The Market Has Been on Fire for 50+ days…Why??
April 16, 2012 by Orange County Real Estate and Long Beach Real Estate · Leave a Comment
Since the beginning of March we have seen unprecedented demand from buyers and an unprecedented decrease in inventory to purchase. Demand is low because less people are willing to sell at what may be all time lows. If the home is priced within market value range, there will be multiple offers, almost guaranteed.
The amount of offers depends on the sales price. The true conforming loan limit of $417,000 is going to have the highest demand and likely the greatest amount of offers. Most people have found that they can qualify for this amount with a minimal down payment and pay almost the same as they do in rent. Therefore, anything under $450,000 is really moving fast, day 1-7 and close to full price.
The mid-range price points $500k – $700k are also moving quickly if priced right. If a seller’s asking price is within $10,000 of market value, the home will fly off of the market. They are moving fast, but not as fast as the 450k and under prices. There are just less people in this price point.
The upper end market consisting of high conforming loans and jumbo loan buyers is still being heavily scrutinized. Still we see an increase in demand. These buyers are still weary that they are going to overpay as the price point still may have a ways to go on adjusting. The asking prices must be within $20,000 of market value or they risk being overlooked. There just isn’t the same fear of loss in this category.
With all that said, I still cannot confidently say we are in a market recovery. The only reasons I can see for increased demand are: some volatility in the interest rate market as a result of Federal intervention (Bernanke QE3 Report), increased consumer confidence following a bullish stock market, fear that the market may be bottoming and buyers might lose, Europe has been out of the media until recently, Israel has been softer on news until recently and the spring selling season is almost always a given.
Now stop….if we don’t let our minds get brainwashed, we realize the real facts haven’t changed. The big 5 bank settlement “Robosettlement” is still going to lead to more foreclosed inventory leading to forced supply where standard sellers would naturally slow inventory. There are still millions of homeowners not paying their mortgages or upside down. Billions of dollars in 7 year ARM loans were written in 2006 and into 2007, do the math, they will adjust through 2013. The unemployment percentages are still through the roof and we are getting lower job ratings than expected. Our stock market is now correcting as companies pull back on hiring. Europe, China and Israel are all rearing their pretty heads again. China recently announced lower than expected GDP, Israel still might bomb Iran and let’s face it, the Euro should be squandered. Germany leaving the Euro would devalue it greatly and resolve much of the problem for the remaining countries, but this solution is still a variable certainty. Oh yeah….we are still 15 trillion in debt and don’t know who are next President will be.
The facts are the same as they were before; society just isn’t paying close enough attention. Even I am questioning…Is this really real?? Time will tell.
This demand we are seeing now is likely a false demand, but if you want to sell now….sell now and price it right. You will have multiple offers fast.
All things considered, I am not yet sold on the recovery. I will say for the first time in a long time, the market feels and looks GOOD. I’m with you, I hope things improve and stand up to the test of time. Let’s look at things in another 10 weeks. My guess….we may realize that the numbers don’t lie and may be back to the pre-demand era.
Your Thoughts?
Share on FacebookForeclosures Ramping Up in 2012.
February 28, 2012 by Orange County Real Estate and Long Beach Real Estate · Leave a Comment
Why this will be GOOD for OC Real Estate?
The $25 Billion settlement from five of the largest banks (Citi, Ally, Bank of America, Wells Fargo and JP Morgan Chase) will have an effect on the foreclosure markets and real estate in general. It may not be what most of you think however. 
This $25 Billion is a surprisingly easy check for these monster banks to cut. It may help as many as 1,750,000 people get either refinanced, loan modifications and or some compensation for those already foreclosed on ($1,800 check). To put this in perspective, there are 3.4 million people right now that are at least 90 days late on their mortgages. Over 11 million people currently owe more on their homes then they are worth by about 750 Billion. You can make your own relative assumptions based on those numbers. The type of help these individuals will receive is subject to speculation.
Now for what the much much much bigger picture result will be of the settlement.
This settlement does not come as a result of the unethical lending processes that caused the problem. It comes as a result of banks not completing the foreclosure process up to legal standards; this has been coined “robo-signing”. This debate about whether or not banks should be responsible for sub par “robo-signing” practices, which may have lead to some unnecessary foreclosures has been going on since 2011. Anyone could argue that this was silly in fact because these people were not paying their mortgages. In 2011 foreclosures slowed down by roughly 40% as this settlement and processes have been debated.
