What Next?

Summer is almost over, or is it really?  With the coastal marine layer extending its "June Gloom" run well into what should now be the dogs days of summer, it leaves many wondering, will it finally make that long awaited appearance?  We all hope so, in fact, normally the best summer coastal weather and beach days appear in September.  The kids are back in school, the vacation crowd has receded from our shores, leaving wide-open beaches, short traffic free commutes (unless you are on the 5 freeway these days) and much shorter waits at all the local restaurants.  Finally!

As we reorient our focus to winding it all down and resuming our "normal" schedules, there are those who have been in the trenches trying to capture that elusive "Steal of a deal" short sale, foreclosure, bank owned home or the ever-increasing equity sale.  The challenges have been many as of late, the prices, as predicted, have not only turned the corner,  but we have realized substantial, actual gains in the local real estate markets.  Talks of bubbles, unheard of just a year ago, are now back in the discussion. Now that interest rates have also changed direction and are well on their way off historical lows, it has many either reaching deeper into their pockets and having to settle for that home that only last year, was $75,000 less.  OUCH!
A quick look at some data shows us this to be true.  A quick look at Scott Grannis' Calafia Beach Pundit and his July blog post, it shows a nice shot of where we were and where we may be headed

http://scottgrannis.blogspot.com/2013/07/housing-prices-firm.html

 

Scott's article mentions that home prices seem to be slowing, and not necessarily because of the traditional easing at the end of the summer, but that factors such as the perceived large run up in home prices and talk of bubbles have buyers rethinking the timing.  That and of course the largest run up in interest rates in as many years.  See the chart below.

Even with this latest run up in rates, there are still great deals to be had.  The big picture tells us it is still a great time to refinance that old 5% plus rate or purchase that first time home.  Whether you are trading up or down, now just might be the perfect time while the prices take a brief pause.  If you have been thinking of selling to take advantage of the market, it is time.  Get your home listed and exposed out into the market to get it sold well before the end of the year.

 

You can check market activity and search for homes for sale at www.MJDavisProperties.com or check out recent sales and stats using this interactive link  Coastal OC Sales Market Report

Real Estate's Bumpy Ride

A lot has happened in this ever-shifting real estate market since my last post back in July.  This latest update, while long overdue, offers support to the insight offered in the previous posts.  In many aspects it has been a quick close to what turned out to be a great summer and an even quicker start to our finally cooler fall season.  While the local temps have yielded to some cooler and wetter weather, home sales and prices have gone the other way for the most part.

Interest rates continue to drive further recovery to our local real estate market here in south Orange County. While they had been up slightly for a short time over the last few weeks, they are still touching historical record lows and that is keeping the steady stream of buyers lining up to make offers for the relatively few properties available here in South County.  If your home is priced right for this current market, sellers are seeing prices driven up by multiple offers and being able to pick from a nice pool of buyers that range from first time buyers, investors (many of which are all cash), those looking to trade up and those trading down.

From offers I have written that stretch from LA to San Diego, there have been very few that hit the owners tables all alone.  In some cases there have been eight, fifteen, twenty and one where there was thirty plus!  A very unique aspect that comes from this newly reinvigorated sellers market is that you need to have your buyers positioned to make an offer that stands tall among all the others.  For our sellers, it is a welcome change and one reminiscent of the middle part of the last decade.

In looking at an updated chart from our last July post, you can see that the sales numbers bear out evidence of this continued recovery, while the numbers are not even close to the crazy run up that prompted this twisted real estate and economic malaise, that is actually a good thing.

While the southernmost coastal cities (Laguna Beach, Dana Point & San Clemente) have posted higher total sold numbers, the average sold price figures, YTD 2012 compared to all of 2011 tell a mixed story.  Laguna Beach and San Clemente have both posted solid gains, Laguna Beach sits at 6.8% when compared to prices last year and San Clemente has solid gains showing a healthy 5%+.  Dana Point, while posting in increase in total sales overall has continued to drop, sitting around  a 7.8% drop in prices.

As expected, this "Recovery" has been all over the news, both local and national, over the past few months.  Many wonder what the future holds, can this run continue, through a presidential election, the economic and political instability in Europe and points further east?  Only time will tell but if I had to throw down some money, my bet is on slow and steady.  One of the most positive aspects of our current real estate market is that there is some benefit for both sides, sellers and buyers.  On the sell side, you have your choice of buyers, they are lining up, offers on hand, most of them are even reasonable.  For buyers, the deals are still out there and the rates, well, these are as good as they have ever been.

Jump in, its time, no matter what side you are on, its win-win (for now).  The Fed can only hold rates down for so long (right, wrong, artificially too low, whatever, there is no wrong answer) and when the rates turn, it will have a much bigger impact on the market than any other of the metrics.

