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Real Estate Wish-List

20 January 2010, 7:39 pm

One of the most common problems between brokers and prospective homescroll buyer’s is a lack of communication, which often leads to frustration. On the broker’s side, he/she feels that the client is too picky and will never find the perfect property; while the home buyer gets annoyed with the properties that the broker is sending and begins to feel that they are incompetent. Believe me, a broker only want to serve his/her clients in the most efficient way possible, conserving time for both himself and his clients. This is why withholding information, such as maximum price or preferences, from your agent will only make delay the process and waste time on both sides. If you feel that your broker is only presenting homes at the top of your price range, then that is not someone you should work with. But, keep in mind, your taste may be expensive and that only the homes that meet those tastes are at the top of your price range. Be sure you to justify your reasoning before you just to such conclusions. Apart from the few unethical brokers, we truly want to serve our clients at our highest level possible.

In order to be efficient with time, I find that a home buyer’s wish-list is an effective way to communicate efficiently. My home buyer’s wish-list, is a two page form containing questions and possible preferences a client may have. With this list, I am not only able to save my time but I am able to serve my clients more efficiently by being on the same page.  Also, it is not uncommon to work with clients for over a year, making it difficult to remember the specifics. I can constantly reference the list when searching the Multiple Listing Service (MLS) for possible homes. It is important to be as honest as possible when filling out the wish-list.  After all, if you can’t trust your broker with matching your preferences, how can you trust him/her to negotiate on your behalf? Purchasing a home is a huge decision, and you must be comfortable with your broker.

Feel free to use the attached wish-list. To find more helpful real estate tools, please visit Helpful Real Estate Tools.

Robert Larsen
Coast Sotheby’s International Realty
Robert.Larsen@CoastSIR.com

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2010 and Beyond…

20 January 2010, 1:35 pm

Defaults Down 35 Percent from a Year Ago

Throughout 2009, a common theme was the existence of “shadow inventory” andCartoon the growing presence of mortgage defaults. Now, in  2010, all the talk has stopped and investors betting on a continued down market are looking towards other statistics to support their theory. But, before we begin to analyze new arguments, lets look at why the previous talk about shadow inventory and defaults stopped.

Banks filed 1,535 notices of default in Orange County in December, down 35 percent from a year ago and 18 percent from November ‘09, reports MDA DataQuick. The lowest levels since September of 2008.

Default notices, which start the foreclosure process, have been trending down since reaching a peak of 3,485 in March 2009. They have declined each of the past five months.

Foreclosures totaled 796 houses and condos last month, up 18 percent from November and 11 percent from a year ago. Foreclosures generally increase from November to December, but the total was also the highest in five months. One data point does not signify a trend, but it will be interesting to see if banks work on their foreclosure backlog in coming months while starting the foreclosure process on fewer homes.

Take a look at the default and foreclosure numbers below:

Despite the tragedy of so many people losing their homes to foreclosures, it is an inevitable process. One home lost, is a new home for another; and the foreclosures are being purchased. It wouldn’t be such a bad thing if more bank owned homes were on the market, but unfortunately investors are purchasing the REOs in bundles. Each month more and more homes are being purchased by investors and flipped for a quick profit. Below is a graph illustrating the number of foreclosed homes purchased either through REO or by an investor.

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Home Builder’s Constructions Forecast

19 January 2010, 8:44 pm

Home Builders Expect Construction Recovery

Housing construction is expected to rebound this year from the severely depressed 2009 level, but the market remains fragile as foreclosures continue to rise.

Builders are likely to start construction on 610,000 single-family homes this year, up 38% from last year, according to David Crowe, chief economist for the National Association of Home Builders, which is meeting this week for its annual convention. That forecast assumes that the total number of U.S. jobs will start growing again in the second quarter. Housing starts would remain far below the 2005 peak of 1.7 million.

Mr. Crowe cautioned that the housing market remains tenuous, partly because foreclosures are still increasing, job growth this year is likely to be tepid, and builders are having trouble getting credit.

