Here’s the latest Orange County Housing Report from Steven Thomas, President of Altera Real Estate.
After dropping nearly 22%, Orange County housing demand is now in a normal summer cyclical pattern.

Housing Demand:

Over the last 5 years the average drop in demand was 3.2%, this year it was only 2%.
Whatever the reason, the end of school, graduation, the start of summer, demand cyclically drops at this time of year.  The only difference this time around is that demand had already dropped 20% due to the end of the Federal first time home buyer tax credit.  When demand reached 3,979 pending sales on April 29th, the height for 2010, and the highest threshold in almost five years, there was a rush to purchase by first time home buyers.  That segment accounted for 25% of Orange County’s housing activity.  With so many of them pushing to purchase by a deadline, it left a void in demand for the six weeks that followed the expiration.  It wasn’t until the past two weeks when the normal housing pattern for Orange County reemerged.  Earlier in the year, the market followed a normal pattern as well, until March and April.  Demand grew by 30% in those two months, and then subsequently, dropped almost 22% in May and June.  Demand, the number of new pending sales over the prior month, decreased by 60 in the past two weeks and now totals 3,107.  For the second report in a row, demand is less than the

prior year with 522 fewer pending sales compared to 2009.  From here, demand typically falls in the next two weeks and then climbs at the end of July.  With the distraction of the Fourth of July weekend coming up, that sounds fairly accurate.

Active Listing Inventory:

The inventory has continued to grow unabated since the beginning of the year.
Last year the inventory dropped by 36%.  This year, however, the Orange County housing inventory has grown by 3,034 homes, a 43% increase.  In the past two weeks, the inventory has grown by 345 homes, a 3% increase, and now totals 10,469.  This is also the second report in a row where the inventory is higher than last year.  Last year the inventory was at 9,188 homes, 1,274 fewer than today.  The drop in demand is partially to blame for the increase in the inventory, but keep in mind that it was still increasing unabated when demand was at its highest level in years.  We have also heard that the market is really hot in lower price ranges, which is true, just ask any buyer.  However, all ranges have experienced an increase in inventory, especially homes between $250,000 and $1 million.  For homes priced between $500,000 and $750,000, the inventory has increased by 60%.   The reason for the increase in inventory is because there are many homeowners who have held off on selling their home, pent up sellers, who have been waiting for the market to turn so that they could take advantage of the market and sell their home.  Homeowners have heard about the hot market in the lower ranges with a lot

of activity, multiple offers and homes selling for very close to their asking prices, and in many cases, above their asking prices.  The problem is that many of these pent up homeowners are placing their homes on the market at unrealistic levels, thousands above the most recent comparable and pending sales.  Buyers in today’s market have become “spreadsheet buyers,” pouring over the comparables and not wanting to pay much more than the last buyer.  With demand hot, many are willing to pay a bit of a premium to purchase their dream home, but more along the lines of an extra $5,000, not $15,000 or more.  As long as the overall economy’s health is in limbo and more distressed homes are hitting the market, buyers are unwilling to pay an extravagant premium to own a home.  As a seller, it is imperative to carefully consider all recent comparable sales, taking into account location and amenities, and price accordingly.  Then, listen carefully to how the market responds to your home and make any necessary adjustments.

Foreclosures and Short Sales:

Since October 1, 2009, the distressed inventory has grown by 37%.
The active distressed inventory has increased from 2,346 homes on October 1st and now totals 3,217, levels not seen since May of 2009.  The distressed inventory now represents 31% of the current active inventory.  Last year at this time, there were 2,919 distressed homes on the market, representing 32% of the active inventory.  The number of foreclosures within the active listing inventory increased by 29 homes in the past two weeks from 530 to 559.  The expected market time for foreclosures is 1.52 months, an exceptionally HOT seller’s market.   Short sales, where a homeowner attempts to sell a home for less than the total outstanding loans against a home, requiring lender approval, increased by 108 homes over the past two weeks and now total 2,658.  The expected market time for short sales is 2.28 months, still a HOT seller’s market.

