South Orange County Homes for Sale

In the last few years you may have seen price declines in your neighborhood, depending on exactly when you bought and where you live.  For many of you, the tax assessor has reassessed the value of your home downward to reflect your home's decline in value.  When that happens, your property tax bill decreases since much of the bill is based on the property value. 

If the assessor hasn't decreased your value, or you think it isn't accurate, you can submit an Orange County property tax appeal for reassessment.  There are two types of appeals, formal and informal.  Formal appeals are to dispute the value listed on your property tax bill and generally are done in the summertime.  Now is the time for informal appeals. 

To file an informal appeal, go to the Office of the Assessor's page on "Declines in Market Value".  Click on "Request for Informal Assessment Review" to get the form.  If you have any trouble with getting the form, ask me and I will get you a pdf copy.  Ask a real estate agent you trust to get you comparables as of January 1 on your home to fill in that section.  The deadline is April 30.

Call or write if you have any questions.

Orange County housing inventory very low, prices down slightly

According to Dataquick, Orange County housing prices were down about 2% year over year (flat month over month) in December 2011.  This is nothing new.  We have been advising our clients about the relatively flat prices for a while now.  Sales are down about 6% year over year (increased month over month) in December 2011.  On its face, this seems more significant, but sales are in the same general range they have been in since the recession, so this is also nothing too new.

Here's the shocker: Inventory is down over 30% year over year.  That's right, not 3%, 30% percent.  I did a little digging and found that inventory is down about 50% since August 2010.  In less than 18 months, half the homes on the market are gone.  Vanished.  The reason is even stranger.  There weren't a flood of sales, there was no mass auction on the courthouse steps.  Instead, every month last year fewer sellers decided to sell than the year before.  In fact, going through our database we couldn't find a single year in the last 10 years (as far back as it goes) that had fewer sellers decide to sell their homes.

What does it all mean?  Why is this happening?  And what does it mean for buyers and sellers in 2012?  Here are some of our educated guesses.

Fewer equity sellers lead to a fast moving equity market

According to CoreLogic, the vast majority (over 80%) of homeowners in Orange County have equity in their homes.  Yet, most people are not willing to sell into the current market unless they "have to".   Finances, job relocation, family changes all lead to sellers listing their homes, but few and far between are the homeowners who sell to upgrade because they just want something better. 

In 2012, this could mean less competition for equity sellers.  It could also mean that buyers will need to act more quickly on equity homes than they have in the past.  Because of the overall state of the economy, however, we have tempered expectations on this leading to significant price increases.

Short sales continue to be a significant part of the market

The number of foreclosures in Orange County has decreased to the point that when we show homes for buyers, we don't spend a lot of time talking about preparing to buy one.  However, we do spend a good deal of time talking about short sales.  Pending sales are up dramatically as buyers have been willing to buy the short sales that are on the market and as sellers and banks use best practices to get short sales accepted in a reasonable amount of time.  We had a lot more successes in 2011 with short sales on both the buying and listing sides than ever before.

In 2012, I would expect short sales to continue to come on and off the market.  With fewer short sales on the market, the trend of multiple offers on every short sale will probably continue.  Again, our expectations on price are tempered by bigger issues like consumer confidence, unemployment, etc.

Appraisal issues become more prevalent

Assuming sellers don't come on the market in droves to see if they can get a high price in a low inventory market, appraisal issues will be a challenge for both equity and short sales.  Fewer homes, means fewer sales, which makes appraising a property less predictable.  Buyers and sellers both will need help navigating the tricky waters of not only negotiating a price that is acceptable, but negotiating appraisals that don't come in at value, because of a lack of comparables.

Call us if you need help leveraging the current market for your home buying or selling this year.  

President Obama on Friday signed a bill increasing the FHA loan limits nationally.  Here in Orange County that will raise the FHA loan limit to $729,750.  This will help those buyers buying or considering buying a home with a loan from $625,000 to $729,750.  Prior to this bill, no federally backed loans greater than $625,000 were available.  Almost all loans of that size were considered "jumbo" loans with higher interest rates and tougher qualifying standards.  A few things to consider with the new law:

1.  It only applies to FHA loans.  It does not apply to Fannie Mae or Freddie Mac loans.  FHA loans tend to have lower interest rates, but some high costs associated with them.

2.  Last time the limits were set at $729,750, we thought they were indefinitely set there, but with Fannie Mae, Freddie Mac, and FHA all struggling, the loan limits were lowered earlier this year.  The lesson: take advantage of the increase in loan limits now while they are available; they may be gone tomorrow.

3.  It can take a couple of weeks for guidelines on increased loan limits to work their way through lenders' systems, so don't be discouraged if you don't see low rates posted yet on $700,000 loans for lenders.  It's coming.

If you have questions on how this might affect your decision to buy or sell, call me and I'll walk you through your options.

