Compliments of Zee Afjari 949.533.0449 Www.zeeafjari.com DRE#

8/14/2019 Compliments of Zee Afjari 949.533.0449 Www.zeeafjari.com DRE#

http://slidepdf.com/reader/full/compliments-of-zee-afjari-9495330449-wwwzeeafjaricom-dre 1/4

Complments o

Zee Ajar

949.533.0449

.zeeajar.com

DRE# 01219332

ORANGE COUNTYMARkET OvERviEw a monthly real estate report | February 2

What a dierence a year makes. As poor as the

ousing market was in January 2009, a year

aggressive subsidies and sluggish economic

mprovement has produced a tentative

ptimism in January 2010.

Te rst-time homebuyer tax credit was

xtended and revised in 2009 to include some

ualiying move-up buyers, and housing sales

n the conorming loan range began to soar inmost areas o the country by May 2009.

Te job losses that had helped to swell

istressed home inventories appeared to be

asing by year’s end. In December, the Labor

Department announced that initial job loss

laims were the lowest since September 2008.

nstead o subprime-driven oreclosures, the

rowth o distressed home inventories during

009 was ueled by job losses. According to

Realty rac, nearly 2.82 million homes, or one

n 45, were in some stage o oreclosure last year.

our states — Caliornia, Florida, Arizona

nd Illinois — accounted or more than 50

ercent o those homes, with more than 1.4

million properties there receiving a oreclosure

otication.

Despite escalating job losses, the number

home sales moved upward on improved

ordability, concentrated in the conorming

oan ranges. By the second hal o the year,

ousing inventories were declining rom aecessionary peak o over 11 months on hand

o a 6.5-month supply. (Housing supplies are

aid to be balanced at six months o inventory

n hand. Below that level constitutes a seller’s

market, characterized by less inventory, more

uyers, and rm-to-rising prices. A market

with over six months o inventory is considered

buyer’s market, with high inventory, ew

uyers, and alling prices.)

First-time homebuyers made up an astonishing

51% o the market. (A typical gure is

40%.) Tat’s good news, because rst-time

homebuyers drive housing markets, allowing

move-up buyers to act as well.

Ne Year, Ne Maret

Te only constant is change.

Te November 2009 sales pace o 6.09 millionunits sold was 44.1% higher than the 4.54

million units sold in November 2008 — but

that pace may not be sustainable without

continued low mortgage interest rates.

While interest rates still remain well below 6%,

the number o home sales is expected to continue

rising. However, prices still ace considerable

headwinds. Tere will be a continued supply

o inventory rom distressed homes, and

interest rates are expected to rise when the

government stops subsidizing mortgage-backedsecurities in Q1.

With mortgage-backed securities purchases

by the ederal government ending in February

2010 and homebuying tax credits ending in

April 2010, mortgage interest rates are already

beginning to rise above 5% or benchmark 30-

year, xed-rate conorming loans.

In view o those acts, First American

CoreLogic’s LoanPerormance Home Price

Index predicts that home prices in 45 o the

largest metros will all another 4.2% beore

showing a modest annual gain by October 2010

Te index calculates that prices will bottom in

March 2010.

The Calorna Outloo

Unlike the rest o the nation, Caliornia has a

large amount o pent-up demand rom buyers

who can now aord to buy a home. While

Caliornia will benet rom the tax credit,

housing sales here will also be supporte

historically low aordability.

Te Caliornia Association o REALO

First-time Buyer Housing Aordability I

measures the percentage o households

can aord an entry-level home in the

As o Q-3, 2009, the index was 64, me

64% o households can aord to buy an

level home using a one-year, adjustablemortgage as calculated by Freddie Mac.

gure is down rom 67 in Q-2, 2009.

Over 536,720 homes were sold in Nove

2009 across the state, up rom 512,84

November 2008. Te median price

$304,520 — up 5.8% rom $287,880 a

ago, and happily well above the C.A

October orecast.

Besides historically low aordability, why

the number o home sales improve so m

toward the end o the year? Other key aincluded record low interest rates (4

according to Freddie Mac or bench

xed-rate 30-year loans); high volume

distressed housing (one-third o inventory

in November 2009), which impacted

prices; and inventories alling below distr

levels (4.5 months on hand) in the conor

loan ranges.

Prices appear to have bottomed in many

and most price ranges below the conor

loan limit. Dataquick, which uses corecords, reported that 102 o 362 Cali

cities showed higher median prices

a year ago.

