In Orange County the supply of foreclosed properties is dropping as bargain hungry buyers with high down payments make purchases before the market makest its
long expected recovery. But another round of foreclosures projected to hit will lower home values as bankers slash prices to get properties sold. Orange County is forecast to sustain more modest deflation of 7.8% for the year.
The supply of foreclosed properties is dropping as bargain hungry buyers with high down payments make purchases before the market makest its long expected recovery. But another round of foreclosures projected to hit will lower home values as bankers slash prices to get properties sold. Orange County is forecast to sustain more modest deflation of 7.8% for the year.
Bob, gloom and doom huh? I just told someone that prices in their part of Texas were expected to go up by 3.9%. I can see reasons, trends, statistics, charts, and policies that are leading to lower prices. How many links to articles do you need for me to prove my point? Would a dozen be enough? I could do that easily.
Knowing that rates on mortgages will go up in april when the fed stops buying mbs is easy. Knowing just how much is hard.
Knowing that going from 5% to 6% interest rates takes away 11.9% of buying power
Knowing that going from 5% to 7% interest rates removes 23.9% of buying power
How can you expect prices to go up when less house will be able to be bought for the same payment?
I agree that a free $8k probably did not make a dent in a $600k and up housing market. But losing 23.9% of buying power sure will. They both happen just about the same time. Good government planning there.
Just keep talking the way you've been.
On a public forum.
As I just said to another agent on another thread who has a tendency to be openly disdainful and insulting of anyone who might disagree with him, its all in the delivery.
Well of course not Barbara, how wedickulous but just out of scientific curiosity, did you see your shadow when you woke up from your nap?
I do know I like the "rodent prognosticator" phrase and intend to steal and use it, it could come in handy on some threads when I need to make a point like "You you Rodent Prognosticator you"
"I think everything can easily be interpreted in a number of ways."
Apparently just two ways....What's really goin on and Bob' world
Just to clarify.....I was referring to things in general, not just Orange County. But let's be honest.....I want to have potential clients find me in Orange County, so that's where I posted it. I can see why it could be confusing....
Sorry if I wasn't clear,
I agree that that price range should see softening as the result of tighter credit and higher interest rates. The $6500 tax credit did not affect it at all since you had to buy a home under $800,000 to qualify for that tax credit. I think it's interesting, though. I was out today looking in Stoneridge at homes between $775-900,000. All were equity sellers and all priced too high. One was listed at $770,000 and I sold that exact model on a better street for $620,000 in December, no way that's going to appraise that much higher.
I think some of the equity sellers in that price range see the increase activity of the lower price ranges and think we are back to the "ask whatever you want" stage.....or they are willing to "wait for their price" so we'll see. We can write an offer, but if it doesn't appraise? I'm not sure sellers understand that just because they can get a buyer to pay a certain price......unless it's cash...they are still subject to reality. Banks are not interested in over-lending.
I think I rambled, but it was on my mind this afternoon.
Chivalry is running rampant on Trulia...and I am delighted to accept :)! I agree that we've gotten a bit off track, but interesting to see what people think of the tax credit. Seems the consensus is that the tax credit has made little difference. Regardless of whether we see a dip coming or not....the main reason we see that dip is interest rates? unemployment? Seasonal dips? Fair enough?
Seriously? Shoot, they'd be lining up to buy me a bus ticket. And that's just my friends.....
Uh, that's ColumBUS. We're in the midwest, not S. America. And we're ColumbusITES and the only time we get mad is when the team up North beats us. So we haven't been mad much lately.
Hey, Dunes, I had fun watching my Buckeyes put a beat-down on your Duckies a few weeks ago. Made my scarlet and gray heart proud.
BTW, I could never live in Oregon anyway. You guys drink weird coffee, get way too much rain, and vote for really weird people for elected office. Wait, I'm thinking of Seattle. Ah, same difference. :)
2569 postings, seriously? You're up there but you got a long way to go to beat our Texas friend.
My apologies to Karen for going waaaaaaayyy off track. We'll it's Friday afternoon at 4:50 after a long week.
Remember: one of the good qualities in a Realtor is sense of humor!
We can differ on opinions without getting personal. Also, you Realtors, we are held to a higher standard and that includes how we conduct ourselves on public forums. We all need to have thick skin now and then. "I'm rubber, you're glue it bounces off me an sticks to you!"
Let's just respectfully agree to disagree, o.k.? Passionately disagree but do it respectfully.
