Inventory Trends Continue ... For Much Longer?

Now that we can all get back to our regular routine and stop fantasizing about hitting it big for $640 million, let's focus in on a bit of reality.  We are still in the midst of the prolonged dip in inventory and it continues to be a factor in this still undecided market.  Trolling through the most recent stats and figures this morning over a hot cup of fresh brew, I found that San Clemente has actually lost even more ground in overall inventory since our last post back on March 16th, San Clemente is down from 231 active listings to just  these 224.

 In looking at the chart above, we can see that with the exception of January,  the number of homes sold has outpaced the amount of new homes coming to market, a trend appearing to start in October 2011.

Below, we see that Dana Point has remained relatively well balanced when compared to San Clemente with a total of 181 Active listings, not much change from the 179 for sale back on March 16th.

Laguna Beach though seems to be well out front in the available inventory with these 241 homes for sale, considering the population differences, there are plenty of choices.  Just bring your checkbook, because the average list price is $4,072,601.  It is a bit skewed though, 25 of the 241 for sale are listed at $10,000,000 or above.

So when does the market start to resupply towards a more balanced real estate outlook? The answer may lie in the data relating to the fabled "Shadow Inventory".   This rumored cache of real estate gold, is said to be sitting at 1.6 million units, nationally, down from last years number of 1.8 millon.  It is further reported by Justin Hilley, of HousingWire.com ®, that data pulled from Core Logic®,  estimates that "of the 1.6 million national units, Florida, Illinois and California account for roughly a third or nearly 528,000 homes".   Does this mean that we are due a flood of homes in the next 24 months that will contribute to yet another economy crushing decline in the housing sector.  It is unlikely, although I would expect we will see a moderate stream of homes released starting in the next few months, this will allow lenders to ease their already battered balance sheets, one step at a time.  This, coupled up with the "normal" Spring listing boost should satisfy the  continued demand for homes and help "balance" things back towards a buyers market.

Once we get past the upcoming tax deadline, look for a noticeable increase in the second half of April.  Now that interest rates have again retreated after a week of instability, we should have a decent run of stable rates, you could see ranges from just under the 4% threshold to 4.5% or just above.

As always, if you are thinking of taking advantage of this historically volatile market in the next one to two years, NOW is the time to get in the game!

Spring Opportunities...?

  Today is the first day of Spring 2012, the "Vernal Equinox", when the sunrise and sunset share the light of day and the dark of night with equal favor. From here on out though, the days get longer (actually these days, they have all seemed long) and we all get to bask in some long overdue sunshine. With this new transition, we all look forward to things to come, Summer, BBQ's, baseball, the beach, the 5:30 a.m. start at your home course and even a few nice South swells.

Another thing that many of us have long anticipated is the return of some stability in the housing market. That time when we had an idea of what is going to happen with reasonable certainty.
Remember those days?

It was not that long ago when things were easy to determine where they were headed. Right or wrong, you just knew that your home was going to double in value next year and you would have
that nice little five-bedroom "Beach Cottage" front row at T-Street.

All you had to do was sign that listing agreement, stick the sign in the ground and make sure the new beach chair and sunscreen were ready to go. It was that easy... Almost...

  While these T-Street Treasures are still there today, things have changed. They can be had for well below a peak 2007 list price of $5,250,000 for a single-family lot and home on Paseo De Cristobal.
In fact, Spring usually brings such "bargains", if you can consider a $3.3 million dollar oceanfront enclave a bargain. Maybe you can, at over 6,000 square feet, six bedrooms and seven baths, with that view, it is a steal compared to some of the other comparably appointed estates just a dozen or so miles to our North.

To know where we stand now as we head into Spring and Summer, all we have to do is look at some Spring trends of the past decade. Starting back in 2002, ending the period from January 1st to March 20th, San Clemente stood at 187 homes sold for an average sales price of $490K. They sold in a combined average of just 79 days on the market. 2003 saw the jump to $562K on 203 homes sold and averaged only 77 days on market. Spring of 2004 saw a very dramatic jump to an average of $712K. For 2005, try $775K average, nice huh..? T-Street here we come! By the Vernal Equinox of 2006, we hit $975K, but could it keep going? Next stop, the Cotton Estate at our southern border?

Could it be?

Well, Spring 2007 we cracked the million-dollar average, $1,004,040. Wow... Start packing, right? Not so quickly. 2008 gave us $894K, 2009 a plunge to $669K. Was 2010 the year of the recovery? After all the Spring average put us at $711K. Not at all, 2011 saw us back in the high $600K range and now, how about this Spring? We just closed 149 homes for an average of $637K and it is taking nearly 130 days on market for a home to sell, on average. The graphs show it, the run up, the peak, the fall. All the way back down to where we are today. Is there more to give? Yeah, probably a bit. How much though is a thing of great speculation and wild theory, even this one here. I do know that if you are still thinking about dusting off that beach umbrella, do it now and get out there looking, because one thing is certain, June will be here soon.

What A Difference A Week Makes..

Here I sit, typing away on a Friday night,  looking up all the weekly sales and listing stats for our little slice of paradise.  Keeping one eye on the big spoiler rolling down the coast.  Rain, rain, go away, we all have things to do this weekend that DO NOT include paddling down to the market, camping out under umbrellas watching the kids attempt whatever outdoor activities still remain scheduled or trying to qualify for the pole position out on the I-5 with the other racers. Don't the forecasters know my littlest Leprechaun turns eight tomorrow..?   Well, I guess it's just the price of living in paradise, before you know it things will be back to being blissfully perfect in a matter of days. Just wait..

  At the office today, a friend mentioned about some family being back in Michigan this past week, they just sat through unseasonably warm temps (80+ degrees no less) and a very rare tornado.. IN MARCH..!

