Phillips Ranch, CA

Market remains very strong for the month of December. According to Dataquick, sales volume was up 31% in 12/09 comparing to 12/08 in Los Angeles County. The meian price was up 5.9% from $320,000 to $339,000.

First-time buyers and investors continued to dominate the buy side of the market last month. FHA loans, a popular choice among first-time buyers, accounted for 39.6 percent of all home purchase in December.

Absentee buyers – mostly investors and some second-home purchasers – bought 19.2 percent of the homes sold in December. Buyers who appeared to have paid all cash accounted for 24.9 percent of December sales, based on an analysis of public records.

Below are the charts of number of home sold in the past 3 years in the neighboring cities.

Inventory level remains very low in December 2009. Below is a chart showing the inventory level in Chino, Chino Hills, Diamond Bar, Walnut and Phillips Ranch.

In Chino and Chino Hills, house supply are both less than one month. Despite of the higher tax rate with Mellos Roose and HOA, Chino and Chino Hills continue to attract large number of buyers who desire newer homes at a deep discounted price. Some good deals in Chino are only 50% of it's 2006 value making it one of the hottest cities to invest.

Inventory levels in Diamond Bar, Walnut and Phillips Ranch are all below one and half months supply. I am also seeing a fast price rebound in those cities.

Fall is typically the slowest time for real estate market. Unlike the past, the low inventory level shows a continue strong demand for housing.

Number of houses sold last month in June 2009 went up dramatically and the buying frenzy continues in July.

Why is it important to hire a agent who is familiar with the area you are buying or selling instead of an out of the area agent who is a trusted friend? The answer may be very simple.

1. Convenience

Is it easier for a local agent to drive 5 to 10 minute or out of the area one to drive 30 to 60 minute to the house for showing? It is more practical to hire a local agent who is nearby due to the showing convenience.

2. Area Knowledge

On top of that, the local agent who specializes in the area knows the neighborhood by heart. They are familiar with the rating of the schools, the crime rate of the area, and where the parks and shopping malls are. Those local knowledge may require some research if the agent is out the area and could be totally unaware of.

3. Pricing Knowledge

A local agent who monitors the real estate market in the area is familiar with the pricing of each home sold on a daily basis. The agent understands the type of buyer for each type of house from experience and can price the house accurately.

There was one bank owned home in Diamond Bar for sale that is located in a extremely busy main street in June 2009. It is difficult to drive in and out of the house due to the street traffic. The same house was sold frequently every few years. It was normally priced about 10% below the market price in the past due to it's functional obsolescence.

It was sold 8 days after it was listed at regular market price. Buyers normally believe bank owned homes are good deals and especially if the value of the property checked out with appraisal site such as Zillow.com. This kind of situation could be easily prevented if buyer is assisted by a competent local agent.

With a good local agent working for you, it can help prevent selling your house too low or buying too high. Therefore, it is to your best interest to hire an agent who is familiar with the area you are buying or selling.

Below is a chart showing the number of houses sold in Phillips Ranch from 2006 to 2009. In April 2009, 7 properties were sold and 19 properties went into escrow. Of the 7 properties sold, 1 is regular sale at bargain price, 2 short sales and 4 bank owned properties.

17 properties went into escrow in March and only 7 were sold in April showing the level of difficulty to close escrow successfully. Unless the property is an outrageous deal like the bank owned or short sales selling 10% to 40% below market, buyers are not that desperate to get the deal through in today's buyer's market.

Transactions could easily fall apart in escrow due to buyer's inability to secure a loan or buyers' change of mind. Unless the escrow is closed successfully, sellers need to psychologically prepared for the worst scenario to put the house back on the market if buyer back out from the deal.

The sales volume is almost double this April comparing to last April in 2008. We are continue seeing market price rebounding rapidly for about 10% to 15% since January.

Since the interest rate is still below 5% for 30 year fix rate loan, it is great time for buyers to secure good deal at low interest rate.