Cindy Lamb ~ Homes under $1 Million in OC

This is what I've been blogging about. Here's a snippet from my company's latest Market Time Report,

"At the beginning of the year, demand, a snapshot of the last 30 days of escrow activity, was at 944 escrows. Today, demand has increased by an additional 1,139 escrows to 2,083."

That is... UP BY 121%

What of prices, however? Still low! I think we will have a couple more months before prices start following demand back up. It will depend on how the recently-released new FHA loan limits affect demand for properties in different price ranges. Right now, REOs (bank-owned foreclosures) still lead the market. Buyers are already seeing the best-priced properties getting snatched from their grasp by other buyers. This is not the time to step over quarters to pick up pennies. Be ready to act on a property you know is the right home for the right price, or someone else will.

I think the back half of this year will be a significant improvement upon the front half. Demand may peak late this year, around Fall, as people realize they must act while they can (as of this writing, the raised FHA loan limits are only set to remain so until year's end).

The smart buyer would be looking for deals now, before there is too much competition to get the best price.

It's finally official. FHA loan limits have temporarily been raised to over $700,000. For the first time in a very long time, regular Californians can buy a regular home with a regular (non-jumbo) loan.

And prices are down, way down. In some cases, bringing the cost of renting and the cost of buying fantastically close to eachother. Case in point: a 3-bedroom apartment in or near Mission Viejo, according to those available on apartmentguide.com, will run you upwards of $2300. Compare that to a particular condo development I am aware of, whose values have plummeted (due to a high incidence of foreclosures, putting downward pressure on pricing), to the point where you can get a 3 bedroom, 1 1/2 bath townhome with 1-car garage for as little as $250,000. At a 7% interest rate, the principal and interest on a 30-year loan for that amount will run you about $1663/mo. Add in around $300 for the HOA and account for property taxes, and you're still running right around the cost of renting - BEFORE you account for the enormous tax breaks that come with being a home owner! Oh, and by the way... the national average interest rate (according to MSN.com) is 6.01%, not 7%.

Is this the case everywhere? No. But it CAN be done. Even in nice areas like Mission Viejo.

The point you should really take away from this story is this: this is a great time to get into a home.

And like all good times, it's not going to last forever. The FHA limits are only set to remain at their new levels for the duration of 2008. Prices, while they may yet drop a bit more, are likely to stabilize soon, as action picks up in the market (and action IS picking up in the market... more buyers are taking advantage of current pricing to get into a home). Already, many were calling for an unusual buyer activity pattern this year, with fall being predicted as the year's high point (usually market activity peaks around May, this year some are predicting October). I believe, with the FHA loans only set to go through 08, as we get closer to the end of the year, more people will realize that they need to get in and take advantage of it while they can. Prices will not keep dropping in such an environment, so the smart buyers are getting into the market now or in the next couple months to minimize competition for the best-priced homes.

Nobody knows what 2009 will bring, except a new tax year. This brings me to my final argument for buying in 2008 "while the iron's hot"... you can get write-offs on this year's taxes. Even if you wait until the very last minute to decide that this is the year you buy a home, try to close before the year ends in order to take advantage of the write-off. Talk to your accountant to get an accurate picture of just how significant that write-off can be.

It's always nice when our government wants to hear what we think before spending our money. We should take advantage of the opportunity and get involved.

OCTA (Orange County Transportation Authority) is looking at six alternatives for major projects addressing our transportation needs. In the interest of gaining public feedback on the recommendations, OCTA is hosting 3 "open house" meetings, the first being tomorrow, March 5th.

That open house will take place from 5:30 to 7:30 p.m. at the Laguna Hills Community Center Heritage Room, 25555 Alicia Parkway, Laguna Hills.

A second open house will be held at the same time the following day (March 6) at Lake Forest City Hall, 25550 Commercecentre Drive.

Th third open house will be held on March 11, at R.H. Dana Elementary School at 24242 La Cresta Drive in Dana Point, which will also be held from 5:30 to 7:30 p.m.

For more information about the South Orange County Major Investment Study, call 888-647-4762 or to complete an online survey, visit www.octa.net/socmis.

Ahh...

The verdant hillsides, 70 degree temperatures, buyers calling me up and wanting to see homes... it must be spring!

However, even I am surprised with the suddenness of the uptick in activity. In the last 5 days I have been contacted by 3 of my buyers, showed several homes to one, nearly wrote an offer only to have the desired property go into escrow, scheduled showings for another client for next weekend, and had a third client contact me with serious questions about a property they want to see.

Now sellers, don't go getting all excited. Yes, it's spring and there's more activity, but be advised that there will also be an increase in inventory (your competition!) as well. This is still a very good time to stay put and only sell your home if you absolutely have to. Only the best priced homes, in the best condition and location, are going to attract the attention of buyers. However, if you keep your home in top showing form at all times, AND you are aggressive with your pricing, you may just see multiple offer situations.

Buyers.... what does this mean for you? Simply, it's time to get off the fence! We're only two weeks into the year and already I've had a buyer lose out on a home he really liked because he didn't get in ahead of another buyer. Yes, there are a lot of homes to choose from, but there are more buyers actively looking now, too. Remember, if it looks like a good deal to you, it looks like a good deal to everyone else as well! Sleepytime is over. As we continue on into the spring, buyer activity is going to continue to increase, so NOW is the time to get in there and find your home, before someone else does! It also means you need to be prepared to act once you find that "right" home for you. So get on the phone with your lender TODAY, and get yourself pre-approved (not merely pre-qualified, which means bupkis under current lending conditions). That way you know exactly how much home you can afford and have a lender standing by ready to issue you a pre-approval letter to accompany any offer you may write. If you don't talk to a lender before you find the home of your dreams, that delay may cost you the chance at that home.

Don't wait to go see those homes that interest you, every day you wait is a day that someone else could walk in and write an offer.