Linsey Planeta - Your 'OC Real Estate Voice'

Remember those long car rides that seemed to last forever? I used to pester my poor parents with the tired question, "Are we there yet?" As a mother to 3 kids, 10 and under, I'm now on the receiving end of that tired question.

This Orange County real estate market is one of those long car rides where we are all asking the same question about the bottom of this market - "Are we there yet?" I even have moments where I want to say in my whiniest voice, "How much longer, Mom?"

Did you ever notice that your parents were intentionally vague? There were no specifics. Now, as a parent, I understand why. The answer can vary depending on traffic, bathroom breaks, if we stop to eat, and of course the potential need to pull over to break up a fight.

So if you are wondering how much longer - I'm right there with you. But it depends. It depends on how the foreclosure market is impacted by government intervention. Will it help or just delay the the healing of this market? How available is money? Will the strict lending guidelines continue?

But if you keep your eyes peeled, you may see a few roadsigns that will give you some clues. Watch the percentages of distressed inventory versus traditional sellers. Watch the lending trends. Watch the average days on market. Track absorption rates. Notice the listing price and the final sale price. All of these are indicators of where we are on this road trip.

So are we almost there? The answer just might be, yes.

Originally posted on OC Real Estate Voice

One of the things that I constantly talk about on OC Voice, is the need to be an educated buyer or seller. My goal is always to provide information that helps to educate my readers about what trends we are seeing - without putting you to sleep. Heck - I still want you to keep reading and I know statistics are boring.

So today - I had an interesting conversation with an agent regarding her philosophy about showing buyers property. I'll be honest, I'm a little shocked by the philosophy. She shared with me that she shows her clients homes that are up to $50,000 outside their budget because of course, 'in this market, there is room to negotiate.' Okay, fair enough. This isn't the strongest market, but I'm not biting. Let me explain why....

• In the price range her clients are in, there is very little inventory. In addition, if they are hoping to avoid a short sale purchase, and want a bank owned home or an equity seller, that accounts for approximately less than half of what is on the market. There is competition for the quality product.
• The closed sales in the area are selling at 98.65% of list price. In this instance, the buyer's agent is hoping to negotiate 17% off list price. Based on local numbers, I think it's fair to say that it might not be a realistic method of searching.
• Average time on market in this area, at this price range, is 60 days. This is a far cry from a buyer's market. However, going into the higher price points - then it becomes more of buyer advantage.
• This strategy has nothing to do with value. What if the home was listed 10% below current market value? Isn't that already a good deal? What if the home were $50,000 overpriced? That certainly isn't the good deal that they are hoping for.
• Lastly, why show a buyer a home that is out of their price range? Long term, this isn't fun for anyone.

The key is to understand the details of the market you are buying or selling in - not just an overview. All of Orange County is not the same. Each city is different and each price range is different. It is critical to understand the market within the larger market.

Again, the message is to be educated about your market. Don't let mass media, your friends, or even your agent be your sole source in your decision making process. Let the numbers speak to you because without fail, they're telling you a story.

Originally posted on OC Real Estate Voice

The Orange County Register has recently posted a series of predictions about the future of the real estate market in Orange County - Eyeball 2009. The predictions are from local experts, economists, and Realtors. If you're interested in the varies perspectives - take a look at the various links provided below.

I'll share with you the one thing I know for sure: No one knows for sure. These may be well educated folks and some I place more value on than others. At the end of the day, if you are considering buying or selling in this market - educate yourself, analyze your personal goals, assess your personal circumstances in relation to your objectives and make a decision based on that. Nothing I say, or anyone else, ought to be the sole reason that you do, or do not, decide to buy a new home (or sell one).

Try not to be part of the 'herd' mentality. That kind of thinking is part of the reason so many homeowners are in trouble today. It's tough being a buyer today. Who wants to stand around the water cooler at work and explain purchasing real estate in this economy? Tough, but if it works for your circumstances, are there great opportunities? You bet. It's really about being able educate yourself and make the decision that works for you.

That being said - let's hear from the various Orange County voices:

• Outgoing President of Orange County's Association of Realtors -Dick Gaylord
• Managing Director of Pimco - Scott Simon
• 2009's President of Orange County's Association of Realtors - Mary Jane Cambria
• The Founder of The Concord Group - a real estate consulting firm - Richard Gollis
• Economist & Dean of Mihaylo College of Business & Economics at Cal State Fullerton - Anil Puri
• Housing rights advocate at Fair Housing Council of Orange County - David Levy
• CEO of Buchanan Street Partners, a commercial real estate management firm - Robert Bruswick
• Former UCLA economist, now co-founder of Beacon Economics - Christopher Thornburg
• Advertising executive, president and CEO of Most Agency - John Most
• President of Prudential California Realty - Rich Cosner
• CEO of investment adviser Spectrum Asset Manager - Ryan Kelly
• Owner of JLE Property Management - Jerry L'Ecuyer
• Division President for California homebuilder Fieldstone - David Greminger
• UC Irvine's Merage School of Business' Director for Real Estate - Kerry Vandell
• President of Altera Real Estate - Steven Thomas
• Lender and Owner of Mortgage Accelerator Plus - Norm Bour
• Mission Viejo Broker and forecaster - Gary Watts

Always open to, and interested in, your feedback.

