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For the 22 business days ending March 19 — DataQuick’s freshest stats — Orange County homebuying patterns showed:

• 70 of O.C.’s 83 ZIP codes had losses in their respective median selling price. Overall, prices were -23.8% vs. a year ago.
• 3 of O.C. ZIPs had median sales prices above $1 million in the period (highlighted in green below!) Compare that to 11 million-dollar ZIPs when the county median price peaked in June 2007. Since that pricing pinnacle, there’s been a 41% drop in the countywide median price!
• 56 of O.C. ZIPs had year-over-year sales gains in the period. Overall, sales were +38.5% vs. a year ago.
• 16 of O.C. ZIPs has sales gains of 100% or more in the period.
• For a detailed report on the price moves, CLICK HERE!

Here’s a look at the 83 ZIPs and how they fared in terms of median selling price and total sales for the period:

last 22 days dataquick.doc

For more information about your specific neighborhood, Contact Sandra Carlisle at (949) 500-0482. 

* Sorry for the inconvenience, but email inquiries will only be responded to if they include a valid phone number. 

The answer may surprise you…

The entry level market here in Orange County is very hot right now.  Why?  Prices have fallen and in many cases buyers are finding it is cheaper to own than rent a comparable property.  Nate recently took a mortgage application for a first time home buyer purchasing a townhome in Aliso Viejo for $350,000.  The Realtor and client found that a comparable property would rent for $2,200 per month.

These particular buyers qualified for an FHA loan with a minimal 3% down payment.  Their total cash investment would be $10,500.  The closings costs were to be paid entirely by the seller, which is permissible on FHA loan at an amount up to 6% of the sales price.  The buyer obtained a 5.50% 30 year fixed rate mortgage with a total payment of $2,693 per month, which included principal, interest, property tax, mortgage insurance and HOA dues.  After deducting the principal contribution and the monthly income tax benefit from the home, the buyer’s net mortgage pay was $1,797 per month.  The net mortgage payment is quite a bit better than the $2,200 per month it would cost to rent a comparable property, especially considering that rent typically goes up 3-5% per year versus the stability of a 30 year fixed mortgage payment.

Many of the buyers who have been sitting on the sidelines of the real estate market are now finding it is more economical to own than rent.  Interestingly enough, investors have reached the same conclusion as they are starting to purchase these entry level homes for improved cash flow.  This is now starting to create competition (multiple offers) for entry level buyers and the homes they want. 

If you are ready to find out if it would be cheaper for you to own, than it would be to rent, contact Sandra Carlisle at (949) 500-0482 or give Nate a call about what price range you can buy in versus the payment you want at (714) 394-0506.

Yesterday, the Federal Government too some significant action regarding Fannie Mae and Freddie Mac.  Also yesterday, the heads of First Team participated in a conference call with the Department of Treasury and the new Fannie/Freddie regulator. 

Here is the gist of what was discussed and what we can expect as consumers & real estate agents.

• The Treasury decided to place the GSEs into conservatorship because they would not be able to meet their mission on a going forward basis.  The GSEs had begun to sell assets.
• Under this conservatorship, the GSEs will not be under any pressure to sell assets and the Treasury’s actions will begin to reverse the mortgage cycle and begin to build confidence in the GSEs and the mortgage market.

First Team’s view is that…

• This move, in the short term, will provide stability in the mortgage market by easing capital concerns at Fannie & Freddie
• Many people believe, including Lawrence Yun (NAR Chief Economist), that this move by the Treasury could, in the short run, reduce mortgage rates even further.
• This new management should keep Fannie & Freddie’s business partnerships intact
• The Department of Treasury, through 2010 seems to have the intent of expanding Fannie and Freddie business (at least during the housing downturn) 
• We believe that Fannie & Freddie might actually loosen up credit standards in order to stimulate the mortgage market
• The likely primary driver for this move by the Fed was concerns about stable domestic and foreign debt investment in the GSEs.

Looking at this move in the Longer Term:  It seems that this move by the Treasury will basically revert Fannie and Freddie to a facility for federally backed mortgage debt.  The theory appears to be that the GSEs will be employed as a counter cyclical model which means that when times are tough, their job will be to rachet up companies and when the environment is more “normal”, they will back off and let the private market carry the ball.

The future structure of Fannie Mae/Freddie Mac:  It looks like next year’s Congress, new administration and all interested parties will be pondering the question of what the post conservator GSEs will look like.

