Market Conditions in 90630>Question Details

Grace, Home Buyer in 90630

Whats up with the market?Prices doesn't seem to be coming down in my neighorbood. Is it the right time to buy?

Asked by Grace, 90630 Tue Oct 28, 2008

My family has been looking for homes since the 90's and have been waiting for the right time to buy. We lost a few number of chances and would like to take advantage of this economy crisis to buy a bargain. However, the neighorhoods we are interested in don't seem to affected by the economy, AT ALL. Now, if I was referring to Beverly Hills, Bel Air, Newport Beach etc, I would know exactly why but the neighborhoods I am referring to don't come close to those sort of neighorboods. I currently live in the OC and in the city of Cypress. My family has had their eye on the subdivision "Sorrento". Sorrento is considered the cream of the crop in cypress but the prices seem so ridiculus and unreasonable in this economy. Yet, people still seem very interested in this neighborhood and these homes are selling like hot pancakes. I can't see making high profits with the selling prices today. So with that being said, is it the right time to buy? Am I reading the market accurately?
Thanks

Help the community by answering this question:

Answers

17
Not all area's are as affected by the current market. Remember, LOCATION, LOCATION, LOCATION. There are some neighborhoods that are so desireable because of schools, area, or whatever, that continue to prosper in this market. There are many people that buy a home because of the lifestyle the area provides, rather than to make a profit on their home. Where are you going to live when you sell your home in your favorite neighborhood for profit? Most people would want to stay in that neighborhood.

I suggest looking at what is most important to you. Is the neighborhood more important to you than the bargain. If the answer is yes, then you should buy.

Jeremy Lehman
Century 21 Beachside
Jeremy@LehmanHomes.net
1 vote Thank Flag Link Tue Oct 28, 2008
Even though this posting is several years old... Im going to chime in anyways. Each market is unique. Each market is affected differently. Every market was affected by the decline in values, some more than others. We are currently on the upswing. Last year the US had hundreds of thousands of homeowners that finally came out from being underwater on their mortgages/loans. They are now in positive equity positions. If you've been trying to time the market since the 90's, then you really lost out. I am not sure that you'll ever be ready to buy. Properties have increased in value significantly in the past two decades. You've got to be in it for the long haul in order to see the real value in home ownership. You could have had your home more than halfway paid off by now, written off so much of the interest over the years and accrued as much as double the value in equity.

Best of luck.
0 votes Thank Flag Link Fri Mar 28, 2014
We agree with Brett here to some extent ...

Real estate is primarily LOCAL. In other words, what is happening in Las Vegas or NY .. or New Orleans .. is not what is happening here in California. Buyers should look at each LOCAL area carefully, and each individual property, for history of prior sales, and make a decision based on facts.

It's understandable that buyers would have some emotional involvement with a home or property. That emotion should be balanced with careful analysis. The buying of a home is a long term proposition .. and owning at least five years.

Harrison K. Long, Coldwell Banker Previews, Irvine, CA.
http://www.ExploreOCHomes.com
0 votes Thank Flag Link Mon Apr 13, 2009
RealEstate#1,

You have given some of the worst answers that I have ever heard. "Sell Tomorrow"?, Even in California, that is bad advice. I know prices have been on a roller coaster ride over the past few years but, now, if anything would be the worst time to sell and, the best time to buy. As an investment, it is necessary to have the foresight and the courage to do the opposite of the masses. If everyone is buying then, you should be a seller. If everyone is in a rush to sell then, it is a great time to be a prudent buyer. Of course, nobody can predict an exact bottom either in the real estate market or the economy as a whole. Also, every Real Estate market is highly localized. So in conclusion, my advice to Grace is this: Look at every property individually. Search the history of previous sales, and make a calculated decision based on the facts, not on sentiment or scare tactics. Consider the purchase of a home a long term investment on at least a 10 year time frame. The days of the quick California-flip are definitely over, for now.
0 votes Thank Flag Link Mon Apr 13, 2009
Bob Phillips did a nice job with prior answer here, and best wishest to him.

Grace presented her question during October, 2008. We don't actually know whether Grace .. question presenter made a move to buy a home at any time. I hope she did at 90630. She would have had a much better selection of equity sale situations at that time. Now she will have lots of short sales to see and consider.

Harrison K. Long, Coldwell Banker Previews, Irvine, CA.
0 votes Thank Flag Link Sun Apr 12, 2009
Actually, for Grace's sake, since she posted the question at the end of October, she would have been better off to buy then, than now. There were far fewer buyers, with fewer multiple offer sales, and the prices haven't gone up OR down, since then. Now, she's faced with increased competition for any house she's interested in.

Interest rates are better now though.