Originally posted on OC Real Estate Voice

I love variations in weather and believe it or not, 75 degrees and sunny, day-in-and-day-out bores me. But Santa Ana winds are never a welcome sight.

Last night, my youngest woke with a fever. We knew she had come down with something yesterday during the Charger/Steeler game (yeah Steelers! - but that's another post), but last night she awoke with nearly a 103 degree fever. Poor thing. It's awful to be sick like that, and to hear that wind howling with such force was scary. We were all up for a while listening to those winds.

What are Santa Ana Winds? We usually experience them in Orange County from October to March. Some folks believe they're due to desert heat, but in actuality it's the converse. It's due to cold temperatures in the desert - thus the fall, winter season. It's an odd thing. They are usually warm, even hot, and very dry. It sounds as if it will be freezing outside and I had to explain to my 10 year old that his thick jacket would be wasted on a day like this. He refused to believe me until he stepped out into the hot wind.

We are always leary of the risks posed by the Santa Ana winds - potted plants overturned, falling trees, and the worst - fires. The impact of these winds can be felt from Los Angeles, through Orange County, and down to San Diego. The first Santa Ana Wind can be an odd, even unnerving experience, for someone moving into the area.

Today, my daughter stayed home. I'm monitoring her fever and listening to the howling wind - waiting for both to subside.

Originally Posted on OC Real Estate Voice.

When you are looking to buy a home in Orange County, or anywhere else for that matter, it is critical to drill down into the numbers for the sector of the market that you are looking at. Orange County numbers are wonderful benchmarks to know, but our market is made up also of submarkets within the OC. It's important to understand Absorption Rates, Average Days on Market, price per square foot, sale price to list price, etc.

For every buyer I'm working with, I try to do an analysis that really tells the story of the market they are hoping to buy in. This allows them to have a realistic picture of the market and compete effectively for the home they hope to buy.

If you are a seller, these numbers will be important to you too. Even if you are not a buyer or seller right now, hang in there. This may seem dry, but I'll try to make it fun. There is a story told by the numbers every time! :)

Today, I did some research for an investor I am working with in Rancho Santa Margarita. She is looking for a condo around $250,000 that has at least 2 bedrooms and 1 car garage. I looked at the numbers for Rancho Santa Margarita between $200,000 and $300,000, with a minimum of 2 bedrooms and 1 garage - Active, In Escrow, and Closed Sales going 90 days back. (I recently did this analysis for a Mission Viejo buyer and only included sales over the previous 30 days, but in this instance that would have been swayed too heavily by the holidays). Here's what I found for this submarket:

Active Inventory - 47 Listings

• 34 Short Sales or 72%
• 9 Bank Owned or 19%
• 4 Traditional Sellers or 9%

In Escrow - 22 Listings

• 9 Short Sales or 41%
• 9 Bank Owned or 41%
• 4 Traditional Sellers or 19%

Closed Sales in the Last 90 Days - 27 Listings

• 10 Short Sales or 37%
• 10 Bank Owned or 37%
• 8 Traditional Sellers or 30%

Analysis of Closed Sales

• Short Sales: Average Days on Market - 96, Sale Price to List 102.17%, $256.47 price per sq. ft.
• Bank Owned: Average Days on Market - 35, Sale Price to List 98.89%, $248.17 price per sq. ft.
• Traditional Sellers: Average Days on Market - 33 (there was one outlier here that if removed would have made it 14), Sale Price to List Price 96.43%, $263.35 price per sq. ft.

Hey wake up! This is fun - really!

So what does all this tell us?

I'm a little surprised to see that some short sales are getting done in this price range. We still have a large swing in the percentage of active inventory versus closed sales within the short sale market, but maybe the banks are starting to pull it together. I'll be watching.

It's also still clear that the traditional seller is able to secure a slightly higher price. The swing was much greater in the Mission Viejo analysis I did earlier, but it is still there. Why? I think buyers still love to have full disclosure from a real seller. They also tend to be properties in slightly better condition. And the best part - you submit an offer, and a real live person actually responds in sometimes as soon as 24 hours! Wow!

Still the best 'deal' going is the bank owned home. Just beware, is it still a 'deal' if you have to put in a lot of money after the close? Maybe yes, maybe no. Each property will require individual analysis to make sure that one is really getting a good value for the home.

Hope this helps my investor - and you. If you ever are in need of a little Microscope on the Market - just let me know. Just make sure you've had your coffee first.

Originally posted on OC Real Estate Voice