I really don't understand why you feel the need to prop up the real estate market's future, it gives you no credibility to speak about a boom. It's not a "doom and gloom" attitude, it's just the facts.
The tax credits are most likely going to expire and that's going to slow down the market. It's an emotion-driven market. The interest rates are going to go up, we have to since the government is borrowing at a much higher rate than they are charging, that's going to hurt new purchases. We are facing a long term recovery of jobs, so who is going to buy these homes?
This excited seller's market is a bubble. It doesn't mean it's going to drop through the floor, but certainly any reasonable person can predict a slower market to come and thus a dip in prices.
I wouldn't put it past some folks to do exactly as you have suggested
I do that routinely... what, you think these "Mayor-badges" are easy to get...?
So when Barbara wakes up from her nap will the appearance or non-appearance of her shadow help us determine if the Tax Credit will be extended or not? Was there a shadow or not?
"BUT, it maxes out at $8000, which is obviously 10% an $80k house".
It's obvious since I posted that for you
Wasn't Tonya and everyone else "nitpicking" just the other day when you sent your suggestions to everyone via email? lol
I'll let you get back to sharing the expertise of a Orange County Agent ;)
Because of lending. Lending is taking a long time, so that's my assumption. I have checked with my RE attorney and CPA, so I am suggesting clients speak to their own, but I would not want to be in a position to tell them "it's fine" and then find out later they could not take the credit.
So that's how I'm proceeding.
Pay particular attention to his final paragraph. It seems to think that the tax credit has already had minimal impact on our local market. That has been my opinion, as well. Nice if you can get it, but not the most compelling reason to buy a house.
I will tell you anecdotally that I'm finding a slowdown with my first-time home buyers this past week. Especially by those who are looking in a price range that almost always has short sales. They are realizing they are probably too late to get anything approved...and if it's a short sale starting from scratch, they are right.
Are you saying that the tax credit is their sole motivation for taking the plunge, or is it that the sense of urgency is diminished?
Do you think that the soon to expire tax credit in addition to deep discounts and the soon to expire 3.5% seller concessions for closing costs and/or appliances on many of these distressed properties may be helping to create a sense of urgency and fueling the fire in your area?
It's not doom and gloom to see what's going on. I spent some time this week with a OC Realtor who showed me some interesting comps and while some ares were going up in price the past 6 months, not all were and some of the higher end homes are still selling pretty low.
I wrote a couple of offers about 7-10% under asking for the equity sellers and one has already come back and wanted to talk. I'm worried about appraisals, and my agent is having an appraiser eyeball the comps for me before I do anything else. We'll see. My agent thinks we are still too high on these offers, so this might have been an exercise.
They put out a new prediction for 2010 and claimed they were about 80% correct for last year. That beats the NAR economist doesn't it?
I have found the housing predictor Dan attached is very close in theory with the NAR's predictions for the 2010 year though.
I think predicting trends is useless. There will always be highs and lows but regardless there will always be a segment of the population that wants/needs to move. There will always be agents who stick it out during hard times and those who don't.
Then there will be people like me who decide to get into this business during one of the worst downturns (in my area anyway) in recent memory. I'm not sure what that says about me, except maybe I am slightly insane.
Bob, just curious- you say how great things are in your area yet cite over 60% REOs and short sales. Does that not indicate something to you???
I am most definitely not an economist but gee, to me that spells out people buying over-priced houses that were way over their head. The market in good ol' sunny southern CA may be booming but apparently at huge cost to a significant segment of the population.
Certainly I don't have ANY credibility in Orange county, I'll give you that - I stay away from the left coast. I thought we were talking about the real estate market in the entire country, not just Orange County, Ca. My comments were about the general consensus of what's going on around the country. And in 2009 the country, in general, struggled in the area of real estate.
Yes, Bob, you have impressive credentials. And you've been in business longer that I have. But opinions and experience aside, nobody would argue that we shouldn't be concerned about what's been going on the past couple of years. What's important is now, not the past 33 years of history. I'm not a doomsday theorist, just trying to be realistic. If you're particular market is doing well then more power to you. However, nobody really knows how to predict anything these days. If we've learned anything in the last couple of years it's that the real estate market is unpredictible.
BTW, I didn't think that Karen was just asking for opinions from Orange County.
Bob, for most people 2009 sucked, to put it lightly. Are you trying to be positive? 2009 was a bad year for real estate across the country. Either we have different data or you expect 2010 to be bad as well. Guess I'm not getting it.... Yeah, I know: low interest rates, cheap houses, etc. for 2009 but even with that it was a bad year for real estate. My hope is that 2010 is NOT like 2009 (although I actually did quite well in 2009 most did not).