The convention drew more than 50,000 builders, suppliers and other participants, down from more than 60,000 last year and 140,000 in 2007, a spokeswoman for the home builders said. Many suppliers were touting energy-efficient products rather than glitzy décor. “The builders here are the survivors,” Mr. Crowe said.

Less than three miles from the convention, around 60 people perched on folding chairs in a parking lot to bid on foreclosed homes, a daily feature of the Las Vegas market. About 60% of Las Vegas home sales in December were foreclosed properties, according to the Greater Las Vegas Association of Realtors.

Many builders are focusing on low-cost homes to compete with foreclosures. In Las Vegas, the typical new house from KB Home is priced in a range of about $150,000 to $170,000. Four years ago, typical new homes in Las Vegas were in a range of $400,000 to $550,000.

Frank Nothaft, chief economist at the government-backed mortgage investor Freddie Mac, said the percentage of people who are behind on their mortgage payments probably won’t peak until the second half. As of Sept. 30, about 14% of American home-mortgage borrowers were at least 30 days behind on payments or in foreclosure, according to the Mortgage Bankers Association.

John Burns Real Estate Consulting, an Irvine, Calif., firm that advises home builders, said sales of new homes and visits from potential buyers have picked up in recent weeks after a lull in last year’s final quarter.

Many builders are starting the year with low inventories of completed homes, the firm said. That should spur building in the months ahead as builders seek to have houses ready for people who want to make purchases before the April 30 deadline to qualify for a tax credit for home purchases.

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Orange County Real Estate Market Update January 18, 2010

18 January 2010, 11:09 pm

- Robert Larsen 1/18/2010

With one of the key measures below the benchmark for the second week in a row, would-be home buyers face the best rates since the spring, and the statistics continue to show it. Last week, reports were released re-affirming the notion that interest rates will remain low through 2010, but how low is low? Well right now, mortgage rates are as low as they have been all year and many buyer’s are trying to take advantage. Anyone selling, showing, or buying a home can tell you that people are out looking to purchase. Even with the current downpour of rain, prospective home-buyer’s are on the search. And, to top it off, I don’t see things slowing down. As we approach March and April, we will see more and more people taking advantage of the tax credit. Combined with the seasonal spring and summer upswing in real estate activity, the Orange County median home price will continue to rise.

As reported in the The 18th annual survey by the Association of Foreign Investors in Real Estate, the United States is voted to be the world’s best real estate investment opportunity.

  • 51% see U.S. as best opportunity for capital appreciation (vs. 37% in 2008, 26% in 2007, and 23% in 2006.)
  • U.K. was 2nd best bet country with 30% of the votes. China was third at 10%.
  • Two-thirds of those polled plan to increase their U.S. investments in 2010 compared to 2009. (62% increase for equity investments; 83% for real estate debt.)
  • Most favored American cities? D.C. then New York, followed by San Francisco, Boston … then LA.
  • 33% are more optimistic about the U.S. real estate market than they were in June 2009; only 6% are more pessimistic.

Also in the headlines…

Lennar Reports Profit as New Orders Increase

Home builder Lennar Corp. swung to a surprise fiscal fourth-quarter profit, breaking a two-year string of losses, as the company benefited from hefty one-time gains.

Chief Executive Stuart Miller also said the company experienced its first year-over-year increase in new orders, 3%, since the start of 2006.

Mr. Miller added that the housing market continued “to move toward stabilization as more confident home buyers took advantage of increased affordability and the $8,000 federal tax credit” that was extended in November.

