Category Archives: Market Conditions

Orange County Market Update

The market continues to be busy in the lower end of the price range, and bank-owned and short sales are making up about 61% of all closed sales in Orange County. 

Today, there are a total of 11,577 homes for sale in Orange County.   Of those, 4783 (42%) are labeled as either bank owned or short sales.  Of the 4363 that are currently in escrow, 2925 (68%) are distressed.  In the last 30 days, 1018 (61%), of the 1653 closings were distressed.

Buyers are looking for the best values that they can find, and the best priced homes are usually bank owned.  Short sales are closing more often than in the past, but it is still frustrating for a buyer to make an offer, then have to wait weeks or months to get an answer from the lender.  It will be interesting to see what effect, if any, the President’s new stimulus plan will have.  

The latest foreclosure listings are now posted for selected cities or areas in South Orange County.  If you are looking in an area that I haven’t included, please let me know and I’ll run the list just for you!

Other posts like this:

2008 End of Year Report 
2008 Orange County Mid-Year Report
2007 Orange County Sales Report

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Thanks for visiting!

Vicki Lloyd

Lake Forest Market Update – January Sales Report

January closed sales in Lake Forest, California were less than December, but still better than January 2008.  A total of 39 homes and condos closed this year, versus only 20 last year, an improvement of 95%!    

Single family homes :

20 homes closed escrow in January.  Foreclosures or short sales were 14 of the 20, so 70% of the sales were “distressed”.  The average price came to $498,512 ($270/square foot).  The *median was $473,500. 

The least expensive single family home in January was reported in the MLS as closed at $310,000 although when checking the title records, it shows a sales price of $330,000 with a $326,701 FHA loan.  (?)  I am only guessing, but the seller must have paid some closing costs and the buyer’s loan amount includes the upfront mortgage insurance premium along with some other closing costs.  The other possibility is that the listing agent made a typo when entering the closed price, and hasn’t corrected it.

The most expensive home sold in January closed at $795,000 ($245/square foot.)  It had been on the market since 4/07/08 and had been reduced 8 times from $919,900 down to $799,900 when it finally sold.  If the seller had priced it correctly to begin with, he would have saved 8 months of interest payments, taxes, insurance, and HOA dues, which I calculated to be worth a little over $30,000!

Condos & Townhomes:

19 condos or townhomes were closed in January.  Foreclosures and short sales made up all but one of them, so 95% of the January condo sales were “distressed”!  The average sales price was $209,350 ($194/square foot) and the median price was $210,000. 

The least expensive condo was a 2 bedroom with 944 square feet that sold for over list price ($124,900) at $133,000 ($141/square foot).  The buyer put down 20%, so I am guessing that he is an investor who will rent it out.  With total payments (PITI+HOA) of less than $950/month, that investor should have a positive cash flow of $150 – $200 each month.  

The most expensive condo sold also happened to be the only condo that was not distressed.  It had 3 bedrooms, 2 1/2 baths and a 2 car garage and sold for $345,000 ($252/square foot) after 75 days and a 10% price reduction.  I found it interesting that it only took 10 days at the corrected price to attract the final buyer!

 *The median is the price where 1/2 of the homes sold for more, and the other half sold for less.

Homes in Lake Forest California: MLS Extremes

Of the 204 active homes in the Lake Forest California MLS today, there are 37 that are bank-owned (REOs), 107 that are offered as short sales (subject to lender approval), 47  that (I think) are over-priced, and 13 that are in the range to sell within the month. 

The current average list price in Lake Forest is $418,441 at $265/square foot and has been on the market for an average of 109 days. 

Out of curiosity, I sorted all the active properties in Lake Forest to check various highs and lows.  Here are the extremes at the far ends today: 

  • The least expensive home is a one bedroom condo offered at $107,500. 

 cheapest

  • The most expensive is a large re-built home on the lake front at $1,650,000.  This house also has the most square feet of 3850, the most baths with 5, and is the newest built in 2006. 

 Most Expensive Home in Lake Forest

  • The smallest property is a one-bedroom condo of 610 square feet, priced at $162,000. 

