Conrad Real Estate News

Transcription

1 Conrad Real Estate News Orange County Facts Recently obtained from our So Cal MLS database Between March there were 26,798 total homes sold. To compare, there were 27,248 sold between March just for fun, there were 45,460 sales between August Last month, there was an average of 7,247 homes listed for sale in all of Orange County. To compare, there were an average of 13,784 active listings in March of 2011 and 13,894 active listings in March of **The highest inventory was back in September, 2007 with 19,978 homes for sale!!** Last month, the average price was $502,000 while the average listing price was $956,000. **In the recent recession, the lowest average price was back in February 2009 at $458,000** San Clemente, Dana Point, San Juan Capistrano and Mission Viejo There are currently 696 active listings with 789 pending escrows There are currently 35 active bank owned listings and 64 pending escrows, totaling to about 6.5% of the current market. The average price for a bank owned home is $469,000 There are currently 104 active short sale listings and 437 pending short sale escrows, totaling about 36% of the market. The average price for a short sale home is $462,843 SPRING 2012 Newport Beach, Corona Del Mar, Laguna Beach, Newport Coast There are currently 890 active listings with 302 pending escrows There are currently 12 active bank owned listings and 16 pending escrows, totaling to about 2.5% of the current market. The average price for bank owned homes is $1,250,000 There are currently 60 active short sale listings and 117 pending short sale escrows, totaling about 15% of the market. The average price for a short sale home is $1,058,800

2 Market Insight The inventory of homes for sale is almost at an all time low. As we are writing this, San Clemente, for example, has only 235 homes available. Last year at this time, there were over 400 available! The last time the inventory was this low was The media will start picking up on this in a couple months. If you just take SC, DP, and SJC, the total active listings as of 4/5/2012 was 696 active listings, compared to 1023 in Pending sales are also on the rise. In the same area, there are 789 pending sales compared to 291 in 2011 (**This is not a misprint!!**). Many homeowners who have not had to sell have simply taken their homes off the market. We call them discretionary sellers and many of them have tried more than once to sell in the last couple years, now more and more of them are not trying at all until the prices start appreciating again. Around the Orange County area we are seeing a huge transition in the market and something we haven t seen in years. Short sales continue to take over the distressed sales market. In Orange County right now 8 out of 10 distressed properties are short sales. Both short sales and bank owned properties are over the top hot with today s buyers. Everybody wants a foreclosure, but few realize how competitive this market has become. Most distressed listings hit the market and within days, if not hours, there are multiple offers. It is very difficult as a buyer to pick up these properties now. These are all good signs that we have formed a significant bottom in the market, especially in the coastal areas of Orange County. buyers and attract them to the auction that typically takes place in 30 or 60 days. All the buyers see this low teaser listing price, when in reality the home is worth 650k and that is what the seller wants to accept. With short sales, typically the seller and agent pick the price, and since the homeowner is upside down, they are typically indifferent about the price. Many times they list these properties well below what the market will demand. So, we blame these two entities for some of the confusion in the market as far as values go with buyers. We are here to help clear up the confusion and please let us know if you would like us to evaluate the market correctly for you. The market is definitely changing, especially in the last 3 months; with increased buyer demand, lower inventory, etc so we have a mix of the old market and new market and that is why you will see some large disparities in sale prices in some communities. This is just a consequence of the market transition and we witnessed this back in We can t say it enough. If you have any plans to invest in real estate, do it now, it s the time to invest again. The wave of foreclosures that everybody has been talking about is a fallacy. It is not going to happen for the Orange County area. Many of the properties in these banks shadow inventory are being sold as short sales or banks are giving the homeowners modifications. The ones that do not sell as short sales and go back to the bank, are being released into the market, where they get snapped up in a matter of days. The banks are intentionally doing this, we believe, to keep the supply down and demand up. The strategy has been working for them, and we don t see that changing. There is still massive confusion in the market. We blame this on sellers and agents that way under price short sales in communities, giving buyers a false sense of value and/ or auction companies that sellers hire to sell their home. As an example, these auction companies will list a $650,000 home on the MLS for $400,000 to create a frenzy among The sales numbers would be stronger if there was more inventory. The sale numbers for March and April will still be impressivewhen they come out in a couple months, but it would be even more impressive if there was more inventory for the buyers to purchase! With all this excitement about the changing market, the buyers are still price sensitive and will not bite

