Make Your Home Search Easier and Mobile

Whether you have and Evo, a Blackberry, a Droid, or an iPhone, this simple addition to OC Real Estate Voice may just help make your home search a bit easier when you are out on the road.

• Do a full search from your phone
• Find homes that are listed within a specified radius of your location
• View listing details for a specific home
• View photos for a specific listings
• Easily contact me with questions

What Will It Look Like?

If you are in a neighborhood you like, or in front of a home that interests you, simply use the GPS feature to get the list of homes within a specified radius of your location.  Select GPS and authorize your mobile device to use your location. (BTW – for all of you that love to make fun of my iPhone’s battery life, feel free to continue….)

Specify the radius (as low as .25 miles for example).

Home Search Results

Listing Detail on Mobile Search Device

Listing Details

Listing images

How Can I Use This Search?

Simply go to http://m.ocrealestatevoice.com on your mobile device.  If you are using an iPhone, use the ‘+’ sign and click ‘Add to Home Screen’.

You are in action!  If you have questions, or any problems, don’t hesitate to let me know.

Skip the Weather Forecast – It’s 70 and Sunny:  No disrespect to the local weather forecasters, but we don’t rely on them for much.  If they predicted 70-something for temperatures year round, they’d be right (or close to it) most of the year.  For many folks, this is the ideal and is one of the reasons so many people love living here.  If you enjoy seasons, it may be an adjustment.  5 minutes of rain = Storm Watch & Traffic

• The Mello Roos Dilemma:  Buying a newer home, sans the Mello Roos bond are contradictory goals.  By and large, homes constructed after 1982 will have a mello roos bond.  The newer the home, the higher that bond is likely to be.  Newer homes and mello roos go hand-in-hand.  Sorry.  I don’t like it either.

• It’s Expensive:  No kidding.  Orange County real estate is still expensive, even after prices have fallen.  As of today, $500,000 will likely get you an entry level home with little or no yard – depending on where you are in the OC.

• Land of the Beautiful People: With nice weather, comes lots of opportunities to be outside to play, to exercise, and enjoy beaches making it easier and desirable to stay in great physical shape.  Cosmetic surgery doesn’t hurt either.

• We Aren’t  ‘Orange County Housewives’:  We aren’t all like that.  Okay – some of us are, but not all.

• ‘Large Yard’ is a Relative Term: The high cost of housing for Orange Country primarily resides in land value.  Land is at a premium and builders structure tracts to maximize return – meaning much smaller lot sizes.   Homes sit on smaller lots and are closer together.  If you are looking for a large yard, with some exceptions, older is often better.  And FYI, generally a 10,000 square foot lot is considered BIG.

• It’s the Burbs:  A lot of Orange County is made up of suburban living with all it’s wonderful pros and a few cons.  Great schools, beautiful parks, proximity to shopping and restaurants, community activities all account for some of the positives.  As for the downside – architecture isn’t always unique and if you’re not careful, you just might find yourself pulling into your neighbor’s driveway.

• Yes, Homes Are Cheaper In Corona:  It never fails; every time I work with someone relocating to Orange County that is unfamiliar with the area there are 3 distinct stages: 1 – Excitement, 2 – Sticker Shock, 3 – So I hear you can get a much bigger house in Corona….  And, yes you can.  Before we go look at those homes however, you are required to sit on the 91 freeway during peak traffic hours and visit during peak smog season.  Then we’ll talk.  Sorry Corona lovers.

• We Like National Chains:  We do have some amazing strip malls with lots of chain stores and restaurants.  But if you look hard enough (and I have as of late) there are some wonderful, privately owned restaurants.  Coastal towns like Laguna Beach, Corona del Mar, San Clemente, Costa Mesa, and Newport Beach are always guaranteed to have some things a bit more eclectic.

• There’s Lots To Do: Kids play outside year round, outdoor exercise is common, skiing isn’t far (Big Bear, or just a bit farther is my favorite, Mammoth Mountain), beaches, amazing surfing, skate parks, and of course, the all-important Disneyland (although you may go less than you think you will).

Alright you OC folk – enlighten me.  What have I failed to mention?

Disclaimer:  This post is deeply biased and written by a 4-Season-Loving, ski fanatic, Oregonian that has called Orange County home for some of the early days of her childhood and the most recent 12 years.   Go Figure.

There are specific contingencies outlined in the RPA – loan, appraisal, inspection, to name just a few. The default in the contract is 17 days for all of the contingencies. In years past, it has been possible to meet that time period with a strong lender. Today, the environment has changed dramatically and there are some things you must be aware when you remove that loan and appraisal contingency.

