Orange County CA Real Estate

Unfortunately, real estate values have declined substantially in Orange County, CA. in the past 2 years. Home prices have dropped by as much as 35% in some areas, to market values that existed in 2004’. A small consolation to homeowners who purchased in the years 2005’ and 2006’, is that it may be possible to reduce your Property Taxes. As specified in Proposition 13 (Prop 13), your property taxes are based upon the price you purchased the home for times approximately 1.15%. For example, if you purchased a in 2006 for $700,000, your property taxes are approximately $8,050 per year. If your Orange County home is now worth $500,000 today, then you could possible save about $2,300 per year!

So far this year (2008’), the Orange County tax assessor has estimated that there are 125,000 properties that have a Market Value that is lower then the Prop 13 Tax Value. And the Tax Assessor has already sent thousands of tax reduction notifications to many Orange County homeowners. The problem is that the Tax Assessors automatic property reduction is typically substantially less then what you can accomplish by disputing your tax bill.

So lets begin to estimate if a reduction in your property taxes is possible. First, you can go to the follow Orange County Tax Assessor website: http://tax.ocgov.com/tcweb/search_page.asp  and enter in your APN number and obtain a quote of your current Tax Bill. Next, lets get a quick and free rough estimate of he value of your home. Go to www.Zillow.com and type in your address, and this software will give you an estimate of the current value of your home. A word of caution, Zillow can sometimes give inaccurate results, either high or low by Tens of Thousands of dollars. A much more accurate estimate can be obtained by a local experienced Realtor. I only recommend Zillow because it is instantaneous and easy. With this current market value, multiply by 1.15%, and compare this Tax amount to the Tax Bill found on the Assessors website above. If it is lower by about $400 or more, then I suggest you pursue a property tax dispute.

It is possible for you to conduct the dispute with the Tax Assessor yourself. The property tax dispute form is free, and not too terribly complicated. But if you make a mistake and it is rejected by the Orange County Tax Assessor, then you have to wait for one year, before you can attempt another dispute…potentially costing you hundreds if not thousands in savings. According to the Orange County tax assessor, the number one reason for declined property tax disputes are not due to the form being incorrect, but the current market valuation that is required to be submitted with the form. Comparing your home other like kind homes that have recently sold, and making the appraiser like adjustments, up or down, is not as easy as it looks. Therefore, we recommend that you hire the services of a licensed appraiser or a property Tax reduction firm. I could list some here, but you can easily find numerous service providers by searching in Google using “Reduce Orange County CA property taxes”.

If you have any questions regarding your Orange County property taxes, or real estate in general, please feel free to call us at: 949-388-3396, or email us at: Info@SearchOCHomes.com 

The general perception of many homeowners in Orange County is that the 'bank is trying to take my home'.  That is not true. No bank wants to foreclosure on a property in a declining market such as the current situation in Orange County. The bank lent the borrower the money so they could collect the principal and interest payments and keep the note securitized. If you are paying on time and values are holding or increasing. your mortgage note gets sold and resold for huge profits. Banks make fortunes off borrowers who make every payment on time through the life of a loan.

In 2008's real estate market, banks stand to lose $0.35 to $0.60 on the dollar for any foreclosed property.  This is a gigantic loss, and the banks today would rather collect a lower payment than none at all and own a vacant home.  Declining property values combined with constricting lender guidelines and adjusting interest rates have resulted in the modification boom. Basically, when you owe much more on your home that it is worth, you are in deep trouble. No one is going to buy a home for 15% - 30% above market value and no lender is going to refinance that property. 

Your mortgage is the collateral for the note that a bank lends a borrower.  Realistically speaking, no bank would originate a note lending at over 100% of the value of the property. Even lending at 100% is unreasonable.  Millions of Americans have taken out high LTV loans out in markets like Orange county, that were at the time appreciating but now have rapidly depreciated. Then, when the borrowers ARM adjusts and he can no longer make the payment a bank will try to refinance, only to discover there is little chance.

Most believe their only option is to foreclose.  Since they cannot make the payments, sell, or refinance, what other options are there ? The first option that a bank gives are a short sale, deed in lieu of foreclosure, or forbearance agreement.  With so many Orange County homeowners wanting to keep their home and a vast supply of empty homes, the banks are forced to re-examine their strategy.  In today's economy, banks are willing to modify loans to keep people in their homes. They can reach many more homeowners by doing so and continue receiving monthly mortgage payments.

