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Local home prices up 10.2%

February 26, 2013

The market activity for the first 2 months (1/6) of 2013 in Orange County feels much stronger than 2012. It will be interesting to see the Q1 2013 numbers.


O.C. homebuying up 18 percent in early February

February 23, 2013

Our first peek at February homebuying shows Orange County’s shoppers staying active. DataQuick’s Orange County homebuying report for the 22 business days ending February 7 shows:

• Median selling price for all residences of $460,000 — that is up 17.9 percent vs. a year ago.

Total Orange County sales of 2,413 residences closed in the latest period — that is up 17.5 percent vs. a year ago.

• Resales of single family homes were up 17.0 percent vs. last year; condo sales rose 9.1 percent vs. year ago. Builders’ new homes sales were 80.4 percent higher in the same period.

• $460,000 median selling price is 29 percent below the June 2007 peak of $645,000.

• The most recent median is 24 percent above the cyclical low hit in January 2009 at $370,000 — so the median has recouped 33 percent of the $275,000 price drop from the peak.

• Compared to cyclical low, single-family house median is 24 percent higher ($418,250 in January 2009); condo median is 23 percent higher ($252,000 in March 2009.) Builder prices for new homes are 61 percent above June 2009’s $424,000 bottom.

•Builder’s new homes sales were 7 percent of all residences sold in the period vs. 4 percent a year ago.

On a community level:

• 73 of 83 local ZIP codes with gains in their respective median selling price. Taking sales volume in consideration, home-sale pricing is up in ZIPs representing 89 percent of the Orange County market.

• Eight of 83 ZIPs with median sales prices above $1 million in the period vs. 11 million-dollar ZIPs when the county median price peaked in June 2007. Million-dollar ZIPs had 108 home sales in this period — down 13 percent vs. a year ago.

• There were two ZIPs with medians under $250,000 vs. five a year ago. ZIPs with medians under a quarter million had 2 percent of all sales in the most recent period.

• 54 of 83 ZIPs had year-over-year sales gains in the period — or 65 percent of the market; five ZIPs had sales gains of 100 percent or more in the period.

• 48 local ZIPs had both sales gains and price gains in the period. These double-gainers had combined sales volume equal to 66 percent of the Orange County market.

Originally posted on

O.C. homebuying up 18 percent in early Feb. | percent, sales, year – Business – The Orange County Register.

5 Factors That Decide Your Credit Score

January 22, 2010

5 Factors That Decide Your Credit Score

Credit scores range between 200 and 800, with scores above 620 considered desirable for obtaining a mortgage. The following factors affect your score:

1. Your payment history. Did you pay your credit card obligations on time? If they were late, then how late? Bankruptcy filing, liens, and collection activity also impact your history.
2. How much you owe. If you owe a great deal of money on numerous accounts, it can indicate that you are overextended. However, it’s a good thing if you have a good proportion of balances to total credit limits.

3. The length of your credit history. In general, the longer you have had accounts opened, the better. The average consumer’s oldest obligation is 14 years old, indicating that he or she has been managing credit for some time, according to Fair Isaac Corp., and only one in 20 consumers have credit histories shorter than 2 years.
4. How much new credit you have. New credit, either installment payments or new credit cards, are considered more risky, even if you pay them promptly.

5. The types of credit you use. Generally, it’s desirable to have more than one type of credit — installment loans, credit cards, and a mortgage, for example.

For more on evaluating and understanding your credit score, visit

Revised Home Buyer Tax Credit Resources

November 15, 2009

I have been getting a lot of questions lately on the newly revised and expanded Home Buyer Tax Credit. Rather than re-write what has already been said, I thought I would compile a list of resources on the subject. The biggest changes are:

  • the tax credit no longer applies only to first time home buyers
  • income limits to qualify have been increased substantially
  • the time frame was extended

For exact details, take a look at the articles below: is a resource sponsored by the National Association of Home Builders. has updated their site to reflect the recent changes, but still have some of the old information present on the site. According the site, there is “more to be added soon.”

The Wall Street Journal did a decent job of summarizing the details, as well as providing some Q & A here.

U.S. News and World Report Money‘s article.



