From the category archives:

3 – Orange County Economic News

Orange County real estate prices holding steady

by vbindi on June 20, 2011

With all of the talk of “double dip” in home prices, and the “2nd great recession”, home prices in Orange County California have been holing up rather well. We have been tracking home and condo prices in Orange County since 1999, and we utilize the Average Price per Square Foot versus just the simple Median or Average home prices, for the Price per Square Foot indicator is much more accurate and is not prone to inaccuracies due to changing home buying habits of the general public. Also, Our Price per square foot statistics are limited to a certain range of home sizes and certain like-kind Cities in central and south Orange County, to further get a better gauge on the movement of home prices in a given geographical Area.

OC Homes Price 6-1-11

The graph shows the Average Price per Square Foot for both detached Homes and attached Condominiums in central and south Orange County. As can be seen, prices have been holding rather steady now since the Spring of 2009. In the past 6 months there has been a small dip of around 10% for Condos, and 8% for detached homes, and it appears that this small dip may be also showing signs of stabilization. Overall, detached homes prices have not decreased by about 30% from the peak in the summer of 2006. For Condos, prices have decreased by a total of approximately 43% since the 2006′ peak in pricing.

For more information about Orange County home and condos currently for sale, or past property sale prices, contact eVantage Real Estate at: 949-388-3396, or email at Info@eVantageRE.com, or visit our website via the Link above.

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Orange County Mortgage Rates Could Rise Soon

by vbindi on September 15, 2010

Mortgage rates in Orange County could rise for all borrowers as a result of additional costs that are likely to be incurred by banks when they comply with new rules for the global financial system.

Central bankers and regulators from 27 countries agreed in Basel, Switzerland that banks should raise the amounts they hold in common equity from 2 per cent to 4.5 per cent to help ensure that the financial system can survive any future shocks. They will also have to hold a capital conservation buffer of an additional 2.5 per cent, raising their total liquidity cushion to 7 per cent of their assets and liabilities.

In a joint release, regulators said the new “Basel III” rules would provide a “fundamental strengthening of global capital standards” after the meltdown that crippled the world economy in 2008-09.”

But what does all this mean for the ordinary OC mortgage holder?

The warning is being released that the cost of borrowing would rise as a result of Basel III. The liquidity requirements are significant under this new system, as these feed through to the price and the availability of lending.

“A bank is like any other business – if its fixed operating costs go up, then so does the price of its product.”

“All the changes are good from a stability perspective but add billions to the fixed operating cost of a bank. The consequence is that inevitable the cost of credit – the price the borrower pays from money – will rise.”

http://eVantageRE.com

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Orange County Real Estate Market Report

by vbindi on September 10, 2010

Welcome to the eVantage Real Estate’s monthly Orange County Real Estate Market Report. We chart Months of Inventory, Active vs Pending and Price per Square Foot for the south Orange County real estate market,  using our own proprietary indicators.  These charts are more time responsive and accurate compared to what is published by the traditional sources.(ie: Major Banks, Title Co’s, News Periodicals). The higher the Months of Inventory, the slower the market, and visa versa.

blog-graph-2

The overall Months of Inventory for All Price Ranges is still rising as a steady rate, which indicates the market is slowing down. This is due to a combination of the 1t Time Homebuyer Tax Credit termination, and the dog Days of Summer slowdown… the true test will come around September or October, for in past years, this indicator would max out and then decline in those months…. if it does not Max out this time, this may signal the beginning of double dip in home prices.

All Price Ranges are beginning to slow down, with the High End (Prices above %1.1Mil) as usual, being the softest at around 11.5 Months of Inventory which is a soft Buyers market. On the other end of the spectrum at the “Less than $450,000″ price range, the months of inventory is 1.8 months, which is a brisk Sellers Market, often times results in multiple offers on well price listings… Albeit, most of these lower priced listings that sell quickly are either bank owned REO properties or short sales.

The Inventory of Active Homes for sale continues to steadily rise since the beginning of this year, while the rate of sales (Pending in Escrow), has been steadily declining since April/May of this year. Of interesting note, is the number of  Homes Pending at this time compared to last year… The national press has been making the headlines about how the number of sales (or homes Pending under contract) has dropped by 25% in July of this year, as compared to July last year. The rate of sales in south Orange County has started to decline since April, but at a much slower rate of decline compared to national reports. In July of this year, the number of homes in Escrow was 1,809, as compared to last July which had 1,736, which actually represents an increase of 4%… not a decline of 25%.

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As we estimated well over a year ago, the overall dramatic decrease in the Months of Inventory put a halt to price reductions… prices have been holding steady for over a year now. If the Months of inventory keeps rising, and does not Max out in October, we may see an additional small decline in prices in the months ahead.

For more information about Orange County real estate, feel free to contact eVantage Real Estate at:  (949) 388-3396

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A New Cry On The Horizon: Let the Market Fall?

by vbindi on September 7, 2010

The unexpectedly deep plunge in home sales this summer is likely to force the Obama administration to choose between future homeowners and current ones, a predicament officials had been eager to avoid.