For more information about Loan Modifications in Orange County, CA., please give us a call at:  949-388-3396, or drop us an email at:  Info@LoanModsPlus.com  

 

Today, foreclosed REO homes and Pre-Foreclosure (Short Sales) make up a large percentage of the Listings and Sales in Orange County, CA.  This severe market correction started in the summer of 2006', and probably has 6 to 12 more months to go. Currently, there are 15,046 homes and condos Active for sale (Listed in the MLS).  Of this total, 29.5% are Short Sales and 6.3% are bank owned REO's.  This represents a total of 35.8% of all inventory is a financially distressed property on the market for sale.  Below is a table showing these results as well as how these percentages of distressed listings range from City to City.  

As can be seen in the table below, this market correction is affecting the lower priced markets much more severely then the highest priced markets.  For example, 64% of Santa Ana's inventory of homes for sale are either foreclosed REO's or Short Sales.  While only 4.4% of the inventory or properties for sale in Laguna Beach, CA are bank owned REO's or Short Sales.   

City	Listings	Short Sales	Short Sale  %	REO	REO %	% Total Distressed
Anaheim	1207	615	51.0%	157	13.0%	64.0%
Huntington Beach	699	121	17.3%	18	2.6%	19.9%
Laguna Beach	343	12	3.5%	3	0.9%	4.4%
Mission Viejo	448	159	35.5%	28	6.3%	41.7%
Orange	667	211	31.6%	53	7.9%	39.6%
Rancho SM	367	131	35.7%	28	7.6%	43.3%
San Clemente	528	88	16.7%	15	2.8%	19.5%
Santa Ana	1595	815	51.1%	207	13.0%	64.1%
Yorba Linda	426	67	15.7%	14	3.3%	19.0%
Orange County	15046	4432	29.5%	951	6.3%	35.8%

Looking at the number of properties sold in the past 90 days reveals some other interesting facts.  There are 951 Bank Owned REO properties currently on the market for sale, and 986 REO's sold and closed escrow in the past 90 days.  This results in just 2.9 Months of Inventory which is a Sellers Market !   For those of us working in the field, this chives with experience in which many REO listings are selling rapidly and many with multiple offers.  The other interesting fact to not is that there are 4,432 short sales actively listed for sale, but only 556 closed in the past 90 days.  This represents 24 Months of Inventory.   What is actually going on here is that the Short Sales are actually selling at a much higher rate, but these sales have a high failure rate for many inexperienced Listing Agents are having hard time getting them approved by the Banks in order to close.  The moral of this story is that if you are interested in purchasing a Short Sale, make sure you are working with an experienced agent who has a track record of success with these types of purchases.

City	Sold Past 90 Days	Short Sales	Short Sale %	REO	REO %	% Total  Distressed
Anaheim	337	44	13.1%	118	35.0%	48.1%
Huntington Beach	364	31	8.5%	34	9.3%	17.9%
Laguna Beach	49	2	4.1%	2	4.1%	8.2%
Mission Viejo	226	22	9.7%	52	23.0%	32.7%
Orange	223	25	11.2%	45	20.2%	31.4%
Rancho SM	189	40	21.2%	33	17.5%	38.6%
San Clemente	157	21	13.4%	24	15.3%	28.7%
Santa Ana	306	41	13.4%	130	42.5%	55.9%
Yorba Linda	134	12	9.0%	12	9.0%	17.9%
Orange County	5370	556	10.4%	986	18.4%	28.7%

Here is another way of looking at it.  There are 4 times as many short sales listed for sale as compared to bank owned foreclosures (REO).  But when it comes to actual closed sales, there are twice as many Bank REO closed sales are there are short sale closings. 

Why you may ask ??  Here is what's going on....Short Sales are receiving offers to purchase at a much higher rate, but these transactions are experiencing a high failure rate for many inexperienced Listing Agents are having hard time getting them approved by the Banks in order to close.  The moral of this story is that if you are interested in purchasing a Short Sale, make sure you are working with an experienced agent who has a track record of success with the Short Sale. 