3 Market Insight buyers and attract them to the auction that typically takes place in 30 or 60 days. All the buyers see this low teaser listing price, when in reality the home is worth 650k and that is what the seller wants to accept. With short sales, typically the seller and agent pick the price, and since the homeowner is upside down, they are typically indifferent about the price. Many times they list these properties well below what the market will demand. So, we blame these two entities for some of the confusion in the market as far as values go with buyers. We are here to help clear up the confusion and please let us know if you would like us to evaluate the market correctly for you. The inventory of homes for sale is almost at an all time low. As we are writing this, San Clemente, for example, has only 235 homes available. Last year at this time, there were over 400 available! The last time the inventory was this low was The media will start picking up on this in a couple months. If you just take SC, DP, and SJC, the total active listings as of 4/5/2012 was 696 active listings, compared to 1023 in Pending sales are also The market is definitely changing, especially in the last 3 on the rise. In the same area, there are 789 pending sales compared to 291 in 2011 (**This is not a misprint!!**). months; with increased buyer demand, lower inventory, etc Many homeowners who have not had to sell have simply so we have a mix of the old market and new market and that is taken their homes off the market. We call them discretionary why you will see some large disparities in sale prices in some sellers and many of them have tried more than once to sell communities. This is just a consequence of the market transition in the last couple years, now more and more of them are not and we witnessed this back in trying at all until the prices start appreciating again. Around the Orange County area we are seeing a The wave of We can t say it enough. huge transition in the market and something we foreclosures that haven t seen in years. If you have any plans to invest everybody has been talking about in real estate, do it now, Short sales continue to take over the distressed is a fallacy. It is not sales market. In Orange County right now 8 out of it s the time to invest again. going to happen for 10 distressed properties are short sales. Both short the Orange County sales and bank owned properties are over the top area. Many of the properties in these banks shadow inventory hot with today s buyers. Everybody wants a foreclosure, but are being sold as short sales or banks are giving the homeowners few realize how competitive this market has become. Most modifications. The ones that do not sell as short sales and go distressed listings hit the market and within days, if not back to the bank, are being released into the market, where they hours, there are multiple offers. It is very difficult as a buyer get snapped up in a matter of days. The banks are intentionally to pick up these properties now. These are all good signs doing this, we believe, to keep the supply down and demand up. that we have formed a significant bottom in the market, The strategy has been working for them, and we don t see that especially in the coastal areas of Orange County. changing. There is still massive confusion in the market. We blame this on sellers and agents that way under price short sales in communities, giving buyers a false sense of value and/ or auction companies that sellers hire to sell their home. As an example, these auction companies will list a $650,000 home on the MLS for $400,000 to create a frenzy among The sales numbers would be stronger if there was more inventory. The sale numbers for March and April will still be impressivewhen they come out in a couple months, but it would be even more impressive if there was more inventory for the buyers to purchase! With all this excitement about the changing market, the buyers are still price sensitive and will not bite at prices. You can be overpriced by 5%-10% in this market, not get offers, then lower it to a more realistic prices, and multiple offers will occur almost immediately. It s very black and white with these very informed, knowledgeable buyers in today s market. The buyers out there have never been more educated. With the advent of popular real estate websites such as Redfin, Realtor.com, Trulia, etc buyers can find the sales history of the home, loan amounts, comps in the area, etc. Even though this is nice information, we highly recommend not believing everything you read or hear on the internet. Mis-informaiton is out there too much and we try to help our clients get the real story on the local market. Over the past 4 or 5 years, we ve helped homeowners remarket their homes to get it sold. It can still be a challenging market for non-distressed sellers that are trying to get top retail price. We ve told our clients over and over, that a home needs to have 5-stars on all the aspects agent marketing program, desirability, sales price, location, showing quality, upgrades, etc.. If the home lacks being a 5star, it is very difficult to get that top retail price. As part of our customer service, we provide a free 2-3 hour consultation with our staging specialist. She can help advise and de-clutter a home to show it the best it can. We ve found it makes a world of difference in getting buyers emotionally involved in the home, and that is the name of the game when trying to get top dollar! We ve officially been inaugurated into the local Orange County Sports world with our affiliation with the national brand Sportstar Relocation. It s a national network, headquartered in Manahattan Beach by high profile real estate agent Ed Kaminksy of Shorewood Realtors. We are the official Orange County representative for the Los Angeles Angels of Anaheim and the Anaheim Ducks. This service fills the void within the sports world of helping players and their families relocate from city to city. Finding a high quality, knowledgeable agent throughout every major city is a challenge. In addition to helping with the relocation, the service also provides help with moving companies, staging/furnishing, travel, and much more! For over 10 years, we have continued to be the service provider of many Angel baseball players and their families. If you have any contacts in Orange County or nationally, we can provide help. Please contact us for more information. Investment Opportunities: Over the last 4-5 years, it s been no secret that rates and prices have fallen. With these new market conditions have brought out fantastic investment opportunities. We can t say it enough..if you have any plans to invest in real estate, do it now, its the time to invest again! There are a lot of great opportunities with the right coaching. In fact, you can purchase a property and have it professionally managed by our company, where you or your partners have almost no invested time invested. HS 4.25 X 2.5 AD_Layout 1 Buying a Home? Selling a Home? Let us help you build your financial future. Bill Conrad b illc@conradrealestate.com Conrad News-Spring.indd 2 Jeremy Conrad jconrad@conradrealestate.com 3/28/12 7:07 AM Page 1 Orange County s #1 Independent Escrow Company Discover the Power of Independence Town Center Drive Suite 135 Laguna Niguel, California Toll Free: Web: Eddie Tanamachi Katie Wilson-DiCaprio Tel: Fax: Cell: Fax: Sr. Escrow Officer eddie@homesteadescrow.com Director of Marketing katie@homesteadescrow.com 4/25/12 2:29 PM

