Marcus ... You have received sound advice from a number of good Realtors here. Thanks to them for that.

Sounds like you are listening to the radio and reading the papers about doom and gloom in real estate. That is of course your choice.

Please know that residential real estate is "LOCAL" ... What is happening in Texas, Riverside, Las Vegas, Central California, Oklahoma, Ohio, Alabama, is not what is happending at Lake Forest, CA. Homes are Lake Forest under $500K are selling at Lake Forest. All qualified Realtors and brokers will tell you this.

We representing buyers at this time who have made offers on three different homes at Lake Forest and have not yet been the highest bidder.

If you want to wait at Lake Forest, that's OK. There will be nice homes for sale there in six months and next year too. We just won't be able to predict the asking prices.

Harrison K. Long, Explore Group Properties, Coldwell Banker Previews. http://www.ExploreTheOC.com.

Thanks for your responses.

I'm a little surprised to read all of the buy advice right now.

I've decided to wait a little longer due to budget concerns and uncertainty on the employment front. If I lose my job, at least I'm liquid and can move on.

Besides all that, I've read that there are $31.4 billion dollars worth of California Alt-A loans set to recast starting this year 2009 through 2012? And I'd be willing to wager quite a high number of them located right here in Orange County. That's going to affect an awful lot of California households.

I'm patient.

Thanks again and good luck.

Marcus ... Please always consider strongly the information provided to you by a qualified Realtor ... such as Valerie here.

Don't pay any attention to those people who are not Realtors or agents, and especially do not consider information provided to you by somebody who doesn't know the local market.

Lake Forest homes in the range from $400,000 to $500,000, if priced correctly, are selling fast, and many over the asking prices.

Harrison K. Long, Explore Group Properties, Irvine, CA. http://www.ExploreOCHomes.com

There are some good answers to your questions in here. Remember that finding the best deal is a combination of price and interest rates. If prices go down another 10%, but rates go up 1.5% in the same period, your monthly payment will be HIGHER for the next 30 years!

In timing the market, keep an eye on both. When it comes to budgeting, I'd use a budget calculator. I've created one in Excel that compares renting to buying, with tax benefits and other expenses built in. Shoot me an email and I'll be happy to send it to you, Nancy

Lets really look at L.F. In the price you are looking at from 10/1/08 tru 1/1/09 price range $400,000 to $500,000, there were 49 homes sold, of that 17 sold for more than listing price = 34%.
Now lets look at 1/1/09 thru 3/17/09, there were 29 homes sold, of that, 13 sold for more than listing prices = 44%. The size of the properties sold were pretty much in the range below 2,000 sqft.

The prices are holding in the range you are asking for, so you have to look at loan rates and other things to use for your decision.

It is time for you to move forward and think about buying a home at Lake Forest, which is hot now in terms of buyers and multiple offers on properties.

Harrison K. Long, Explore Real Estate Group. http://www.ExploreTheOC.com.

Sounds of Irish .. Celtic Fiddle Fest and Happy St. Patrick's day greeting to you. ♫ http://blip.fm/~32l5r

Here is my blog that answers your question.

More Signs Of Recovery : The Cost Of Owning Versus Renting Falls Back To Historical Norms

It is also linked below.

Hi Marcus,

Here is a web site that you can search the MLS for either rentals or for sale. Set up to get both in a daily report ,including when prices change. It is all about having as much information as you can.

Hello Marcus - this entry in my blog 2 days ago should answer your question:

http://southorangecounty.wordpress.com/2009/02/25/more-signs…

I started my career in Lake Forest 32+ years ago, and know the community like the back of my hand, having watched it grow up. I would be honored to be of service to you.

Marcus ... If you continue to be in a renting home situation, plase consider now as a possible good time to buy.

Mortgage interest rates remain very low, and home asking prices here at The OC have come down.

About one-third of the homes now listed for sale at Lake Forest are short sales not yet lender approved. This is a challenging situation for you as a buyer ... unless you are an investor with patience and money.

I recommend that you check out REO bank owned opportunities here at South OC. Please contact us for more informtion. Thanks.

Harrison K. Long, Realtor and Broker, Coldwell Banker Previews, Irvine, CA

Check out this site for Southern California home searching

One thing not mentioned here, is that a property that is not a "distressed sale" will most likely go for a higher price. This being the fact that there are buyers wanting to buy a house ,that can get though escrow without the seller's bank calling the shots. So be ready and be willing to take your time in searching and make sure, what ever realtor, you choose is willing to go the extra for YOU!

