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8/8/2019 OC Real Estate Report_12_2010
http://slidepdf.com/reader/full/oc-real-estate-report122010 1/4
8/8/2019 OC Real Estate Report_12_2010
http://slidepdf.com/reader/full/oc-real-estate-report122010 2/4
2December 2010 | OC dwellings
Orange CountyOrange County is enjoying a blistering seller’s market in homes under $2 million. Between $2
million and $4 million, the market tips toward a buyer’s market. Upscale homes aren’t expected
to sell at the same pace as more affordable homes, but once supplies build to a year or more, the
market is sluggish to stagnant. Orange County upscale homes are in a buyer’s market above $4
million.
*A balanced market is widely accepted as having six months of inventory on hand with market conditions favorableto both buyers and sellers. A buyer’s market is characterized by conditions such as high inventories, falling prices,concessions by sellers, and incentives among other indicators. A seller’s market has low inventories of homes for sale,escalating prices, and keen competition between buyers, including multiple offers.
Unemployment remained at at 9.6% in
October, but the producer sentiment index rose
5%, an indicator of an improving jobs outlook.
Time to buy in California Nationally, the road to normal has begun,
but the outlook is even more exciting for
California.■ California median house payments were
$1,747 in Q2 2010, down from $3,583 in
Q2 2007.
■ California median home prices were
$375,000 in November 2010, up from
$290,000 in January 2010, and $225,000
in January 2000.
■ California median rents were $1,484 in
Q2 2010, up from $1,046 in Q2 2000.
■ The gap between the average rental
payment and the average mortgage
payment has not been this close in the last
ten years. If you can buy, now is the time.
UCLA Anderson Forecast Senior Economist
Jerry Nickelsburg forecasts that “all the
evidence suggests that California is ever so
slowly coming out of the recession … but,
slow growth means that while the groundwork
for faster growth is being put down, there is
not a lot of perceptible change.”
The California Association of REALTORS®
expects housing sales to end 2010 with a 10%
decline in transaction volume from 2009, but
the trade organization projects a 2% increase
in sales in 2011.
However, softer transaction volume has not
resulted in lower home prices. The trade
organization anticipates that 2010 will end
with an 11.5% increase in median home
prices to $306,500, and that prices will further
increase to $312,500 in 2011.
“As the U.S. economy continues its tepid
recovery, we’ll see some improvement in
California’s economy,” said C.A.R. Vice
President and Chief Economist Leslie
Appleton-Young in September. “We expect a
net jobs increase of approximately 1.4 million
jobs in California for the year to come and an
improvement in unemployment gures.”
As the housing market stands now, sales are
brisk under $500,000, causing prices to rise.
Upscale home prices may soften further,
affording a terric opportunity for home
buyers taking advantage of a three-year price
decline in certain price ranges, especially now
that jumbo loans are more available.
“The wild cards for 2011 include federal
housing policies, actions of underwater home
owners, and the strength of the economic
recovery,” says Appleton-Young. “What
is certain is that favorable home prices and
historically low interest rates will continue to
make owning a home in California attractive
for those who are in a position to buy.”
Southern CaliforniaSouthern California home sales had a
normal seasonal drop in October 2010 from
September, according to MDA Dataquick, but
prices inched higher for the 11th consecutive
month. A glut continues in the high-end
upscale market, where home values dropped
at half the rate of affordable homes following
the housing boom, despite the difculty inobtaining jumbo mortgages.
Overall, home values are still climbing, largely
due to a lower percentage of foreclosed homes
in sales inventories. Foreclosures represented
34.7% of the resale market in October, down
from 56.7% in February 2009. The median
home price in the Southland was $283,000
in October, up 1.1% year-over-year, and up
signicantly from the $247,000 median paid
in April 2009. The median high was $505,000
in mid-2007.
There is also a shift favoring lower-cost homes.
Worth noting is the role of investors andsecond-home buyers, who purchased 21.8% of
the homes sold in October and paid a median
price of $204,500. Buyers who paid cash paid
a median of $200,000, and accounted for
27.1% of the market. That’s signicant, since
the 22-year monthly average for Southland
cash purchases is 14.2%.
These savvy investors aren’t waiting for a
better deal, and neither should you.
Advice for BuyersMarket conditions constantly change. A buyer’s
market with low mortgage interest rates, high
inventories and low prices seldom sees a
bottom in all three factors. Overcorrecting
prices plummeted and began to recover two
years ago, so waiting for a better deal may
not pay off, especially if interest rates start to
rise. A smart investor doesn’t expect to buy
at the bottom. Instead, look at all the market
conditions, and you’ll see the time is right to
strike a good deal on a home.