Appraisal Contingency

The appraisal can general be completed during that 17 day period.  There are some exceptions with conventional loans that are out of your lender/broker’s control.  The appraisals are now ordered through third party companies which can create a delay.  However, let’s say the appraisal comes in at the contract price and within the time frame of the contingency.  Do you remove your contingency?  What are the risks?

The challenge in today’s environment is that the underwriter has the right to order an appraisal review during their review process that takes place prior to final loan approval and the drawing of loan documents.  This is generally late in the game, and certainly after your contingency period.  If the appraisal review brings in a lower value and you have already removed your appraisal contingency, what are the choices?

• Cancel the escrow – in which case you may lose the deposit
• Come up with the difference in sales price versus contract price (be aware, this may impact qualifying if the lender is watching your cash reserves closely)
• Negotiate with the seller (who may be less amenable if they see you have removed you appraisal contingency)

Loan Contingency

This is particularly challenging in today’s environment.  Given the June 1st implementation of the Loan Quality Initiative, Fannie Mae is now requiring that a buyer’s credit is pulled just prior to close of escrow – regardless of the previous approval status.  This makes removal of your loan contingency even more crucial.

Underwriter reviews, large amounts of buyer documentation, and late credit review can make the loan approval status fall into areas of less certainty than we have had before.  If you remove your loan contingency and find that late in the game you no longer qualify for the loan, you are likely to lose your deposit, so be cautious and thoughtful when you remove your loan contingency.

Ways to ensure your loan approval will remain secure:

• Do not make any purchases on credit
• Do not deplete your cash reserves
• Do not move money around without a conversation with your lender
• Do not do anything that might have an adverse impact on your credit score
• Do not pay off credit cards without direction from your lender
• Do not change jobs
• Provide the documents that your lender requests of you in a timely fashion
• Be aware, requests for new documentation come in throughout the buying process so be prepared to respond quickly
• Communicate with your lender
• Interview lenders and find someone that you trust!

Do I Have To Remove My Loan or Appraisal Contingency?

No.  But there are risks.

So what happens?  First, be aware of the time frames in your contract.  Sometimes the loan contingency may run until the loan is funded if the offer is written this way.  But, if you are required contractually to remove it in 17 days, for example, the Seller has the right to issue the Buyer a Notice to Perform.

The Notice to Perform may require that in a specified period per the RPA, the Seller will have the right to cancel if the Buyer does not remove the contingency.  The Buyer should be entitled still to their deposit – but you risk loosing the property.

The real estate agents should be in communication however, and in some cases a listing agent and seller may feel that the buyer, the contract, and the escrow are worth moving forward with leaving the contingency in place.  Just be aware – they do have the right to cancel – depending on the structure of the RPA.

Every now and then, I have a well meaning prospective buyer say to me, “I’m already working with an agent, but if you find a good deal, let me know and I’ll use you.”  Sometimes it’s someone I meet at a social event or someone that inquires from my blog.

I think the buyer’s mentality is understandable.  Their intention is twofold: (1) get the feelers out about what they are looking for in the housing market (2) to let me know that I will be compensated if I find them that coveted ‘good deal’.

My response is the same every time:  (1)”Do you feel you are getting good support from your current agent?”  (2) “If so, I would continue to work with them.”  I won’t be calling with the inside scoop on a new listing.

Why, you ask?  Several reasons:

• Is it reasonable and fair to preempt another agent’s hard work?  As a buyer, if you have an agent that is working diligently and consistently on your behalf, it seems reasonable to reward that agent with your business.
• As agents, we often have access to the same data.  Is it simply a matter of who makes the call, or sends the email, fastest and brings you the ‘great deal’?
• If I’m listing a ‘great deal’, I would still want you to be represented by your agent.  It’s always my preference to have a buyer represented by their own agent.
• Let’s say I did come across a screaming deal before it hit the market – Who would I call first with that ‘good deal’?  The clients that are already committed to working with me in their home search, or the person that may work with me if I find the ‘good deal’?
• As a buyer, you may have signed a Buyer Broker Agreement committing you to utilizing your existing agent.
• And lastly, the agents working in the area, comprise an almost small town-like atmosphere.  Those actively working in the business know one another and complete real estate transactions together – often more than once.  Reputation is crucial and undermining agent/client relationships is a career killer.

