Rosario Rodriguez, J.D., South Orange County Realtor

In the last few years you may have seen price declines in your neighborhood, depending on exactly when you bought and where you live. For many of you, the tax assessor has reassessed the value of your home downward to reflect your home's decline in value. When that happens, your property tax bill decreases since much of the bill is based on the property value.

If the assessor hasn't decreased your value, or you think it isn't accurate, you can submit an Orange County property tax appeal for reassessment. There are two types of appeals, formal and informal. Formal appeals are to dispute the value listed on your property tax bill and generally are done in the summertime. Now is the time for informal appeals.

To file an informal appeal, go to the Office of the Assessor's page on "Declines in Market Value". Click on "Request for Informal Assessment Review" to get the form. If you have any trouble with getting the form, ask me and I will get you a pdf copy. Ask a real estate agent you trust to get you comparables as of January 1 on your home to fill in that section. The deadline is April 30.

Call or write if you have any questions.

Orange County housing inventory very low, prices down slightly

According to Dataquick, Orange County housing prices were down about 2% year over year (flat month over month) in December 2011. This is nothing new. We have been advising our clients about the relatively flat prices for a while now. Sales are down about 6% year over year (increased month over month) in December 2011. On its face, this seems more significant, but sales are in the same general range they have been in since the recession, so this is also nothing too new.

Here's the shocker: Inventory is down over 30% year over year. That's right, not 3%, 30% percent. I did a little digging and found that inventory is down about 50% since August 2010. In less than 18 months, half the homes on the market are gone. Vanished. The reason is even stranger. There weren't a flood of sales, there was no mass auction on the courthouse steps. Instead, every month last year fewer sellers decided to sell than the year before. In fact, going through our database we couldn't find a single year in the last 10 years (as far back as it goes) that had fewer sellers decide to sell their homes.

What does it all mean? Why is this happening? And what does it mean for buyers and sellers in 2012? Here are some of our educated guesses.

Fewer equity sellers lead to a fast moving equity market

According to CoreLogic, the vast majority (over 80%) of homeowners in Orange County have equity in their homes. Yet, most people are not willing to sell into the current market unless they "have to". Finances, job relocation, family changes all lead to sellers listing their homes, but few and far between are the homeowners who sell to upgrade because they just want something better.

In 2012, this could mean less competition for equity sellers. It could also mean that buyers will need to act more quickly on equity homes than they have in the past. Because of the overall state of the economy, however, we have tempered expectations on this leading to significant price increases.

Short sales continue to be a significant part of the market

The number of foreclosures in Orange County has decreased to the point that when we show homes for buyers, we don't spend a lot of time talking about preparing to buy one. However, we do spend a good deal of time talking about short sales. Pending sales are up dramatically as buyers have been willing to buy the short sales that are on the market and as sellers and banks use best practices to get short sales accepted in a reasonable amount of time. We had a lot more successes in 2011 with short sales on both the buying and listing sides than ever before.

In 2012, I would expect short sales to continue to come on and off the market. With fewer short sales on the market, the trend of multiple offers on every short sale will probably continue. Again, our expectations on price are tempered by bigger issues like consumer confidence, unemployment, etc.

Appraisal issues become more prevalent

Assuming sellers don't come on the market in droves to see if they can get a high price in a low inventory market, appraisal issues will be a challenge for both equity and short sales. Fewer homes, means fewer sales, which makes appraising a property less predictable. Buyers and sellers both will need help navigating the tricky waters of not only negotiating a price that is acceptable, but negotiating appraisals that don't come in at value, because of a lack of comparables.

Call us if you need help leveraging the current market for your home buying or selling this year.

President Obama on Friday signed a bill increasing the FHA loan limits nationally. Here in Orange County that will raise the FHA loan limit to $729,750. This will help those buyers buying or considering buying a home with a loan from $625,000 to $729,750. Prior to this bill, no federally backed loans greater than $625,000 were available. Almost all loans of that size were considered "jumbo" loans with higher interest rates and tougher qualifying standards. A few things to consider with the new law:

1. It only applies to FHA loans. It does not apply to Fannie Mae or Freddie Mac loans. FHA loans tend to have lower interest rates, but some high costs associated with them.

