Orange County Real Estate – Buyers’ Market Update

by leslie on December 2, 2008

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What’s Happening Today in the Orange County CA REO Real Estate Market?

November Orange County REO Market Update

We’ve called the Orange County REO market the fastest moving market in the county today – homes selling at great prices and in faster time that the other two current markets (the Short Sales and the Equity Owners.) Attached is a very provacative chart for November REO home sales in major South Orange County cities including Irvine, Newport Beach, Newport Coast, Laguna Beach, Aliso Viejo, Laguna Niguel, Mission Viejo, Tustin, Ladera Ranch, Rancho Santa Margarita, and Coto de Caza. This shows that of the REO homes sold in this sample of Orange County cities that closed escrow in November, 43% sold for more that the original list price. Yep, you read it right. 74 out of a total of 172 homes that closed escrow in November sold for over the list price. Folks. we haven’t seen this kind of trend before in this market.

November Report

Now, we’d be willing to dismiss this as a fluke if it were just a couple of isolated incidences, or if it only occurred in one city. But 43%?? That’s almost half of the homes sold. And across every city represented? That’s right – check the chart. The easiest way is to look for the red numbers – that means the home sold for more that it was listed for. More than the bank, having expert agents familiar with the local Orange County market work to establish a reasonable price. Every single city we sampled had the same trend. And across every price range – from under $200K every step of the way up to $1.2M. That’s no fluke, nor can it be attributed to a rogue REO listing agent putting all of their bank inventory on the market under market value.

What Does it Mean That 43% of Closed REO Transactions in Orange County in November Sold for Over the List Price?

We’d love to be the first to claim, boldly and loudly, that we’ve hit the bottom of the market, but we’ll leave that to the newspapers. They’ll call it once it’s come and gone. And prices are shooting back up again. But if we subtly announce it, based on data that shows that buying pressure is driving the prices above the market price, based on demand, you’d be smart to make your move now. Because as REO experts, here’s what we know.

REO Properties are listed at one of three price points, decided by the Bank’s Asset Manager. These price points are as follows:

Quick Sale Price – the price it will take to sell the home in 30 days or less with no repairs
As Is – the price it will take to sell the home in 60 – 90 days with no repairs
As Repaired – the price the home will sell for in 60 – 90 days with recommended repairs

Without a doubt, of the 74 Orange County REO homes in our sample that sold in November for over the list price, they were in each of these categories. Some sold for quick sale; priced just below the market trend to appeal to multiple buyers and bring offers quickly. Other sold “As-Is” – often with missing ovens, toilets, and bedroom doors – priced just at market pricing to bring offers yet not dump the price. Others sold with repairs as significant as new appliances, new counters, new flooring, and major repairs to pools, water heaters and landscape – at competetive market pricing to retain as much of the bank’s interest (no pun intended) as possible.

And look what happend last month! Our sample most assuredly represents each of the banks sale categories. And across the board – the prices were driven up from the listed price the bank was willing to sell for to a price the buyer was willing, if not forced, to pay for what they wanted. A tipping of the scales, perhaps? Back to the seller’s favor? We have a long way to go to get back to the peak. But return, we will. And surpass it eventually. You decide what to do with the facts. There is no doubt that this is a great time to buy a home in Orange County- for yourself, your parents, your children, your friends, and as an investment in your financial future. But you better decide soon, before all the home sales price numbers on our report are red!