesting to note volume.  Nearly across the board, the number of sales increased from 2008 to 2009.  Jury is out for 2010 – but my personal opinion, given the expiration of the Housing Tax Credit, things may be fairly quiet for the 4th quarter of this year.

Jon Lanser with the Orange County Register recently did a post breaking down the number of sales and the change in median price per zip code that might be interesting to check out.