Orange County Housing Report

August 10, 2009

If you are like me, you are naturally a skeptic. There are too many people, corporations, and spam emails flooding my inbox, spinning a self-serving angle on data that supports the outcome they want to prove correct. I cannot think of a more common discussion in Southern California coffee shops than the housing market. Bulls and Bears duking it out, viewing the trends and numbers through lenses that fit their perceptive prescription. The last couple of weeks we have seen an increase in positive articles and indicators on the housing market surfacing. It seems more writers, economists, and pundits are feeling  comfortable stepping out on the subject of “the bottom”. Knowing that a bottom can only truly be observed in retrospect, what does all this positive talk mean?  Below is a recent emailed report I received from my friends over at Altera.  What is your take on the market? Feel free to comment below.

Orange County Housing Report:  Demand is Up and Supply is Down

August 6th, 2009

As is typical for this time of year, demand increased a bit at the beginning of August; however, the continuous drop in the active listing inventory is far from ordinary.  Inventories have been dropping across the nation and Orange County is no exception.  Since March of this year, the active inventory has been steadily dropping.  The inventory has shed 2,925 homes since then, a 25% drop.  Currently at 8,681 homes, that is far fewer than the 14,348 last year or 17,611 two years ago.  So, what’s going on?   Prices are down, interest rates are down, affordability is up and demand is up.  All of these forces together have been pulling the inventory down.  Throw in the fact that discretionary homeowners are only placing their homes on the market if they have to and are motivated to do what it takes to compete in this market.   Demand, the number o f new pending sales within the past month, is currently at 3,481, an increase of 165 pending sales within the last two weeks.  Last year demand was at 2,940.  So, with an increase in demand and a lower inventory, the market has heated up.  The expected market time for all of Orange County is currently at 2.5 months, technically a seller’s market.   The lower the range, the hotter the market.  All ranges below $1 million are pretty hot, but homes priced below $500,000 are sizzling.  The expected market time for homes priced between $250,000 and $500,000 is currently at 1.30 months.  For detached homes within that range, the expected market time is only 1.02 months.  When the expected market time drops to such low levels, sellers are busy sorting through multiple offers and buyers are writing offer after offer with no luck.  I have been asked many times why the market is not appreciating given all of the activity.  The devil is in the details.  Even though the distressed inventory has been dropping and now represents 29.5% of the current active inventory, 50% of current demand is distressed properties.  With so many short sales and foreclosures driving demand, these distressed sellers are keeping a lid on any price appreciation.  But, don’t misinterpret me.  There may be a lid on appreciation, but in the hotter areas and price ranges there is also a lid on price depreciation.  Values have fallen significantly since the start of this downturn, fueled by a consistent supply of distressed properties.  So, current values have reached affordable levels where it makes sense again to own versus rent.  First time home buyer activity has returned with a vengeance as well.  Throw in the return of investor activity and it is no wonder that demand has increased this year.

How do the distressed numbers look?  First off, the “next wave” of foreclosures that we have been hearing about since the beginning of the year still has not materialized.  I have been hearing from industry experts and agents alike that the next wave is still coming.  I am certain that they are right to a degree, that the distressed numbers will increase, just not at the great numbers that they are anticipating.  The agents on the streets are telling me that they all have pockets full of buyers waiting for the right property to come onto the market and they all would love a “foreclosure deal.”  This is where pent up demand really does exist.  Any surge in foreclosures would be met with buyers in waiting.  We can expect a lot of competition and continued multiple offers for some time to come.  There are currently only 2,559 distressed homes on the market, a drop of 57 in the past two weeks.  This is the lowest drop in the distressed inventory since February of this year.  Could we be reaching a plateau before the overly predicted wave to come?  Only time will tell.  There are only 299 foreclosures currently on the active market with demand at 590, representing an expected market time of .51 months.  That’s correct, two weeks.  Foreclosures are so incredibly hot that they can generate 20 plus offers.  Yet, only one gets the property.  Demand is plentiful, there just is not enough supply.  There are 2,260 short sales on the active market with demand at 1,145 and an expected market time of 1.97 months.