4 Short Sale Myths Debunked! 2012 is the year of the short sale. As your life long real estate consultant, we are here for you, your family and your friends to successfully help navigate the complexities of this challenging market. Here are a few myths that can help clarify the mysterious short sale. Please let us know if you have any questions or would like to discuss details with us or our short sale team of CPA s, attorneys and credit specialist. Myth #1: The homeowner must fall behind on mortgage payments in order to qualify for a short sale. Debunked: Years ago this may have been true, but not in A financial hardship must exist, such as the ARM (Adjustable Rate Mortgage) increasing in monthly payments. Loss of job or income. Health or medical issues. Extraordinary loss in home value (which may be considered a hardship). Myth #2: Banks would rather foreclose on a property than approve a short sale. Debunked: Many still believe this myth to be true, but more accurately, banks would prefer not to foreclose on a property due to the $50-70k it may cost the bank per transaction. Banks lose less money on a short sale than on a foreclosure. Note: In California, some lenders may pay owners as much as $25,000 to opt for a short sale. Myth #3: Homeowners must be pre-approved by their lender to be eligible for a short sale. Debunked: Absolutely not true. By and large, most lenders will consider short sale offers. However, each lender may have unique and specific processes to follow, from listing the home to the acceptance of a short sale. Bypassing any part of this process may result the sale not closing, so be sure to follow each lenders processes closely. Myth #4: Short sales never close. Debunked: Obviously not true. In some areas of the U.S., nearly 50% of all closings are considered to be distressed properties, meaning REOs and short sales. Myth #5: Short sales take months (and months) to close. Debunked: The short sale processes must be learned. Once mastered, it may not be uncommon to close a short sale in 30 days. However, certain idiosyncrasies may slow the process and each lender presents their own unique set of specific challenges. No two short sale transactions are identical. Myth #6: Damage to the homeowner s credit standing is comparable in a short sale and a foreclosure. Debunked: In many cases, credit repercussions and deficiency protections are much more damaging with a foreclosure. Short sale transactions can often lead to faster financial recovery for the homeowner and should be carefully considered. Note: If the homeowner missed no mortgage payments, they may be eligible to finance the purchase of a home immediately following a short sale transaction. Myth #7: Following a short sale, the homeowner will be ineligible to purchase another property for the next 5-7 years. Debunked: Not true. Using conventional lending guidelines, some consumers may obtain a Fannie Mae backed mortgage a short 24 months after the close of their short sale. Myth #8: After a short sale transaction, the homeowner will receive a 1099 and be forced to declare the loss as income. Debunked: The owner may indeed receive a 1099, but due to the 2007 Mortgage Forgiveness Debt Relief Act, among other considerations, the homeowner may not owe any taxes on their transaction. Note: This Act is due to expire at the end of Myth #9: The lender will sue the homeowner after the close of a short sale (or foreclosure, or deed in lieu of foreclosure) for the deficiency. Debunked: California has certain anti-deficiency protections in place for short sales and foreclosures, depending on the circumstances.* Here are a few examples of our recent sales to investors: 1- Condo Purchase (low maintenance, conservative investment): $350,000 purchase price for 1994 built condo with 3 bedrooms, 2.5 baths. With about $12,500 investment into carpet, paint, appliances, this condo is ready to rent. With 30% down payment or $105,000, the total payment, including HOA fees is approx. $1725/month. The unit will rent for around $2400/month, for a cash flow of $8100/year and cash on cash return of 7.7%. **This does not take into consideration any appreciation, large monthly debt reduction or increased income with rental increases.** 2- Triplex Purchase (higher maintenance, aggressive investment): Purchase price of $675,000 for a 1960 s downtown building with three 2 bedroom, 1 bath units. With about $15,000 for paint, carpet, etc, the property will rent for about $4800/month. With 30% down payment or $202,000 down, total payment is approx.$2950/month. With $4800/month rental income, cash flow is $1850/ month or $22,200/year for a cash on cash return of 11%. **This does not take into consideration any appreciation, large monthly debt reduction or increased income with rental increases.** 3- Fourplex Purchase (higher maintenance, aggressive investment): Purchase price of $890,000 for a 1960 s downtown building. With about $15,000 for paint, carpet, etc, the property will rent for about $6100/month. With 30% down payment or $267,000 down, total payment is approx. $3954/month. With $6100/month rental, cash flow is $2146/month or $25,752/year for a cash on cash return of 9.6%. **This does not take into consideration any appreciation, large monthly debt reduction or increased income with rental increases.**

