O.C. property index up again

August 11th, 2011, 1:00 am · 29 Comments · posted by Jon Lansner

By The Big Orange Index’s math for the second quarter, local real estate enjoyed its sixth consecutive advance — but the smallest gain in the streak. Homebuying and lending is down, but hiring and construction are up.
 

That’s the springtime read of my Big Orange Index, a compilation of three dozen measures of local economic patterns. Overall, Big Orange Property Owner index was 124 for last quarter. That’s up 0.38% vs. the previous three months and up 9.84% vs. a year earlier.

FULL BIG ORANGE INDEX ANALYSIS HERE!

Here’s benchmarks that comprise the Big Orange Property Index and how they’re doing:

  • People working in real estate and finance jobs averaged 157,700 in past year. That’s up 0.21% vs. the previous three months and down 0.19% vs. a year earlier. Employment Development Dept. is the source.
  • Homes sold ran 29,426 in past year. That’s down 4.08% vs. the previous three months and down 10.32% vs. a year earlier. DataQuick is the source.
  • Local home value ran at an estimated 453,108 in past year. That’s down 0.24% vs. the previous three months and up 1.63% vs. a year earlier. Compilation of data from Real Estate Research Council and Federal Hosuing Finance Agency is the source.
  • Residential building permitting pace was $1.16 billion in past year. That’s up 3.90% vs. the previous three months and up 30.29% vs. a year earlier. Chapman U. estimate is the source.
  • Mortgage making of all sorts in Orange equals $62.68 billion in past year. That’s up 0.85% vs. the previous three months and up 43.07% vs. a year earlier. DataQuick is the source.
  • Large-complex rents in O.C. averaged 1,425 in past year. That’s up 1.33% vs. the previous three months and up 1.82% vs. a year earlier. RealFacts is the source.

 

Real estate for sale in Yorba Linda looks brighter by one set of statistics.

Every two weeks, Orange County broker Steve Thomas publishes a report on the supply of local homes for sale. Here’s what the latest report — as of July 7 — has to say about Yorba Linda …

Compare these trends to countywide patterns:

  • Cities with highest level of distressed properties among their listings? Anaheim was tops — 60.3% — followed by Rancho Santa Marg. at 58.3% of listings and Santa Ana at 57.8% of listings.
  • Fewest? Corona Del Mar was tops — 3.1% — followed by Seal Beach at 3.7% of listings and Newport Coast at 8.1% of listings.
    • 384 residences listed in brokers’ MLS system with 94 new deals opening in the past 30 days.
    • By Thomas’s math, this community has a “market time” (months in would take to sell all inventory at current pace of new escrows) of 4.09 months vs. 4.87 months found two weeks earlier vs. 4.58 months seen a year earlier. Countywide, latest market time was 3.96 months vs. 3.78 months a year ago.
    • So, homes in this community sell — in theory — in 3% more time than the countywide pace.
    • Of the homes listed for sale in this community, 96 were either foreclosures being resold or short sales, where sellers owe more than the home’s value. So distressed properties were 25.0% of supply of homes for sale vs. 33.1% countywide.
    • Homes for sale in Yorba Linda represent 3.4% of Orange County inventory — and 2.6% of all the distressed homes listed for sale in Orange County. New escrows here are 3.3% of all Orange County’s new pending sales.

     

    Housing Starts up 14.6% in June to 629,000 units

    Tuesday, July 19th, 2011

    Housing starts rose 14.6% in June, according to Commerce Department data, continuing gains of the prior month and coming in well above most analysts’ estimates.

    On a seasonally adjusted basis, starts increased to the highest level since January at 629,000, up from a revised 549,000 for May and nearly 17% higher than 539,000 a year earlier.

    Analysts polled by Econoday were expecting housing startsto come in at 575,000 with a range of estimates between 550,000 and 600,000. Economists surveyed by MarketWatch projected starts to come in at 580,000 for June.

    In a joint release, the Census Bureau and Department of Housing and Urban Development said single-family starts climbed 9.4% in June to a seasonally adjusted rate of 453,000 units, up from a revised 414,000 for May.

    June’s increase comes on the heels of a 3.5% increase in May. Starts dropped 22.5% in February, which was the largest monthly decline since March 1984.

    Building permits in June rose 2.5% to an annual rate of 624,000 from a revised 609,000 for the prior month.

    To search all homes for sale on the MLS please visit www.RajQsar.com/search

    Should Congress Extend Higher Federal Mortgage Limits?