Te major concern going orward is a po

increase in oreclosure and short sale act

According to Realtyrac, 632,573 Cali

properties received a oreclosure ling in 2

an increase o nearly 21% over totals or 2

Te state did experience a our-month re

2009 The Year in Ree



ORANGE COUNTY

Orange County housng s n a heated seller’s maret*, th as lttle as 2.4 months o nentory onhand n homes prced under $1 mllon. in homes prced aboe $1 mllon, selecton s larger, butunque, upscale and luxury propertes aren’t expected to sell as qucly as more tradtonal homes.Beteen $2 mllon and $6 mllon, homes are aeragng 17.6 months o nentory, hch sn’t outo the ordnary n hgh-end homes. Homes prced aboe $6 mllon could be sad to be n a serousbuyer’s maret.

Detached homes stand alone and share no common alls th any other neghborng home. Attachedhomes share at least one common all th another home. The type o home onershp s determnedby hether or not t s a condomnum, tonhome, duplex, co-operate or other.

– a decline that ended in December 2009

when oreclosure activity shot up nearly

9% over November. However, oreclosure

activity in Q-3 was down 17% rom the

previous quarter, suggesting that the upturn

was a temporary spike.

Tat indicates that 2010 will not begin with

a dip in oreclosures. Mortgage insurer PMI

Group is braced or higher oreclosures,according to David Berson, chie economist.

Ater alling 13% in 2009, he says home

prices will all nationally another 5% in

2010, but will fatten by year end.

Freddie Mac Chie Economist Frank Nothat

is slightly more optimistic, predicting

that home prices will all 3% in 2010.

On a brighter note, he believes that mortgage

interest rates on benchmark conorming

loans (30-year, xed-rate) will remain

under 6%.

Advice or buyers: Buyers should be aware

that as long as incentives are in place, home

sales in the conorming loan ranges will be

brisk. Get pre-qualied with a reputable

lender like HomeServices Lending powered

by Wells Fargo, www.hslca.com.

Keep mortgage interest rates in perspective

with home prices. Te historical median or

mortgage interest rates is 9%, over three and

a hal points higher than it is today. Home

prices are almost where they were ten years

ago in some areas o Southern Caliornia.

I you pay a higher interest rate now

than last month, remember you’re way

ahead on price.

Advice or sellers: Even though the market

is much improved, now is not the time

to slack o on presentation. Te cleanest,

most up-to-date homes in the best condition

and repair will always sell or more

money than comparable homes with in less

perect shape.

In the conorming loan range, be prepared

or multiple oers, but don’t try to

anticipate the market by raising the asking

price beyond what can be supported by local market comparable sales. Remember,

lenders are cautious and may decline your

buyer’s loan i they can’t justiy your asking

price. Tat will waste precious marketing

time — and hurt your pricing i you end

up having to put your home back on the

market because your deal ell through.

*A balanced maret s delyaccepted as hang sx monthso nentory on hand th maret

condtons aorable to both buyersand sellers. A buyer’s maret scharacterzed by condtons suchas hgh nentores, allng prcesconcessons by sellers, andncentes among other ndcators

A seller’s maret has lo nentoreso homes or sale, escalatng prcesand een competton beteenbuyers, ncludng multple oers.



7.9

3.1

2.8

2.8

2.1

1.9

1.9

1.6

0.0 2.0 4.0 6.0 8.0 10.0

900K & Over

00K - $899K

00K - $799K

00K - $699K

00K - $599K

00K - $499K

00K - $399K

nder $300K

Detached Properties - Inventory in Months

Detached homes under $1 mllon are n a heated selle

maret, th so lttle nentory n some prce ranges th

homes are sellng aster than replacements can come

onto the maret.

11.9

6.9

6.2

4.6

3.5

2.6

2.1

2.3

0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0

00K & Over

0K - $899K

0K - $799K

0K - $699K

0K - $599K

0K - $499K

0K - $399K

nder $300K

Attached Properties - Inventory in Months

Attached homes are also n a seller’s maret, th

nentores buldng only n homes prced $900k and

aboe.

Detached Properties - Pricing Realty for Sellers, per square foot

$292

$317

$326

$320

$526

$0 $100 $200 $300 $400 $500 $600

PENDING SALE

HOLD DO NOT

SHOW

CLOSED SALE

BACKUP OFFERS

ACTIVE

, , . . .

Sellers should carefully consider

current buyer demand when pricingtheir home for sale. When list prices

per square foot of Backup and

Pending status properties are below

that of Active properties, sellers

should ask for pricing counsel from

their Agent.

Acte home prces per square oot much hgher than

o closed sales n detached propertes urther llustrate

seller’s maret n the conormng loan ranges. Hoee

detached home propertes are also more unque, hccan se lstng prces per square oot.