If you are a buyer, how should you respond to this market?  First, please throw out the notion that there is no competition and that you can write an offer for thousands less than the asking price.  The sales to list price ratio for homes priced below $500,000 is 100%.  That means that, on average, homes are selling for their full asking price.  For all homes in Orange County, the sales to list price ratio is 98%.  Remember, homes have already dropped 30% or more in value.   As a buyer, do NOT write an offer for 10% or more off of the asking price with a letter detailing that the housing market is currently in a declining market.  These buyers feel that the ultimate sales price should reflect a future drop in values.  That notion of purchasing is ludicrous.  Industry experts and economists cannot accurately determine future prices and are constantly revising their estimates.  The values are already highly discounted over the past few years.  Arriving at the fair market value includes taking into consideration pending activity, recent sales (within the prior 90 days), property condition, seller motivation and circumstances, location, upgrades, lot size and amenities.  To rely on or other online valuation tools is also absurd.  These tools only take into consideration property size and sales price, ignoring all of the other factors that are used to arrive at price.  There has been a lot of pressure on interest rates to move higher.  Gone are the days of interest rates below 5%.  As interest rates rise, affordability drops.  In purchasing today, the monthly payment is approximately the same as a home purchased later with a drop of 10% in value and a 1% rise in interest rates.  These historically low interest rates are not here to stay.  How long they remain low is anybody’s guess.  Last, buyers should only purchase in today’s market if and only if they plan on living in their home for years to come.  In the long run, Orange County housing has proven to be an excellent long term investment.  It is also a great place to call “home.”

Originally received in an email from Steven Thomas, President
Quantitative Economics and Decision Sciences, B.A.
Altera Real Estate

O.C. housing analyst says ‘Buy now!’

July 31, 2009
housing price chart

housing price chart

Well-known Orange County real estate analyst/consultant Mark Boud has come out boldly in a letter to clients stating that local homes are a unparalleled bargain. He writes …

“We may never see this type of opportunity in terms of housing values relative to incomes in Orange County again.  If you feel secure in your job, and can make the payments, you may never see such a ‘perfect storm’ again regarding the undervaluation of housing in Orange County.”

Boud’s enthusiasm stems from his economic model showing what he sees as unprecedented affordability of local housing. The accompanying chart (click on it for a larger version) shows his view of the boom’s overvaluation of Orange County homes — and the ensuing price collapse and its creation of “undervalution.”

Here’s snippets of his letter (COPY IS HERE) that support his “Buy Now!’ thesis …

* It is, in essence, the “perfect storm” in terms of low prices, historically low fixed mortgage rates, and continued high incomes (for those who are employed).  Granted, an increasing number of unemployed workers aren’t in a position to take advantage of this historically high level of undervaluation, but for those who can afford it and do feel stable in their jobs, they may never experience this opportunity again in their lifetimes.
* With the federal and state tax credits that are currently being offered, (first-time buyers’) financially secure parents recognize that first-time buying adult children may never get a better opportunity to … purchase a home in Orange County.  Though we don’t have specific statistics to quote, we are observing and hearing about an enormous number of first time buyers who are receiving financial support from their parents for the purpose of purchasing their first home.  When the banks won’t lend, the Bank of Mom-And-Dad is the next best thing.
* The door of opportunity (or the period of undervaluation) begins to close in Year 2011, and eventually closes completely by Year 2014, when we forecast that the supportable price level (which will fall as mortgage rates climb) will meet the forecast level of median home price in Orange County.

July 30th, 2009, 11:18 am · originally posted by Jon Lansner the O.C. Register website.

Buying is now cost-effective for some renters

July 24, 2009

decisionsMany renters debating whether to buy or rent their homes are realizing that the increase in affordability,
coupled with low interest rates and tax incentives, are tipping the scales toward home ownership.