For additional info relating to MLS statistics, data and real time MLS home searches, visit http://BuySouthOChomes.com

Train Keeps on Rolling

Now that we are all comfortably rolling along in the summertime groove, it appears that the current real estate environment is also traveling the same tracks that have carried us through spring.  Interest rates continue to touch and hold new record lows, purchase business is steady and the expected boost of new inventory has yet to show.  What gives?  Wasn't there supposed to be a wave of new inventory that would crush any hopes of a rebound?   A flood that many on the sidelines had predicted and banked on, one that would have so much inventory hitting the market that we would see another 10% to 15% drop in prices across the board.  What happened? Many have stood by and watched as rates plunge and inventory continues to thin, hoping that now is finally the time.

Well, it has not quite worked out that way to the surprise of many.  A quick look at the chart shows that we have indeed started to see a measurable recovery. Huh..?  Recovery..?  Where is the double dip crash?    Now I use the term "Measurable Recovery" very carefully.  It does not mean we will see home values start racing skyward as we did back when Alan Greenspan famously coined the term "Irrational Exuberance", but what we have seen is a shift towards a seller's market.  In fact, if you are currently in the market and seriously looking for a home, I would be willing to bet that many of you have made an offer on a home where you were one of several, if not many offers, on a home that you missed out on.  It is a fact of this "New Market", that after looking long and hard for the perfect home for you and your family,  you will have some competition. 

The year over year chart measures sold real estate activity in the cities of San Clemente, Dana Point and Laguna Beach.  Each year, going back to 2002, measuring the total number of closed sales up to the mid-point of July.  You can see that in all three cities we are well off our lows of 2008. Sales continue to improve from one year to the next but without that feeding frenzy driving prices soaring towards unsustainable growth.  You can see in this next link, exactly what they are selling for and at what percentage in relation to the list price.  This chart covers Laguna Niguel, Dana Point, Corona Del Mar, Newport Beach, San Clemente and Laguna Beach. Market Report - San Clemente, Dana Point, Laguna Beach, Corona Del Mar, Newport Beach & Laguna Niguel   To get an idea of what interest rates are and what payments would be using mortgage calculators, check out this link. Interest Rate and Mortgage Calculators .

We first saw some indicators of the increase in sales volume in the industry trade magazines, web sites and industry blogs over the last six months.  Now it is much more mainstream, many of those in the national press and regional media are claiming that we are finally and measurably, on the road to recovery. The San Francisco Chronicle claims "After several years of false starts, the evidence is finally starting to point to signs of a real recovery". Housing Wire magazine states that JP Morgan Chase economists are calling for real estate prices "to rise 12% by 2016".  Soon we will be seeing it consistently on all the major news channels, monthly, weekly, then daily, with all the talk of real estate being back. Finally.

Well, the truth is that it is back, and it has been for a little while now.  The key is do you want your piece of the pie, now or later.  Wait much more and there will be more offers to compete with and possibly, even higher prices. Smaller pieces of pie and more expensive...  Don't wait,  NOW is the time.

To view any property listed on the Orange County MLS, check out Buy South OC Homes

The Local Patch News sites

Make sure to check us out as we occasionally post to this fabulous local news source!  Patch is growing quickly and is a great alternative to the larger, less in depth news sites.  You can find them in many of our local Orange County communities and surrounding areas.

Here is just a partial list:

• Aliso Viejo
• MCB Camp Pendleton
• Carlsbad
• Laguna Beach
• Laguna Niguel
• Lake Forest
• Mission Viejo
• Newport Beach - Corona Del Mar
• San Clemente 
• San Juan Capistrano

If you don't see your city, just contact any of the other Patch editors and voice your opinion.  The more interest they get the better the chances your local city with be featured.

As always, keep checking back here for the latest in local deals on real estate, interest rates and anything affecting our local real estate landscape!  You can also find us and the hottest real estate deals around at:

 www.MJDavisProperties.com

Interest Rates versus Inventory

OK, OK, the new home listings predicted to start showing up in April took a bit longer than expected to materialize. This unpredictable run continues to reflect the contrary nature of today's real estate market. It was a short-lived bump in rates that seemed to have tempered the market just a bit. Now that the facebook IPO has came and went with a whimper, the stock market volatility continues to be driven in part by the uncertainty Greece, and the rest of the European Union is sowing. We should see rates continue to bump along lows with the occasional three-eighth bumps here and there. Overall, it is having a nice effect on the sector driving interest rates and we are pleasantly surprised to see rates again setting new record lows. With this continued historic drop in rates, many people are taking advantage of both record lows in housing and the cost to finance these homes.