The local real estate market seems to be acting similarly odd... Or at least as unpredictable.

  The inventory continues to shrink at Orange County's Southern most border.  San Clemente  currently sits at just 231 homes for sale..  That's it...  231 homes for a population that according to the 2010 Census, is over 63,500 people.  Mighty slim, especially compared to  Laguna Beach, which as of tonight, the  CRMLS © Multiple Listing Service, is showing that there are 236 homes currently for sale for their 22,723 residents (again, 2010 Census stats).  Dana Point is holding its own  for the 33,300 + inhabitants with 179 homes ready for their new owners.

With this week's jump in interest rates and the ever-thinning inventory, I can't help but think that we are close... Close to the elusive "Bottom". I am not quite ready to call it yet but if you are planning to buy a home in the next year, you should be looking now.  Don't ever forget, that for buyers, it is still your market.  For now...  Rising rates are one of the enemies we must all deal with.  You, me, the banks, the sellers... EVERYONE.  When that rubber band snaps and things finally start getting back to the new normal, we will all once again readjust to yet another economic trend.

     Reproduced with the permission of Mortgage-X.com

All you have to do is look at the chart above and you can see the slight dampening of the trend line curve..  Now look back to previous years and see what happens after they go flat.  They bounce, sometimes for a year or longer, although they do tend to soften up after a period, the important thing to realize is that we are so close to unsustainable low rates that they will have nowhere to go but back up to what used to be unheard of lows. 5%, 5.75%, 6%, do I hear 7%? You remember, right?  7% is doubtful in the next two years but who really knows beyond that?  Now is the time.  Time to strike the deal that fits your budget, your lifestyle and your 10-year plan.  Beyond that?  Even harder to tell, but for now, now is the time. Sharpen your pencils and get out there before you are reading about it in the local Patch, or even worse, your neighbor scores that trade up gem.  Leaving you wishing you had.  Go ahead....test the water..

There should be plenty this weekend.

Picture Perfect Day..!

This is why we live where we do!  An absolutely beautiful day to get outside, take in some sunshine, fresh air, and enjoy it while it lasts.  With a slight cooling trend heading in over the weekend, it still won't be as bad as if we were in the Great Lakes or Central Texas regions where they will see temps in the high 20's to the low 40's.  With lots to do over the weekend, it is a great time to get out there and start "Kicking some tires" or in this case, some "Garage Doors".

Dana Point continues with the "Festival of the Whales" ...  According to reports, there seems to be an abundance of whales and other fabulous sea life out there to catch on one of these local cruises.  If you have never been out there to see these majestic creatures, you owe it to yourself and your family to at least try it once.  These are moments that you will for your whole life and kids are sure to never forget.

Speaking of abundance, there are 15 Dana Point homes that have been listed for sale in the last 7 days.  Spring is here and the local markets should reflect this, week over week, with more and more listings hitting the market.  These 15 join the already 159 homes that have been patiently waiting for those offers.  With interest rates bouncing a bit over the last few days, now is a great time to lock in if you have an accepted offer with a firm close date.

Another area with an active week for listings is Laguna Beach, they too had 15 new listings, with the especially impressive Irvine Cove listing. According to notes in the CRMLS ©, it has never been listed for sale since it's construction in 2002. At nearly 7,000 square feet and 5 bedrooms and seven baths, there is plenty of room to take in the spectacular ocean and white water views.  It joins a very select list of homes currently listed North of the $10,000,000 price tag, and if you were wondering, there are 25 world class estates looking down at the more "moderately priced" luxury segment.  There are still plenty of bargains in all price ranges in Laguna Beach, down in Dana Point and a bit further South into San Clemente.

With the busiest week of all, San Clemente rang in with 25 new listings this week alone. As the Spring market continues to heat up, you will see this trend continue, as we mentioned in last week's post.  Anyone wanting to beat the rush and get their home sold, needs to get the ball rolling as more and more buyers are taking advantage of the awesome interest rates; many dropping into the high 3% range. These 25 San Clemente homes offer some great opportunities, from the $299,900 home built in 2001 and offering nearly 1400 square feet to luxuriously roomy 4,300 square foot, 5 bedroom and 5 bath home priced at $1,195,000.

So get out there and soak up some sunshine and while you are at it, take a look at some great opportunities that are ready and waiting for your offer!

Big Discounts In Some Premium Areas..!

Welcome to March!  Before you know it, June will be here and the kids will be out of school and the real estate market should he humming along nicely.. ! (uhh.. maybe..)  Whether you're looking to buy or sell, one thing for sure is that with each passing month, we are that much closer to end of this long and somewhat painful recession.  Exactly when still remains the topic of much speculation but one proven fact is that by the time you are hearing about the "End of the Recession" and that the "Bottom has finally hit" in the mainstream media, it probably happened months before. Anyone who is seriously considering buying or selling and has been waiting on the sidelines should take a serious look at doing so.

The San Clemente February home sales figures have shown some impressive discounts being had and not all of them on starter condos or that long vacant foreclosure that was trashed to the point of  being a "knock down remodel".  Of the 57 closed sales recorded through the CRMLS ® for the city of San Clemente, there are over 24 that closed with discounts to the originally listed sales price of double digits. There was the starter condo at 1040 Calle del Cerro that sold at a 13% discount but consider that 12 Via Conocido in Talega was discounted approximately 18% to it's closing price of $1,200,750, for a 5,800 square foot, six bedroom, seven bath estate.  One of the biggest bargains was just 250 yards from the beach at 235 West Escalones.  It was actually two homes that sold for $700,000, down from it's original list at $975,000, over a 28% discount.

Take a look at this link  SanClemente 12-month Sales History ~ March 2011 to February 2012   for all the preceding sales for the complete year.  Until the next post.....