• An analysis of 45 metro areas by the Associated Press found that the gap between the monthly mortgage payment on a median-priced home and the median rent has decreased from $777 a month to just $221 in the past three years.
• In markets across the nation, including the inland areas of California, prices have declined by nearly 40 percent, resulting in rising sales as first-time buyers use a federal tax credit that covers 10 percent of the home price, up to $8,000.
• Favorably priced foreclosures in some markets are drawing multiple bids. Many housing experts believe that as supply and demand even out, home prices will eventually begin to rise, but for now most buyers are having little difficulty finding affordable homes.
• Qualified first-time buyers may be eligible for loans insured by the Veterans Administration (VA), which does not require a down payment. Another loan product gaining popularity are those insured by the Federal Housing Administration (FHA), which require only a down payment of 3.5 percent.
• It is important that potential home buyers not only look at the monthly mortgage payment compared with their monthly rent payment, but that they also consider other costs associated with homeownership. These can include homeowner association (HOA) fees, insurance, maintenance, and utilities, which most renters are not responsible for paying.

To read the full story, please click here

Beach towns suffer deepest O.C. home-price dips

July 22, 2009

“Analysis of MDA DataQuick’s June report shows Orange County’s beach-close communities — the priciest of four geographic slices of the county — suffered the biggest price drops last month. Curiously, that resulted in only an roughly average gain in homebuying …

  • DataQuick identified 504 homes selling in beach cities’ ZIP codes last month, +16% from a year ago. Median selling price? $676,000 in these 17 ZIPs. Last month’s median price change was -19.3% vs. a year ago.
  • South inland ZIPs — median selling price $483,000 – had 788 sales, +23% from a year ago. In these 19 ZIPs, last month’s median price change was -7.3% vs. a year ago.
  • North inland ZIPs — median selling price $461,250 – had 698 sales, +11% from a year ago. In these 23 ZIPs, last month’s median price change was -10.3% vs. a year ago.
  • Mid-county ZIPs — median selling price $343,750 – had 908 sales, +33% from a year ago. In these 24 ZIPs, last month’s median price change was -13.9% vs. a year ago.
  • All told, countywide sales were +17% vs. a year ago. The median selling price ($418,000) was -11% in the past year.”

July 21st, 2009 by Jon Lansner

Home Affordable Refinance eligibility expanded to 125 percent LTV

July 8, 2009

Fannie Mae last week announced the Home Affordable Refinance Program (HARP) will be expanded to permit refinancing of existing Fannie Mae and Freddie Mac loans with current loan-to-value ratios (LTVs) up to 125 percent, an increase from the current LTV limit of 105 percent. Fannie Mae characterized the expansion as a move to help lenders serve more borrowers with a demonstrated track record of paying their mortgages, but who have been unable to refinance due to significant property value declines. Loans with LTVs above 105 percent will be eligible for a same-servicer refinance under the Refi Plus manual underwriting option, and the new loan must be a fully amortizing fixed-rate mortgage with a term greater than 15 years, up to 30 years. Fannie Mae is evaluating potential updates to Desktop Underwriter to allow LTV ratios above 105 percent.

In conjunction with the LTV expansion, Fannie Mae also announced it is offering a 0.50 percentage point reduction in the loan-level price adjustment (LLPA) charged for manually underwritten Refi Plus loans with LTVs above 105 percent and loan terms greater than 15 years, up to 25 years.  Refi Plus mortgage loans with LTV ratios that exceed 105 percent are eligible for whole loan purchase or delivery into MBS on or after September 1, 2009. Please refer to Announcement 09-23 for information about a new MBS prefix and other operational and delivery details for loans with LTVs above 105 percent.

Freddie Mac announced Read more…

Home Buyer Tax Credit Can Be Applied to Purchase Costs

June 3, 2009

U.S. Dept. of Housing and Urban Development (HUD) Secretary Shaun Donovan recently announced that the Federal Housing Administration (FHA) will allow home buyers to apply the administration’s new $8,000 first-time home buyer tax credit toward the purchase costs of a FHA-insured home. The American Recovery and Reinvestment Act of 2009 offers home buyers a tax credit of up to $8,000 for purchasing their first home. Families can only access this credit after filing their tax returns with the IRS. Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate.

Currently, borrowers applying for an FHA-insured mortgage are required to make a minimum 3.5 percent down payment on the purchase of their home. Current law does not permit approved lenders to monetize the tax credit to meet the required 3.5 percent minimum down payment, but, under the terms of the announcement, lenders can now monetize the tax credit for use as additional down payment, or for other closing costs, which can help achieve a lower interest rate.

more info