UCLA Anderson Forecast on Orange County Housing

The UCLA Anderson Forecast was released last week, projecting the economy in Orange County, California, and the Nation.  Here are some of the Orange County housing highlights with my comments on the numbers:

UCLA forecasts a 34.6% increase in Orange County home prices over the next 6 years.

Another way to look at this is a 34% increase in 6 years is about the same as 5% appreciation per year.  Michael Bluejay has a great post on the relationship of appreciation to inflation and all of the caveats to consider in looking at housing appreciation.  Suffice it to say that 5% doesn't look good if you were hoping for the kind of short term large gains we saw in the early 2000s, but it looks great when you consider what it has looked like in the past few years.

UCLA forecasts new construction, which recently had risen 60%, will continue to rise through 2015 when it will be about 5 times its low in 2009.  There will be a shift to condos and apartments versus houses. 

I have shown a lot of new construction homes this year and anecdotally it seems like they are selling.  Especially developments in highly desirable areas of Irvine (Woodbury, Laguna Altura, etc.).  It also does seem like condos/townhomes, and everyone's favorite, detached condos, form the majority of homes in the new construction market.

UCLA does not think there will be a flood of foreclosures, continuing the recent trend of slowly declining foreclosures.

"Foreclosures" can mean a lot of different things.  From my perspective, "short sales", which are not necessarily "foreclosures" are holding down prices right now.  Homes that have actually been "foreclosed" on and are now owned by the bank not only don't make up a significant part of the market, but they sell for more than short sales.  Right now, about 30% of the Orange County market is made up of short sales and about 5% is bank owned.  UCLA is probably right that there won't be a flood of foreclosures, but what will really make a significant difference in the Orange County market is a faster short sale process.  Once short sales are off the books, the path will be clearer to higher prices and more sales.

Aliso Viejo walk score

In L.A. Story, Steve Martin put it best when he said: "Walk? A walk in L.A.?" Let's face it, many of us don't buy a home in Southern California, let alone in Aliso Viejo because it is walkable.  We buy here because of the sunshine, jobs, schools, low rates of crime, and did we mention the sunshine?

Be that as it may, many Aliso Viejo home buyers care about how walkable their home is.  Often those clients try to live close to the Aliso Viejo Town Center.  One such client recently picked one home over another in part because it had a much higher walkable score from walkscore.com.  That got me wondering about what the Aliso Viejo walk score is and how that compares to other South Orange County homes.  Here's a comparison of average scores for some South Orange County cities (out of 100):

Aliso Viejo: 52

Laguna Niguel: 53

Laguna Hills: 59

Laguna Beach: 53

Mission Viejo: 53

Lake Forest: 53

Irvine: 60

Generally a score a score 50-69 is an area that is "somewhat walkable."  While on average not comparable to more walkable cities like Chicago where I grew up (78) or here in California, San Francisco (88), these are fairly typical numbers of suburban California areas.  More importantly, if you want a more walkable home, according to walkscore.com, the top 10% of homes in each of the above towns has a walkscore of 80% or better, which would mean most errands could be done by foot.

The Aliso Viejo walk score is an indicator that, as with the rest of Orange County, you need a car here to survive.  However, even within the 'burbs, you can places where your feet can be your primary transportation.

9 Richemont, Aliso Viejo CA 92656 is located in the Promenade tract. This 3 bedroom home for sale by Don Juan Avila Elementary School features 2,100 interior square feet, including a giant loft, and 4,600 square foot lot.  The front landscaping of this 3 bedroom home for sale by Don Juan Avila Elementary School is maintained by the association and features a 2-car garage plus driveway. The backyard of this 3 bedroom home for sale by Don Juan Avila Elementary School has an extra large yard with built-in barbecue and custom landscaping.  To view this home call or send Veronica Encinas a text message at (949) 616-4440.  To schedule a private showing or to get more information she is available right now.