Advice for SellersExcept in the affordable price ranges, it’s
still a buyer’s market in most areas. Thatmeans competition is strong from new homes,
foreclosed homes and other homes for sale
in your neighborhood. Get your home in
pristine move-in condition. Lower the price if
inventory levels are over six months on hand.
Be open to negotiating terms with buyers.
kendra stevens REALTOR ® License #01845227
949.680.8617kendra@OCdwellings.comwww.ocdwellings.com
independently owned and
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3December 2010 | OC dwellings
Detached homes in Orange County are
selling at a blistering pace in all conforming
loan price ranges. Only when prices reach
$900K and above do supplies start to tip
from a seller’s market to a buyer’s market.
Attached homes are selling nearly as well
as detached homes. Under $600K the
market is heated, and it balances nicely
under $800K. Once prices go higher,
supplies start to build, but far from a
sluggish level.
Detached d home asking prices per
square foot are not far aeld of sold prices,
further supporting evidence that homes
are selling proportionately well across all
price points.
Detached Properties - Inventory in Months
Attached Properties - Inventory in Months
Detached Properties - Pricing Realty for Sellers, per square foot
8.1
4.3
4.5
4.3
3.7
3.5
3.1
3.4
0.0 2.0 4.0 6.0 8.0 10.0
$900K and over
$800K - $899K
$700K - $799K
$600K - $699K
$500K - $599K
$400K - $499K
$300K - $399K
Under $300K
$308
$322
$339
$302
$454
$0 $200 $400 $600
PENDING SALE
HOLD DO NOT SHOW
CLOSED SALE
BACKUP OFFERS
ACTIVE
Sellers should carefully consider current buyer
demand when pricing their home for sale.
When list prices per square foot of Backup
and Pending status properties are below that
of Active properties, sellers should ask for
pricing counsel from their Agent.
11.5
9.2
6.7
6.8
4.7
4.5
4.0
3.6
0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0
$900K and over
$800K - $899K
$700K - $799K
$600K - $699K
$500K - $599K
$400K - $499K
$300K - $399K
Under $300K
8/8/2019 OC Real Estate Report_12_2010
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4December 2010 | OC dwellings
The gap between attached home asking
prices per square foot and those of solds
is even smaller than that of detached
homes, suggesting that sellers are pricing
their homes accurately and to sell quickly.
After peaking in August, new listings have
declined, even while absorption rates
have improved, preventing supplies from
building and allowing inventory levels to
deplete.
New attached home listings peaked in
September and declined in October, but
absorption rates have risen steadily since
July 2010.
Attached Properties - Pricing Realty for Sellers, per square foot
Detached Properties - Monthly Listings Taken and Absorbed
12 Months through October 2010
Attached Properties - Monthly Listings Taken and Absorbed
12 Months through October 2010
2,046 1,999
1,786
2,0011,949
1,7381,876
1,919
1,6091,570
1,0371,175
0
1,000
2,000
3,000
0
500
1,000
1,500
2,000
2,500
3,000
New Listings Listings Absorbed
New Listings 1175 1037 1609 1570 1919 1876 1738 1949 2001 2046 1999 1786
Listings Absorbed 1261 1066 1126 1289 1622 1678 1443 1512 1380 1494 1535 1618
2009/11 2009/12 2010/01 2010/02 2010/03 2010/04 2010/05 2010/06 2010/07 2010/08 2010/09 2010/10
$229
$251
$266
$253
$298
$0 $50 $100 $150 $200 $250 $300 $350
PENDING SALE
HOLD DO NOT SHOW
CLOSED SALE
BACKUP OFFERS
ACTIVE
Sellers should carefully consider current buyer
demand when pricing their home for sale.
When list prices per square foot of Backup
and Pending status properties are below that
of Active properties, sellers should ask for
pricing counsel from their Agent.
1,2751,308
1,1561,2011,189
1,1021,1531,169
1,080
1,003
702
800
0
300
600
900
1,200
1,500
0
300
600
900
1,200
1,500
New Listings Listings Absorbed
New Listings 800 702 1080 1003 1169 1153 1102 1189 1201 1275 1308 1156
Listings Absorbed 754 712 867 869 1086 1152 837 945 833 957 996 1098
2009/11 2009/12 2010/01 2010/02 2010/03 2010/04 2010/05 2010/06 2010/07 2010/08 2010/09 2010/10
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