And one more quick side-note – if there is a ‘good deal’ to be had today, it WILL have multiple offers.  No one calls me asking for a ‘nice overpriced home’ these days.  Everyone is looking for a deal.  The good news, compared to pricing as far back as 2003, it’s all a good deal.

The best strategy, find a home you love, that fits the needs of you and your family, and your budget.  If an agent calls you with the deal of the century, if it’s not in your budget, and not going to support what you really need in a home, it doesn’t matter what kind of deal it is.

Wagon Wheel is small community in Trabuco Canyon located off Oso Parkway not far from the south gate of Coto de Caza.  The homes were built in the mid 90’s by Kaufman & Broad who subsidized the original mello roos bonds making it known in part, for it’s very reasonable tax rate.

Homes range in size from the condos in the Dakotas (835 to 1,117 square feet) to the gated community of Stonecliff (up to just over 3,000 square feet).

Current market conditions in Wagon Wheel are not dissimilar to Orange County as a whole.  The upper price points remain very slow and the lower price points are plagued by distress inventory.

Market Conditions

Note that there is very little bank owned inventory on the market currently, but given the recent completion of the moratorium on foreclosures, we are seeing Notice of Defaults on the rise again and in the coming months, I expect to see bank owned homes back on the rise in Wagon Wheel and all over Orange County.

The highest sale year to date is in the California Laredo tract at $725,000 in February.  The next closest sale was $600,000.  The poor sale history for the upper price points is  not isolated to Wagon Wheel and is seen across the market due to the lack of available financing and buyer cautiousness.

The highest sale in the last 30 days was in the California Landmark tract, a traditional sale for $556,000.  Between $500,001 and $750,000, there are 5 available properties and 3 in escrow.

Under $500,000 is plagued by distress sales.  Currently 4 out of 5 active listings are short sales, yet the 4 equity sellers currently in escrow reflect the buyer demand – buyers are often reluctant to wait out the lengthy short sale process and opt for a traditional sale.

Questions?

If you are wondering how these statistics and trends impact your buying, or selling process, please don’t hesitate to let me know.  I’m always happy to help.  No pressure and no obligations.  I can be reached at (949) 939-2514 or emailed at linsey@ocrealestatevoice.com.

This information and stats are from SoCalMLS and are deemed reliable but not guaranteed.

So today – I had an interesting conversation with an agent regarding her philosophy about showing buyers property.  I’ll be honest, I’m a little shocked by the philosophy.  She shared with me that she shows her clients homes that are up to $50,000 outside their budget because of course, ‘in this market, there is room to negotiate.’  Okay, fair enough.  This isn’t the strongest market, but I’m not biting.  Let me explain why….

• In the price range her clients are in, there is very little inventory.  In addition, if they are hoping to avoid a short sale purchase, and want a bank owned home or an equity seller, that accounts for approximately less than half of what is on the market.   There is competition for the quality product.
• The closed sales in the area are selling at 98.65% of list price.  In this instance, the buyer’s agent is hoping to negotiate 17% off list price.  Based on local numbers, I think it’s fair to say that it might not be a realistic method of searching.
• Average time on market in this area, at this price range, is 60 days.  This is a far cry from a buyer’s market.  However, going into the higher price points – then it becomes more of buyer advantage.
• This strategy has nothing to do with value.  What if the home was listed 10% below current market value?  Isn’t that already a good deal?  What if the home were $50,000 overpriced?  That certainly isn’t the good deal that they are hoping for.
• Lastly, why show a buyer a home that is out of their price range?  Long term, this isn’t fun for anyone.

The key is to understand the details of the market you are buying or selling in – not just an overview.  All of Orange County is not the same.  Each city is different and each price range is different.  It is critical to understand the market within the larger market.

Again, the message is to be educated about your market.  Don’t let mass media, your friends, or even your agent be your sole source in your decision making process.  Let the numbers speak to you because without fail, they’re telling you a story.

When you are looking to buy a home in Orange County, or anywhere else for that matter, it is critical to drill down into the numbers for the sector of the market that you are looking at.  Orange County numbers are wonderful benchmarks to know, but our market is made up also of submarkets within the OC.  It’s important to understand Absorption Rates, Average Days on Market, price per square foot, sale price to list price, etc.

For every buyer I’m working with, I try to do an analysis that really tells the story of the market they are hoping to buy in.  This allows them to have a realistic picture of the market and compete effectively for the home they hope to buy.

If you are a seller, these numbers will be important to you too.  Even if you are not a buyer or seller right now, hang in there.  This may seem dry, but I’ll try to make it fun.  There is a story told by the numbers every time! 