If you have any questions regarding Bank REO's or Short Sales in Orange County, contact us at:  949-388-3396 or drop us an email at:  Info@OCBankREO.com    Also, we just opened a new website for Banks who have REO properties for sale in Orange County, Ca. 

More so then ever before, Mortgage Banks are looking for ways to avoid foreclose on delinquent Orange County CA. homeowners.  So today, mortgage banks and homeowners, with the guidance of their real estate professionals, are working out creative alternatives to resolve non-performing mortgage loans.  This type of mortgage loan workout is normally referred to as Loss Mitigation.

Here are some little known and interesting facts about Loss Mitigation: 

1.) Fifty percent (50%) of the Homeowners who are foreclosed upon never initiate any "contact" with their mortgage bank from the date they miss their first payment.

2.) Mortgage Banks / Mortgage Insurers / Mortgage Guarantors absorb losses of more than $50,000 for every foreclosed conforming loan and $40,000 for every foreclosed non-conforming loan.

3.) Fewer home loans are now being foreclosed. Many conventional mortgage banks, as well as FHA, VA, FNMA and FHLMC require that all options to avoid foreclosure must be explored (ie: Loss Mitigation).

The benefits of Loss Mitigation are that Mortgage Banks and Mortgage Insurers can reduce Foreclosures, Save money, and Re-establish communication with Homeowners.  Homeowners may be able to preserve home-ownership, or at least sell and relocate prior to foreclosure thus salvaging their credit and eliminating the stigma associated with foreclosure. The Real Estate Economy as a whole also benefits by preserving home-ownership rates, reduce financial losses caused by foreclosures, maintain a strong  viable housing market, and eliminate the blight that may be caused by a vacant and neglected foreclosed home.  

Today, due to the dramatic slow down in homes sales, and the drop in home prices, many homeowners find themselves in financial hardship.  These hardships are usually caused by job loss, illness, disability, death in the family, relationship breakup or divorce, poor money and credit management, and other reasons.  The good news is that many mortgage banks are agreeable to alternatives other then foreclosure.  There are typically 6 different Options that the mortgage banks may consider for a homeowner who is in financial difficulty. These 6 options are:

Option 1: Rate Reduction Modification. This type of loan modification will permanently reduce the interest rate associated with the loan, thus lowering the monthly payment from the Homeowner.

Option 2: Capitalization. Capitalization means adding the delinquent payments into the remaining balance and updating the payment due date and perhaps "recasting" the payment amount. Capitalization may be used when other modifications would not be appropriate, such as, if the interest rate is already at or below the market rate, or if the delinquent amount due is just too much for the Homeowner to pay back within the specified period of time

Option 3: Term Extension.  Term extension is extending the amount of time the Homeowner has to repay their loan to achieve a reduced monthly payment (i.e. 15 year mortgage extended to 30 years). Term extensions are often used together with an interest rate reduction or a capitalization modification.

Option 4: One-Time Assumption. Most mortgages are non-assumable, which means the loan cannot be transferred from one owner to another. However, as a form of loss mitigation, the mortgage bank may opt for a one-time assumption, in order to facilitate the sale of the property. Generally if the Homeowner can demonstrate hardship, Fannie Mae and Freddie Mac may allow a one-time assumption. HOWEVER, the transaction must be an "arm's length" transaction. In other words, there cannot be any pre-existing relationship between the Homeowner and the individual assuming the mortgage.

Option 5: Loan Type Conversion.  Some Homeowners with an adjustable rate mortgage (ARM) may not be able to keep up with increased payments during times of increasing interest rates. In this case, the mortgage bank may opt to modify the loan type to avoid increasing the interest rate. The loan could be converted to a fixed rate mortgage.

Option 6: Short-Sale.  A short-sale requires that prior to the sale, the mortgage bank  agrees that the sales proceeds from the sale of the Homeowners home will satisfy the debt, even if that amount is less than what the Homeowner owes on the loan. Many conventional loan mortgage banks prefer this method when the home is severely upside-down (ie: the home is worth substantially less then the mortgage debts owed).  A Short Sale will still negatively affect a homeowners credit, but is far less damaging to ones credit rating (ie: FICO score) then a Foreclosure.