Some of the main facts regarding the federal action…

• Conservatorship - While there is no change in status for the Federal Home Loan Banks, Fannie & Freddie are immediately placed into a conservatorship.
• GSE Portfolios - In order to promote market stability, GSEs are allowed to increase their MBS portfolios until the end of 2009.  Starting in 2010, these portfolios will be gradually reduced at a rate of 10% per year through run-off to eventually stabilize at a much lower size.
• Treasury Preferred Stock Agreement - The Federal Housing Finance Agency (FHFA) and the Treasury have established a Preferred Stock Purchase Agreement .  This ensures that each company maintains a positive net worth and is intended to provide security to GSE debt holders and MBS investors.  In exchange for this, the Tresury receives a senior preferred equity share and warrants to protect the taxpayers.  Comon and Preferred Shareholders will bear any potential losses ahead of the government’s senior preferred shares.
• Secured Lending Credity Facility - The Treasury has established a new secured lending credit facility that will be available to Fannie, Freddie and the Federal HOme Loan Banks.  It is intended to serve as an “ultimate liquidity backstop” which expires on December 31st, 2009.
• Treasury Program to Buy GSE MBS - A Temporary Program will be initiated later this month by the Treasury to purchase Fannie Mae and Freddie Mac MBS.  These purchases will be made as appropriate and the program will expire on December 31st, 2009.

Other Highlights…

• The GSEs are expected to resume normal business operations Monday
• The United States government will assume control over the Board and Management
• The current CEO’s for Fannie & Freddie are being replaced but will stay on through a transition period
• The new CEO of Fannie Mae will be Herb Allison
• The new CEO of Freddie Mac will be David Moffett
• No dividends will be paid on preferred or common stock
• All political activity and lobbying by the GSEs will cease.

More information will be forthcoming shortly.

MarketWatch Article — http://www.marketwatch.com/news/story/fed-takeover-fannie-freddie-must/story.aspx?guid=%7BF6597149-BF77-4CBB-8785-D009BE980BFA%7D&dist=hppr

2008 California Explosion Summary!

1. OC Register April 22nd - Home buying demand jumps 23%.  Wave of first time buyers causes number of properties in escrow to soar vs. a year ago.  Activity is a strong hint that the county will see a mathematical end to the home buying slump, a 30 month losing streak that started in September 2005.

2. OC Register May 23rd - Wall Street investors sink $500 million into Standard Pacific Home Builders, Marlin Patterson which oversees $9 billion in investments, will employ a series of deals to help get the builder back on track.

3. OC Register May 30th - A 15,000 square foot home in Coto de Caza sold for $19.5 million last week which was a record over the previous $15 million high in 2005.

4. LA Times June 1st - Sales of bank-owned properties are picking up. REO’s in good condition and listed at $300,000 or less are drawing as many as 15-20 bids from homebuyers.  One home in LA was listed at $250,000 and it was bid up to over $500,000, which was the market price.

5. OC Register June 3rd - Economists at Global Insight and National city Bank say Orange county housing is now 5.2% undervalued.  It’s the first time this math shows local homes as relative bargains to broad economics since the second quarter of 2003.  It’s also the largest undervaluation since the final three months of 2002.  The data shows new purchase deals in the works at a two-year high.

6. OC Register June 3rd - Demand for OC homes now topping 2006 pace.  The number of deals in escrow as of Thursday was 2,720, an improvement of 46% from a year ago and 4% higher than at this time in 2006.  The recent surge in deals suggests the county’s housing losing streak dating to October 2005, will end soon.  The index shows that it would take 5.61 months for buyers to purchase all the homes listed for sale.  That compares with 5.82 months two weeks earlier and 8.86 month a year ago.  The latest county of 2,720 deals in escrow is up 173% from January 19’s wintertime low.

7. OC Register June 3rd - Federal Reserve Chairman Ben Bernanke said he does not believe the United States will experience the out-of-control prices seen with 1970’s oil shocks.  “We see little indication today of the beginnings of a 1970’s style wage-price spiral, in which wages and prices chased each other ever upward” Bernanke said.  His remarks come just one day after he said that the Fed’s rate cutting campaign was coming to an end because of increasing concerns about inflation.

8. OC Register June 5th - The Labor Department reported that productivity rose at an annual rate of 2.6% from January through March, faster than the government’s first estimate of 2.2% a month ago.  Wage pressures eased from the final three months of last year as labor costs rose at an annual rate of 2.2% in the first quarter compared to 4.7% surge late in 2007.  Rising productivity allows businesses to finance higher wages from increased output.

