Please don't misunderstand, buyers that took action, still bought 20% below the high of2007, but due to tight inventory, sellers enjoyed many multiple offer opportunities and bids were sometimes over list price. As a result, the 2013 housing market had its biggest gains since 2004. Increase demand coupled with limited supply resulted in a 19.7% jump in home prices. Having reported that, December was still a very slow month for sales for the resale home in Sothern California. In fact, they were at a 6 year low in volume, according to Data Quick, even as prices jumped, for precisely that reason, low inventory, more demand on the housing that was available. (More on the exact numbers later). What is the outlook after one month of 2014? Decidedly, it is a mixed bag: 1) Inventory remains tight, although listings are already starting to hit the post-Super Bowl market pick up. Sellers who list early without waiting until the official spring season will be rewarded with a brisk and busy market. The O.C. jobless rate dropped to 5.2% reportedly at the end of January. The Fed has trimmed back another 10 billion a month in its commitment to buy bonds. The response overall has been favorable which means expect interest rates to continue to inch upwards. If you are a buyer looking to keep as much purchasing power as possible, pay more attention to interest rates than housing prices, because therein lies your true north. You qualify for a loan based on what you can pay, so be cost sensitive more than price sensitive. There has been some solid economic news reported, such our 4th quarter 3.2% annual rate of growth, based largely on consumer spending which is usually a signal that people are feeling better about their own personal economic outlook. Consumer confidence is a key to any serious turnaround coupled with hiring trends and housing. But the strength of the report also came from the type of spending; durable goods such as cars, technology, and appliances. Spending on services also rose significantly meaning traveling, dining out, and other non-essentials are also coming back. There is a ways to go yet, hiring being the key and still lagging behind the high of 2006. Expect as those numbers increase, so will the housing market continue to heat up.
Wednesday, February 12, 2014
The total number of houses sold in Orange County for December, (the last full month available), was 3,089. That number shows a .6% increase in sales volume, but is very deceptive. The number of single-family resale homes was 1,730 which was a 13.9% decrease from December of 2012. Condos came in at 777 which was down 2.4%. It was not hit nearly as hard because entry level buyers often find themselves in a condo, and that market segment has been very steady. Million dollar plus homes have also seen record numbers, as reported here last month. The missing segment has been the move up buyer or move down buyer. As more and more homeowners get their equity position back, and new construction ramps up, giving those specific buyers a new place to go to, expect to see the middle price range come into its own in 2014. Speaking of new homes, the number of sales for December was 582, a 120% increase year over year. Distressed sales accounted for 24% of the December 2012 market, while in 2013, distressed sales numbered only 14%. The median price for all house rose 21.3% to $570,000. Separating out the condos, the median price was $372,000 a 22% rise and single-family resale was $639,000, rising 21%. All figures are comparing December 2012 to December 2013. More information is available at www.dqnews.com.
Sunday, December 1, 2013
Here is the real scoop on what's happening in the real estate market. First of all, don't just stand there...BUY!! The whole reason the median price of a single-family property increased so rapidly the past 60 days, (more on prices in the next paragraph), is because interest rates jumped more than a full percentage point. Between that increase and sellers demanding greater increases than the market could bear, sales slacked off in the price ranges most susceptible to interest rate increases, namely $250,000 to $750,000. Without the volume of those sales to temper the million plus purchases, the median price shot up. Many families were forced to the sidelines with the interest bump. Now, they can return, because in case you didn't hear... rates are back down, low...really low. Also, during the past 60 days, more property has hit the market, inventory levels are much healthier, creating more competition for sellers. This will naturally keep prices in check to a normal appreciating market. Don't miss out on the great rates again. Go out and find your dream home! The Federal Reserve has made it clear in recent articles and blogs that the U.S. economy still needs support from its low interest-rate policies, because it is growing only moderately. After its policy meeting, the Fed also announced that it will continue buying bonds to the tune of 85 billion a month to keep those rates low and encourage borrowing and spending. The question is: does that mean through first quarter next year? Or possibly second quarter? If buying a family home, to raise your family, spend your quality time, now may be your time.
According to all sources, including, the LA Times, the OC Register and DataQuick, the So Cal area's home price gains for August and September are the highest since '05. Before we get too excited, let's remember what we discussed in the last section of this newsletter. The sheer number of deals in the upper price range and cash transactions in the multi-million dollar range had a lot to do with the increase. Lack of inventory also drove up prices. Expect them to soften somewhat because of the increased inventory we wrote about. The number of sales in Orange County for September (the last complete month available) is 2,916. That number was up 8.9% from the previous month year over year. The median price for all properties was $550,000 up 22.2%. However, the median price for a single-family was $612,000 and that is a 20% increase from the same month of 2012. The median price for a condo was $380,000 and that was up 24.6%. The volume for the number of sales for single-family was flat with 1,807 sales, but condos rose 16% in volume to 836. The median price was highest for new homes at $696,000 but the sales were a paltry 273.
A recent article in the OC Register reported a 5 year prison sentence for a man forging deeds on vacant properties and then renting them and collecting those rents. The unfortunate part of this scenario is for the homeowner who may have moved out of a distressed property or simply moved and had not yet disposed of the existing property and now have to deal with tenant's rights, as well as a forged deed. Fortunately, the ALTA Residential title policy protects against after close of escrow forgery. Not all title companies issue this policy or do so automatically without Western Region Exceptions, but Fidelity National Title does. Always check to make sure you receive this superior title policy when you are purchasing a home.
There are many cheap, easy (ok maybe a little effort involved), ways to help buoy your asking price when you sell your home. Here are a few. (For even more info, go to www.kcmblog.com) First off, we are mainly talking about curb appeal, and a few cosmetic things inside your home. Curb appeal is huge, because buyers always look at homes initially based on their visual, emotional, reaction to the home. Make sure your roof is repaired and will pass for a one year roof certificate. Gutters should be cleaned and repaired. Invest a small amount of cash in really cool numbers for your address on your home's facade. Windows and trim should look newer, with no cracked paint. Wash your home's face, get the dirt and grime off it and add $10,000 to your sales price! Upgrade your front door to a snappy color or etched glass or trim. Replace old light fixtures for a more modern, with it look. Brush up your landscaping with a few new plants or flowers. Inside, think about replacing carpet with tile (if time or money), otherwise get your carpets cleaned. These types of changes require mainly, time, a little money, but could result in better and more offers for you.