Interest Rates:

Interest rates are at a 60 year low and will NOT last.
Everybody is so focused on price and the current historically low interest rates have become an expected part of our real estate market.  However, with all of the money that the Federal government has poured into our economy, there is a real threat of major inflation on the horizon.  One of the only ways to counter the threat is to raise rates.  Due to the lackluster economy, the Federal Reserve is currently stuck and unable to raise rates in the short run, but sooner or later they will be forced to make a change.  Rates are predicted to increase to 6% over the course of the next year.   As interest rates rise, buyers can afford less of a home.  This is best illustrated in an example.  For a buyer with an income of $100,000 and putting 20% down, a rise in interest rates from 5% to 6% equates in a drop in home affordability from $590,000 to $540,000, a $50,000 drop.  Buyers waiting for that “good buy” may find it next year, but at a price, with higher rates and a larger monthly payment.

Orange County Housing Report: Demand is Normal Again is a post from: Orange County Real Estate-Orange County Homes For Sale

Brand new on the market!  Click “play” to see a short video of this great home for sale in Orange, with wonderful patio, upgraded kitchen and bathrooms, and beautiful living space.

This end unit condo in Chapman Townhomes, with 3 bedrooms and 3 bath, has vaulted ceilings, gorgeous natural light, and a secluded garden back yard.  The private master bedroom has romantic balcony and a walk in closet with mirrored doors.  Skylights and ceiling fans bring the sunny Southern California climate indoors.  Tired of dealing with Short Sales and Bank Owned homes?  This is a standard sale with an equity owner!  Call me for a private tour of this wonderful Orange County home for sale – 949-584-5221.

An Oasis in Orange – Condo for Sale by Equity Owner is a post from: Orange County Real Estate-Orange County Homes For Sale

Jon Lansner of the OC Register reports that the latest Dataquick homebuying report shows the median home price in March was $432,000, up 12% from a year ago.  The number of homes sold in Orange County also continues to rise, with the March sales of 2,652 homes 9% higher than in 2009.  That makes 20 of the last 21 months where the number of homes sold was higher than the previous year, after a streak of 33 months of declining home sales.

Orange County Home Prices Up 12% in March is a post from: Orange County Real Estate-Orange County Homes For Sale

You put an offer on a great home, and the response from the seller comes – a counter-offer, marked “MULTIPLE COUNTER OFFER”.  What does it mean?  What should you do?  Well, first of all, don’t panic!

What Does “Multiple Counters” Mean?

Often in today’s Orange County Real Estate market, homes in high demand because of price or some other factor will attract more than one buyer.  This is especially true for Single-Family homes price around $500,000 or less.  When a home for sale attracts more than one buyer who makes an offer, the seller has several options.  One of those options is to make a “counter offer” to the prospective buyers.

If counter offers are made to more than one offer, that is a “multiple counter offer” situation.

Know the Market

As I said – don’t panic, or let emotions take over.  It’s very hard to know exactly what the seller is thinking or what there motivations might be, so just stick to the facts.  How does the home compare to others on the market, or that have sold recently?  Are there special features (or flaws) that make the home stand out?  How does the seller’s counter offer relate to that market knowledge?

Know Your Limits

Regardless of the market situation, keep in mind what your own limits are, and don’t go overboard.  If you’ve set a budget that is being pushed, go ahead and review that budget, but don’t abandon it in the face of some competition.

Make an Informed Decision

Now that you’ve thoroughly reviewed both the counter offer, the market, and your own limits, decide on a course of action.  You can respond to the counter offer with a counter offer of your own – which might include either a higher or lower purchase price!  You can accept the counter, and hope that yours is the offer that’s accepted, or you can decline to respond and start looking for the next deal.   Whatever you decide, rest assured that you’ve carefully weighed all the options and made the BEST POSSIBLE OFFER based on your own limits and the market conditions.

Unlike when the seller makes a counter offer to a single offer, the buyer’s acceptance of the offer

What a Multiple Counter Situation Means to an Orange County Home Buyer is a post from: Orange County Real Estate-Orange County Homes For Sale

DSNews is reporting that on Wednesday Wells Fargo joined Bank of America to become the second major US bank to participate in the HAMP Second Lien Modification Program.

A Step In the Right Direction

Under the Second Lien Modification Program (2MP), when a homeowner obtains a loan modification on the first mortgage the second lien holder must either modify the second as well, under proscribed guidelines, or may accept a lump sum from the government to cancel the lien.  This removes a significant obstacle to relief for distressed Orange County home owners, because even if they are successful in modifying their first mortgage the remaining second could keep their debt load unmanageable.

One Quarter of All Second Liens Now Under HAMP 2MP

Wells Fargo’s decision to sign on to the 2MP is important because of the huge number of loans they service.  Between Wells and Bank of America, they hold almost $265 billion worth of second liens – about 25% of the entire US market.  There’s still a long way to go, but this is a positive step for home owners, the Real Estate market in general, and Orange County Real Estate too!