My last article addressed shadow inventory by its definition. Shadow inventory is a direct result of this settlement. For those of you who missed the article, shadow inventory is the unknown amount of distressed homes not yet foreclosed on. Foreclosures slowed down and got backed up and hid in the “shadow inventory.” Well guess what???? The settlement is over.
Now the process of foreclosures can regain its momentum! The banks just loosened their belts. This is the real effect. Romney said it best, not to be political, he said the best way to resolve this problem is get through the inventory as fast as possible. Well….here we go.
In the short term expect foreclosures to rise dramatically and rapidly. This will put downward pressure on the market and prices. However, the long term effect is to improve once the storm passes; and it will pass more quickly with the settlement wind behind it.
As always Team Sackin is giving you the real scoop. Now you can make educated decisions. This is a great year to invest in foreclosure property and marry the low interest rates. If you are going to sell, sell sooner than later. If you are investing in residential income, now is the time, rents are going to be in tremendous demand for years as people recover on their credit.
2012 should be the last dance my friends. Act now and take advantage of this historically aggressive market place. But do it with expert guidance. Call us for an action plan.
Share on FacebookNovember 3, 2011 by Orange County Real Estate and Long Beach Real Estate · Leave a Comment
Shadow Inventory?
October 31, 2011 by Orange County Real Estate and Long Beach Real Estate · Leave a Comment
Shadow inventory has become a new and mysterious term in the world of Real Estate. What is shadow inventory exactly? It is the unknown volume of foreclosure inventory that banks don’t really feel like talking about. It hides in the banks shadow and leaves most of the common world to wonder…..Just how much inventory is there? How many people are sitting in their homes, not paying their mortgages, hiding in the shadow inventory?
So let me tell you if it is real and how much there really might be based on credible sources.
First off, yes it is real. When Bank of America started getting questioned for wrongfully foreclosing on homes as a result of “Robo-Signing”, the process of working through the inventory yielded. Let me take a minute to say that this accusation against B of A was an absolute joke. Maybe the paperwork wasn’t processed correctly, but these individuals weren’t paying their mortgage! This is a trustee state! Anyway it slowed things down. Since then inventory has been building. Try to imagine a toll booth on a major interstate. All of a sudden, they start only letting one person through every 15 minutes instead of every 15 seconds. The booths are the banks and the cars are individuals not paying their mortgage.
What is happening with inventory right now in today’s market? Here is one example. On Thursday approximately 300 homes were scheduled to be sold at the court house steps (Auction, Trustee Sale, Sheriff’s Sale, whatever you want to call it). Out of those, 26 actually made it to bid and only a handful, maybe 7 sold. Do the math, that means that 274 people are still at the toll booth, not paying their mortgage and hiding in the shadow inventory. That is one day people!!!!
So, how many cars are backed up at the toll booth, when will the traffic jam break, how fast will it go and what will be the end result? Here is the view point from two of my best anonymous resources for inside information.
REO Asset manager for Wells Fargo: Right now there are 6 million people who have a Notice of Default filed against their properties. Basically, 6 million people are facing foreclosure and are backed up at the toll booth. This manager who moved 4300 foreclosures last year, who has been in the business for decades feels that a day will come when the wheel barrel dumps and all of the properties hit the market at one time. This would hypothetically drop the market by 25% overnight. I am not so sure that I agree with his wheel barrel dumping theory, but I do trust his inventory assessment.
Asset Manager for 182 banking institutions: Before 2013, there will be 25 million more foreclosures. This inventory is in the projected shadows should unemployment stay high and asset values depreciate. Basically, if we stay in the same slumped economy with little improvement, we are going to get body slammed. Let’s multiply each home by 2 people. That is 50 million people without homes who can’t buy again for 3-7 years depending on the product they choose to purchase. That is almost 17 times the amount of people living today in Orange County, which has more people than the entire state of Ohio.
I don’t believe, even though it is hard not to based on credibility that the shadow inventory will dump like a wheel barrel. I feel the banks will continue to balance their check books absorbing liability at a sustainable rate and selling it at a sustainable rate. This will keep the market pretty flat to mild softening for several years (maybe 5?).
The given here is inventory. The unknown variables are: Government rescue programs, jobs and interest rates.