You're asking REALTORS if now is a good time to buy?!! lol

If you are now renting, it is a great time to buy a detached SFR home at Lake Forest, CA. There are lots of choices for you as a buyer. There are even some good bank owned and REO homes on market. Contact us for information.

If you are interested to buy or sell your property and make a move, please contact us. We are here to help and serve as Realtor agents for those who want complete and fine representation.

Harrison K. Long
Realtor and Broker
Coldwell Banker Previews, Irvine, CA
949-854-7747
Check out the best web site for Southern California home searching http://www.BuyersExploreHomes.com

Marcus,
Thanks so much for your comments. So often we craft an answer to a question and hammer the submit button, never to get any feedback on how it was recieved. It's nice to know there are readers who give careful consideration to our thoughts.
The issue of the quality of offerings in Lake Forest is one that besets all markets that have a high percentage of distressed properties. No one is who doesn't have too is selling in this market. In my home town of San Clemente we have 20% fewer properties for sale than at this time last year and we have relatively few distressed homes on the market. One thing to remember is that the market place is fluid and the inventory is constantly changing. Sometimes the owner of a quality home that shows pride of ownership has a live changing situation that necessitates selling his home. I think some premium should be paid for a home of this type versus a bank owned or short sale listing that has had all maintanence deferred for a substantial amount of time. It would just be a judgement call on your part as to what that amount would be.
I wish you luck in your search, because no matter how didligent we are in monitoring the market there is a degree of luck in being in the right place with the right offer at the right time for the right house.
If I can be of service, I can be contacted by e-mail or phone
Bill m Godwin
First Team Real Estate
949-606-5669
Bill@BillMGodwin.com

Thanks to everyone for their advice on my question.

I agree that interest rates will (and should) go up in the future and that this will reduce my purchasing power. The most frustrating issue in Lake Forest, in my view, is what closely coincides with Vicky Lloyd's comment. The inventory of quality single-family homes in Lake Forest is very low, and home sale prices are still very high. Sellers are waiting. It's not a buyers market in terms of supply.
Also, you all mention the fact that I need to cross-check again with the lender frequently to ensure that the loan program is still on and that rates are actual and up-to-date. I believe the very fact that I have to do that as a potential buyer (where buyers never had to do that before with respect to loan programs disappearing suddenly) is only going to create added downward pressure on prices. I could be wrong. What I have going for me is a lot of cash for a down payment. I'm just scared to death that this cash is not paying down value of the home I want to buy, instead any downpayment I make is just paying down an overinflated value that is not real.

This is a tough market. I've researched the homes available for sale in Lake Forest. I need something 4 beds (at least), 2.5 baths and more than 2000 sq feet. All I see -and I apologize if I offend anyone here - is trash. I'm very frustrated to the point where I'm thinking: Nice area, but can't afford to have a family and live here.

Thanks again for your insights.

Michael brings up a great point. There are many benefits to buying property today to consider. Two of which are the tax savings each year on the interest you pay on your mortgage and the available loan programs with rates that are still very low historically. Most predictions are that mortgage rates will continue to increase, even thought the Fed decided not to do anything with the prime rate for now. This means the carrying cost of homes will increase, even if prices of homes somewhat decrease.

Another great point Michael brought up is how long you plan on staying in the area. Most agree that holding a property for 5 or more years will yield some sort of gain. Sometimes great gains. Nobody has a crystal ball though.

Despite all the pro's of home ownership, you should ultimately be comfortable with your purchase, and if losing value over the next year or more is going to keep you up at night, then purchasing right now may not be for you.

Good luck,

Jeremy Lehman
Century 21 Beachside Realtors
Jeremy@LehmanHomes.net http://www.LehmanHomes.net (Start your home search here)

Hi there Marcus, the answers you have received are varied. Congrats on getting pre approved , you are taking the best first step to home ownership. The real question to ask yourself is if you were to buy a home how long would you plan on staying there? There are many Short sales and REO's and distressed properties and motivated sellers that I sure you can get a really great deal on. A few points you should consider would be as the loan programs are changing constantly with lenders, many programs that are available today may change in next few months so be aware of that and monitor the rates , even a 1/4% increase can have a big effect on your monthly payment. It will reduce your buying power.
Most savvy buyers realize that the best time to buy is when less are looking, less competition, more motivated sellers, less chance of multiple offers, and historically still low rates.