Wells Fargo Joins HAMP Second Lien Program is a post from: Orange County Real Estate-Orange County Homes For Sale

FHA Loan Alternative – 5% Down Conforming on Orange County Homes is a post from: Orange County Real Estate-Orange County Homes For Sale

Housing Starts Soar To 6-Month High In January… Or Do They? is a post from: Orange County Real Estate-Orange County Homes For Sale

For the second month in a row, 18 of the 20 Case-Shiller real estate markets posted higher home values.  It’s the 6th consecutive strong showing for the benchmark private-sector housing index.

Combined with falling home supplies and rising sales figures, this month’s Case-Shiller Index suggests that housing may have bottomed sometime earlier this year.

It’s cause for optimism.

Even Case-Shiller respresentatives seem excited. In its press release, the publishers singled out the index’s winning streak, commenting on the recent “stabilization in national real estate values”.

But, in that statement, we see the Case-Shiller Index’s biggest flaw.  The index purports itself to be a national real estate metric but, in reality, there is no such thing as a national real estate market.

All real estate is local.

The Case-Shiller Index reports home values for 20 U.S. cities.  Each of those cities, however, is comprised of smaller neighborhoods, each with its own character, desirability, and price points.  Case-Shiller attempts to lump it all together — an impossibility.

As an example, New York City posted a nearly 1 percent increase in July but that figure is just a city summary.  The actual market in three distinct neighborhoods — Upper East Side, Chelsea, and Flatbush — vary tremendously.  Not to mention Long Island, too.

Flaws aside, though, Case-Shiller is still important.  It helps to identify broader trends in housing and housing may hold the key to our economic future.

With July’s Case-Shiller Index, we see that the housing market’s recovery is being sustained.

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The Case-Shiller Shows Home Prices Are Still On Their Way Up is a post from: Orange County Real Estate-Orange County Homes For Sale

Lower Interest Rates Means More Affordable Homes

Orange County home buyers watched today as interest rates on conforming loans droped to 4.75% on 30 Year Fixed Rate home loans.   That means any Orange County home for sale today will cost you less on a monthly basis - if your loan amount is equal to or less than $417,000.00.   And it is not too late to buy a home before the end of the year.  There are lenders who are capable of wrapping up a loan in 10 days, some times even less.  And Bank Owned homes for sale in South Orange County are a prime target for a quick sale.  Give some thought to taking advantage of todays amazing home values and today’s low low mortgage interest rates. 

Sample Mortgage Rate Cacluator

We’ve provided a sample mortgage estimator so you can see the impact movement in the interest rate has on the affordablitiy of Orange County Homes.  The column on the left is the loan amount.  The row of numbers across the top is the interest rate.  The numbers to the right are the principal and interest payment estimates at various interest rates.  The column in yellow shows the payments on conforming loans up to just over the limit of $417,000.00

This chart will help you estimate your principal and interest payment on various conforming loan amounts at a variety of interest rates.

Orange County Homes Just Became Even More Affordable is a post from: Orange County Real Estate-Orange County Homes For Sale

Mission Viejo REO Homes for Sale

As of this post, there are 25 active REO homes for sale in Mission Viejo.  36 Mission Viejo REOs are already in escrow.

These range from a $185K 1 bedroom 1 bath condo in the Las Palmas complex to

a 5 bedroom 3 bath almost 3000 square foot home in Pacific Hills for $745K – that’s $250 a square foot!  What a deal!  And this one look to be clean and undamaged in a major way.

My pick for the day is a single story single family detached home in the La Paz South tract.

This home has been on the market since March when it was a Short Sale listed at $699K – during this time there was no lock box and limited access to show the property.  Prior to that it was listed at $780K.  The bank’s loss is your gain!  Expect, at a minimum, some cosmetic work will need to be done, and as always, get a thorough home inspection in order to avoid as many pit falls as possible!

Remember the Top Tips for going after an REO listing – and go for it!  Just make sure you have your financing in place with a lender who is on top of today’s changing market – and a great Realtor.  This is the market where Real Estate fortunes are made – be one of the winners!  Get a great deal on a Mission Viejo REO home for sale today.

Mission Viejo Homes for Sale – Market Update is a post from: Orange County Real Estate-Orange County Homes For Sale