6November2008
Posted by staceysloan under: Housing and Economy; Buying a Home; Housing Recovery; Selling a Home.
I have said it before, and I will say it again, real estate always, eventually, appreciates. History has shown us, particularly in Southern California, that prices will always rebound. That doesn’t mean that buying a home isn’t a serious decision in uncertain economic times. But these prices may never come around again, because most economists are calling this a “once in a century” economic travesty. UCLA EXPERTS PREDICT A RECOVERY IN THE HOUSING MARKET WILL SPUR THE ECONOMY. (OC Register, 10/28/ 
The article predicts the bottom will hit in summer 2009. They expect a fall of 9% in 2009 and then to rise just 3.5% to 6% over the next 4 years after that. They predict a median rise to $523,563 in 2013. The thing about real estate, unlike other investments, is that it doesn’t go anywhere. That house, or apartment building, or land, is a fixed object, a part of the earth. As Will Rogers once said, “Buy land, God’s not making any more of it.” However, this is a somber time in our history. Decisions are not easy to make. If you have questions on anything from loan modifications, to short sales options, or having home equity and needing to sell in this tumultuous time, I am here to serve you. Please call my office for any questions or concerns regarding your situation.
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6November2008
Posted by staceysloan under: Housing and Economy; Buying a Home; Housing Recovery; Selling a Home.
The number of default notices filed against
California homeowners fell last quarter for the first time in 3 years. But the good news isn’t good. It’s primarily due to changes made at the state level. But on this note, the Bailout will change the current status quo on foreclosure. Look for many people to opt for loan modifications; if they can qualify, and if not, we may see a rise in short sales, as they may be fast tracked for a quick sale rather than the additional cost to lenders of going all the way to foreclosure. Remember a short sale is when a property sells for less than is owed to the bank, but sells subject to bank approval. If you become involved in such a transaction, make sure you consult your CPA and your lender for all tax consequences and financial liability, if any.
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6November2008
Posted by staceysloan under: Housing and Economy; Buying a Home; Housing Recovery; Selling a Home.
California had statewide estimated sales for September (the latest month available) of 40,317 including new and resale houses and condos. That number is up 6.1% from 37,988 in September a year ago. A number that is staying fairly consistent throughout the state and held true for
Southern California is that approximately half of all sales are bank owned properties.
The overall median price in
California dropped to $283,000, down 6% from the previous month and the median for
Orange
County dropped to $425,000, a drop of 25.4%
from a year ago. The total number of sales for O.C. was 2,667, an increase of 62.3%.
The break down of those numbers is as follows: 1,732 single family resale, 750 condos, and 185 new homes.
Housing construction will not rebound much from the lows of 2008.
According to the Kiplinger California Letter, “The latest Construction Industry Research Board report forecasts…work to start on only 74,000 homes, about half of them condos.
By contrast, there were 113,034 housing starts in 2007 and 212,960 in 2004.”
(Dataquick)
foreclosure home sales september 2008 median home price orange county
6November2008
Posted by staceysloan under: Housing and Economy; Buying a Home; Housing Recovery.
The question of whether the current housing market is good or bad depends on your perspective and position in the transaction. Clearly, this is a good time to buy, just check out the headlines of the past few weeks: BARGAIN HUNTERS HELP SHRINK HOUSING GLUT (Wall Street Journal), or LOW HOME PRICES LURE MORE BUYERS (LA Times), or FORCLOSURES HELP SEPTEMBER HOME SALES SOAR 65% IN STATE and O.C. HOME DEMAND NEARLY DOUBLE LAST YEAR’S (O.C. Register). But these driving headlines are not the same thing as positive headlines.
Yes, buyers that can buy are loving this market. Soon, investors will enter the fray and they will like it too. But it all has come at a price. The credit crisis has stabbed America in its heart of hearts, the right to the American Dream, i.e. home ownership. Many Americans are forfeiting that right, albeit through their own poor decision making. We all know now, there is no free money. The question many are asking is, “When will the bottom come?”
According to Dataquick, and as quoted in an article by Peter Hong in the LA Times, “the Southland median is 33% less than a year ago.” This includes some sorely troubled areas in the Inland Empire, also in Los Angeles, and a few spots in O.C. such as Santa Ana and
south Orange
County. The demand for OC housing did double from last year, but pending deals have fallen in the past two weeks, likely seasonal as much as anything else.
Projections for 2009 call for another decrease of 5% to 9% (the Kiplinger Editors project 10%) and possibly more properties in the multi-million category as they truly haven’t taken a substantial hit yet. (OC Register)
bargain hunters foreclosures in September housing recovery orange county
14September2008
Posted by staceysloan under: Housing and Economy; Housing Recovery; Life in Orange County; Selling a Home.