For more information about Loss Mitigation or Short Sales in Orange County, CA., please feel free to call us at: 949-388-3396 or email us at: Info@OCShortSaleInfo.com , or Text Message at:  949-283-4679

We have been tracking the Months of Inventory in south Orange County, Ca. along with Active versus Pending sales, and Price per Square statistics, since July of 2002'.  As most everyone is aware, the real estate market here is southern California has slowed down substantially compared to 2 years ago.  Homes are setting on the market for sale much longer,  prices has decreased substantially, and mortgage loan delinquencies have resin dramatically. 

But in the midst of all of this bad press, we have noticed a very interesting trend... albeit a short term one.  For the past 7 weeks, the number of homes Pending in escrow has been steadily increasing for homes priced less then $450,000.  On October 8, 2007 there were 84 homes under contract in escrow in this price range in south Orange County, Ca.   That number has steadily increased and now stands at 150 homes pending in escrow.  That's an increase of  21% in the midst of all of the negative press, and the traditional seasonal holiday slow down in the local marketplace. 

What is this due to one may ask ?  Well it is certainly NOT due to "not ready for prime time" home buyers who are using zero down, stated income purchase money loans, for those loan programs essentially have been deleted from the marketplace.  What we do see is the drop in home prices by about 10% to 15% that has occurred in the past 10 months, has resulted in seasoned prospective home buyers and investors now seeing some true values in the marketplace who are increasingly making offers to purchase.  Will this continue throughout next year ?  Well it may be too soon to draw any type of long term conclusions, but I think that this is a good early indicator. 

Our charts of Price per Square foot for both detached SFR's and Condo's, has shown that the peak in home pricing occurred in May of last year at about the $407/SqFt level for detached homes.  Prices have been slowly decreasing since that time to a level of $356/SqFt today for detached single family homes.  This represents a decrease of 12.5%, and since closed sales prices are always a lagging indicator, and given the recent sales that I have seen in certain areas, I predict this number will show prices having already fallen to a level of 15% to 20% for certain areas and product types.

For more information about the local real estate market here in Orange County Ca., please feel to call us at:  949-388-3396 or drop us an email at:  Info@SearchOCHomes.com  or Text Message us at:  (949) 283-4679.   

Below is the National Economic Week in Review that may affect the Orange County real estate market.

Fed cuts short-term rates

As was widely expected, the Federal Reserve Board lowered short-term interest rates by 0.25% on Wednesday, to 4.50%. The rate cut was the centerpiece in a busy week of economic news. On the bright side, the U.S. economy expanded at a solid pace in the third quarter, the employment situation appeared healthy, and inflation was largely contained. Meanwhile, consumer confidence slipped, manufacturing growth slowed, and residential construction remained weak. Against this backdrop, crude oil prices touched record highs (near $95 per barrel) and the U.S. dollar hit record lows against the euro and the Canadian dollar. For the week, the S&P 500 Index fell 1.6% to 1,510 (for a year-to-date total return of 8.1%). The yield of the 10-year U.S. Treasury note fell 12 basis points, to 4.29%.

FOMC lowered interest rates by a quarter-point

The Federal Reserve Board's Open Market Committee (FOMC) voted Wednesday to lower the target for the federal funds rate by 0.25%, to 4.50%. The action followed a 0.50% rate cut in September. In the accompanying statement (which is carefully read by analysts), the FOMC suggested a more neutral stance regarding future rate cuts. Economic growth was solid in recent months and inflation has improved during the year, but the FOMC noted that growth will likely slow in the fourth quarter and energy prices could drive inflation higher. The committee said that after this rate cut, "the upside risks to inflation roughly balance the downside risks to growth." The next FOMC meeting is scheduled for December 11.

Unemployment rate unchanged

The unemployment rate for October held steady at 4.7% for the second straight month. Nonfarm payrolls increased by a surprising 166,000, led by gains in professional and business services, health care, and leisure and hospitality. The manufacturing and residential construction sectors posted job losses in October. Average hourly wages increased a modest 0.2% to $17.58, a pace that seems to pose limited inflationary threat.

Consumer confidence hit two-year low

Consumer confidence fell in October for the third consecutive month. The Conference Board's index of consumer confidence declined nearly 4 points to 95.6, the lowest level since October 2005. Consumers were concerned about their present situation, their expectations for the next six months, and the outlook for the job market.