My advice is that you buy when you find a house you really love and can afford. It may not be the bottom, but it will be a great deal. In the long haul you will make money. Watch the 10 year bond which is an inverse of the stock market. The 10 year bond parallels interest rates. If the stock market gets bullish, the 10 year bond rates go up. If the 10 year goes up so do rates. Last week’s bullish stock market hiked interest rates in the short term. The fact is, even if you wait for lower prices, which is likely, you may miss interest rates. Overall, rates will affect your affordability index and home price index options the most. If you can lock up a 4% give or take on a 30 year fixed today, do it. You will make money. You will only know when the market hits bottom when you are looking back.
Share on FacebookHello clients and Friends:
September 6, 2011 by Orange County Real Estate and Long Beach Real Estate · Leave a Comment
Hello clients and Friends:
Team Sackin hopes you had a memorable Labor Day weekend filled with your favorite activities & traditions.
As you may know, Labor Day pays tribute to the contributions and achievements of American workers. It was created by the labor movement in the late 19th century and became a federal holiday in 1894.
As I began my own ‘day off from Labor’ this morning, I was curious and wanted to know more, wondering EXACTLY how this holiday originated. I found lots of insightful reading. I’d like to share if you are interested. Enclosed is a link to the full article from History.com, ( the folks behind the History channel). I found this one to be the most complete plus it had great related stories and video too!
Since Labor Day often also symbolizes the end of Summer & start of Fall, Philip, Brian and I express our best to you and your families as we enter the new season.
Labor Day at HB State Beach click to see all CA. State Beaches
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Huntington Beach Pier, site of Nike US Surf Open
August 6, 2011 by Orange County Real Estate and Long Beach Real Estate · Leave a Comment
Downtown Huntington Beach, next to the Huntington Beach pier is the site of Nike US Surf Open. Check the best surfers this weekend with live entertainment and freebies. For more information watch video and view link.
Official page for NIKE US SURF OPEN 2011
Check out what’s for sale near the Huntington Beach pier.
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(all data current as of
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$359,000 : 16867 Bluewater Ln, Huntington Beach1 bed, 1 full bath
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$364,900 : 16400 Saybrook Ln 20, Huntington Beach3 beds, 2 full baths
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$369,900 : 4682 Warner AVE B304, Huntington Beach3 beds, 2 full baths
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$399,000 : 17622 Misty Lane, Huntington Beach3 beds, 2 full, 1 part baths
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$399,000 : 5022 McFadden, Huntington Beach3 beds, 2 full baths
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$399,900 : 16400 Saybrook Ln 120, Huntington Beach3 beds, 1 full, 1 part baths
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$415,400 : 16400 Saybrook Ln 23, Huntington Beach3 beds, 2 full baths
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$419,000 : 4912 Searidge Cir, Huntington Beach2 beds, 1 full, 2 part baths
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$450,000 : 5412 Edinger Ave, Huntington Beach3 beds, 2 full baths
Listing information deemed reliable but not guaranteed. Read full disclaimer.
Share on FacebookWhy the Real Estate Market Should be Stabilizing
July 21, 2011 by Orange County Real Estate and Long Beach Real Estate · Leave a Comment
Let’s first talk about why most people feel that the market is NOT stabilizing. The number one reason is people don’t have jobs and therefore cannot consume. Second, the media keeps reporting the doom and gloom of more foreclosures and short sales. Simple economics, supply will continue to out way demand. So with increased inventory and no people to buy, the market should continue to trend downward, right?
Those of us who are actually in the market 24/7 should be reporting more often. Not those who report the same news about Casey Anthony. So allow me to dissect what the experts in the industry are seeing, that includes us.
The Wall Street Journal recently posted an article that home sales in Orange County CA actually saw an increase in the median home price over the past few months. This is not the compelling aspect of the artice. Anyone worth their salt will respond correspodingly “It’s the summer selling season skewing the numbers and median has very little statistical weight.” I would agree with that statement. What is more interesting is the report that 25% of purchases were made by investors. The fact is, large corporations are doing well and the private sector is making money, they just don’t need any additional employees to run their businesses. Those with cash are getting richer and are eating up these Real Estate and Financing opportunities (4.5% Fixed 30 year loans with 0 points or underwriting fees). So much so, that they boosted the median numbers. I know what you are thinking “Separation of classes” absolutely.