It was hard to miss this August 19th headline in the Orange County Register. In fact, it was an end to the longest home buying slump on record. Never mind that the slump ending is directly attributable to still increasing foreclosures, and a still decreasing median home price. After all, the buyers had to live through the first half of the decade, so sellers will have to live through the second half of the decade. The real estate market is usually comprised of 3 types of markets; seller, buyer, and neutral. So what exactly has been happening to generate the positive press? First of all and possibly most important is affordability has made a comeback. At the end of the selling frenzy and sub-prime debacle, affordability was a scant 11%. No housing market will remain healthy when only 11 out of 100 people can afford to buy a home. We have now risen back above 50%. Secondly, there are screaming deals out there and even though there are a lot of them, there are not as many as there were. In other words, according to the Orange County Register (August 26th 2008), Orange County home demand is up 103% versus a year ago. A report by Steve Thomas shows that, “fresh pending sales from the past month rose 51% in two weeks to 2,991. One year ago, demand was 1,475.” But the really interesting part is that supply is at its lowest level in 16 months. (OC Register).
The Associated Press ran a similar headline, “Sales of Existing Homes in U.S. rose in July, Realtors Group Says.” In fact, sales increasing are a national phenomenon of the moment. At the end of August, according to Jonathan Lansner’ column, who was quoting Steve Thomas’ Market Update, supply, or active listing inventory in SoCalMLS, fell 289 homes in two weeks to 14,059, the lowest level since April 5th, 2007. Even though another wave of foreclosed properties is definitely on the way, for the first time in months the number of distressed properties to hit the market fell in July. Finally, First American CoreLogic reported that prices are not falling as fast as they once were. (Lansner: OC Register) This may suggest that although prices are likely to continue to drop into 2009, it probably won’t be nearly as fast, as prices are leveling off.
orange county real estate sales rise slump over
6August2008
Posted by staceysloan under: Housing and Economy; Housing Recovery.
Real Estate Economics, a homebuilder consulting firm in Irvine has this to say about the Orange County housing market: “Opportunity/Risk Index currently resides slightly below equilibrium, but the trend is toward equilibrium. Any O/R index above equilibrium represents market opportunity, and any index number below equilibrium represents market risk… Within 12 months, (the O/R) index should reach equilibrium… There is a need for an additional 5.6% drop in housing prices before equilibrium is reached in the Orange County Market.
The Kiplinger Report thought the drop would be 10% in 2009 saying, “Home prices have a ways more to drop before leveling off late next year, then staying flat during most of 2010. Difficulties will vary by region. The Inland Empire and Central Valley are sure to have the biggest price drops. Orange County and San Diego prices won’t fall as much. Bargain hunters will spur sales, probably by year end.” We are definitely experiencing that right now. Sales picked up for the first time from May numbers to June. (The latest numbers that are available for a full month.)
Broker and local economist Tom Moon’s predicted price drop for next year, also 10%. Obviously these projections are on top of the already 20% to 25% we’ve seen, depending on the location of the property. So we are looking at a grand total of approximately 35% before we are done. Is there anyone reading this that doesn’t see what impact this will have on the affordability index and how it will spur sales with old fashioned supply and demand. Don’t forget we still have people arriving here that need to buy, we still have a lot of people who were left out of the sub-prime run up and if you read on, you will see that we still have decent economic prospects in Orange County.
house Price decline orange county Price to drop 10% real estate economics
6August2008
Posted by staceysloan under: Housing and Economy; Buying a Home; Housing Recovery; Life in Orange County.
This is probably the biggest hurdle the real estate industry has to get over in the minds of consumers. Unfortunately a lot of the news out there is the dismal outlook for national housing. Regions such as the mid-west, specific cities such as Detroit, or sub-prime havens such as Riverside and San Bernardino or even Las Vegas and Phoenix, have many more problems than we do here in Orange County and Los Angeles.
That is not to say that prices are not poised for a further drop, because they are. There is more on that in the next section. But it does mean that when you try to apprise yourself of what the facts are, in order to make a decision as to whether 
right now, is a good time for you to sell or buy, you should compare apples to apples. For example, if you have a compelling reason to sell your home, i.e. a job transfer, divorce, a health issue, than now is definitely the right time because experts agree, there is more loss on the way before we are done. But if selling is optional, consider your benefits. If you want to sell and capitalize on a move up, then maybe now is good. You need to talk to an expert and gather all the facts. If you are looking to buy, what are your financing needs? Will what you need in a loan program be there in 12 months to make waiting worth while. Is the price drop of 10% worth waiting for over the need for a place to live, especially if you have found the “right house” as a 25% decrease over its high? After all, houses are not meant to be day traded. That was a bad habit that most of the country and certainly Californians partook of for a few years. Read on to see why regional knowledge is good when it comes to real estate.
orange county recovery sloan team stacey sloan
15July2008
Posted by staceysloan under: Housing and Economy; Housing Recovery; Life in Orange County.