Today, I did some research for an investor I am working with in Rancho Santa Margarita.  She is looking for a condo around $250,000 that has at least 2 bedrooms and 1 car garage.  I looked at the numbers for Rancho Santa Margarita between $200,000 and $300,000, with a minimum of 2 bedrooms and 1 garage – Active, In Escrow, and Closed Sales going 90 days back.  (I recently did this analysis for a Mission Viejo buyer and only included sales over the previous 30 days, but in this instance that would have been swayed too heavily by the holidays).  Here’s what I found for this submarket:

Active Inventory – 47 Listings

• 34 Short Sales or 72%
• 9 Bank Owned or 19%
• 4 Traditional Sellers or 9%

In Escrow – 22 Listings

• 9 Short Sales or 41%
• 9 Bank Owned or 41%
• 4 Traditional Sellers or 19%

Closed Sales in the Last 90 Days – 27 Listings

• 10 Short Sales or 37%
• 10 Bank Owned or 37%
• 8 Traditional Sellers or 30%

Analysis of Closed Sales

• Short Sales:  Average Days on Market – 96, Sale Price to List 102.17%, $256.47 price per sq. ft.
• Bank Owned: Average Days on Market – 35, Sale Price to List 98.89%,  $248.17 price per sq. ft.
• Traditional Sellers: Average Days on Market – 33 (there was one outlier here that if removed would have made it 14), Sale Price to List Price 96.43%, $263.35 price per sq. ft.

Hey wake up! This is fun – really!

So what does all this tell us?

I’m a little surprised to see that some short sales are getting done in this price range.  We still have a large swing in the percentage of active inventory versus closed sales within the short sale market, but maybe the banks are starting to pull it together.  I’ll be watching.

It’s also still clear that the traditional seller is able to secure a slightly higher price.  The swing was much greater in the Mission Viejo analysis I did earlier, but it is still there.  Why?  I think buyers still love to have full disclosure from a real seller.  They also tend to be properties in slightly better condition.  And the best part – you submit an offer, and a real live person actually responds in sometimes as soon as 24 hours!  Wow!

Still the best ‘deal’ going is the bank owned home.  Just beware, is it still a ‘deal’ if you have to put in a lot of money after the close?  Maybe yes, maybe no.  Each property will require individual analysis to make sure that one is really getting a good value for the home.

Hope this helps my investor – and you.  If you ever are in need of a little Microscope on the Market – just let me know.  Just make sure you’ve had your coffee first.

Steven Thomas, President of Altera Real Estate recently released his latest Orange County Housing Report and it is definitely worth taking the time to review if you are curious about how the 2008 housing market finished and the possible outlook for 2009. It’s a very comprehensive summary.

I would encourage you to review the charts for Active Listings and Pending Sales. I love the way that it visually lays out the ‘05, ‘06, ‘07, and ‘08 numbers for comparison.

One thing worth noting is that current inventory is way down – 11,842 homes off the March peak of 15,617. Homeowners have definitely taken to heart that selling will not be easy and pricing is critical. If they don’t have to sell, they generally are opting not to.

The biggest facet of our current market is the distressed inventory. As I’ve continued to repeat here, one of the indicators that a recovery is on the horizon is declining numbers in the distressed sector of the market. Right now, Thomas states that 46% of all the current inventory are distressed sales; 76% of those are short sales and 24% are foreclosures.

So where is the demand? Believe it or not, it is a strong seller’s market when it comes to foreclosures and they are selling at 101% of asking price.

Short sales continue to be a frustrating facet of the market because they continue to stay active on the market while a bank approves the offers they have pending. This creates negative and misleading numbers when one analyzes the active inventory. These offers can take weeks, even months, for the bank to approve. The sale to list price on short sales is running at 97%.

If you have questions about how these numbers impact your buying or selling plans, I’m happy to discuss it with you.

One of my clients sent me a link to an article published online on CNBC about ‘Mortgage Re-Defaults Rising with No Sign of Slowing’.  The article states that, “…after 6 months, nearly 37 percent of mortgage loans modified in the first quarter were 60 or more days delinquent,”  and goes on to say that, “after three months, 19 percent were 60 or more days delinquent or in the process of foreclosure.”

There is no question that watching a family lose their home is beyond heartbreaking.  The article did point out a small piece of good news in this fiasco – 9 out of 10 home loans are current.

The article has me thinking about a few things.  Why does someone default?

