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
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.
Century 21 Beachside Realtors
http://www.LehmanHomes.net (Start your home search here)
Here we are - almost 2 years after your initial post. Hopefully, you went against the advice of the D&GBB
( Doom & Gloom Bubble Bloggers.) back in early 2009, and proceeded to buy your house in Lake Forest - back before prices started nudging upward, in Feb. 09 - now to the tune of 12-15% in your price range. Waiting until now would have meant a price at least $50k higher.
A 5% increase between now and a year from now will be an additional $25k.
Of course the D&GBB's are still showing charts predicting decline, and telling horror stories about higher interest rates and/or unemployment - as if those have stemmed any kind of homebuying tide in the past 15 months. They keep showing the same tired Credit Suisse charts from 2 years ago - the ones that haven't come close to fruition, and don't appear to be likely to.
They keep predicting a GIGANTIC wave of shadow inventory foreclosures, that still - after 2 years - has yet to materialize. The only Tsunami that really seems to be out there seems to be a constant wave of ready, willing, and able buyers.
Hopefully, you'll believe the MARKET, and not the D&GBB's.
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.
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
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.
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.
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.
Thanks again and good luck.
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
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
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.
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. â™« http://blip.fm/~32l5r
More Signs Of Recovery : The Cost Of Owning Versus Renting Falls Back To Historical Norms
It is also linked below.
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.
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.
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
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
Check out the best web site for Southern California home searching
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
First Team Real Estates
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.
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 email@example.com. Meanwhile review the inventory and get familiar with the prices and what is selling.
Prudential California Realty
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 -