$228

$250

$260

$250

$333

$0 $100 $200 $300 $400

PENDING SALE

HOLD DO NOT

SHOW

CLOSED SALE

BACKUP OFFERS

ACTIVE

, , . . .

Sellers should carefully consider

current buyer demand when pricing

their home for sale. When list prices

per square foot of Backup and

Pending status properties are below

that of Active properties, sellersshould ask for pricing counsel from

their Agent.

Attached Properties - Pricing Realty for Sellers, per square foot

Detached home prces per square oot tend to be clos

to sold prces than those o detached homes. Loer

bacup oers and pendngs suggest greater olume n

aordable ranges.



©2009 Prudental Calorna Realty independently oned and operated. Objecte data used n ths report proded by Real Data Strateges. inc. Our company’s malng materals are prnted on paper certfed by the

Forest Steardshp Councl (FSC) as the product o sustanably managed orests. An ndependently oned and operated member o the Prudental Real Estate Aflates, inc. Ths s not ntended as a solctaton your property s currently lsted th another broer

1,194

1,057

927

1,1171,049

1,123

1,021984

1,101

996928945

0

300

600

900

1,200

1,500

0

300

600

900

1,200New ListingsListings Absorbed

New Listings 945 928 1101 996 984 1021 1123 1049 1117 1194 1057 927

Listings Absorbed 710 758 987 986 935 1117 1096 1098 1118 1127 1007 1074

2009/01 2009/02 2009/03 2009/04 2009/05 2009/06 2009/07 2009/08 2009/09 2009/10 2009/11 2009/12

Attached Properties - Monthly Listings Taken and Absorbed12 Months through December 2009

The rate o ne lstngs enterng the maret peaed n

October 2009. Snce then, ne lstngs hae declned,

and absorpton rates hae ncreased proportonately.

Ne attached home lstngs peaed n October 2009.

Snce then, the number o ne lstngs has declned

and absorpton rate mproed n December 2009 .

Detached Properties - Listings Sold by Calendar Quarter9 Quarters through December 31, 2009

.. . . .

$685$688$629$586$632$758 $679$825$935

4,573

2,184 2,279

4,079

4,077

4,392

3,300

4,060

4,621

$0

$200

$400

$600

$800

$1,000

2007/ 4 2008/1 2008/2 2008/3 2008/ 4 2009/ 1 2009/ 2 2009/ 3 2009/ 4

0

1,000

2,000

3,000

4,000

5,000

6,000Avg Sale Price List ings Sold Units

1-year avg. price trend: Up 8.5 %2-year avg. price trend: Down 26.7 %

1-year sales trend: Up 0.4 %2-year sales trend: Up 86.7 %

Average Sale Price (Thousands) Homes Sold

Detached Properties - Monthly Listings Taken and Absorbed12 Months through December 2009

1,611

1,379

1,905

1,7311,6881,794

1,6991,6071,586 1,5551,4591,536

0

500

1,000

1,500

2,000

2,500

0

500

1,000

1,500

2,000

New Listings Listings Absorbed

New Listings 153 6 1 459 15 86 155 5 1 607 16 99 17 94 168 8 1 731 19 05 161 1 1 379

Listings Absorbed 116 3 1 219 14 70 158 4 1 548 16 66 16 02 168 9 1 657 15 64 160 1 1 470

2009/01 2009/02 2009/03 2009/04 2009/05 2009/06 2009/07 2009/08 2009/09 2009/10 2009/11 2009/12

.. . . .

$331$327$309$293$312$396 $354$404$448

2,903

1,358 1,381

2,190 2,571

2,692

2,071

2,409

2,635

$0

$100

$200

$300

$400

$500

2007/ 4 2008/ 1 2008/2 2008/ 3 2008/ 4 2009/ 1 2009/ 2 2009/3 2009/4

0

1,000

2,000

3,000

4,000Avg Sale Price Listings Sold Units

1-year avg. price trend: Up 6 %

2-year avg. price trend: Down 26.1 %

1-year sales trend: Up 6.7 %

2-year sales trend: Up 89.3 %

Average Sale Price (Thousands) Homes Sold

Attached Properties - Listings Sold by Calendar Quarter9 Quarters through December 31, 2009

Detached home sales olumes doubled oer the to

years that prces declned 26.7%.

Attached home prces are don 26.1% oer to years,

th a subsequent poste eect on sales olume.

Documents

Compliments of Zee Afjari 949.533.0449 Www.zeeafjari.com DRE#