OC Real Estate Report_12_2010

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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

[email protected]

independently owned and

operated




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




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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OC Real Estate Report_12_2010