Agreed, but the motivations and the mechanics of buying a home are much different than buying a car. Not sure that is the best analogy but there is some truth (see my previous postings). And again, the end of the tax rebate will not be the market-killer, it will be a quick and dramatic rise in interest rates. That will be something the real estate market cannot quickly absorb.
I'm wondering what you think of the price range from about $800-1,000,000 range will do in the coming months? This price range is not going to be affected by the tax credit, unless it's the move-up credit of $6500. It seems to have quite a bit of short sales and is still moving rather quickly.
BTW, Karen, I do think the tax credit has made a difference, and a big one, at least for me. Many of my buyers when asked why they were buying (or without prompting) have said "we want the rebate." I heard that all summer and fall and since then. The last (8) weeks have been the buisiest Jan/Feb I've ever had. So I'm sure it's had an effect. The only thing that will be hard for the statisticians to measure is "how many of these first-time buyers bought just because of the tax credit and how many of them just bought SOONER because of the tax credit." Buying sooner only gets the market moving more quickly but it doesn't really add anything to the economy in the long run if they were going to buy anyway. "Anyway" meaning in the near future, during the current "economic cycle." I'm also wondering if the tax credit is more appealing where real estate for first-timers is more affordable (like where I am) vs. the west and east coast and the large metro areas. I mean, 8K is 8K but it goes a lot further on a 100k purchase than a 300K purchase....
The correct score at this moment...
2,147 Answers and from that I have received 1,635 Thumbs up... 52 Best Answers
The rest of the contributions would be comments on Blogs and the 8 Blogs I've written...This was done over a 15 month period....
Oh and I've been chivalrous twice and chivalric once, not sure if those were counted as contributions.
@Bruce...Hope to see ya around the forum
you are just drinking the Koolaid and thinking that your market doesn't apply. I see the trends in Orange County, Coto is it? Have you even bothered to look at the NOD filings? what do you think is going to happen. I would be very afraid to have you as my agent, you are just talking a "happy talk." doesn't mean we are going to collapse, but every reasonable person can see a decline coming, when and for how long is to be determined.
Actually, I'm going to move next door to Dunes or Dan and hang out with them all day.
No, I don't really have a Porshe. Not that there's anything wrong with that.
Honestly, I think the incentive is driving business for sure. I think there will be a lull after it expires (assuming it doesn't get renewed) but things will pick up eventually. If buyers get wind that it will be renewed "down the road" they will likely wait to see if that's true. I don't think the bottom will drop out of the market. There will still be sellers who want/need to sell and buyers who want to buy. People still relocate, get divorced, go bankrupt, grow bigger families, graduate, get married, and want good deals while they are around. However, I will say this: If interest rates take off like some have predicted we will be in some serious trouble. That will kill the market way more quickly than the lack of an incentive.
In South Orange County, in the under $350k range for condos, or the $550k range for detached houses - which combined comprise over 75% of both listings and escrows - there are typically multiple offers for every listing.
So, perhaps there will be half as many offers? 5 or 10, instead of 10-20? Well, that would be a good thing, especially for the poor buyers who have lost out on about 5 or 10 properties in a row.
As for theories that 5mm of the "potential" 7mm properties as an alleged "shadow inventory", the foreclosure sites such as RealtyTrac and ForeclosureRadar are verifying that only 50% of NODs and NTSs actually become a foreclosure - meaning that half of that theoretical 7mm will be mitigated, or resolved.
They also predict - remember they are in the middle of this mess - that this 3.5mm "potential" foreclosures are going to be spread over the next 2 or 3 years, with little to no likely further downward pressure on prices.
Most of us ( Realtors and buyers.) in the trenches - here in Orange County, California - are seeing a repeat of 2009, both for this year and the next - with median prices continuing to gradually nudge upward, just like they did last year.
So people will stop buying because interest rates climb to 5.5 or 6%? Poppycock! Sure, fewer will qualify, but 2010 and 2011 will continue to be a great time to buy property in Orange County, California.
Things are gradually, slowly, but surely, getting better. The glass is half full, people, not half empty.
A lot of people have been using the $8k as a down payment. That is gone.
A lot of people have been able to pay (still) high prices due to low interest rates.
They will also be gone replaced with higher rates that make buying at todays prices even less affordable.
Add in more coming foreclosures, and I do not see a healthy re market for awhile yet. Maybe 2014 will be a good year.