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.

To explain my reasons, I have to go back a bit and explain the evolution of my business over the last year or two.  When I launched Belterra in May of 2008, I came into managing a brokerage greatly dissatisfied with the big brokerage model I had been part of in previous years.  Mass hiring, promises of quality that often felt empty, and a general sense that my clients clearly didn’t seem to care whether I worked for my own private company or a national brand.

I immediately had some long term agent relationships that expressed interest in joining Belterra, entirely unsolicited. I will confess, I thought very little about the brokerage model I was delving into. My real intent was to operate my individual business with integrity and autonomy.  Hiring like minded individuals was the extent to which I thought of ‘brokerage’.

In 2009, I sat at a dinner table at Blogworld in Las Vegas surrounded by some of the most fascinating people in the internet real estate space.  The conversation that night and for weeks preceding that dinner surrounded around ‘Brand Promise’, ‘Brokerage of the Future’, and the like.

It became clear to me that the industry was on the cusp of potential change.  I was surrounded by folks that considered the current big broker model broken (maybe even beyond repair) as I did, and that the small brokerage model may in fact have the ability to make significant local change.  The ideas spoke to me, the part of me that is passionate about the industry, the general poor consumer perception of agents, and the value we provide our clients.  It was that trip that I became interested in participating in that industry change – not just witnessing it from the sidelines.

I began to look for like minded people that could support me in creating the technology support to execute my developing vision of a brokerage that provided a clear promise to consumers – great, experienced, knowledgeable agents that are able to provide their clients exceptional information and knowledge utilizing superior technology.

I was fortunate enough to talk to some of the best and brightest in the real estate space that helped me evolve a vision and a plan.  In the end, Garron Selliken‘s M Realty in Portland was most in alignment with my philosophy; it really resonated with me and I knew that this was the type of environment I was looking for.

Orange County became the first M Realty office to extend outside Portland, Oregon.  The brand has now extended into Seattle, Washington.  I feel fortunate to be part of the M Brand and am so thrilled to see my vision coming into reality in Orange County. I really believe what we can bring to consumers and agents are unique and powerful!

Next week, we will be participating in the BuzzRE OC event 29th and will be talking about the role of the internet in agent’s business and how they can bring real meaningful value to their clients utilizing technology.  That evening, we will be enjoying the Launch Party at Tijeras Creek Golf Club.  Looking forward to celebrating!

Welcome back to the newly launched OC Real Estate Voice.  Lots of changes happening here so stay tuned and check back.

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.

I launched this blog in May of 2008 in an effort to bring information to present and future clients that was the truest representation of what I could provide about the Orange County real estate market.   The constant drone of the Realtor community – “It’s a great time to buy” was making me feel a disconnect with my colleagues.  In early 2007, it was a tough market to sell a home and buying made sense for a handful of clients.  This became a place for me to share information about locations and internal markets within South Orange County specifically.

In the Beginning

When one launches a blog such as this, you go into it knowing that what you write initially falls on deaf ears.  I didn’t mind really.  I love the writing, I love the authenticity of it, and I love the platform.  Information about the vast changes in real estate to share with readers was easy to come by….and over time readership grew.

So What Happened?

The last three months have posed challenges and sadly, I let the distractions get in the way of my beloved blog.  I admit that I abandoned my blog as of late.  With a friend’s passing, an increase in very active buyers, and summer with my kids, I let it get the better of me.

When someone first starts a blog, the hardest part is starting.  It’s the momentum that keeps you engaged once it begins.  I have found that starting up again is just as hard.  But today is the day!

So Welcome Back!

For my readers (if you’re still there) and for those just coming on board, I’m back in the saddle again.  Back to the stuff that connected us before, back to the OC real estate voice.  Thanks for continuing to come back.

Then the announcement came regarding an $8,000 tax credit.  Forgive me, but whoop-dee-do.

While this may be meaningful in the lower price points, we aren’t having trouble there these days.  Market time in the under 500,000 range is running around 4 months, and 30 days if it’s not a short sale.  Clearly, that is a strong seller’s market.

