Linsey Planeta - Your 'OC Real Estate Voice'

Steven Thomas, President of Altera Real Estate recently released his latest Orange County Housing Report and it is definitely worth taking the time to review if you are curious about how the 2008 housing market finished and the possible outlook for 2009. It's a very comprehensive summary.

I would encourage you to review the charts for Active Listings and Pending Sales. I love the way that it visually lays out the '05, '06, '07, and '08 numbers for comparison.

One thing worth noting is that current inventory is way down - 11,842 homes off the March peak of 15,617. Homeowners have definitely taken to heart that selling will not be easy and pricing is critical. If they don't have to sell, they generally are opting not to.

The biggest facet of our current market is the distressed inventory. As I've continued to repeat here, one of the indicators that a recovery is on the horizon is declining numbers in the distressed sector of the market. Right now, Thomas states that 46% of all the current inventory are distressed sales; 76% of those are short sales and 24% are foreclosures.

So where is the demand? Believe it or not, it is a strong seller's market when it comes to foreclosures and they are selling at 101% of asking price.

Short sales continue to be a frustrating facet of the market because they continue to stay active on the market while a bank approves the offers they have pending. This creates negative and misleading numbers when one analyzes the active inventory. These offers can take weeks, even months, for the bank to approve. The sale to list price on short sales is running at 97%.

If you have questions about how these numbers impact your buying or selling plans, I'm happy to discuss it with you.

Even in a tough market for sellers, there are still those that must sell due to personal circumstances. Whether it's a divorce, job relocation, or financial strain - there are still homeowners with equity, that find themselves in the position of having to sell and in this market, that can pose some challenges.

I come across articles all day on the Internet and share with you those that I find most interesting or those that in which I feel compelled to share my 2 cents. This article on foreclosures and pricing from early December on CNN Money, was sent to me by a past client that is selling a home out of the area. She is also a buyer in Orange County and sees the significant impact that foreclosure pricing has on her view of traditional, or equity, sellers.

It creates an interesting dynamic for her - she is both a buyer and a seller in this market. That dual role allows her a tremendous clarity in the ability to position her listing. She knows that she must price it to compete with the distress inventory in her marketplace.

As a buyer, she is also seeing that the although distressed inventory in our marketplace is not always in great condition, the best deals are often in that sector of the market.

As stated by CNN Money, "In California, the median price for an REO listing was $259,000 during the week of November 10, 23% lower than the non-REOs on the market according to Trulia.com."

With REO's in the state priced 23% lower than the traditional seller, it definitely puts the price pressure on equity sellers. You must price to compete.

That being said, I have noticed (and discussed here) that traditional sellers do seem to get a higher price per square foot ultimately. The possible reasons? Full disclosure from the seller about past problems, often superior condition, less competition with other buyers because many investors target foreclosures, and the ability to have a timely response to an offer as opposed to the lengthy one in short sale circumstances.

Bottom line - look at your competition. Are there distressed properties in your sector of the market? You may have a bit of an edge as an equity seller, but buyers are looking for a good deal. If you want to sell, you must be perceived as a good deal with pricing that is competitive.

Originally posted at OC Real Estate Voice

This morning I came across an article on CNNMoney.com. They predicted the top 10 worst housing market for 2009 across the country and California had the unfortunate distinction of having 8 out of 10 spots.

Ranked as number 6 for the worst real estate markets in the country was the Santa Ana - Anaheim area. The Median sales price for 2008 was stated at $532,140. The prediction for '09 was a 23.7% decline. The prediction for 2010 was a 3.5% decline. If these predictions are accurate, that would leave us with the median sales price around $391,812 at the end of 2010.

Couple things to note from this report - it's important again to remember the definition of median sales price as I discussed in my previous post. We still have a tremendous amount of distress inventory to consume and much of it is in the under $750,000 price points.

These bank owned properties and short sales that will make up a tremendous amount of our 2009 activity will result in a lower median sales price. I am not saying that prices won't decline, but again, it's important to look at the meaning of these numbers in the right context.

The other question that I find confusing is what is meant by Santa Ana - Anaheim area. Did they look at the numbers from those two metro areas? They don't appear to be referring to Orange County as a whole and Santa Ana has been in the top of the worst performing zip codes in the county so that I'm not sure we can say these are county wide predictions. The news is not good nonetheless.

Other California cities that were facing some unpleasant predictions include Los Angeles (ranked as the worst real estate market in the country), Stockton, Riverside, Sacramento, Fresno, San Diego and Bakersfield.

The only two cities that were out of the Golden State were Miami - Miami Beach and Washington, D.C.

It doesn't happen often but when it does, it's breathtaking. Saddleback Mountain is the backdrop for South Orange County. If you live in Mission Viejo or Rancho Santa Margarita, the views are spectacular. Here is a rare glimpse of Saddleback with snow sent to me this morning from a wonderful past client. The photos were taken from the view in their Mission Viejo backyard.

In the latest Zippy's Report, Orange County Register's Jonathon Lansner's ranking of Orange County zip codes for housing performance, showed that the hardest hit zip codes for the 3rd quarter were some of Orange County's most affluent zip codes.

Included in the worst performing areas were Newport Coast, Dana Point, Coto de Caza (part of the 92679 zip), and San Clement. Some of the biggest improvements were areas that have recently had some of the worst performing zip codes including, Mission Viejo, Anaheim, Santa Ana, Costa Mesa.

This may be a case of 'Trickle Up' economics.