Veronica Encinas | First Team Real Estate | veronica@myocliving.com | (949) 429-7412 9 Richemont, Aliso Viejo, CA Upgraded Promenade home with granite and travertine sits on entertainer's dream yard with oversized built-in barbecue. 3BR/2+1BA Single Family House   offered at $599,000 Year Built 2001 Sq Footage 2,100 Bedrooms 3 Bathrooms 2 full, 1 partial Floors 2 Parking 2 Car garage Lot Size 4,600 sqft HOA/Maint $40 per month DESCRIPTION This beautiful home is an entertainer's dream! Inside, the spacious floor plan features polished Travertine floors, plantation shutters, granite counters, and a huge upstairs loft. The oversized park-like backyard is an amazing oasis, beautifully landscaped with mature foliage, a built-in barbecue and eating bar, and a covered patio from which you can enjoy it all! The kitchen has lots of counter space and storage, plus a convenient breakfast bar for casual dining. The roomy master bedroom has a large master bath that has been completely upgraded with 18 inch tile, granite counters and designer mirrors. The large loft serves as a spacious second family room, but can be converted to a 4th bedroom, and still leave room for a standard loft. The garage has been totally finished with high-end cabinetry and interlocking PVC flooring. The home is zoned for blue-ribbon schools, and is walking distance to Soka, parks, hiking and biking trails, and shopping, and a short drive to the toll road.   see additional photos below PROPERTY FEATURES - Central A/C - Central heat - Fireplace - Walk-in closet - Tile floor - Family room - Living room - Bonus/Rec room - Dining room - Dishwasher - Stove/Oven - Microwave - Granite countertop - Laundry area - inside - Balcony, Deck, or Patio - Yard     COMMUNITY FEATURES - Guest parking       OTHER SPECIAL FEATURES - Oversized yard with custom built-in barbecue - Highly upgraded Promenade home with granite and travertine - Oversized loft large enough for two rooms - Finished garage with high-end cabinets and interlocking PVC flooring - Zoned for Don Juan Avila Elementary, Don Juan Avila Middle, and Aliso Niguel High   ADDITIONAL PHOTOS 9 Richemont front 9 Richemont patio 9 Richemont yard 9 Richemont kitchen 9 Richemont living dining 9 Richemont loft Contact info:   Veronica Encinas First Team Real Estate veronica@myocliving.com (949) 429-7412 For sale by agent/broker Equal Opportunity Housing Posted: Jun 23, 2011, 2:51pm PDT

Million Dollar Listing Financing is Changing in Orange County, California

My favorite real estate show is Million Dollar Listing.  Not only is it virtually in my backyard, the situations that arise on the show seem relatively more authentic than other real estate shows (I'm looking at you House Hunters).  In October, financing may get trickier for those trying to buy a Million Dollar Listing.  Unless the law changes (and they do seem to quite frequently these days), the temporary "Conforming High Balance" loan limits will decrease in Orange County from $729,750 to $625,500.

Big deal you say?  Who is buying these homes anyway?  Well, last year there was a 26% increase in sales for million dollar listings in Orange County.  About 30% of those purchases were for cash, which leaves about 70% that needed financing.  So, come October, lowering the Conforming High Balance loan limit could affect up to 70% of the buyers in one of the faster growing Orange County market segments, the Million Dollar Listing.

What are the ramifications of this change?

Higher interest rates

Starting October 1, loans between $625,501 and $729,750 will no longer be considered Conforming High Balance, but instead will be considered "Jumbo," which will increase the interest rate on these loans.  I heard at a meeting the other day that Jumbo loans can have anywhere from a .25% to .5% higher interest rate than Conforming High Balance loans.  For a Million Dollar Listing (with a $700,000 loan) that can mean a couple hundred dollars of payment per month.

Higher down payment

For Jumbo loans, lenders typically require 20% down payment.  Conforming High Balance loans by contrast can under some circumstances work with only 10% down.  It is currently possible today to buy an $800,000 home (I know, I know, not quite a Million Dollar Listing!) for 10% down or $80,000.  If the limits change, an $800,000 home buyer would have to bring in at least $175,000.  For some buyers, coming up with 20% down payment will be impossible and for others it will constrict their cash flow.

Tougher approval process

Finally, the biggest consequence to the Conforming High Balance limit change is that loans between $625,501 and $729,750 could be more difficult to get.  For most buyers today, getting a Jumbo loan is much more difficult than getting a Conforming High Balance loan, because the latter can be resold and the former can't without difficulty.  If it turns out that you don't qualify for a Jumbo loan, but would for a Conforming High Balance loan, then your maximum purchasing power will be reduced in October by over $100K, because you would be limited to a $625,000 loan, not $729,750.

We have clients in this exact position right now (you know who you are).  Whether you are a buyer or a seller thinking about buying or selling a Milliion Dollar Listing (really anybody in the $700,000 and up price range), contact us so we can walk you through why now may be the best time to buy or sell homes in this price range.

When my wife and I met in college(!), she wrote in a dorm survey that her perfect date was a night of "old movies and dumb jokes."  Anyone who knows me knows that I don't know any clever jokes, so I was in 50% from the get-go. Our relationship developed watching old movies together.

Eventually, we graduated from silents to talkies from talkies to the golden age and the golden age to independents.  But throughout our movie journey, we tried to make sure we saw the Oscar-nominated movies. 

The first year I remember consciously trying to see all of the Best Picture nominees was 1996, when Shine was hard enough to see in the local theater, but Secrets and Lies took some actual work.  That particular year in movies, which included Fargo, The English Patient, and Jerry Maguire, had enough of an impact on me that from then on I wanted to see all of the Oscar nominees every year.

