Zen Ziejewski

For the first 4 weeks of January 2008 Home sales are up 18% in Orange County compared to the previous 4 weeks in December. Unfortunately they are down 37% compared to the first 4 weeks of January in 2007.

As a professional working this market last January, it was extremely busy January of 2007. It was one our busiest months here in Orange County. Buyers were writing a lot of offers and the year started out with a bang. Then the Sub Prime meltdown began in February of 2007 and by the end of March our market really turned down from there in Orange County. Irvine, CA was the capital of Sub Prime lending and the wave of companies began to close and lay off workers.

Based upon the current sales and inventory of 15,245 it would take 12.51 months for buyers to gobble up all homes for sale at the current pace vs. 15 months four weeks earlier. This is still way above the 6.16 months a year ago. The latest inventory count (15,245) is 28% higher than a year ago as of today.

For more great market insight and industry news visit my website at http://www.zensellshomes.com/or my blog at www.zensellshomes.com/blog.asp

Laguna Niguel active listings of existing homes as of January 26, 2008 is at 467. This is down 20% from the peak of last year of 586 which was at the end of September 2007 but it is also up 9.1% from last January. The trend will be for this number to grow into the end of the summer. With the number of home sales trending down due to market conditions it will be interesting to see if we will exceed the last years peek of 586. In comparison to January of 2007, we only had 428 homes on the market a year ago.

Seller's need to be realistic and must realize that they must have their homes in top condition, priced strategically and hire an experienced Realtor with and agressive marketing plan to get their home sold in today's market.

For more great Orange County market insight and industry news visit Laguna Niguel Real Estate, or view the Orange County Market Trends Newsletter at Orange County Real Estate.

Listen to Zen's Laguna Niguel Real Estate Podcast available 24/7.

The Federal Reserve's surprise cut of a key interest rate on Tuesday may lead to lower mortgage rates, but it won't end the liquidity freeze that is keeping many folks from getting a loan, experts said.

For sure, lending rates are down.

The average rate on a 30-year fixed conforming loan fell to its lowest in more than a year in the weeks before the Fed's cut Tuesday. These rates often follow the 10-year bond. And the bond market has long expected the Fed to cut rates at its meeting next week. The cuts just came a little early.

Mortgage brokers quoted rates as low as 5 to 5.25 percent in Orange County on Tuesday for a 30-year fixed mortgage with a one-point fee. But that's only for conforming loans, which are up to $417,000 and can be sold to government-sponsored companies such as Fannie Mae, the largest U.S. funder of home loans. However, because of high home prices in the county many shoppers get jumbo loans, which are above $417,000. Brokers quoted jumbo rates ranging from 6.125 to 6.750 percent on Tuesday.

The lower rates are good for home shoppers in Orange County.

"It's kind of a perfect storm for buyers," said Steve Thomas, president of RE/MAX Real Estate Servicesin Aliso Viejo who sees more homes becoming affordable amid reduced home prices, lots of inventory and the lower rates.

Thomas said cash-strapped homeowners will see immediate decreases in payments for credit card bills and for home-equity-line-of-credit mortgages, which follow Fed cuts. Those decreases will make it easier to make house payments, reducing the risk of foreclosure for some owners, he said.

Other experts say homeowners with good credit who bought after rates began rising in 2004 likely can refinance now into a cheaper mortgage.

Alan Pott, president of lender American Home Equity Corp.in Santa Ana, said he sees another half-point cut next week to combat a liquidity crisis.

Pott said he was offering rates as low as 5.25 percent Tuesday for a 30-year fixed conforming loan with a one-point fee. But that's for someone with good credit and at least 5 percent equity in their home or an equivalent down payment on a purchase.

Homeowners with little equity or poor credit will have a hard time refinancing at all, Pott said.

He expects foreclosures to stay elevated.

Last month in Orange County banks took 644 homes from delinquent borrowers, the second highest monthly foreclosure total in DataQuick's database, which began in 1988.

Some experts say nationwide foreclosures will keep rising as low introductory rates end over the next two or three years on millions of mortgages. Borrowers will be overwhelmed by higher payments and unable to qualify for a new loan, they say.

Al Hensling, head of brokerage United American Mortgagein Irvine, said government efforts to stem the foreclosure tide, such as by pushing lenders to modify loans of struggling owners, have been too slow.

"Although the Fed lowering is dramatic it may be too late in the game to mend the loss of confidence the U.S. consumer has in the economy," Hensling said.

For more great Orange County market insight and industry news visit Laguna Niguel Real Estate or view the Orange County Market Trends at Orange County Real Estate.

Listen to Zen's Laguna Niguel Real Estate Podcast available 24/7.

Borrowers looking to take advantage of a lower 30-year fixed-rate mortgage may finally have their chance as Orange County's rates have dropped to the lowest level since last january.

The average this past week for a 30-year fixed-rate mortgage with a 1 point fee was 5.867 percent, down from 6.015 percent a week ago, Newspaper Chart Services reported. That's the lowest since Jan 11, 2007, when the average 30-year fixed-rate hit 5.854 percent.

Jumbo rates on 30-year dixed loans (over $417,000) with a 1-point fee were also down. Jumbos averaged 6.788 percent this past week compared iwht 6.919 percent a week age. but they still have a way to go to get down to the 6.181 percent average jumbo rate of a year ago.

One-year adjustable rate mortgages also dipped but are no longer the same bargain as fixed-rate loans. The average local ARM rate was 5.032 percent, down from 5.069 percent

For those who are interested in purchasing a home, there are great loans and rates out there. I can help get you the best loan possible to buy the right home for your family.

For more great Orange County market insight and industry news visit Laguna Niguel Real Estate or view the Orange County Market Trends at Orange County Real Estate.

Listen to Zen's Laguna Niguel Real Estate Podcast available 24/7.

According to the OC register more than $147 million in due taxes were not paid by the December 10th, 2007 due date. That is 6.44% of the total $2.28 Billion due versus a year ago the delinquent amount was 4.72% for a total of $99 Million past due. Tax Collector Chriss Street says this is an obvious sign "how stressed the real estate market is."

Other signs of homeowners in trouble: mortgage default notices sent out by lenders to tardy mortgage borrowers and actual foreclosures are also on the rise in Orange County. DataQuick has reported that defaults were up 128% in 2007's first 11 months vs. the previous year; foreclosures soared 568%.

This is just another sign that the housing market in Orange County has further to correct which will create more opportunities for buyers and investors in 2008.

For more great Orange County market insight and industry news visit Laguna Niguel Real Estate or view the Orange County Market Trends at Orange County Real Estate.

Listen to Zen's Laguna Niguel Real Estate Podcast available 24/7.