9. OC Register June 8th - Rent/Buy ratio looking better for O.C. housing.  The rent/buy ratio for Orange County in the first quarter was 22.2, down from a peak of 29.7.  “Rent ratios going down mean houses are becoming more affordable to buy,” says Arnold Slesers, the Economy.com economist.

10. National Association of Realtors June 9th - The pending homes sales index rose nationally 6.3% to 88.2 from a reading of 83.0 in March.  It’s the highest index since last October, but remains 13.1% lower than April 2007 when it stood at 101.5.  In the West, the Pending home sales index rose 8.3% to 98.8 in April and is 4.0% higher than April 2007.  Lawrence Yun, NAR chief economist, says that the underlying fundamentals point to a pent-up demand.  “Home sales are at about the same level ast ehey were 10 years ago, yet the population has grown by 25 million people and we have over 10 million more jobs.  Existing homes sales should increase from an annual pace of 5.05 million in the second quarter to 5.83 million in the fourth quarter.

11. Market Trends Graph June 14 - As of May 30, for Orange County, market trends shows the highest number of sales since March of 2007.  Sales have been trending up every month since the low of 1,056 in January 2008.

• January 2008 - 1,056
• February 2008 - 1,243
• March 2008 - 1,658
• April 2008 - 2,019
• May 2008 - 2,210

Are you ready to take advantage of the current market opportunities?  Do you need more information for a particular area in Orange County?  Contact Sandra Carlisle at (949) 500-0482 or via email at SandraCarlisle@firstteam.com. 

Selling in the OC?  There are a lot of reasons to hire me!

Rumor has it that we are near the bottom of the market here in Corona del Mar…  Can it be??  Let’s look at the facts based on history over the past 4 years for those homes priced up to $1,000,000. 

 The Absorption Rate and how has it changed over the past 4 years…

Market Activity Index - Corona del Mar 2004

Market Activity Index - Corona del Mar 2005

Market Activity Index - Corona del Mar 2006

Market Activity Index - Corona del Mar 2007

Market Activity Index - Corona del Mar 2008

The absorption rate is calculated based on the average rate of sales for a particular year and the current level of inventory.  The number represents how many months it would take to deplete the inventory based on this rate of sales.

• 2004 - 9.2 months (Sellers were super-excited about the market)

• 2005 - 20.3 months (Everyone was wondering what would happen…)

• 2006 - 51.5 months (Now we know what’s happening…)

• 2007 - 60.0 months (The year from H E Double Hockey Sticks (if you are selling)!)

• 2008 - 22.2 months  - We are only halfway through the year and the “Summer Selling Season” has just begun.  Inventory has dropped to 2005 levels and sales are beginning to surge.

Active/Pending/Sold History - Corona del Mar - 2004 to Present

Inventory is more than 50% lower than at the same time last year.  Sales Volume has been steady since October of 2007.  That’s eight months of stabilization.

Price Per Square Foot History - Corona del Mar - 2004/2008

Pricing has been stable since September of 2007.

As a buyer, who wants to anticipate the bottom of the market, there are a few questions you need to ask yourself…

1. How low will inventory have to go before it is again a sellers market?
2. Do I have more or less properties to choose from now vs. a year ago? 
3. Is the risk of the interest rate rising more than the risk of prices moving down?
4. Is Corona del Mar going to hold it’s value?

Here are some answers to consider based on these questions…

1. The current inventory level is 12 homes that are priced up to $1,000,000 in CdM.  We have averaged 1 sale per month since the beginning of January.  This month’s absorption rate, based on the 12 homes available, would be 12.  Sales only have to pick up by 3 homes per month to make this price point a sellers market.  Is it possible that 4 homes, priced under a million dollars might sell during June, July & August?  3 sold per month in March, April & June…  (See the Active/Pending/Sold History link above.)
2. This month you have 12 to choose from.  The same month in 2007 there were 28, in 2006 you had 21, in 2005 you had 11 and in 2004 you had 6 to choose from. 
3. Inflation is currently the greatest risk to the economy.  The Fed fights inflation by raising the interest rate.  Prices generally do not go down when inventory tightens.  Prices will generally go up.  (See the price per square foot graph.)
4. Again, see the price per square foot graph.

What do you think?  Has Corona del Mar hit the bottom or do you feel it’s close???

For more information on buying or selling a home in Corona del Mar or Newport Beach, contact Sandra Carlisle at (949) 500-0482.  To find out what the market is doing where you are, or in your price range, feel free to call me at the number above or send an email to SandraCarlisle@firstteam.com.   

