Linsey Planeta - Your 'OC Real Estate Voice'

Today's Microscope on the Market focuses on the Laguna Niguel real estate market.

Homes Under $500,000

In the under $500,000 market, Laguna Niguel does not vary from any of the cities I focused on in South Orange County with a whopping 63.9% of the active properties in a short sale situation.

Couple of things to note - it would appear that there is significant movement with 71 properties in escrow. Sadly, 38 of them are short sales and those can sit in escrow for 60 to 180 days and that can skew the perception of significant movement. Notice only 18 have actually closed escrow in the last 30 days.

I want to also point out the very low number of bank owned inventory. Pay close attention to this number in the coming months. It will increase again based on the end of the moratorium on Notice of Defaults. Filings are back up to levels prior to the moratorium so watch for this number to increase.

Also of note, despite the large supply of short sales, buyers still look to bank owned homes and equity sellers for their purchases by a significant degree in relation to the supply.

Homes $500,001 to $750,000

Again, despite the large number of short sales, buyers love bank owned inventory and it doesn't last on the market and their is still a significant demand for reasonable equity sellers.

Homes Over $750,001

As I noted in Coto last week, there is just very little in the upper price points that is moving. At this rate of consumption (12 homes a month), we have a 12.25 month supply of homes in this price range. If nothing else were to list in this price range, it would take us over a year to consume the existing inventory with current buyer demand.

The good news in Laguna Niguel - there is very little bank owned inventory and very few short sale listings in this price range. That can be good news for values in the coming year. I'm not suggesting any appreciation guys - but even with slow sales, these folks may have the financial strength to hang on.

*Closed Sales are properties that have closed within the last 30 days from the time of this writing.

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Originally posted on OC Real Estate Voice.

Today's Microscope on the Market focuses on Coto de Caza.

If you aren't from Orange County - yes this is the home of the infamous Real Housewives of Orange County, although I can't say that the friends that I have living in Coto are anything like the woman as depicted on that show. It's really a beautiful gated community with homes in a wide variety of prices ranges. But I won't kid you - some of the highest priced homes in Orange County are behind these gates.

I toyed with varying the breakdown that I usually do (Under $500k, $500 to $750, and over $750), but I've decided for a number of reasons to leave them. More later....

Homes Under $500,000

Although clearly, there is not a lot in Coto in the under $500 market, the buying behavior is similar to other parts of the county - all 5 that are in escrow and the 1 closed sale are all either bank owned properties or short sales.

Homes $500,001 to $750,000

This was one of the rare instances where current equity sellers in escrow actually exceeded the active listings that were equity sellers. I'm not ready to ready too much into it - we are only talking about 6 sellers.

Homes Over $750,001

Given the wide range of values in the upper end of the market in Coto, I think it's important to take note of just a few things in the over $750,000 segment:

• The highest priced home currently in escrow is $1,099,000.
• The highest sale in the last 30 days is $1.6 million.
• The highest sale in the last 6 months per SocalMLS was $2.9 million.
• The only sale over $2.9 in the last 12 months was the record sale on Violeta for $19.5 million. There have been no sales other sales over $2.9.
• In the preceding 12 months there were 7 sales over $2.9 million ranging from $3.2 million to as high as $6,643,750. (Where did that buyer profile go?)
• Currently, there are 24 homes over $2.9 in Coto de Caza - 16% of the active inventory.

While the residents of Coto de Caza may be used to having a longer time on the market given the price point, there is no question that they are certainly feeling the shift in the market at the higher end as well.

We have seen the high end somewhat insulated until recently, but when you seen see such a significant drop in purchases at the highest end, you know that no one (not even the 'Real OC Housewives') is protected.

Today the microscope is on Mission Viejo. (BTW Dear Friends/Readers, if you find this number crunching downright boring - stay tuned. I always come back to the conversations that are much more fun than this! :)

So many of the media numbers focus on Orange County performance, but real estate performance can vary dramatically within our large county and particularly at various price points.

I'm going to spend the next several posts breaking down each of the South Orange County cities to give you an idea of local performance. Whether you are buying, selling, or just keeping an eye on your local market, these numbers tell the story.

Homes Under $500,000

I think one of the revealing things about the under $500,000 market is the fact that while nearly 68% of the active inventory are short sales, they make up less than 28% of the homes that closed in the last 30 days. Demand also is high for bank owned product but very little currently exists - only 6.2% in this price range.

Homes $500,000 to $750,000

Again, very little inventory in the bank owned market, but significant demand. There were very few sales in $500,000 to $750,000 market, as well as the $750,000 market as shown below.

It's important to note where the demand is: of the closed sales in the last 30 days 81.1% have been in the under $500,000 market.

Homes Over $750,001

Interestingly, there are significantly less short sales in this price point. The bad news - sales are slow and with current buying trends, it would take 12.25 months to exhaust the current inventory of homes if nothing else were to come on the market. However in the under $500,000 market, it would only take 4.12 months to exhaust all the inventory at the current rate of consumption.

As I have mentioned many times here, the short sale listings takes months to close and skew the numbers dramatically. With current inventory, it would only take 1.9 months to consume the equity seller and bank owned listings under $500,000. This sector of the market is no longer a buyers market.

The other day, I mentioned my astonishment at the Housing Affordability and Stimulus Plan and how it really leaves California (the most troubled housing markets in the country) out in the cold.

Then the announcement came regarding an $8,000 tax credit. Forgive me, but whoop-dee-do.

While this may be meaningful in the lower price points, we aren't having trouble there these days. Market time in the under 500,000 range is running around 4 months, and 30 days if it's not a short sale. Clearly, that is a strong seller's market.

Where do we need help? The higher price points are hit hard by tight financing, consumer confidence, and high inventory. And frankly, in those price points, the value of a home could potential fall $8,000 while you are in escrow.

Not to mention, first time buyers that qualify for the tax credit, aren't generally buying in that price point - so I guess that doesn't excite me much.

Most recently, plans were announced to cut mortgage deductions for those in the higher income tax bracket. Now, if you live in Orange County and you are making $208,850 or more, you are living a lifestyle that is a far cry from someone living in the Midwest on the same income.

Example: You may have purchased a home in 2006 that you are affording (barely because your bonus didn't come through this year), and you may have lost 30% of the value since you purchased. Since you are considered part of the 'wealthy' in the country, you are now on the verge of loosing some of your mortgage deduction. You know - the mortgage you've been trying to hand onto, even though you owe more than the house is worth....

I'm waiting for the part of this plan that impacts California. Maybe I wasn't clear last time I mentioned this - one that impacts California in a positive way.

Originally posted on OC Real Estate Voice.