Where do we need help?  The higher price points are hit hard by tight financing, consumer confidence, and high inventory.  And frankly, in those price points, the value of a home could potential fall $8,000 while you are in escrow.  Not to mention, first time buyers that qualify for the tax credit, aren’t generally buying in that price point – so I guess that doesn’t excite me much.

Most recently, plans were announced to cut mortgage deductions for those in the higher income tax bracket.   Now, if you live in Orange County and you are making $208,850 or more, you are living a lifestyle that is a far cry from someone living in the Midwest on the same income.

Example:

You may have purchased a home in 2006 that you are affording (barely because your bonus didn’t come through this year), and you may have lost 30% of the value since you purchased.  Since you are considered part of the ‘wealthy’ in the country, you are now on the verge of loosing some of your mortgage deduction.  You know – the mortgage you’ve been trying to hang onto, even though you owe more than the house is worth….

I’m waiting for the part of this plan that impacts California.  Maybe I wasn’t clear last time I mentioned this – one that impacts California in a positive way.

Near the end of December last year I posted the article about about the top 10 worst housing markets in the country, according to CNN.  Unfortunately, 8 out of 10 were in the state of California.  Now keep in mind, California is a massive factor in our national economy.  Our Gross Domestic Product is larger than all but 8 countries in the world.   You will not fix this housing crisis if you don’t address the state of California.

The plan that came out has one elemental problem (there are others but this one is a deal breaker) – it only applies to Fannie Mae/Freddie Mac backed loans.  Translation:  if the loan is over $417,000, no deal.

Let’s examine this just a bit.  In most parts of Orange County, in 2004,  2005, 2006, and 2007, you couldn’t get much more than a very small condo for $417,000.  You couldn’t buy a single family home in most parts of Orange County for under $600,000.   The people that are most at risk are the people that purchased during that period of time- and the big Affordability Plan – doesn’t apply to them.

Look at the numbers for the big California markets – Los Angeles, San Diego, the Bay Area – it doesn’t change.

So call me crazy, but I don’t get it.  Hell, I’m happy for the folks in the midwest that this has an impact on.  I’m happy for the people that will benefit from it.  But I’m not sure this solves the problem at hand.

You can solve this for the folks in Kansas, but if you leave out 8 out of 10 of the worst housing markets in the country, are you really addressing core of the problem?  Just sayin’.

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.

Last night, my youngest woke with a fever.  We knew she had come down with something yesterday during the Charger/Steeler game (yeah Steelers! – but that’s another post), but last night she awoke with nearly a 103 degree fever.   Poor thing.  It’s awful to be sick like that, and to hear that wind howling with such force was scary.  We were all up for a while listening to those winds.

What are Santa Ana Winds?  We usually experience them in Orange County from October to March.  Some folks believe they’re due to desert heat, but in actuality it’s the converse.  It’s due to cold temperatures in the desert – thus the fall, winter season.

It’s an odd thing.  They are usually warm, even hot, and very dry.  It sounds as if it will be freezing outside and I had to explain to my 10 year old that his thick jacket would be wasted on a day like this.  He refused to believe me until he stepped out into the hot wind.

We are always leary of the risks posed by the Santa Ana winds – potted plants overturned, falling trees, and the worst – fires.  The impact of these winds can be felt from Los Angeles, through Orange County, and down to San Diego.  The first Santa Ana Wind can be an odd, even unnerving experience, for someone moving into the area.

Today, my daughter stayed home.  I’m monitoring her fever and listening to the howling wind – waiting for both to subside.

I have to say that I’m not too devastated to see that 2008 has come to an end. There was so much turmoil this year in the housing and financial markets, politics, world events and it’s psycologically comforting to have a fresh start.

A lot has changed for me this year. I launched this blog, OC Real Estate Voice and another blog, Why Didn’t My Home Sell? Both have had a wonderfully warm reception and I thank each of the readers that allow me the privilege of speaking to you. Thank you for your comments and feedback.

I also was recently honored to be invited to write for Agent Genius, which is ‘the first multi-author real estate blog designed by and for real estate agents nationwide’.

Business has been much stronger as demand has increased in 2008. This has definitely not been an easy real estate year but there have been promising things in my personal business and I’m looking forward to a great ’09.

Thank you for reading and I wish you a wonderful, happy, healthy, and prosperous 2009!

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.