I found this in my inbox and thought I would put it out there for all of you…

What do you think?  Is it possible that homes are now undervalued here in the OC? 

O.C. Homes Seen Undervalued, 1st Time Since ‘03 - Jon Lansner/O.C. Register

This article was sent to me last week.  It’s about the Ultra High-End Home Market and how it’s reacted to the mortgage crisis.  The article appears in Newsweek, is titled “What Housing Crisis?  Why the mortgage mess hasn’t hit luxury market, yet” and was written by David Koeppel.  I will apologize in advance to a few of my readers (you know who you are…) because it lacks the doom & gloom you are so fond of sending me.  ;)  But seriously, keep those articles coming to SandraCarlisle@firstteam.com   I appreciate it immensely, even the doom and gloom. 

Here is a quick outline of what you will find in the article:

“With the highest caliber properties, supply is limited, and cost is not something that determines their purchase,”says Shlomi Reuveni, executive vice president and senior managing director of Manhattan-based Brown Harris Stevens Select.

What Housing Crisis? by David Koeppel

• Ultra high-end home prices are still rising

• Shortage of trophy properties on the market

• Increasing numbers of wealthy foreign buyers

• Foreigners capitalizing on the weakened U.S. Dollar

• Sales for home over $5,000,000.00 are up 31% were up in the First Quarter of 2007 compared to 2006

• Most high-end sales are 2nd, 3rd & 4th homes

• There are more wealthy people in the world than ever before

• 11.3% increase in Ultra-High Net Individuals (Those worth more than $30 million)

• 9.5 million “millionaires” which is an 8.3% jump from the June 2006 report

“The rich are even richer than ever before and the very wealthy are pouring more money into residential real estate,” says Laurie Moore-Moore, the founder of the Dallas-based Institute for Luxury Home Marketing.

Orange County Real Estate price per square foot is UP 2% from 12/07 - 01/08* 

The fence can only hold you for so long…

55% of people think home prices will rise.

Demand is increasing.

Increasing demand throughout the OC.

The OC Register is starting to report some interesting facts…

* See Wednesday’s article in the OC Register titled “Half of O.C. homesellers cut price” by Jonathan Lansner, the 2% number is pulled from his graph for that article.

Corona del Mar Market Report Newport Beach California Orange County Real Estate Market Update LuxuryHomes

Corona del Mar  12/11/2007 - 2/11/2008

What has been happening with inventory in the last three months?  Are any homes in Corona del Mar selling?  How many homes are on the market in this Newport Beach Community in my price range? 

$0 - $999,999 

• Inventory is down 31%

• There are 13 homes on the market in this price range.

• 6 homes have closed escrow.

$1,000,000 - $1,499,999

• Inventory is up 30%
• There are 26 homes on the market in this price range.
• 3 homes have closed escrow.

$1,500,000 - 1,999,999

• Inventory is up 53%
• There are 49 homes on the market in this price range.
• 2 homes have closed escrow.

$2,000,000 - $2,499,999

• Inventory is up 5.6%
• There are 18 homes on the market in this price range.
• 4 homes have closed escrow.

$2,500,000 - $2,999,999

• Inventory is up 28%
• There are 23 homes on the market in this price range.
• 1 homes has closed escrow.

$3,000,000 - $3,499,999

• Inventory has remained level.
• There are 11 homes on the market in this price range.
• 1 home has closed escrow.

$3,500,000 - $3,999,999

• Inventory is down 25%
• There are 6 homes on the market in this price range.
• 1 home has closed escrow.

$4,000,000 - $4,499,999

• Inventory is down 50%
• There are 2 homes on the market in this price range.
• 3 homes have closed escrow.

$4,500,000 - $4,999,999

• Inventory is up 50%
• There are 2 homes on the market in this price range.
• 0 homes have closed escrow.

$5,000,000 - No Max

• Inventory has remained level.
• There are 10 homes on the market in this price range.
• 1 home has closed escrow.

Corona del Mar had 22 homes correctly aligned to the market over the past 3 months. 

ALIGNMENT = SOLD   

How can I align my property to the market?  There’s more to it than just slashing the price..

Orange County Real Estate Newport Beach Corona del Mar Market Report Update inventory levels selling a home

Buyers: Should you wait for the market bottom? by Melinda Fulmer, MSN Real Estate

Hi Everyone,

Here is one I didn’t have to write but wanted to pass on to you.  It’s actually written by the “MEDIA”…..   

Which isn’t so scary when they’ve done their research and talked to actual consumers!

Melinda Fulmer has a new fan.