Over the last 18 months, the administration has rolled out just about every program it could think of to prop up the ailing housing market, using tax credits, mortgage modification programs, low interest rates, government-backed loans and other assistance intended to keep values up and delinquent borrowers out of foreclosure. The goal was to stabilize the market until a resurgent economy created new households that demanded places to live.

July housing sales sank 26 percent from July 2009 and there is again a growing sense of exhaustion with government intervention. Some economists and analysts are now urging a dose of shock therapy that would greatly shift the benefits to future homeowners: Let the housing market crash.

Why? When prices are lower, these experts argue, buyers will pour in, creating the elusive stability the government has spent billions upon billions trying to achieve. “Housing needs to go back to reasonable levels,” said Anthony B. Sanders, a professor of real estate finance at George Mason University. “If we keep trying to stimulate the market, that’s the definition of insanity.”

The further the market descends, however, the more miserable one group — important both politically and economically — will be: the tens of millions of homeowners who have already seen their home values drop an average of 30 percent.

The poorer these owners feel, the less likely they will indulge in the sort of consumer spending the economy needs to recover. Obviously, if homeowners see an identical house down the street going for half what they owe, temptation to default may cause more problems than already exist.

It became apparent last week that the administration is deeply worried when the secretary of housing and urban development, Shaun Donovan, appeared to side with current homeowners, telling CNN the administration would “go everywhere we can” to make sure the slumping market recovers.

Mr. Donovan even opened the door to another housing tax credit like the one that expired last spring, which paid first-time buyers as much as $8,000 and buyers who were moving up $6,500. The cost to taxpayers was in the neighborhood of $30 billion, much of which went to people who would have bought anyway. Though the administration quickly backed away from this plan.

Among other initiatives being discussed are $3 billion to keep the unemployed from losing their homes and a refinancing program that will try to cut the mortgage balances of owners who owe more than their property is worth. A previous program with similar goals had limited success.

If last year’s tax credit was supposed to be a bridge over a rough patch, it ended with a glimpse of the abyss. The average home now takes more than a year to sell. Add in the homes that are foreclosed but not yet for sale and the total is greater still.

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Southern California Mortgage Broker Sentenced In Fraud Scheme

by vbindi on August 30, 2010

This is just one more reason to do your homework on who you are trusting when it comes to buying  a home and finding financing;

A former mortgage broker, Mark Alan Abrams- age 49, was sentenced to 78 months in federal prison for a fraud scheme that involved buying houses in some of Southern California‘s most affluent and exclusive neighborhoods and selling them to fake buyers at drastically inflated prices.

Abrams of Los Angeles was also ordered Friday to pay more than $41 million in restitution to two federally insured banks. The sentence came after Abrams plead guilty to a string of accusations- the likes of;  bank fraud, conspiracy to commit bank fraud and loan fraud, making a false statement on a tax return and obstruction of justice.

The judge found that Abrams’ willingness to defraud banks, utilize credit information belonging to unknowing victims and compel employees to participate in the scheme was “particularly evil.”

Abrams and his business partner, Charles Elliott Fitzgerald, bought homes in neighborhoods like Beverly Hills, Bel Air, Malibu, La Jolla and Carmel, and then used fraudulent appraisal information to resell them for inflated amounts to fake buyers who purchased the properties with loans.

Fitzgerald, a real estate developer, was sentenced last year to 14 years in federal prison. He had pleaded guilty to conspiracy to commit bank fraud and loan fraud, running a continuing financial crimes enterprise, money laundering, obstruction of justice and three counts of bank fraud.

Over a three year period , the Lehman Brothers Bank funded 80 loans worth $137 million — $50 million more than what was actually needed to pay for the homes. Fitzgerald and Abrams reaped millions of dollars from these inflated loans and passed kickbacks on to their associates through commissions.

When Lehman Brothers sued Fitzgerald and others involved in the scheme in April 2003, Fitzgerald hid his assets and fled the country- living in Samoa until being extradited to Los Angeles in December 2006. When all is said and done- a total of 11 real estate professionals have been convicted of federal charges related to the scheme.

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Bank Merger Announcement- California United Bank and California Oaks State

by vbindi on August 26, 2010

The Boards of Directors of San Fernando Valley headquartered California United Bank and Conejo Valley based California Oaks State Bank announced yesterday that the companies entered into a merger agreement providing for California United Bank to acquire California Oaks State Bank.

The acquisition is valued at approximately $17.3 million, with approximately half that amount being paid in cash and the balance in the form of shares of California United Bank common stock. As of June 30, 2010, California United Bank had total assets amounting in $532.0 million, total deposits of $420.2 million and seven offices. While California Oaks State Bank had assets of $136.7 million, total deposits of $114.0 million and three offices. Upon completion of the transaction- by close of the fourth quarter 2010, California United Bank will have over $650.0 million in assets and $530.0 million in deposits.

