Linsey Planeta - Your 'OC Real Estate Voice'

My last post had quite a heated debate on Active Rain (which I dig BTW). How do you educate clients about when to buy?

I did some research for a client tonight. The findings are important to share with readers here. If you are a serious buyer or seller, this information is telling. Please stick with the tedium of the stats because the story it tells is meaningful.

My particular buyer is looking in Mission Viejo between $450,000 and $550,000. He wants a single family residence. With that criteria, I hit the MLS looking for a picture of where we really are. He's not alone. His buyer profile is one of at least 3 buyers that I'm working with at the moment in South Orange County.

As many of you know, I'm the last person to jump on the 'Hurry Buy Now' band wagon. However, if you are in this price range in South Orange County - this is speaking to you. What did I find?

There are 40 Active single family residences currently listed in Mission Viejo between $450,000 and $550,000. How do those breakdown?

• 19 are short sales (BTW - refer to my posts on shorts sales to understand the challenges with these sales)
• 4 Bank Owned
• 17 are supposedly equity sellers. Upon further reading of the agent remarks in the listings 2 more of these are actually short sales and 1 is bank owned.

So, what does this leave us? 14 Traditional, Equity Sellers? I should add 5 of these 14 are 55+ communities. There are really only 9 equity sellers in my client's search criteria out of 40.

It then becomes important to analyze the recent resale activity. I pulled sales from the last 30 days with the same criteria - Mission Viejo, single family residences, $450 to $550. Here are the stats:

• 21 Sales
• 6 Bank Owned
• 3 Short Sales
• 13 Traditional Sales (one 55+ community sale)

No rocket scientist needed here. This is out of balance.

If you are not a numbers person, it's okay but just try to stick with me here - 52.5% of the Active Inventory are short sales, but last month only 14.3% of the sales were short sales.

12.5% of the Active Inventory is bank owned, but last month 28.6% of the sales were bank owned.

And most telling, 22.5% of the Active Inventory are equity sellers (not to include senior communities), yet the sales from the last 30 days indicate that 51.1% were traditional sellers.

I'm actually not a numbers guru. I love reading. I love writing. But, I also love logic and this should speak volumes to you. The sellers that don't have to sell have chosen not to; they've heard the message. Buyers that have been fence sitting or have had affordability problems, have found that it is indeed their time. Demand does exist. The inventory may actually be lacking. Do I hear - supply and demand?

Just to temper my enthusiasm, let's look the sales prices. No question - these are some other stats to consider from the last 30 days with that same criteria:

Short Sales - Sold at 98.29% of asking price with an average days on market of 143. The average price per square foot was $253.09.

Bank Owned - Sold at 101.55% of asking price with an average of 16 days on the market. The average price per square foot was $263.06.

Traditional Sellers -Sold at 97.38% of asking price with an average of 34 days on the market. The average price per square foot was $323.09.

I will suspect that the knee jerk response is that traditional sellers are overpriced on a per square foot basis - but look at the demand. There's a reason these are selling. They are in superior condition (sometimes by a lot) and you can actually submit an offer to a live body, that has real emotion, and a desire to sell. What's the value in that?

So, if you think it's a buyers' market, think carefully and ask for the stats. You need more than a cursory overview. You need to drill down into the makeup of what it means to get a clear picture of the marketplace.

This is one picture of the OC marketplace, but from what I'm seeing, in certain pricepoints, it's not isolated. Thoughts? I'm open to our interpretation of these numbers. Let's hear it.

Most of this originally posted on OC Real Estate Voice.

Every now and then you see a headline touting the increase in sales in Orange County. Less than a week ago, Orange County Register's Jon Lanser posted '1-in-3 O.C. ZIPs See Homebuying Doubling or Better'. I love good news but it's important to drill deep into what these statistics are telling us.

Price point is really one of the big players in this discussion. The movement that is taking place is great if you are a seller in the below $500,000 market. With the limitations in lending and lower pool of qualified buyers, sellers in the upper price points have to be prepared for a longer selling cycle.

When we talk about Absorption Rate, we are talking about how many months it would take for the existing buying demand to consume the total inventory if no other homes were to come on the market. I recently calculated the Absorption Rates for some of South Orange County's cities, but to get the truest picture of each marketplace, I thought it was critical to break it down by price point.

This is how it looks:

Notice, for example, Laguna Niguel. It will take 14.42 months to exhaust the supply of inventory with current demand in the over $750 price range, yet homes in Laguna Niguel under $500,000 will only take 5.7 months to absorb. It's important to note that Laguna Niguel has one of the lower rates of distressed property rates in the county and have a much higher median sales price overall.

Steven Thomas of Altera Real Estate, reported in his Orange County Housing Report that 69.4% of all the Lake Forest inventory are distressed sales. Buyers and investors alike are targeting the distressed part of the market as opportunities. Part of the reason that Lake Forest is enjoying one of the lowest overall absorption rates in our market is the high percentage of distress inventory and the related demand.