If you would like to receive the best property listings in Lake forest please let me know

Kind Regards
Michael Barron
Realtor/MBA
First Team Real Estates
michael-barron@sbcglobal.net

All the responders here have provided great answers and I'd just like to add something simple to consider. You are pre-approved "today" for $550,000 at a certain interest rate and based on a number of other factors such as debt, income, etc. Ask your lender how that pre-approval amount would be changed if interest rates were to increase by .5% or 1% - 12 months from now. It would likely suggest that your buying power would be lower.

Lots of things to think about for sure but if you're buying the property to call home, then it couldn't be a better time to buy.

Hi Marcus,

For every $100k you borrow your mortgage/insurance/taxes/interest is $700/per month(at todays interest rate). So for the rent amount of $2700 your loan can not more than $400,000. Prices vary in Lake Forest. As you know we have four areas within the city of Lake Forest, South Lake Forest, north Lake Forest, Foothill Ranch and Portola Hills. There has been a good inventory of shortsale and bankown homes that could fit close to your price. The idea of waiting could be good specially if you could save for a larger down payment. If you like to receive the list of REO and Short sale email me your request at homa@homamoaddel.com. Meanwhile review the inventory and get familiar with the prices and what is selling.

Homa
Broker associate
Prudential California Realty

While the market may continue to decline for a while, other factors may be more important to making your decision to buy. Rather than delaying a purchase "for 12 months" or any other defined period of time, it is better to be educated, very picky, and ready to go when the right house presents itself. Homes are not a commodity where an average $/square foot price determines whether or not you bought it right. It has to fit your personal wants and needs in the layout, location, neighborhood, lot size, etc. The home that may be right for you could come on the market tomorrow, or possibly not for another year or two. Being pre-approved is your ticket to being able to make your move when the right property appears at the price you can afford.

At the moment, the inventory of non-distressed homes is very low, especially for the single family homes priced under $600,000. Many sellers are holding homes off the market, waiting for pricing to improve. New listings come on every day, but they are very random in pricing, styles, and all the other factors that make a difference to most buyers. There is no way to predict when the right one will come on, so the best bet is to be educated and ready to act on short notice.

Almost 50% of the homes offered on the MLS in Lake Forest today are short sales that may or may not really be saleable, depending on what a lender decides on. Some of the bank-owned REOs have been good values, but I have also seen a lot of them being listed at a teaser price, then getting bid up in multiple offers. That can be disappointing and frustrating, but it's what is (unfortunately) happening right now.

Good luck -

Your interest deduction on your mortgage would almost cover the cost of your Taxes, HOA and Insurance so you could figure using the $2700 for just your Interest and Principle payments. At today's interest rate for a 30 year fixed fully amortized loan of 6.25% with no points you could buy a home with a loan of about $425,000 with a 10% down payment the home price you qualify for would yeild about the same net payment.

When looking for the market bottom, it is best to remember that there are actuallt 2 bottoms. One, the absolute price bottom and , two, the Payment bottom. Interest rates have been trending up and it is expected that the will continue to rise in the near term. So, if prices were to go down all or more of your savings would be eaten up in higher interest rates and monthly payments.

I would recommend that if you you can find a home that fits your family's needs and have the same net payment as you now pay in rent - then buy it. Over the next 5 years the appreciation the home gives you will be just icing on the cake and you will have interest and property tax deductions on your tax return to shelter your earned income.

You can e-mail me at Bill@BillMGodwin.com if you would like help finding that special property.

Bill M Godwin
First Team Real Estate
949-606-5669
Bill@BillMGodwin.com

I don't think there is a ton of harm in waiting and watching. I'd talk to a lender you trust about your particular situation. It will allow you to take any necessary measures to work on any credit issues or examine debt to income ratios in preparation for your purchase. It's nice to have a plan.

I would also watch interest rates. That may be the biggest factor in affordability. If rates go up it can have a dramatic impact.

As far as values, I don't see any harm in waiting and making sure you are ready. Inventory will be higher - in my estimation in the coming months. The election will slow things down and the recent mess with Indymac has slowed buying activity already.

Don't hesitate to let me know if I can help or if you need some lender recommendations.

Are you working with an agent? "selection limited" there are alot of REO/Short sales in Lake Forest right now that are 1800sq ft under 550k. Will the prices go down more...probly, but will the interest rates go up? Are you getting any benefits from paying 2700.00 a month rent. If you can afford the payment and your comfortable, why not buy? If you would like a list of available properties let me know if I can be of further assisstance.