San Clemente saw a long overdue resupply of homes as 81 homes new to the market finally made an appearance. The continuing challenge is that while it great to get these properties, 98 homes closed escrow in the month of May. Hard to keep a healthy a balance when the sales keep outpacing these new listings.


The Dana Point market does not appear to be suffering these same issues affecting San Clemente.  It is encouraging to see they had 56 new homes listed for sale while 44 homes closed escrow in the month of May.  You can see in the market report that Dana Point has maintained a nice healthy balance most of the year with the exception of January when you typically get a big boost in homes being listed for the new year.

Laguna Beach seems to be the opposite of San Clemente when it comes to the number of homes listed and sold.  As of Friday June 1st, they are leading the way among coastal cities with 241 active homes for sale.  The new listings have outpaced sales since the first of the year, even with the last three months showing some nice gains.  There were five sales with double digit discounts from list price.  In total, 26 of the 35 homes sold in May sold at a discount to the list price while 5 homes went for more than list.  There were 4 homes sold right at list price.  You can still get great deals on homes but as the market continues to slowly turn, you will see more and more homes getting multiple offers and being bid up as market demand grows.

Overall, we should see these trends continue and when the banks finally get around to working through all their short sales and foreclosures, a healthier market awaits.  When is that you ask? It is already starting to happen, we are seeing more and more value buyers recognizing the deals that are out there and they are getting back in the game.  The crash has happened and is behind us, recovery is ahead, and it is long overdue.

The Price of Admission

It has long been understood that the coast is a desirable place to live.  Anyone who has ever had the chance to plunk down the chair, stake the umbrella in the sand and kick back with a good book, magazine or Kindle understands this.  It could be a day at the beach with the kids, family or friends, it is a ritual most have experienced, and one in which we usually wish that we could repeat far more often than our hectic schedules allow. 

For us fortunate souls who just have to load the car or truck with chairs, boards, blankets and coolers then journey a few minutes towards the coast, we can count our blessings.  There are MANY others who love the beach just as much, maybe even more.  For them, the dream is still yet to be realized, they need to either sell what they currently have or those who are ready to enter into the realm of home ownership for the first time.  For buyers in today's market, the challenges come in varying degrees.  Those that are trying to buy for the very first time are faced with an extremely tight market with continued shrinking inventory.  You can see by the graphic below that if you are looking to buy a home and have up to $400,000 you have some competition.  The investors are alive and well and their pockets are deep and flush with cash.

If you consider that there are a total of 29 homes that are available at $400K or less from Laguna Beach, through Dana Point and south into San Clemente, that figure is astounding!  Who are the 29 lucky ones that may actually close escrow for these?  They should indeed count themselves as lucky because I know almost 29 people alone that are looking in those price ranges.  My greatest challenge right now is the lack of homes at many of the price points.

Between $400,000 and $800,000 you can see a much more balanced availability of homes.  Not usually the realm of first time buyers but certainly those looking to move up to a larger home to accommodate an expanding family or maybe those that continue to thrive in this challenging economy.  The competition from the investor segment is again present and well represented here.  Their favored prey are the long neglected homes that have fallen into disrepair and are ready to be taken back by the bank.  We are still seeing homes priced under market garnering multiple bids, the winner sometimes separated by less than $1,000.

Have a million bucks burning a hole in your pocket?  You have come to the right coastline!  To say the market is "top heavy" may be a bit misleading.  After all, you can't expect your beach front sand palace to come cheaply could you?  But in looking at the sheer numbers of homes available over $1,000,000, all 363 of them, they clearly outnumber the rest of the market, $1MM and under.  From $1MM all the way to the little condo on the hill in San Clemente for just $149,900, they only account for 264 homes.

So, it is really your choice, what will be the cost of admission?  That short drive to the beach, the books, boards, umbrellas and chairs, can be had. And with a little determination, luck, skill and of course the cash, you too can pick your price.

To start your journey, clink the link below and get your ticket:
Coastal Estates

Crazy Busy...

I really need to get some data plugged in here.. It has been an absolutely CRAZY busy ten day stretch, all good stuff but definitely busy.  Look for a much more comprehensive update sometime tomorrow.  We'll have all the latest listings and sales posted along with some other great market data.  As it stands tonight, San Clemente listings have shrunk to 208 active homes for sale.  Dana Point has increased its current available inventory to 194 homes and Laguna Beach has crept up just to 245 since we last blogged about all the numbers.

Look for further analysis in the next couple of weeks as we delve into trying to estimate the numbers of distressed inventory that will likely be hitting the market.

Until then, happy hunting!

Matt