If you are considering buying, or selling your home, and want to know more about what these numbers might mean to you, don't hesitate to let me know. No arm twisting here - just happy to answer questions.

*These numbers are from SoCal MLS figures in the first week of November and
the closed sales in the proceeding 30 days.

Originally posted at OC Real Estate Voice.

Maybe.

I remember in the early stages of the boom, there were whispers of a 'bubble'. By 2005, it had turned into a dull roar. In 2006, economists were shouting at us while many of us were turning a deaf ear, convinced that this market was an exception. I know - not you - just the rest of us. :)

Today, I'm hearing whispers of a different sort. There are signs (albeit very small ones) that there is a light at the end of the tunnel. The Wall Street Journal reported today that a CNBC 'talking head' announced that "Real estate - it's back." This remark came on the heels of the Dow Jones Equity All REIT Index's rally which ended up 12% today.

These are interesting indicators to be watching, but I'm not suggesting we throw a party by any stretch. The REIT index is still down 42% for the year. And as WSJ's author Aton Troianovski points out, the commercial market is exceptionally slow. Local Orange County is not an exception and commercial brokers are checking their ring tones to make sure phones are still operational (I know - been there - 4th quarter '07).

Today there are whispers of a bottom, small rays of sun poking through the dark clouds. It will be interesting to see how long it will take for these whispers to result in a true shift.

A Ladera Ranch Orthodontist is thinking outside the box and I dig it! Dr. Harold Barkate is hosting a candy buy back program from 3 to 5 p.m. on Monday, November 3rd. For every pound of candy a child brings in, Dr. Barkate will pay $1.

Go to his Ladera Ranch office at 800 Corporate Drive, Suite #260. The candy will be donated to military families stationed at Camp Pendleton. Hopefully it will be spread out so we aren't destroying their teeth either.

Not sure if I'll get my kids to bite off on the idea but I'm going to give it a shot. I may have to do my annual pilfering of their stash before we take it in though. :)

Originally Posted on OC Real Estate Voice

Making your home accessible and easy to show is something I've mentioned before, but it bears repeating. Why? Let me share what it's like to set up showings through the eyes of an agent.

Monday, I planned to show some 4 properties in Irvine, California to some clients that were coming in from out of town. On Sunday, I mapped out my showings, put together the schedule, and sat down to call the four sellers to let them know I wanted to show their home. Easy, right? More than plenty of notice, right? It turned out to be far from easy.

Let me break it down for you:

Property 1: The showing instructions read, 'Appointment Only' and '24 Hour Notice Required'. Huh? This was an owner occupied home. 24 hour notice? What the heck for? There were two small dogs on the property when we got there so clearly, it wasn't to get them out. I had to call the listing agent, who had to call her seller, reach them, get approval and then call me back. Thank God I actually had 24 hour notice from my buyer.

Property 2: The showing instructions read, 'Restricted Access - Call the Listing Agent'. Inconvenient, but okay, I can do that. I left a message Sunday afternoon and again Sunday night. I left another message Monday morning. No response. Okay, now I'm started to sweat.

The remarks to agents in the listing on Property 2 say, 'Easy to Show. Call (name) at (number) for showing instructions.' I will share a secret with you... that 'Easy to Show' line is almost always the kiss of death and actually means 'Damn Near Impossible to Show'.

I call the listing office to plea my case. They assure me that they will release an all points bulletin in an effort to find Mr. 'Easy to Show'. About two hours before my Irvine tour, I get the call - 'No problem. Go ahead and go. They'll leave out the lockbox.' Wow. Thanks.

Property 3: Scheduling this showing was a gift to soothe my nerves. The showing instructions simply read, 'Call First' and listed the homeowners number. Cake.

Property 4 (and my favorite): The showing instructions read, 'Appointment Only. Call First,' and additionally, 'Please call first and make an appointment at (number). Seller to control lockbox.'

Not as easy as Property 3, but no problem. I call Sunday - twice, and again Monday morning. Sweating. This line is ringing with no answer and no opportunity to leave a message. The Real Estate Gods are testing me.

Finally, three hours before my tour, someone answers. The person I'm trying to reach is out of the country! When I tell her I want to show this agent's listing she says, "Call back in 20 minutes." WHAT?! I call back twenty minutes later and someone else answers and says that, "Yes, go ahead and show it." Good grief!

Obviously, this was stressful and time consuming for me. In this instance I had a client specifically looking for these 4 homes. Would I have tried this diligently to show these homes otherwise? Certainly not. There are so many options on the market that are significantly easier to get into.

And why all these hurdles? Don't you want a buyer to see your home? This is not the time or place to play the dating game of 'hard to get'. I only want to sell your home. I'm not a circus animal and I won't always jump through hoops of fire to show your home. Come on people, just let me in!

Originally posted on www.WhyDidntMyHomeSell.com