Third-quarter economic growth exceeded expectations

Real gross domestic product (GDP) increased at an annual rate of 3.9% in the third quarter, far surpassing consensus expectations. Strong consumer spending and exports were leading contributors. Meanwhile, continuing weakness in the housing sector and an increase in imports restrained overall GDP growth.

Income held steady, spending growth slowed

Personal income increased 0.4% in September following a 0.4% rise in August. Personal spending increased 0.3% for the month, the slowest growth since June, suggesting that the slumping housing market has slowed—but not stalled—consumer spending. The personal savings rate edged slightly higher, to 0.9%.

Currently there are a total of  7,489 homes and condos listed for sale in south Orange County which in this report we define to include the cities of:  Aliso Viejo, Coto De Casa, Corona Del mar, Dana Point, Irvine, Laguna Hills, Laguna Beach, Lake Forest, Laguna Niguel, Mission Viejo, Newport Beach, Newport Coast, Rancho Santa Margarita, San Clemente, San Juan Capistrano and Tustin. 

Of these 7,489 homes , there are 1,034 Bank Owned REO, Foreclosure and Short Sale properties for sale, which represents 13.8% of the total inventory.  We will track these statistics twice per month and report as the data is gathered.  It's looking like a great time to buy for prices have also dropped by about 10% from the peak in prices which was around the 2nd quarter of 2005'

Predicting the tops or bottoms of any market such as Stocks, Bonds or Real Estate, is educated guess work at best.  But there are usually tell-tale signs that often appear around tops and bottoms that give one a sense of  'seeing the light at the end of a tunnel'.  That may be happening now in the Orange County CA. residential real estate marketplace. 

Tell-tale sign number one, has to do with the subprime lending debacle.   A dismal milestone may soon move into the housing market’s rear view mirror.  Homeowners owing a total of $31.8 billion in subprime adjustable-rate mortgages began paying higher interest rates this  month of September.

That is the highest amount of subprime ARM's due to reset over a one-month period in this housing cycle.  By December resetting subprime ARM's are forecast to drop to $25.2 billion. By the end of 2008, they will have fallen to $3.6 billion.  The reason being is that  lenders have largely stopped making such loans to borrowers with spotty credit histories back at the beginning of this year..

The large volume of interest-rate resets to higher levels, has been the largest factor in the jump in foreclosures in the past 16 months.  In August, foreclosure filings rose 36% from the previous month and were up 115% from last year.  As ARM resets reached it's peak, more homeowners will have trouble meeting payments.

Granted, there will be a delayed affect of anywhere from 6 to 12 months.  Here's why... homeowners who have an interest rate reset increase this month don't automatically stop making payments the next month.  Many will try to hang in there, and some will run out of financial gas in 3, 4 or 6 months, then it takes anywhere from 5 to 8 months for the mortgage banks to foreclosure and put the REO property on the market for sale.... So the negative effect of this months the peak in the mortgage rate resets, probably won't be felt in the market as lower priced bank REO properties for sale, until sometime in the Spring and Summer of 2008'.  While we may see additional weakness in the months ahead one might argue that a record supply of foreclosure homes for sale, combined with a peak in ARM resets, means the housing market is near a bottom. 

The other tell-tale sign, is the very low rate of sales as compared to history.  As we wrote about a month ago and as reported in the OC Register newspaper, the low volume of home sales in Orange County CA. is currently at a 20 year low.  Current sales volume is a bit lower then it was back in 1995 when the real estate market hit bottom here locally, and Orange County declared bankruptcy.  Many large volume markets such as Stocks, Bonds and even Real Estate will tend to fluctuate from extreme highs and extreme lows.  Given that Orange County now has considerable higher population and a greater number of homes then it did in 1995, one would have to conclude that today's low sales numbers can't last much longer and will gradually return to more normal levels.  One of the big difference between Stocks/Bonds and Real Estate, is that the former will make turn around in a matter of months, while Real Estate takes years to correct and adjust.