Smallest 610 sq ft

  • The highest price per square foot ($562) is another lake front home  priced at $1,295,000. 

 Most Expensive per square foot

  • The lowest price per square foot ($138 ) is a 2 bedroom condo at $140,000, which is a short sale. 

 Lowest $/square foot = $134

  • The oldest listing came on the market in October 2007, and is a short sale.  The price started at $485,000 and is now down to $420,000.   (This is a classic case of “chasing the market down”.)

 Oldest listing

  • The one with the most bedrooms of 6, is a short sale and listed for $375,000.

Most Bedrooms

If you would like to check my statistics, or do your own research, please click this link to  Search ALL the homes for sale in the Southern California MLS  (there must be at least one that you like!)

Don’t miss the next exciting update to this blog – click on the envelope to be notified by email!  )

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Thanks for visiting!

Vicki Lloyd

Year End Report Card

A year ago today, I posted my predictions for the Orange County real estate market in 2008.  Today, I can look back and see that I got some right, and some wrong.  (Isn’t that how it always is?)Report Card

Some things I got right :

The volume increased, (but not as much as I hoped.)  As of today, there have been 24,237 closings in the MLS since 1/1/2008 in Orange County.  It is about 20% above the 2007 volume of 20,000, but I had predicted it to come out between 25,000 and 30,000.  Since there may be some more closings tomorrow, and many of the recently closed sales won’t get reported until the listing agent remembers to update the MLS, it is still possible to hit my “25,000” mark, but it won’t go much higher than that.  I’ll admit that I was  optimistic.

Prices decreased – even more and faster than I thought they would!  The median price for a single family resale home now stands at $430,000 (off 34.4% from November 2007) and the median for a condo is $260,500 (off 38%).  See the DQ News Chart

There were a lot of foreclosures, and there will be more to come.  The big bailout, and help for homeowners has been a bust.  Very few delinquent borrowers have been able to modify their loans and keep their homes.  The foreclosures have slowed, but that is probably only due to the new California law that lenders have to document that they have worked with the borrowers prior to foreclosing.  There will probably be a big flood of new foreclosures that will hit the market around March.

A lot of real estate agents have left the business.  Final numbers won’t be available until late January, but I know many agents who have found other jobs and will not be renewing their local Association of Realtor®s  memberships.

The Real Estate Industry has become more “transparent.”   Let’s face it – there are too many places for consumers to do their research and credibility means a lot!   If you aren’t honest and open with your advice and opinions, buyers and sellers  will find someone else who will be.  

Nobody is going to buy a house simply because they see an ad that says “Now is a good time to buy or sell!”  DUH!   Actually, I have gritted my teeth recently when I saw a full page newspaper ad that declared “Work with a Realtor® because they know your market!”  The truth is, some do and many don’t!  To become a Realtor®, you need to have a license and pay dues of $115 per year.  You also agree to abide by the Code of Ethics, but there is no required education or additional testing to maintain your membership.  I am a dues paying member of the National Association of Realtors, and I abide by the Code of Ethics and enjoy some benefits like access to research reports, and publications, but membership alone does not give me any knowledge or authority, and I hate that they waste my dues paying for ads like that!  ( End of rant.)

The parts I got wrong: 

The mortgage market has still not settled down completely.  The FHA loans have made a big come-back, after being close-to-obsolete in California for the last few years, but they have also tightened up on their qualifications for many borrowers, and won’t approve a loan for a property that has changed ownership in the last 90 days.  This puts investors in a riskier position if they want to buy a foreclosure, fix it and put it right back on the market.  Loans of over $417,000 are difficult to approve, and the interest rates are substantially higher.  This is causing problems for buyers (with good credit and documented income)  to buy homes in the higher price ranges.

The lenders are pricing their inventory to get rid of it.  I never would have guessed that they would take this agressive approach.  I’ve been seeing REO properties come on the market at 10% below the most recent comps.  This has created a frenzy for buyers who can’t resist what appears to be a real bargain.  Multiple offers have become the norm for many of the REOs, and buyers have been bidding them up to an average of 102% above original list price.  The REOs and short sales, especially at the lower end of the price ranges, have made up 42% of all sales for 2008.