    Will they stay or will they fall?

    The expanded loan limits that Congress boosted for federally backed mortgages three years ago are set to shrink modestly at the end of the summer, but there’s a movement afoot in Congress to delay the decline in the so-called “conforming” limit, citing the shaky housing market.

    On Friday, Reps. John Campbell (R., Calif.) and Gary Ackerman (D., N.Y.) introduced a bill that would defer the loan-limit reduction for another two years. They say that housing markets are too shaky to consider any reduction in loan ceilings that could raise borrowing costs for some homeowners.

    In 2008, Congress raised the maximum loan amount that mortgage giants Fannie Mae and Freddie Mac and federal agencies could guarantee in certain housing markets. Home buyers in dozens of cities faced a credit squeeze when private lenders pulled back from originating loans that exceeded $417,000, the limit for government-backed loans. Congress allowed limits to rise above that mark in certain high cost markets to as high as $729,750. After September, they’ll fall on a sliding scale, topping out at $625,500.

    A spokesman for Rep. Campbell said Friday that the measure has significant bipartisan support. “There’s a wide recognition in the House and hopefully the Senate that we need to do this,” he said. Congress passed a one year extension last fall, and another extension the year before that.

    The Obama administration in February said it supported allowing the limits to fall as scheduled:

    In order to further scale back the enterprises’ share of the mortgage market, the administration recommends that Congress allow the temporary increase in limits that was approved in 2008 to expire as scheduled on October 1, 2011…. We will work with Congress to determine appropriate conforming loan limits in the future, taking into account cost-of-living differences across the country. As a result of these reforms, larger loans for more expensive homes will once again be funded only through the private market.

    But it’s not clear whether the administration would stand in the way of an effort by Congress to keep the limit at its current level for another year. The administration is “paying attention to market conditions” and “looking carefully” at the impact of the decline in the limits, said Housing Secretary Shaun Donovan in a brief interview on Thursday. He said the administration would make a decision “shortly” on any changes.

    Other top officials, including Treasury Secretary Timothy Geithner, have previously said that the limit should decline in order to create more room for private lenders to compete against federal entities. Bob Ryan, now a senior adviser to Mr. Donovan, reiterated that position at a housing conference in New York last month.

    So-called jumbo loans that are too large for federal backing typically carry higher interest rates and bigger down payments, raising concerns that higher borrowing costs could reduce sales and put pressure on prices.

    “There’s a trade-off there between supporting the higher-priced homes and weaning the system off the unusual limits that were put on during the crisis,” said Federal Reserve Chairman Ben Bernanke in response to questions from Rep. Ackerman at a House hearing on Wednesday.

    Source: The Wall Street Journal

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    10 Secrets of Home Staging

    In a tough market, sellers need all the competitive edge they can get. Home staging is a great way to make your home appear to its best advantage.  Staging is about appealing to a broad range of buyers. It’s about creating an image of a lifestyle that buyers can’t resist. They need to be able to imagine themselves living in your house. Staging doesn’t require a big budget either. Although, if you have the budget to make your home a showpiece, go for it! In general, though, successful staging means paying attention to the details.

     

     

    Here are 10 secrets of staging that can help your home sell.

    1. Declutter. Clutter can be one of the most distracting aspects of showing a house. Instead of a buyer focusing on the unique architectural details of your room, they focus in on your trinkets and trash. You don’t have to toss your decor, just put it away for now.

    2. Furniture: Large, oversized furniture can makes rooms look smaller than they are. The converse if true as well. Small furniture in large rooms looks disproportionate.

    3. Room true to purpose: You may have your dining room set up as an office or a second bedroom set up as a craft room, but buyers need to see homes true to their purpose. They want to see the formal dining room that was advertised on the MLS. They want to see 2 bedrooms, not one and a craft room.

    4. Proper lighting: Good lighting makes everything look better. CFL lights in “daylight” color makes rooms look light and bright even during the evening hours. Be sure all rooms are well lit, including laundry rooms, garages, and closets.

    5. Repairs: Most buyers aren’t interested in fixer-uppers. They want homes that have been well-maintained. You may have to spend a little time and money to fix broken doors, drawers, and windows. Buyers will notice every loose board and trim piece. Fix it before you start showings!

    6. Keep it neutral: It is much easier to imagine putting your mark on a neutral room than it is to imagine yourself living in someone else’s Moroccan paradise. Paint is relatively inexpensive. Play it safe and pick out neutral tones.