If you are a potential Buyer waiting on the side lines, you may want to get ready and start to look closely at some of the pricing opportunities coming on the market now in the form of Bank Owned REO properties ans Short Sale foreclosures.  If you would like to receive a list of low priced foreclosures, bank REO's, and short sales as they come on the market for sale, via email, visit our website at: www.OCBargainHomes.com  

REO's can be a good opportunity, but as with any other real estate purchase, it depends on the details of location, condition and comparable properties.  But first, for those of you not familiar with the term REO let me explain.   REO (short for Real Estate Owned) is when a Bank or other Financial Institution takes back a home via Foreclosure sale.  A Foreclosure occurs when the home owner gets too far behind in their monthly mortgage payments, and the Lender files what's called a Notice of Default.  In Orange County, the home owner then has 3 months to pay the Lender all of the back payments that are due (called Arrears), and keep the monthly loan payments current.  If the home owner fails to do this in the 3 month period, then the Lender files what's called a Trustee Sale notice.  The home owner then has just 3 weeks  to pay the lender off in full for all of the arrears and the loan balance due.  If this does not happen in the 3 week period, then the subject property is sold at the Orange County courthouse to the highest bidder for all cash on the spot (No loans, no investigation, no contingencies).  If there are no takers at this open bid auction, the the subject property is officially Deeded back to the lending institution, and the property becomes an REO. 

It may take the lending institution anywhere from 1 to 4 months to place this REO property back on the market for sale, usually with a local Realtor who is experienced with REO sales.  This REO property is then listed in the local Orange County MLS just like any other property for sale. 

Now to answer to original question... Are REO's a good deal for a Buyer ?  Sometimes they are and here is why.  Banks are not in the business of owning homes, but to lend money.  REO properties hurt their financial balance sheets for they are a non-performing asset (no mortgage income nor rent income).  Therefore they are usually motivated to sell these properties in a reasonably short period of time.  The second reason the Banks are motivated to sell sooner rather then later, is that in some neighborhoods, vacant homes are sometimes subject to vandalism, or just simple detrimental acts of nature (ie: freezing temperatures), thus potentially costing the Banks even more money.   The third reason why REO's can sometimes be a good buying opportunity is that many of them are in need of some repairs... from minor tender loving care, on up to a Major Fixer Uppers.  And Fixers can sometimes be a good buying opportunity assuming that the Buyer is fully aware of the needed repairs and can cost effectively have repairs done.

How does one then determine if an REO property listed for sale is a good deal ?  Well, just like any other potential purchase, the Buyer, or the Buyers agent should conduct a comparable analysis of similar homes that have recently sold in the neighborhood.  If the property can be purchased for less then those comparables, minus the cost of repairs plus a little bit extra for any unknowns, then that property may qualify as a good deal.

We have many years of experience in finding, negotiating, repairing and selling REO, foreclosure and Fixer-upper homes.  Feel free to call us anytime at:  949-388-3396 or email us at:  Info@OCRealtyGroup.com     Feel free to visit our website to receive a free list of distressed properties (bank REO, foreclosure, Shot Sale) for sale in Orange County.  If you are a Bank or financial institution looking for a local Realtor in Orange County with REO experience, please visit our website at:  Orange County REO Sales.

Even though much of the news regarding the local Orange County CA. real estate market is negative, I truly believe that now is a good time to buy a home in Orange County, CA.  Prices are down, interest rates are still low, the current and long term local job markets look healthy, coupled with the great quality of life... and much of the news regarding the local real estate market is negative.  Recovering technologies such as semi-conductors and Internet, new technologies such at Bio-Tech and Asian trade, are all strong employers here in Orange County which will keep the job market strong and relatively high paying.

Let's look at the price and sales data.  We have been gathering market data on a weekly bases since July of 2002'  Since we began gathering this data, we are now at a point of the largest number of homes listed on the market for sale at 4,597.   As an interesting comparison, south orange county had just 500 homes on the market for sale in February of 2004’.  Also, at that time (February 2004’) there were about 1,500 homes sold in escrow, whereas today there are only 763 homes sold in escrow.  

There have been some new recent articles quoting a recent Dataquick report, that the Median Price of homes in Orange County has only dropped by $1,000 from April of this year compared to April of last year, which represents just about a  0.15% drop in prices, which essentially is no drop in prices at all.  That calculation may be true, but if you have been active in selling real estate in this market, like I have, you know this not to be true, so how can this be ?   Our data gathering and analysis give us the answer.    