Overall, my predictions weren’t too far off, so I’ll give myself a B+ for getting close.   In the next few days, I will make my new predictions for 2009 and this time I will be more specific and try to get closer to actuals.

Lake Forest Market Update – November Sales Report

November 2008 sales in Lake Forest are up 233% from last year’s dismal numbers, but sale price per square foot is off by almost 26%.  Prices ranged from a low of $110,000 up to $724,900.

First time buyers were the driving force behind the improved sales volume, since they didn’t have to unload a previous property in order to buy.  FHA loans with 3.5% down payment were the favorite financing method used in the majority of these sales.  Condos accounted for 61% of the sales.

The “average” condo sold for $231,587, after 59 days on the market with the range running from $110,000 up to $385,000.  Of the 38 condos sold, 12 went for more than the list price.  Most of those were bank-owned and were aggressively  priced well below average @ $185/sqft versus the overall average of $206/sqft. 

Single family homes ranged from a low of $335,000 up to $724,900, and averaged $268/sqft after 61 days on the market.   Of the 7 homes that sold for over list price, 5 of them were bank-owned and sold quickly for an average of $272/sqft and spent only 28 days on the market!

There are currently 218 properties in the “active” status on the MLS, split exactly down the middle with 109 condos starting at $114,000 and 109 single family homes ranging from $335,000 up to $1.650 million.   With single family pricing starting at $335,000, it’s very difficult to get any attention for the townhomes above the $390,000 mark, no matter how large or nice they are! 

The good news at this time is that gas prices are affordable again, interest rates are approaching historic lows, and pricing is getting much closer to “fundamentals” where the cost of owning is only slightly higher than the cost of renting a similar property.  I expect after the first of the year, and particularly after the new administration takes office, that volume will pick up substantially in the lower end of the price range and a lot of renters will become buyers!

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Lake Forest Market Update

Homes in Lake Forest are selling!  The preliminary numbers for the month of September are up from last year, although the average price is lower than a year ago.  In September 2008, 63 properties closed escrow compared to 26 in September 2007.  The sold prices ranged from a low of $100,000 for a one bedroom condo to $1,387,400 for a lake front custom home.

The current active inventory, is 251 properties.  Of those, 124 are coded as short sales, and 44 are lender owned.  The remaining 79 “non-distressed” properties range in price from $179,000 for a one-bedroom condo, to $1,695,000 for a custom lake front home.

Active251 Properties

 

Beds

Baths

Sq Ft

List Price

LP/SqFt

DOM

Min

1

1

610

$88,000

$96.49

0

Avg

2.9

2.25

1539

$437,457

$271.51

98

Max

6

5

3850

$1,695,000

$560.25

411

Pending Sales85 Properties

 

Beds

Baths

Sq Ft

List Price

LP/SqFt

DOM

Min

1

1

685

$108,900

$137.82

0

Avg

3.0

2.25

1526

$370,871

$237.46

52

Max

5

3

3350

$1,395,000

$575.02

234

Backup Offers50 Properties

 

Beds

Baths

Sq Ft

List Price

LP/SqFt

DOM

Min

1

1

662

$110,000

$151.93

1

Avg

2.9

2.25

1408

$394,518

$273.95

71

Max

4

3

2701

$1,185,000

$493.75

315

Closed Sales63 Properties

 

Beds

Baths

Sq Ft

List Price

LP/SqFt

Sold Price

SP/SqFt

SP/LP

SP/OLP

DOM

Min

1

1

685

$95,000

$138.69

$100,000

$0.00

88.00%

71.00%

1

Avg

2.7

2.25

1378

$380,951

$268.89

$365,674

$259.48

98.00%

95.00%

50

Max

5

4

2860

$1,550,000

$541.96

$1,387,400

$485.10

115.00%

115.00%

279

Educational Video Explains Housing Cycles

This video was produced by John Burns Consulting, a company that specializes in advising the homebuilding industry, but the explanations and lessons provided in it also apply to the resale home market. 

 

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