We were able to see all of the Best Picture nominees again in 1997, 2000, and 2004, but most years we were only able to see 3 or 4 of the Best Picture nominees before the ceremony (after the ceremony, I have been able to complete the set in 1987-1990, 1992, 1994, 1999, 2002, and 2005, and yes, that does take a while to look up and yes this is a long parenthetical).  Then the academy let the floodgates open.

The 2009 awards opened the competition up to 10 Best Picture nominees.  What?!  We actually scrambled last year to try to see all of those, but alas, the life of a busy (Realtor, parent, fill-in-the-blank) got the better of us.  We saw 9 of the nominees (still haven't seen A Serious Man). 

This year, same thing: 9 out of 10.  With 127 Hours out of the theaters by the time of the nominations and not yet out on DVD, to paraphrase Annette Bening from The American President, "We got screwed!"  We toyed with the idea of illegally downloading the thing, but c'mon that would be a bit over the top don't you think?

Without further ado, and considering that, while we have seen lots of movies, we can never quite get the hang of how the academy votes, here's who my wife and I think will win in the major categories and our favorites:

Best Picture: We agree on the winner King's Speech, but Veronica's favorite is The Fighter and my favorite is Inception.

Best Actor: We again agree on the winner, Colin Firth (King's Speech), but our favorite was Jesse Eisenberg (Social Network).

Best Actress: Winner and our favorite, Natalie Portman (Black Swan).

Best Supporting Actor:  Winner and our favorite, Christian Bale (The Fighter).

Best Supporting Actress: My winner and our favorite, Amy Adams (The Fighter).  Veronica thinks Melissa Leo from The Fighter will win.

P.S. If you haven't seen any of these movies and are wondering what to see of the ones still at the theaters, I would try to catch True Grit, which is going to be a lot better on a big screen than at home.

3 bedroom home for sale brings out all of the cliches in Aliso Viejo

This newly listed, 3 bedroom home in Aliso Viejo at 94 Plateau, brings out all of the cliches:

"Honey stop the car!" is an old favorite.  Of course, in this case, you'll have to stop the car, because this is superbly located at the end of a cul-de-sac. 

Or how about, "location, location, location!"  To be fair, this has only one location, perched on a hill with a sweeping panoramic view, but it may cause you to repeat yourself.

"So good, you'll want to buy two."  Well, if any property were that good, this might be it, with its granite, travertine, and real wood floors.  If you are looking for two, we have another one listed, not yet on the market we can talk with you about.

"Words cannot describe."  I've been working on describing this 3 bedroom plus a large loft and am obviously getting nowhere, so there you go.

"You've arrived . . . ."  Well, if you are reading this at home or at work you haven't really arrived at this new listing.  To arrive you need to travel just a few blocks from the Aliso Viejo Town Center.

"Won't last at this price" This one is actually true as we just changed the price in less than a week!  It is now priced $599,900 to $634,900.

Stop by this regular sale open house this Saturday, February 12, 11-3p.m. "before it's too late!"

Aliso Viejo Homes Market Update January 2011

Aliso Viejo homes last month showed a month-to-month decline in active homes, but also a decline in pending and sold homes:

Usually, a decline in active inventory is good news for sellers as there is less competition in their community.  However, the decline in pending and sold homes indicates that buyers are not buying at the pace they were in 2010, although they are buying more Aliso Viejo homes than they were in 2009.

The January 2011 absorption rate for Aliso Viejo homes is about 5.5 (274 active units/50 sold units).  A number between 4 and 6 is generally considered a "neutral" market although it is on the edge of a buyer's market.

Prices continued to generally decline for Aliso Viejo homes as well:

Keep in mind that price per square foot varies by size and style of home, such that Aliso Viejo detached homes from 2,000 to 2,500 square feet sold for about $282 a square foot in January 2011, a full $20 per square foot more than the average.

The average "days on market" for Aliso Viejo homes increased to its highest level since 2009 in January 2011:

The length of time short sales are taking for approval and stricter lending criteria are contributing to a longer days on market number. 

As I mentioned here last month in discussing Aliso Viejo 3 bedroom homes, averages won't tell the whole story.  The size of your home and the number of bedrooms in your home will affect what kind of market there is for your home.  3 bedrooms sell in a shorter amount of time than 4 bedrooms do and right now the inventory for 2 bedroom Aliso Viejo homes is more than a year!

Where are the opportunities in Aliso Viejo today?  With prices and interest rates historically low, there are great opportunities for buyers right now in Aliso Viejo.  If you are one who likes to follow the crowd to be safe, 3-bedroom detached homes are selling briskly at the moment.  If you prefer to find particularly down markets, consider the 2-bedroom condo market which has an extreme amount of inventory.

Whatever you decide to buy, the window is closing for rates and prices to both be this low at the same time, so call me to find out how to take advantage of the Aliso Viejo market today.