2. Last time the limits were set at $729,750, we thought they were indefinitely set there, but with Fannie Mae, Freddie Mac, and FHA all struggling, the loan limits were lowered earlier this year. The lesson: take advantage of the increase in loan limits now while they are available; they may be gone tomorrow.

3. It can take a couple of weeks for guidelines on increased loan limits to work their way through lenders' systems, so don't be discouraged if you don't see low rates posted yet on $700,000 loans for lenders. It's coming.

If you have questions on how this might affect your decision to buy or sell, call me and I'll walk you through your options.

UCLA Anderson Forecast on Orange County Housing

The UCLA Anderson Forecast was released last week, projecting the economy in Orange County, California, and the Nation. Here are some of the Orange County housing highlights with my comments on the numbers:

UCLA forecasts a 34.6% increase in Orange County home prices over the next 6 years.

Another way to look at this is a 34% increase in 6 years is about the same as 5% appreciation per year. Michael Bluejay has a great post on the relationship of appreciation to inflation and all of the caveats to consider in looking at housing appreciation. Suffice it to say that 5% doesn't look good if you were hoping for the kind of short term large gains we saw in the early 2000s, but it looks great when you consider what it has looked like in the past few years.

UCLA forecasts new construction, which recently had risen 60%, will continue to rise through 2015 when it will be about 5 times its low in 2009. There will be a shift to condos and apartments versus houses.

I have shown a lot of new construction homes this year and anecdotally it seems like they are selling. Especially developments in highly desirable areas of Irvine (Woodbury, Laguna Altura, etc.). It also does seem like condos/townhomes, and everyone's favorite, detached condos, form the majority of homes in the new construction market.

UCLA does not think there will be a flood of foreclosures, continuing the recent trend of slowly declining foreclosures.

"Foreclosures" can mean a lot of different things. From my perspective, "short sales", which are not necessarily "foreclosures" are holding down prices right now. Homes that have actually been "foreclosed" on and are now owned by the bank not only don't make up a significant part of the market, but they sell for more than short sales. Right now, about 30% of the Orange County market is made up of short sales and about 5% is bank owned. UCLA is probably right that there won't be a flood of foreclosures, but what will really make a significant difference in the Orange County market is a faster short sale process. Once short sales are off the books, the path will be clearer to higher prices and more sales.

Aliso Viejo walk score

In L.A. Story, Steve Martin put it best when he said: "Walk? A walk in L.A.?" Let's face it, many of us don't buy a home in Southern California, let alone in Aliso Viejo because it is walkable. We buy here because of the sunshine, jobs, schools, low rates of crime, and did we mention the sunshine?

Be that as it may, many Aliso Viejo home buyers care about how walkable their home is. Often those clients try to live close to the Aliso Viejo Town Center. One such client recently picked one home over another in part because it had a much higher walkable score from walkscore.com. That got me wondering about what the Aliso Viejo walk score is and how that compares to other South Orange County homes. Here's a comparison of average scores for some South Orange County cities (out of 100):

Aliso Viejo: 52

Laguna Niguel: 53

Laguna Hills: 59

Laguna Beach: 53

Mission Viejo: 53

Lake Forest: 53

Irvine: 60

Generally a score a score 50-69 is an area that is "somewhat walkable." While on average not comparable to more walkable cities like Chicago where I grew up (78) or here in California, San Francisco (88), these are fairly typical numbers of suburban California areas. More importantly, if you want a more walkable home, according to walkscore.com, the top 10% of homes in each of the above towns has a walkscore of 80% or better, which would mean most errands could be done by foot.

The Aliso Viejo walk score is an indicator that, as with the rest of Orange County, you need a car here to survive. However, even within the 'burbs, you can places where your feet can be your primary transportation.