5 33831 Robles Drive Dana Point 3 bedrooms, 2.5 baths, 2,189 Sq. Ft. Upgraded, spacious floor plan Lantern District, close to DP Harbor Short drive to beach and entertainment Asking $599, Avenida Merida San Clemente 3 bedrooms, 2.5 baths, 2,310 Sq. Ft. Highly upgraded, granite countertops Built in BBQ and fire pit Around corner from Hermosa Sports Park Asking $609, Avenida Adobe San Clemente 3 bedrooms, 2.5 baths, 1,460 Sq. Ft. Private townhome Ocean views from most rooms 2 attached car garage Asking $439, Avenida De La Estrella San Clemente 3 bedrooms, 2 baths Charming beach cottage Stunning back yard with private spa Oversized 2 car garage Asking $489,999 Conrad and Associates (949)

6 2309 Calle La Serna San Clemente 3 bedrooms, 2 baths, 2,176 Sq. Ft. Panoramic ocean, sunset and Catalina views Gourmet kitchen Open floor plan, natural light Asking $889, South Ola Vista San Clemente 4 bedrooms, 3.5 baths, 3500 Sq. Ft. Highly upgraded custom home Built in BBQ, Spa in private canyon setting Short walk to Rivera beach in SW San Clemente Asking $1,450, Colina Del Arco Iris San Clemente 5 bedrooms, 4.5 baths, 3,200 Sq. Ft. Panoramic 180 degree ocean views Exclusive Gated Reserve West community Super upgraded home and backyard Asking $929, Copper Lantern Street Dana Point 3 separate units, 2,700 Sq. Ft. 6 bedrooms, 5 bathrooms Lantern District, close to DP Harbor All units are nicely remodeled Asking $865,000 Conrad and Associates (949)