    7. Fresh flowers: It’s all about things smelling fresh and clean. Flowers add life and fragrance to a room!

    8. Thorough Cleaning: Clean from top to bottom. The basics mean having dishes and laundry done. Deep cleaning means cleaning carpets, removing stains, and scrubbing that bathroom until it sparkles.

    9. Staged Dining Area: You can really make a room pop by setting a formal place setting. Outdoor dining spaces also look great set with placemats, chargers, and proper plates and glasses.

    10. Hotel Inspired Bedrooms. Boutique hotels do a great job of making bedrooms feel luxurious. You can do the same by updating your bedding and having a liberal use of pillows.

    Staging can make your home can make you stand our from your competition. It may mean the difference between selling and not in this tough market.

    Give us a call today and watch our team transform your home in preparation for the MLS and the market!

    www.RajQsar.com

    Published: June 30, 2011

    New Home Prices on the Rise, Inventories Shrink

    June 24th, 2011

    The median sales price of new homes rose to $222,600 in May, a 2.6 percent increase from April, and the first increase to new-homes’ median sales price since December of last year, the Commerce Department reported Thursday. New homes are 30 percent higher than the median sales price of existing, resale homes, which is double the normal markup, analysts say.

    Foreclosures and short sales–which are selling, on average, at a 20 percent discount–continue to hamper the new-home market, making it difficult for builders to compete against the ultra low prices.

    While the prices of new homes were on the rise, inventories of new homes continued to shrink, with inventories falling to its lowest level on record (166,000 homes). Economists noted that at the May sales pace, it would take 6.2 months to clear the supply of homes off the market.

    Overall, fewer people purchased new homes in May as the new-home sector continues to face one of its worst years, the Commerce Department reported. New-home sals dropped 2.1 percent in May to a seasonally adjusted annual rate of 319,000 homes. That pace remains far below the 700,000 homes a year that economists view as healthy for the new-home sector.

    Regionally, sales of new homes were mixed. For example, in the Northeast, sales of new homes dropped nearly 27 percent and 3.5 percent in the West. However, new home sales increased 2.4 percent in the South but remained flat in the Midwest compared to April.

    Looking for real estate in Orange County?  Please visit www.RajQsar.com.

    “No Double Dip” According to Chapman Study

    Orange County’s economic recovery is indeed slowing, but fears of another recession or “double dip are unfounded, according to economists at Chapman University.

    The highly anticipated midyear economic update, presented by the A. Gary Anderson Center for Economic Research at Chapman University, last week confirmed that both the regional and national economies have been hit by a series of factors that have combined to put the brakes on the weak, but steady recovery over the past 18 months. Soaring gas prices, the Japanese earthquake and the end of government stimulus spending, as well as the federal budget stalemates, have impacted manufacturing output and chilled consumer confidence – and therefore spending – since January.

    However, Chapman President James Doti is still predicting that the recovery is “downshifting, not reversing itself.” He also said this is not entirely unexpected when rebounding from a recession, particularly one as deep and unprecedented as the most recent downturn.

    The wild card in the recovery picture, is housing prices, which were down 4.3 percent for the first three months of this year after slight gains in 2010. Falling home prices have a direct and negative impact on personal wealth and generally cause consumers to curb or stop spending on durable goods altogether.  And then this triggers a domino effect that hurts retail and manufacturing – resulting in a very negative cycle. The other significant concern with declining home prices is the risk of more foreclosures and ultimately more stress and troubles for the nation’s banks.

    Although affordability has rarely been better than it is today we are still faced with a lot of mixed signals and concerns on the housing front.  And even though the foreclosure rate has peaked, it may take another three years before the unprecedented foreclosure chapter in this recession is finally over. As many as 3 million more properties are at risk nationally and, ultimately, must be refinanced or sold before we reach normal foreclosure levels in a healthy economy.

    Chapman economists predict that housing prices in the county and California will show a 4 to 4.5 percent decline in 2011 and virtually no appreciation in 2012.

    In terms of gas prices, another major drag on the recovery since January, Chapman predicts the price per gallon will remain steady between $3 and $4 through the year, barring any unexpected oil supply disruption.

    On the all-important jobs front, most industry sectors will continue to show positive growth through 2012. The fastest growing jobs will be in the professional and business services, leisure and hospitality, and education and healthcare. Doti forecast that Orange County will have a net job gain of 20,000 or 1.5 percent by the end of this year and about 30,000 jobs or a 2.2 growth in 2012, roughly the same as California. He further characterized this level of job growth as positive and added that it will improve personal income and ultimately consumer spending.

    Why it is Time to Buy

    Back in June 2006, when the housing market peaked, the prospect of a five-year national housing bust seemed unimaginable to most people. And yet here we are, with the latest Standard & Poor’s Case-Shiller index showing that prices hit new bear-market lows, falling back to 2002 levels nationally and to 1990s levels in some battered regions.

    Despite all the gloom, however, there are growing indications that it is a good time to buy. Mortgage rates, which fell to 4.55% for the week ending June 2, according to Freddie Mac, are near 50-year lows. Homes have become more affordable than they have been in years: According to Moody’s Analytics, the ratio of home prices to income is now 20.9% lower than the 15-year average through 2010, and 12.5% lower than the 1989-2004 average. A historic glut of homes, meanwhile, has created a buyer’s market: There were about 15 million vacant homes in the U.S. last year – some 3.1 million more than normal.

    Such conditions might not last long. Moody’s Analytics predicts that the number of distressed sales will begin to fall in 2013, and that prices will begin to edge upward then. Home building is at a virtual standstill, so the supply overhang isn’t likely to get much worse. Meanwhile, demographic indicators such as “household formation”—the number of new households each year—are on the rise, and promise to take a bite out of the glut in coming years.

    The upshot: While we might not see rapid growth in the next couple of years, there are a tremendous number of positive signs that could lead to a rebound. The short-term outlook isn’t encouraging. Job growth remains weak, foreclosure sales are making up more of the market, and economists are predicting that home prices will fall more in the coming months.  But the long-term benefits of homeownership remain very much intact. For now, at least, you can deduct the mortgage interest on your taxes – a big perk for people in higher tax brackets. You get to paint your walls any color you wish, without having to clear it with a landlord. And assuming you can buy a home for about the same price as you can rent one, buying will give you the ability one day to live rent-free. Come retirement time, a paid-off mortgage means your monthly expenses are significantly reduced, and you have a chunk of equity to play with.

    So what might the next five years look like? Once the foreclosure mess begins to clear up, say housing economists, the traditional drivers of the housing market—demographics, affordability, loan availability, employment and psychology—should take over.

    Here is a glimmer of what the future may hold: While overall home prices fell by 7.5% in April over the same period a year earlier, according to CoreLogic, a Santa Ana, Calif., provider of real-estate data and analytics, if you exclude distressed sales, prices were off just 0.5%. So if you are in a market that isn’t battered by foreclosures, you may be close to a bottom already.

    Please visit www.RajQsar.com for all your real estate needs in Orange County.

    10 Cities With the Highest-Priced Listings

    Daily Real Estate News  | April 28, 2011

    10 Cities With the Highest-Priced Listings
    Last month, the national median list price was $199,500, down 0.25 percent for the year, according toRealtor.com housing data of 146 markets. But in San Francisco, the median list price is more than three times that amount.

    The following is a list of the cities that had the highest median list prices in March 2011, based on Realtor.com housing data.

    1. San Francisco
    Median list price: $639,000
    Down 8.45 percent for the year
    Median days on the market: 63

    2. Santa Barbara-Santa Maria-Lompoc, Calif.
    Median list price: $559,000
    Down 19.57 percent year-over-year
    Median days on the market: 117

    3. San Jose, Calif.
    Median list price: $470,000
    Down 5.05 percent year-over-year
    Median days on the market: 71

    4. Orange County, Calif.
    Median list price: $450,000
    Down 5.05 percent year-over-year
    Median days on the market: 100

    5. Honolulu
    Median list price: $444,000
    Down 1.11 percent year-over-year
    Median days on the market: 112

    6. Santa Fe, New Mexico
    Median list price: $435,000
    Up 4.82 percent year-over-year
    Median days on the market: 288

    7. Ventura, Calif.
    Median list price: $420,000
    Down 6.67 percent year-over-year
    Median days on the market: 93

    8. New York
    Median list price: $389,000
    Down 2.51 percent year-over-year
    Median days on the market: 146

    9. Naples, Fla.
    Median list price: $389,000
    Up 2.40 percent year-over-year
    Median days on the market: 225

    10. Boulder-Longmont, Colo.
    Median list price: $380,000
    Up 2.73 percent year-over-year
    Median days on the market: 114
    To search for Million Dollar Listings just go to www.RajQsar.com/Search


    Source: REALTOR® Magazine online (April 28, 2011)

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