Now let’s address the second and probably the most significant element determining the stabilization of Real Estate, inventory. What everyone is saying “The banks are holding all of this inventory and they are going to let it all go.” Why would they do that? All of the big banks are showing earnings and have learned to balance their books with distressed property as a liability. I can only speculate, but it seems that the bank chooses based on how much they can absorb monthly which properties to foreclose on. This is why some people hang out for 2 years without making payments and others get tagged in 3 months. It appears to be random, but I cannot confirm that. It is a simple system of checks and balances. It is working! Banks are profitable. Furthermore, and this I can confirm, banks have developed much more efficient systems for the short sale and foreclosure process. Banks are sending out multiple appraisals in some cases to determine the values of short sales before they approve them. Meaning, the smoking deals and huge losses by banks are eroding almost completely. Short sales used to take 6 months, we just closed 3 in under 90 days. Foreclosures are flying off the shelves as they come on. Everyone knows that a foreclosure is going to be fairly easy to negotiate, the banks set the price off the bat! Pay this get this! It is simple, fast and there are some good deals as a result of the risk taken for “As Is” no disclosure.
The wrap up is that there are buyers and the banks have become efficient liability balancing, short sale and foreclosure processing machines. Before you say “The banks are going to foreclose in 2012 in drones” ask yourself. Why would the banks disrupt their check books?
These two elements, supply and demand and lack of buyers has destabilized our market for the past 4 years. The changes in the market that I have addressed in this blog are what lead me to believe that the market is stabilizing.
Your Thoughts?
Share on FacebookCustomer FAQ, “Im a buyer and I need help with understanding loan fees and closing costs?
July 14, 2011 by Orange County Real Estate and Long Beach Real Estate · Leave a Comment
Scott explains that it is our policy to sit down in person, with the lender and go over all closing costs for your home purchase transaction. Is this a customer service that would add value to your Real Estate experience?
Share on FacebookCEO Robert Toll of Toll Brothers, his insights on where the market is.
July 7, 2011 by Orange County Real Estate and Long Beach Real Estate · Leave a Comment
While in Palm Springs for the Fourth of July, I read a great interview with CEO Robert Toll of Toll Brothers,
one of the country’s biggest home builders. His insights on where the market is ..and is going are very insightful. Here’s my take on this for our local market, watch the video…………………
What are you doing Fourth of July weekend, HB and FV residents?
June 30, 2011 by Orange County Real Estate and Long Beach Real Estate · Leave a Comment
If you’re staying home, why not start your Holiday weekend off with a FREE docent led tour of our own natural gem by the sea? I am talking about the beautiful, restored Bolsa Chica Wetlands Ecological Preserve. Did you know that this preserve is an historical treasure trove of geographical info, more bird and wildlife species than I can mention, and gorgeous views of water, sea and sky.
According to the Amigos de Bolsa Chica, a volunteer group who is partially responsible for the bounty of land and wildlife we see at the wetlands: “The Bolsa Chica includes over 1,200 acres of undeveloped wetlands, lowlands and lower mesa. This area is rich with history beginning with the Native Americans who lived atop the mesas to the oil production in the twentieth century. The Bolsa Chica is also an important stop for migratory birds along the Pacific Flyway, including some endangered species and threatened species.” Click here to check out the “First Saturday” Walk schedule.
http://www.amigosdebolsachica.org/tours.htm
They have many walks available that showcase the diversity of this amazing natural wonderland that’s right in Huntington Beach’s own backyard!
Hey, if Saturday is already booked, you are in luck! The Bolsa Chica Land Trust conducts tours of their own every third Sunday.
Check them out: http://www.bolsachicalandtrust.org/tour.html
If you do nothing else, take a few minutes to read about these two organizations that have helped restore and preserve a piece of our local history. We are lucky to have this open space in an increasing urban environment.
It is pretty amazing, and I’m grateful I can enjoy this beauty every day on my way to and from the office.
Like the Wetlands? How about checking out some of the homes that back up to this natural beauty. Click here to see what the ”Bolsa Landmark” neighborhood is like:
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(all data current as of
5/18/2012)
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$1,149,000 : 6041 Judwick Cir, Huntington Beach4 beds, 2 full, 1 part baths
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$949,000 : 5882 N MIDWAY DRIVE, Huntington Beach4 beds, 3 full baths
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$764,900 : 18111 S Lakepoint Ln, Huntington Beach4 beds, 1 full, 2 part baths
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$829,900 : 6011 Kenwick Cir, Huntington Beach4 beds, 2 full, 1 part baths
Listing information deemed reliable but not guaranteed. Read full disclaimer.
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