By the way? The median price in O.C. has risen for the past two months. Just a smidge, mind you, but higher, nonetheless. Here's MY prediction, since you've made one. Prices in Orange County, California, will be AT LEAST 10% higher than they are now, by 2013.

I'll look you up in 4 years to remind you which one of us was closer to correct, OK?
Web Reference: http://BobPhillips.net
0 votes Thank Flag Link Sun Apr 12, 2009
Bob: That is what all the Pro;s told Grace 6 months ago. You will be right one day. I agree that RE can not got o zero - there will be a bottom this century.
0 votes Thank Flag Link Sun Apr 12, 2009
RealestateTroll#1? You're hilarious, my friend.

If you wait until 2013, you'll be near the top of the NEXT bubble. And obviously too late - AGAIN.

But you just keep beating those drums of negativity - to an increasingly smaller number of ears everyday.
Web Reference: http://BobPhillips.net
0 votes Thank Flag Link Sun Apr 12, 2009
Prices are headed down. Sell tomorrow if you can. Wait to buy until 2013+ if you must.
0 votes Thank Flag Link Sun Apr 12, 2009
Nathan? Take your cut & pasted Bubble Blog baloney back to Fresno, where it MIGHT be relevant.
Web Reference: http://BobPhillips.net
0 votes Thank Flag Link Sun Apr 12, 2009
California Foreclosures About To Soar
Posted by Tyler Durden at 10:50 AM

In light of the market moving preannouncement by WFC, which as David Faber points out may have used some "leeway" with the marks on the company's mortgage related assets, it makes sense to present some California foreclosure data to show just how hot the refi market really is. We grab the following data and charts from the excellent Field Check Group blog.

The bottom line is that there is a massive wave of actual foreclosures that will hit beginning in April that can’t be stopped without a national moratorium — this wave is so big I would not put it past them trying it.

CA foreclosure background - in mid-2008 the foreclosure wave was artificially held back as a result of the CA law SB1137 enacted in Sept 2008. This also kept NOD’s and NTS’s at much lower levels than the actual defaults that were occurring. Other bubble states and several banks/servicers also went on random moratoria and the foreclosure wave was held back for the past six months.

But just like so many other intervention and moratoria in the past, the problem just comes out the other side even more violent than if they would have done nothing. Adding insult to injury, the GSE’s announced this week that they were coming off moratorium, which could increase foreclosures by 20-25% alone.

March brought the first 50k+ count ever for NOD’s in CA.

From here the banks and servicers will try anything they can to get borrowers into mortgage mods before the Notice-of-Trustee Sale in filed 4-5 months down the road but ultimately most will make it to foreclosure sooner or later.
0 votes Thank Flag Link Sat Apr 11, 2009
I'm a broker who lives in Cypress. I sold our own Garden Grove home in 2003. We saved the profit from that home and moved to Cypress for the schools for our kids. We've been waiting ourselves to purchase in Cypress near Arnold. It's not just Sorrento. It's also the neighboring neighborhoods too- whether they be condos or single family homes. Of course Sorrento is the newest and the biggest around here. But I think for the environment and school, this side of Cypress is always in demand.

If you look at the real estate trends you will see the greatest peaks and troughs in the cheaper less desirable neighborhoods. The more expensive/exclusive/desirable neighborhoods will more often rise with the market but also hold much of their gains in the down market. As there are very few adjustable mortgages in these neighborhoods, fewer go into foreclosure, thereby putting less downward pressure on the community as a whole. If you look, there aren't much foreclosures going on around here - say compared to there in Hawaiian Gardens.

I'm sorry to hear that you have been looking since the 90's. The most important thing is to see what you can afford- combination of what you have to put down and what kind of loan you can get- and buy it, assuming you like the house.

If you had bought in the 1990's, by any measure you would still be ahead in this down market. My guestimate is that the market will go down to the 2002-2003 levels overall. But that does not mean that will happen in Sorrento, Newport, Laguna Hills, etc.

Since you buy property with mortgage, you are using other people's money. If you buy it with a fixed rate mortgage, due to inflation, what you borrow becomes cheaper each year. Therefore, from the perspective of a home as an investment, you loose out by waiting and waiting. I think the Obama administration this year represents the golden opportunity for home buyers.

Charles K. Park
Real Estate Broker
http://www.charleskpark.com
(714) 932-3277
Web Reference: http://www.charleskpark.com
0 votes Thank Flag Link Wed Feb 4, 2009
Grace ... we have the old fashioned idea that if person truly wants to buy a home ... in any market ... and is willing to buy and live in the home for 3 to five years ... that person should find the home they like, check out the comps, hire a quality Realtor agents, someone who will represent their interest moving forward ... and then offer and buy the home at the best price in the shortest possible time.

If you want fine representation and are interested in discussing this and the process of buying a home, please call or contact me. Thanks.