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Home Prices in Orange County

15 January 2010, 1:56 pm

O.C. home prices up $69,000 vs. bottom

For the 22 business days ending Dec. 23 – DataQuick’s latest homebuying report — Orange County saw …

  • $439,000 median selling price that is +9.7% vs. a year ago but -32% below June 2007’s peak of $645,000.
  • The most recent median is 19% ($69,000) above the cyclical low hit in January 2009 at $370,000 — a current bottom that was -43% below the peak.
  • Prices fell on a year-over-year basis from Sept. 2007 through August. (Worst at -31.5% in August 2008.)
  • Single-family homes resell for 32% less than their peak pricing (June ‘07) while condos sell 36% below their peak in March 2006. Builder prices for new homes are 39% below their February ‘05 top.
  • In this most recent period, O.C. shoppers bought 3,041 residences — that is +10.4% vs. year-ago buying activity. (From 1997-2006, monthly sales averaged 4,304 per month.)
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    PIMCO, Gross: Rates won’t spike in 2010

    15 January 2010, 1:48 pm

    Bill Gross, the Pimco bond guru and “manager of the decade,” thinks interest rates will be relatively flat in 2010.

    Gross, who runs Pimco’s Total Return Fund from Newport Beach, tells me …

    • “Short rates — Fed Funds — on hold for all of 2010″
    • “Intermediate and long rates dependent on what happens in March. If the Fed stops buying $1.5 trillion of mortgages and Treasuries.”
    • “If they do (stop) then the 10 year (now at 3.75%) could go to 4.0%. If they don’t stop, then 3.5%.
    • “So not much of a range. Inflation will be coming down and that will help.”
    • And, ominously, he ended: “But we have a helluva deficit to pay for.”

    Earlier this week, Morningstar awarded Gross their “Fixed-Income Manager of the Decade” award stating …

    • Pimco Total Return investors are $47 billion wealthier for the decade, highest among all fund managers. (Morningstar’s wealth creation figure is the aggregate return made on dollars invested in the fund in the decade.)
    • “Gross has stayed ahead of the competition throughout the decade by making the right calls at the right times. For example, despite the mess that mortgages created in the market, bonds backed by mortgages have been one of the fund’s largest sources of excess return.”
    • “Gross is one of the best investors of our era. Many investors eagerly await the insights in his monthly investment outlook. And in 2009, investors poured more than $50 billion into Pimco Total Return.”

    With the winter season coming to an end, so goes the unclear future of the housing market. The most unpredictable moment of the last 3 years is nearing an end. During the third quarter of 2009, analysts were unsure which way the real estate market would turn. It had been experiencing unprecedented strength the entire year but pessimists had a valid point when they attributed it all to a seasonal strength. Going into the winter season, potential homebuyer’s were nervous that the strength would die and the price spiral would begin once again. Due to low interest rates and price cuts, the winter season has remained strong and activity is not far off from its’  September highs.

    While not there yet, we are just around the corner from the next seasonal trend, which is strength and activity. The spring and summer will once again bring about more activity, and further stabilize the housing bottom. Interest rates will continue to support the housing market through 2010.

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    Orange County Real Estate Market Update January 11, 2010

    13 January 2010, 5:40 pm

    - Robert Larsen

    After an unexpected error, the Orange County Coastal News blog is back! Delivering the most relevant updates and analysis on the OC real estate market. If you would like to receive market updates that are no longer available on the blog, feel free to email us.

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    Searching for the Perfect Home

    29 December 2009, 1:41 pm

    The Home Buyer’s Checklist

    - Robert Larsen December 29, 2009

    Searching for that perfect home can be quite a challenge. Sooner or later, the dozen upon dozen of homes that you have viewed will quickly blur together and you won’t be able to remember the specific details that you liked and dislikes about the individual homes. Often times, this can become very stressful and make the exciting task of finding your dream home about as fun as going to the dentist for a root canal. Don’t let this happen to you, or if you’re an broker, don’t let this happen to your clients. Remember this is the home that you, or your clients, will be living in the the next 5, 10, or 50 years of your/their life. Don’t start off with negative memories of the home.

    Prospective home-buyer’s need to stay as relaxed about the situation as possible, in order to make the transition from one home to another as memorable as it should be. Also, stress can lead to forced decisions in purchasing a home, which could mean that it is a decision that you could soon regret. You should not be required to compromise your needs and wants when trying to find your perfect dream home, because it is out there and sooner or later you will find it. In order to relieve some of the stress of trying to remember all the little details about each home, it is beneficial to write things down and keep good notes. If you’re anything like me and need to constantly stay organized, instead of using blank pieces of paper, try using this Home Buyer’s Checklist. This simple, yet efficient, checklist will keep your thoughts on specific properties organized; try to keep them all in one folder. If you have questions about a property that you had previously seen, just simply refer back to your folder of checklists.

    Equally as important, especially in today’s market, make sure you are up-to-date with new listings and price reductions, because your perfect home is probably another person’s perfect home as well. Depending on your time-frame, you should be reviewing the changing real estate market on a daily basis. It doesn’t take long, but if you don’t, there is a good chance that someone else will be purchasing your dream home. Have your agent email you updates daily to keep you informs.

    If you would like to receive more helpful forms like the Home Buyer’s Checklist, please visit my other website, Captivating Estates, by clicking the link. Or copy and paste the URL below into your web browser.

    http://captivatingestates.com

    If you enjoyed reading this article and would like to stay up-to-date on everything OC Coastal News has to offer, please subscribe to the feed in the top right corner. It’s free, of course!

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    Has Housing Reach a Bottom?

    28 December 2009, 12:53 pm

    Dramatic 2011 housing rebound eyed

    December 28th, 2009, 6:00 am posted by Jon Lansner

    Homebuilder consultant Mark Boud of Real Estate Economics …

    Eyeball: Did Orange County housing have a bottom in 2009 — full or partial?

    Mark: We formed a price floor around June 2009 and have since seen improvements. We actually formed a floor in sales volume back in January 2008, and have since seen improvements. Prices always lag sales volume — both up and down — by as much as 2 years. Some are forecasting a “double dip” or “W” recession where housing prices continue to deteriorate — partly due to a deluge of distressed inventory to be unleashed on the market. I don’t buy it. At current levels of undervaluation, distressed inventory is being absorbed faster than it is being introduced, and this trend will continue in Orange County and throughout California. 2010 won’t feel like a dramatic improvement in either price or sales volume, but small, incremental economic and market improvements will continue through next year, with more dramatic improvements forecast for 2011.

    Eyeball: Driving forces in local housing — good or bad — in 2010?

    Mark: Unfortunately, the main driving force won’t be job growth until the latter part of 2010. The main driver in housing sales during 2010 will be under valuation. Home prices remain grossly undervalued relative to incomes when the present mortage cost-to-income relationship is compared to long-term trends. Undervaluation will be increasingly realized as we move closer to economic growth. Sidelined buyers will re-enter the market in larger numbers to take advantage of distressed housing, low priced resales, and reduced priced new homes.

    Eyeball: Predict 2010 gain in DataQuick’s OC median home-sale price …

    Mark: We predict a 2.1% positive change in the median price of housing in Orange County during 2010; our forecast for 2011 is +4.0%; and we forecast an +8.0% change by 2014.

    Eyeball: A year from now, what surprise might we be talking about?

    Mark: The new home market may rebound more dramatically than the overall housing market. For example, new homes being offered on the Irvine Ranch may absorb and appreciate faster than anyone anticipates – partly due to the lack of competitive new home inventory and partly due to a faster-than-anticipated drop in distressed housing inventory. As early as January, there may be a bit of a new home ‘frenzy’ on the Irvine Ranch.

    Eyeball: Thinking back over this decade, list “lessons learned” from the roller coaster ride?

    Mark: Most of the problems we face now are because we deregulated the mortgage market during this decade. By reducing our mortgage standards, we allowed non-traditional buyers — speculators, investors and unqualified buyers — to enter the market en masse, and encouraged the housing market to transition to an investment market. We’re paying a deep price for such foolishness.

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    Hello world!

    7 December 2009, 6:25 pm

    Welcome to WordPress. This is your first post. Edit or delete it, then start blogging!

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