There was an Associated Press article whose headline read, “US Housing Slump a Prelude to Recession“. It was a brief article and had 3 main points: 1) if history is any guide, a recession is most likely around the corner because a recession followed 6 of the last 7 housing downturns. 2) Housing stats are at all-time lows since after WW II. 3) After the recession ended, housing starts typically rebounded strongly after inventory fell and home sales picked up.
What I would add to this equation for Southern California in general and Orange County specifically should inspire hope. I’m not trying to be naïve. I know we are months from a full recovery. Obviously we have economic woes beyond housing, i.e. food and gas, to name just two. However, let me add that the Associated Press also noted that immigration growth would be a key factor in rejuvenating the market. We also have tremendous economic diversity that is currently being overshadowed by the mortgage meltdown but won’t be forever. Prices falling every month mean more buyers that can enter the market each month. All these first time buyers are planting the seeds for the first true move up market in almost a generation. We need these buyers to start the cycle in a recovering housing market. Finally, generation “Y” is the first generation to be as big as the boomers. Expect them to fuel a housing market as they turn 25 to 35 in the coming years. With mortgage practices returning to normal, money should be available to those who qualify and expect a return to normal appreciation. With as much trepidation as the next year may bring, it will also bring the same level of opportunity for many. I am always here to answer any questions you may have.
housing slump orange county recession Southern California stacey sloan
15May2008
Posted by staceysloan under: Housing and Economy; Buying a Home; Housing Recovery; Selling a Home.
The next paragraph will have the exact numbers of sales which will still be down from the previous year, but up from the previous month. The fact is sales are way up from February. March sales (the latest month available) in Los Angeles, Orange, Ventura, San Bernardino, Riverside and San Diego counties were up 19.8% from February. According once again to Dataquick, that’s still not great as the average increase from February to March for the previous 20 years has been 38%. Yet I think it’s a number worth looking at. Why? Because most brokers reported their highest monthly sales in 15 months, which means this March was a heck of a lot better than March of ’07. The current inventory levels have not only stabilized, but they have hit a neutral plateau meaning they don’t really favor sellers or buyers. According to the OC Register (April) supply is hovering at about 6.77 months, meaning if not another house was listed it would take 6.77 months to sell every home currently listed to reach 0% inventory. This is not a bad number considering the affordability index is rising monthly. In fact, it’s risen from a low of 11% at the height of the market to around 30%. That’s the number of people that can afford to buy a home at current prices. Even though the emotions of the market favor buyers and because of that supply favors buyers, activity is slowly growing. Are we out of the woods? No, let’s be realistic and truthful. But, investors are sneaking back in and there are some great deals out there. If you need to buy, you need to call me. There are not a lot of great reasons to wait because the single factor that should sway you is interest rates and they are still at near historic lows.
march 2008 orange county real estate sales stacey sloan
11May2008
Posted by staceysloan under: Housing and Economy; Buying a Home; Housing Recovery.
There is a lot of conflicting information out there. Have foreclosures peaked? Maybe not everywhere, but Orange County is getting close. The banks took possession of 698 properties in March, down 4% from February and down 13% from January. (Source:Dataquick) They could spike again, slightly, over the next few months but indications would be that the number is stabilizing. Some reasons are that more and more lenders are developing work out programs, loan modifications and loan relief. Short sales are still out there but frankly they are the riskiest bet for a buyer. You could be tied up for weeks waiting for a response from a lender, unlike a bank owned which is listed for a set price and is ready to go. Remember, however, that most bank owned properties are sold “as is” and “buyer beware.” They will need work and patience. Don’t expect to lowball these properties either as multiple offers are starting to make an appearance on these already price adjusted homes. I want to say a word about FHA loans. The loan limit on this product has risen to $729,000 in Orange
County.
It allows for a 3% down payment or 5% if it’s a “jumbo lite.”
The money can be gifted and need not be seasoned.
It is available for refinance up to 97% loan to value for rate and term.
This is a viable option for refinances if some of your equity has been lost.
Please call me for any questions on any real estate matter.
I am your expert on “the whole enchilada!”
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