Harrison K. Long
Realtor and broker
Explore Group Properties, Coldwell Banker Previews
http://www.BuyersExploreHomes.com (the best search web site)
949-854-7747
0 votes Thank Flag Link Thu Nov 6, 2008
Grace,

As you well know, Sorento IS a highly sought after market in Cypress. Add to that the fact that it is also a very small market with very few sales and the problem with trying to track or, especially, predict market trends in that addition are difficult.

I went back to January 2007 to see what trends we might be able to see. The largest number of homes sold in Sorento in any month since the start of 2007 was three in June of this year.

I like to look at price per square foot because of the variations in size, number of bedrooms, condition, etc. The five homes currently listed in Sorento have an average price per square feet of $317.07. This is within the scope of the historical prices since January 2007. This price per month has dipped into the high $200s per square foot and peaked as high as right around $350 a square foot.

Bottom line - it's never a bad time to buy as long as your plan is to live in the home for a number of years. Land and homes in Orange County are limited and the only way to build substantially more homes is to build UP (multi-story condominiums). Therefore, over the long term, home values in Orange County and costal Southern California will only appreciate. When we will start the coming recovery is a matter of speculation.

Cypress is one of the areas I'm intimately familiar with and I'd be happy to help you with finding your next home. Give me a call or drop me an email!
Web Reference: http://www.TimKunze.com
0 votes Thank Flag Link Wed Oct 29, 2008
Grace,

As you well know, Sorento IS a highly sought after market in Cypress. Add to that the fact that it is also a very small market with very few sales and the problem with trying to track or, especially, predict market trends in that addition are difficult.

I went back to January 2007 to see what trends we might be able to see. The largest number of homes sold in Sorento in any month since the start of 2007 was three in June of this year.

I like to look at price per square foot because of the variations in size, number of bedrooms, condition, etc. The five homes currently listed in Sorento have an average price per square feet of $317.07. This is within the scope of the historical prices since January 2007. This price per month has dipped into the high $200s per square foot and peaked as high as right around $350 a square foot.

Bottom line - it's never a bad time to buy as long as your plan is to live in the home for a number of years. Land and homes in Orange County are limited and the only way to build substantially more homes is to build UP (multi-story condominiums). Therefore, over the long term, home values in Orange County and costal Southern California will only appreciate. When we will start the coming recovery is a matter of speculation.

Cypress is one of the areas I'm intimately familiar with and I'd be happy to help you with finding your next home. Give me a call or drop me an email!
Web Reference: http://www.TimKunze.com
0 votes Thank Flag Link Wed Oct 29, 2008
Most experts say that no one will know when the bottom of the market will be reached until we look back well after the prices have started going back up.

Cypress (90630) saw a 5.4% drop in prices from 2006 to 2007 and then an additional 22% drop in 2008 from 2007. However sales activity in OC was up nearly 62% from Sept 2007. While 2007 numbers were not tough to beat, there apparently is not a big shortage of buyers for homes priced correctly.

I would bet tt if we took a poll of every OC Realtor on Trulia, that over 80% of them that have written more offers over the last 12 months, that were rejected versus accepted because of multiple offers....especially on homes in better neighborhoods, or on properties that were very well priced for their neighborhood.

If sales activity continued up through the end of the year, I would seriously start to consider that maybe we are very near the bottom. More importantly than timing precisely when the bottom of the market is, is timing when is the right time to buy for you. If you qualify for a home in Sorrento, and are comfortable with the payments, and know you want to stay there at least 5 years or more, than I don't know how much longer you will want to wait.

Additionally, if someone borrows $800,000 at 6.5%, their monthly payment would be $5057 a month. At 7.5%, the payment would be $5594 a month....a whopping $537 a month more....over $200,000 more over the term of the loan.

There is a lot to consider when buying a home in this or any market. Make sure you talk to a Real estate professional that will help you achieve the home ownerships goals that are right for you. You are also welcome to search for Sorrento and other Cypress area homes at http://www.TheLuxuryMLS.com.

Good luck in your home search.

DaveO@theOCmls.com
Web Reference: http://www.TheLuxuryMLS.com
0 votes Thank Flag Link Tue Oct 28, 2008
Can't see who making high profits? The seller (who bought in the 90's or sooner) or you (if you choose to sell in 2015 - 2020)? Why shouldn't a seller make a profit?

If you are reading closed sales prices and are seeing that the demand is sustaining the prices over time, then how else can you read the market? Sounds like a neighborhood that would be a good choice to buy in to me.

This is why, whenever anyone buys, they should be buying (like Jeremy said) Location, Location, Location.
Web Reference: http://www.OCBeachBlog.com
0 votes Thank Flag Link Tue Oct 28, 2008
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2014 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer