Orange County Real Estate

 

May 14, 2018

5 Ways Tax Reform Has Impacted the 2018 Housing Market

Housing+Tax+Reform+2018

 

Starting late last year, some predicted that the 2018 tax changes would cripple the housing market. Headlines warned of the potential for double-digit price depreciation and suggested that buyer demand could drop like a rock. There was even sentiment that homeownership could lose its coveted status as a major component of the American Dream. 

Now that the first quarter numbers are in, we can begin to decipher the actual that impact tax reform has had on the real estate market.

1. Has tax reform killed off home buyer demand? The answer is “NO.”

According to the Showing Time Index which “tracks the average number of buyer showings on active residential properties on a monthly basis” and is a “highly reliable leading indicator of current and future demand trends,” buyer demand has increased each month over the last three months and is HIGHER than it was for the same months last year. Buyer demand is not down. It is up.

2. Have the tax changes affected America’s belief in real estate as a long-term investment? The answer is “NO.”

Two weeks ago, Gallup released its annual survey which asks Americans which asset they believed to be the best long-term investment. The survey revealed:

“More Americans name real estate over several other vehicles for growing wealth as the best long-term investment for the fifth year in a row. Just over a third cite real estate for this, while roughly a quarter name stocks or mutual funds.” 

The survey also showed that the percentage of Americans who believe real estate is the best long-term investment was unchanged from a year ago.

3. Has the homeownership rate been negatively impacted by the tax changes? The answer is “NO.”

Not only did the homeownership rate not crash, it increased when compared to the first quarter of last year according to data released by the Census Bureau.

In her latest Z Report,” Ivy Zelman explains that tax reform didn’t hurt the homeownership rate, but instead, enhanced it:

“We have been of the opinion that homeownership is most highly correlated with income and the net effect of tax reform would be a positive, rather than negative catalyst for the homeownership rate. While still in the early innings of tax changes, this has proven to be the case.”

4. Has the upper-end market been crushed by new State and Local Taxes (SALT) limitations? The answer is “NO.”

In the National Association of Realtors latest Existing Home Sales Report it was revealed that:

  • Sales between $500,000 and $750,000 were up 4.5% year-over-year
  • Sales between $750,000 and $1M were up 15.1% year-over-year
  • Sales over $1M were up 17.3% year-over-year

5. Will the reforms in the tax code cause home prices to tumble over the next twelve months? The answer is “NO.”

According to CoreLogic’s latest Home Price Insights Report, home prices will appreciate in each of the 50 states over the next twelve months. Appreciation is projected to be anywhere from 1.9% to 10.3% with the national average being 4.7%.

Bottom Line

The doomsday scenarios that some predicted based on tax reform fears seem to have already blown over based on the early housing industry numbers being reported.

March 22, 2018

#YorbaDays | Join Us For a Great Day Of Fun!

Yorba Days - 2018

Feb. 6, 2018

When Only The Best Will Do!

When Only The Best Will Do!

Feb. 1, 2018

Bidding Wars Abound… How Long Will This Trend Continue?

Real Estate Bidding Wars

 

Just like with any product or service, the law of supply and demand impacts home prices. Any time that there is less supply than the market demands, prices increase.

In many areas of the country, the supply of homes for sale in the starter and trade-up home markets is so low that bidding wars have ensued, and the busy spring-buying season is just around the corner.

CoreLogic recently conducted an analysis on national home prices at the time of sale for their January 2018 MarketPulse Report and found that a third of homes sold for at least list price.

“The share selling above list price was almost three times the trough in January 2008 and represented more than one-fifth of total sales.”

Many markets in the western part of the country and around major cities are experiencing higher shares of homes selling above list price.

“San Francisco had the largest share of homes—76 percent—that sold for at least the list price, and Seattle and Los Angeles followed with 63 and 51 percent, respectively. Miami had the lowest share—16 percent—of homes selling at or above the list price.”

Increased demand during the spring and summer months, the traditionally busier seasons for real estate, will no doubt influence how many homes continue to sell over list price.

This should not be seen by sellers as permission to overprice their homes, though. Buyers are becoming more and more educated, especially those who have been searching for their dream homes for a while now while waiting for new inventory to come to market.

Realtor.com gives this advice:

“Aim to price your property at or just slightly below the going rate. Today’s buyers are highly informed, so if they sense they’re getting a deal, they’re likely to bid up a property that’s slightly underpriced, especially in areas with low inventory.”

Bottom Line

Without a large wave of new listings coming to market, buyers will continue competing with each other for the homes that are available. If you are thinking of selling your home, now may be the time to do so before more competition comes this spring. Let’s get together to determine the demand for your house in our area.

Jan. 12, 2018

The Impact Staging Your Home Has on Sales Price [INFOGRAPHIC]

The Impact Staging Your Home Has on Sales Price [INFOGRAPHIC]

Some Highlights:

  • The National Association of Realtors surveyed their members & released the findings of their Annual Profile of Home Staging.
  • 50% of staged homes saw a 1-10% increase in dollar value offers from buyers.
  • 77% of buyer’s agents said staging made it easier for buyers to visualize the home as their own.
  • The top rooms to stage in order to attract more buyers are the living room, master bedroom, kitchen, and dining room.

 

Jan. 2, 2018

How Rising Prices Will Help You Build Family Wealth in 2018

How Rising Prices Will Help You Build Family Wealth in 2018

 

Over the next five years, home prices are expected to appreciate on average by 3.35% per year and to grow by 24.34% cumulatively, according to Pulsenomics’ most recent Home Price Expectation Survey.

So, what does this mean for homeowners and their equity position?

As an example, let’s assume a young couple purchases and closes on a $250,000 home this month (January). If we only look at the projected increase in the price of that home, how much equity will they earn over the next 5 years?

 

How Rising Prices Will Help You Build Family Wealth in 2018

Since the experts predict that home prices will increase by 4.2% in 2018, the young homeowners will have gained $10,500 in equity in just one year.

Over a five-year period, their equity will increase by nearly $45,000! This figure does not even take into account their monthly principal mortgage payments. In many cases, home equity is one of the largest portions of a family’s overall net worth.

Bottom Line

Not only is homeownership something to be proud of, but it also offers you and your family the ability to build equity you can borrow against in the future. If you are ready and willing to buy, find out if you are able to today!

Dec. 24, 2017

Market Update | Orange County Housing | December 2017

Orange County's Hot Housing Market 2017

Hot, Hot, Hot, Housing Market!

It is the Middle of December, a time that year in and year out proves to be the slowest time of the year with regard to Demand for Housing and New Listings being places on the market (for sale). Yet, this year the market in December is still HOT!

  • The active inventory (Homes Listed for Sale) has decreased by 300 homes in the last couple of weeks and now totals a mere 4,123. Expect the inventory to continue to drop over the last couple of weeks of 2017. Last year at this time there were 4,789 Homes for Sale, 766 more than today.
  • Today, there are 30% fewer homes on the market below the $500,000 price point than there were at this same time last year. And overall demand is down by 25%. Quite Simply, there are fewer and fewer Homes and Condo's available below the $500,000 price point. This price range, in general, is slowly disappearing.
  •  Demand, the number of pending sales over the same time the prior month, plunged by 218 over the past two weeks. Down 10% and now totals 1,864. Currently, the average Pending Price in Orange County, CA is $853,151.
  • The average Listing Price for all of Orange County, CA remained at $1,800.000, This number is currently high due to the variety of Luxury Homes currently sitting on the market and not moving as quickly as the home for sale in the lower price ranges.
  • When it comes to Homes priced under $750,000, the market is very Hot, with an expected Market Time of under 39 days. This price range accounts for 38% of the current active listings in Orange County CA. and 63% of overall demand.
  • As for homes priced between $750k and $1 Million, the expected Market Time is just 58 Days, a Hot seller's market (anything under 60 days). This price range currently accounts for 17% of active inventory and 19% of overall demand.
  • For homes priced between $1,000,000 and $1,250,000, the expected market time is under 80 Days - A slight seller's market.
  • For upper-end Luxury Homes priced between $1,250,000 and $1,500,000, the expected market time has actually decreased from 129 days to 118 days. With regard to the homes priced between $1,500,000 and $2,000,000, the expected market time has increased from 169 days to 207 days. Homes in the $2,000,000 to $4,000,000 range can expect an increased market time of 227 days and the ultra-luxury market above $4,000,000 are now looking at an average market time of 527 days.
  • Overall, the current expected Market Time for all Homes in all Price Ranges in Orange County, CA is around 64 days, a tepid seller's market.

All of the information above is current as of December 17th, 2017. We will bring you another update in a couple of weeks :)

 

Original Post: OCsearch.com

 

 

 

Dec. 23, 2017

House Prices Are NOT Headed For Another Crash!

Housing Crash 2018?

As home values continue to rise at levels greater than historic norms, many are concerned we might be headed for another crash like the one we experienced a decade ago. The simple fact is the Lenient Lending Standards of the previous decade (which created false demand for housing) no longer exist. But, what about Home Prices?

Are prices currently appreciating at the same rate as they were just prior to the crash of 2006-2008? Freddie Mac just released the numbers below - let's take a look:

 

Housing Price Appreciation 2017

The levels of appreciation we have seen over the last 4 years aren’t anywhere near the levels that were reached in the 4 years prior to last decade’s crash.

We must also acknowledge, to a degree, the current rise in prices is the market trying to catch up after a Housing Market crash that dramatically reduced prices over a period of 5 years.

At the End of the Day

 

Prices are rising at levels greater than historic norms. However, we are not at the levels that led to the housing bubble and burst.

Dec. 23, 2017

Need A Bigger House?

Time For A Bigger House? from Brian Packham on Vimeo.

Dec. 5, 2017

Why is There So Much Paperwork Needed to Obtain a Mortgage?

Why is There So Much Paperwork Needed to Obtain a Mortgage?

 

Why is there so much paperwork required by the Lenders for a residential mortgage loan application when purchasing a home today? I feel like they need to know absolutely "everything" about me and even then they need 3 separate sources to independently validate every single fact I provided them on the application.

As a buyer, my friends and family are telling me the process was 100 times easier when they bought their home 20 years ago.

Well, there are two very good reasons why the mortgage loan process is much more difficult now than in past decades.

1) After the U.S economy crashed in 2008, the government put in place new guidelines demanding that the banks prove beyond any doubt that you are indeed able to pay the Mortgage you are applying for.

In the years preceding the housing crises, more than a few people "qualified" for a mortgage that in reality, they could never pay back. This ultimately led to millions of Homeowners losing their home. The government aspires to make sure this never happens again.

2) The simple fact is, Banks do not want to be in the Real Estate business.

Over the last several years (since the crash), Banks have been forced to take on the huge task of liquidating millions of homes that ended up being foreclosed on and also negotiating millions more through the short-sale process. Just like the government, banks do not want more foreclosures. For that simple reason, they need to double (or even triple) check every detail on the application.

However, there is some good news to be found in this situation.

The housing crises that forced the banks to be extremely diligent about their paperwork requirements also allowed you to get a very low-interest-rate in the 4% range!

Those friends and family you know that purchased homes 10 or 20 years ago did, in fact, experience a simpler mortgage application process. But, they also paid a higher interest rate - the average rates for a 30 year fixed mortgage in the 1990's was 8.12% and in the 2000's was 6.29%.

Today, if you went to your bank and said you were willing to pay 7% instead of around 4%, they would likely bend over backward to make even today's more complex process as easy as possible for you.

At the end of the day...

Instead of focusing on the more complex paperwork process, let's be grateful we are able to purchase a home at historically low interest rates.

 

Original Post - OCsearch.com