The rates on the adjustables are actually lower in recent months than they were a year ago.  In addition to that, some of the Interest Only notes have yet to adjust at all.  Payments in many cases are the same, or even less than they were one year ago.

I’ve seen that in some instances, people frankly are not interested in paying $500,000 for a home that is now worth $375,000 and decide to walk away from the property.  Does a loan modification make sense for those owners?

Lending restrictions were way too lenient up until recently.  Some folks were approved for loans that they never would have qualified for under the strict requirements of today’s lending standards.  Does a loan modification make sense for those owners?

Temporarily reducing the interest rate, tacking on the arrears to the back-end of the loan may provide immediate relief but is it only delaying the inevitable?  Do loan modifications like this make sense?

Maybe it’s time to be honest and say that current levels of home ownership are higher than they’ve ever been, and just maybe, that isn’t a good thing.  It’s not good for the homeowners that aren’t really qualified, and it’s not good for the housing market.

Maybe it’s time to really help those homeowners get out from underneath the homes that they cannot sell for what they owe.  Maybe it’s time to let this market run it’s course without trying to fix it with band-aides and superglue.  Maybe it’s time to get a really efficient and effective short sale process to assist these distressed homeowners.

Bailout plans that focus on loan modifications and saving the homes may not necessarily be the answer.  As I’ve said before, where is a Bailout plan that really deals with the heart of the crisis?  Where is a plan that is effectively dealing with the real issues on Mainstreet?   I’m waiting…and not patiently.

This particular buyer is looking in Mission Viejo between $450,000 and $550,000.  He wants a single family residence.  With that criteria, I hit the MLS looking for a picture of where we really are. 

As many of you know, I’m the last person to jump on the ‘Hurry Buy Now’ band wagon.  However, if you are in this price range in South Orange County – this is speaking to you.  What did I find?

There are 40 Active single family residences currently listed in Mission Viejo between $450,000 and $550,000.  How do those breakdown?

• 19 are short sales (BTW – refer to my posts on shorts sales to understand the challenges with these sales)
• 4 Bank Owned
• 17 are supposedly equity sellers.  Upon further reading of the agent remarks in the listings 2 more of these are actually short sales and 1 is bank owned.

So, what does this leave us?  14 Traditional, Equity Sellers?  I should add 5 of these 14 are 55+ communities.  There are really only 9 equity sellers in my client’s search criteria out of 40.

It then becomes important to analyze the recent resale activity.  I pulled sales from the last 30 days with the same criteria - Mission Viejo, single family residences, $450 to $550.  Here are the stats:

• 21 Sales
• 6 Bank Owned
• 3 Short Sales
• 13 Traditional Sales (one 55+ community sale)

No rocket scientist needed here.  This is out of balance.

If you are not a numbers person, it’s okay, just try to stick with me here – 52.5% of the Active Inventory are short sales, but last month only 14.3% of the sales were short sales.

12.5% of the Active Inventory is bank owned, but last month 28.6% of the sales were bank owned.

And most telling, 22.5% of the Active Inventory are equity sellers (not to include senior communities), yet the sales from the last 30 days indicate that 51.1% were traditional sellers.

I’m actually not a numbers guru.  I love reading.  I love writing.  But, I also love logic and this should speak volumes to you.  The sellers that don’t have to sell have chosen not to; they’ve heard the message.  Buyers that have been fence sitting or have had affordability problems, have found that it is indeed their time.  Demand does exist.  The inventory may actually be lacking.  Do I hear – supply and demand?

Just to temper my enthusiasm, let’s look the sales prices.  No question – these are some other stats to consider from the last 30 days with that same criteria:

Short Sales – Sold at 98.29% of asking price with an average days on market of 143.  The average price per square foot was $253.09

Bank Owned - Sold at 101.55% of asking price with an average of 16 days on the market.  The average price per square foot was $263.06.

Traditional Sellers -Sold at 97.38% of asking price with an average of 34 days on the market.  The average price per square foot was $323.09.

I will suspect that the knee jerk response is that traditional sellers are overpriced on a per square foot basis – but look at the demand.   There’s a reason these are selling.  They are in superior condition (sometimes by a lot) and you can actually submit an offer to a live body, that has real emotion, and a desire to sell.  What’s the value in that?

So, if you think it’s a buyers’ market, think carefully and ask for the stats.  You need more than a cursory overview.  You need to drill down into the makeup of what it means to get a clear picture of the marketplace.

This is one picture of the OC marketplace, but from what I’m seeing, in certain pricepoints, it’s not isolated.  Thoughts?  I’m open to our interpretation of these numbers.