Dataquick basis there estimates on Median home prices which is the price in the middle in which half the homes sold for a higher price, and the other half sold for a lower price.  This calculation compares small low priced entry level homes, with larger multi-million dollar ocean view estates, and everything in between.  Our graphs have shown that for several years, the sub $400K market was always the hottest market with the lowest months of inventory.  But in the past 5 months or so, this has not been the case, and now the sub $400K is one of the softest markets with one of the highest months of inventory (currently at 9.8 months).  What this tells us is there are now more buyers purchasing larger and higher priced homes as compared to lower priced entry level homes.  This phenomenon then skews the Median Price (and Average Price) calculation to the higher end of the price spectrum. 

According to our calculations which looks at price per square foot for specific product types, prices have actually dropped about 10% nominally since the peak in pricing in May of last year… I predict that this softness in the market will continue throughout the remainder of this year and begin to strengthen next year.

The Orange County CA. MLS called SoCalMLS recently merged with the MLS that services much of the San Fernando Valley, called CrisNet MLS.  This merger in February now makes the SoCal MLS the second largest MLS in the country.  Currently there are over 13,140 attached condos listed for sale on SoCalMLS and 31,250 detached homes listed for sale, with over 50,000 licensed members comprising of real estate agents and brokers, mortgage lenders, appraisers and other support professionals.  SoCal MLS uses the TEMPO MLS system software technology that is owned and operated by First American MLS solutions, a division of First American Title Company.

This additional size, now gives SoCal MLS much more clout and capital funds in which to acquire additional technology services for it 's Realtor members and the Public. Some of the many important and useful technologies added to the SoCal MLS in the past several years have been:

• MongoFAX - turns ordinary FAX machines into PDF scanners.
• eNeighborhoods - provides neighborhood and school information to Orange County home buyers and Realtors.
• MLS Alliance - allows Orange County Realtors to perform home searches for their buyer clients throughout the greater southern California region.
• Multiple photos which allow Listing Agents to add up to 30 photos to every property they list for sale.
• Home Video tours - Listing Agents can add Video Tours from most every 3rd party vendor, to any listing in SoCal MLS. 
  
• Aerial Maps - shows Google Earth type satellite images of most every property listed for sale.
• Lightning CMA Plus - a sophisticated software service that assists Listing Agents in provided Comparable Market Analysis (CMA) for their clients.
  
• Tempo Client Gateway - a web based home searching, capture, sorting and comment Internet software service that let's Realtors to set up an automated search  for their buyer clients, that only captures new listings of homes for sale that meet the buyers pre-defined criteria (ie: price, size, location etc).  This service saves these new listings on a custom website and allows to Buyers to Sort,  Prioritize and even comment on each listing..  One of the more powerful tools added to Tempo for the use of prospective home buyers.
  

There are many new and exciting technologies in the development pipeline scheduled to be added to the Tempo MLS system for this year and next, which will make SoCal MLS one of the most robust and use friendly MLS in the Nation. 

If you would like to search for any home for sale on the made for Public version of the  SoCal MLS system, please visit our website at:  Orange County CA. MLS

Our previous blog article ( The Orange County Real Estate Market is Alive Again ! ) caused a bit of controversy, so I thought I would further clarify and elaborate on the previous report...  Someone commented on that previous blog post that I'm calling for a 'Recovery' in the local Orange County real estate market... I never used the word Recovery for in my mind a recovery is a return to last summers peak in pricing and I do not see that occurring this year or next year...  What I did say, is that I see an end to price reductions, which in other words, I'm estimating that we have reached the bottom of the market with regard to price reductions (or very close to the bottom)...

Let's dive into the details of home pricing... but some background first.  The home price figures that many of the newspapers and large banks quote are based upon Quarterly, 6 month or Yearly data of either the Average home price or the Median Home price.  They then usually compare this to the same time period of last year.  The problem with this approach is two fold... One, there is an inherent lag due to the long averaging period of 3, 6 or 12 months coupled with the fact of comparing those averages to 1 year ago.. Two Average home prices can be skewed by a few high price sales, and both Median and Average home prices can be skewed by home owners opting for larger or smaller homes as demographics change. 

To Read the entire Article with Graphs, Click Here -->   more »