California United Bank intends to continue to operate both of California Oaks State Bank’s branches as full-service branches. At close of the merger, California United Bank will feature six full-service branches; located in Encino, Santa Clarita Valley, Los Angeles, South Bay, Conejo Valley and Simi Valley and three commercial lending offices located in Glendale/San Gabriel Valley, Orange County and Walnut Creek.

The merger was agreed upon unanimously by both banks Board of Directors. However, the acquisition is still subject to approval by bank regulatory authorities and the shareholders of each of California United Bank and California Oaks State Bank as well as other customary conditions.

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Mortgage Rates Hit NEW Record Low (Again!)

by vbindi on July 27, 2010

Just when you thought they couldn’t get any lower, 15- & 30-year fixed mortgage rates have hit yet another historic low.

According to data from Freddie Mac’s weekly survey of mortgage rates, interest rates on 30-year fixed rate mortgages averaged at 4.54%, down from the previous week’s rates of 4.56% and 5.25% a year ago.  The 15-year fixed rate mortgages averaged at 4%, down from 4.03% in June.  These are the lowest recorded rates since Freddie Mac began tracking the mortgage in 1971.

As the stock market begins to show signs of recovery, this might be the last hurrah for these low rates.  If you haven’t considered a home loan refinance, you should definitely start thinking about it.  Talk to a Home Loan Expert to find out if refinancing makes sense for you before these rates start soaring.  And they will.  It’s only a matter of time.

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Countrywide In Large Subprime Settlement

by vbindi on July 20, 2010

Countrywide is paying the biggest tab yet in settling a subprime class action suit.

And like it or not, the deal brings a rare bit of good news for some embattled former executives of the troubled mortgage lender, including longtime CEO Angelo Mozilo.

A federal judge signed off Monday on a settlement under which former shareholders of the troubled mortgage will get $624 million, the Los Angeles Times reported. The plaintiff lawyers called the sum the largest shareholder settlement since the mortgage meltdown started in 2007.

The company didn’t admit to any wrongdoing. “Countrywide denies all allegations of wrongdoing and any liability under the federal securities laws,”  a spokeswoman writes. “We agreed to the settlement to avoid the additional expense and uncertainty associated with continued litigation.”

But shareholders led by a group of New York pension funds say they were ripped off when Countrywide failed to inform them of its growing dealings in low-quality loans.

“Countrywide’s actions have improperly enriched executives at the expense of shareholders,” New York City Comptroller John C. Liu, who serves as a trustee of some of the plaintiff pension funds, said in May when a preliminary deal was reached. “This historic settlement sends a strong message that this behavior is unacceptable in Corporate America, and that management will be held accountable to shareholders, especially when they put self-interest before shareholders’ interests.”

But how strong is the message when all the payments will be made by Countrywide’s owner and its auditor? Not a penny will be paid by the executives and directors who were at the helm when the company plunged head-on into the business of lending to riskier customers.

Bank of America, which acquired the mortgage lender two years ago and has since stopped using the Countrywide name, will pay $600 million and accounting firm KPMG will pay $24 million.

The Countrywide settlement comes just days after officers and directors in another big subprime class action agreed to pay $90 million to settle claims in that case. New Century co-founder Brad Morrice said then that he hoped the settlement “would make up for some of the losses suffered and provide closure to me and the shareholders.”

Closure isn’t coming any time soon for Countrywide. Bank of America’s annual report provides a list of legal cases tied to Countrywide that covers parts of three pages.

Nor is Mozilo out of the woods. He and two other former Countrywide execs still face a Securities and Exchange Commission fraud suit that centers on familiar allegations, that the company duped shareholders by failing to disclose the growing risk of its subprime lending business.

Still, for one more day at least he and his friends atop the nation’s most notorious subprime lender got off scot-free.

 Article from Fortune’s Wall Street Blog.

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Fewer Orange County Homeowners Have ‘Underwater Mortgages’

by vbindi on July 13, 2010

A smaller percentage of Orange County homeowners were saddled with “underwater mortgages” in the second quarter as more homes entered the foreclosure process even as price declines slowed, real estate website Zillow.com said Monday.

Fewer homeowners with so-called underwater mortgages — where the amount owed on the mortgage exceeds the home’s value — is nevertheless a positive for the housing market as it could portend fewer defaults and foreclosures down the road.

The percentage of American single-family homes with mortgages in negative equity fell to 21.5 percent in the second quarter from 23.3 percent in the first quarter and 23 percent a year ago, according to the Zillow Real Estate Market Reports.

These underwater mortgages are one of the biggest banes of homeowners since negative equity makes many of them unqualified for home loan refinancing and prevents some from selling.

“While fewer homeowners were underwater in the second quarter than the first, it is not yet time to break out the champagne bottle,” Stan Humphries, Zillow chief economist, told Reuters in an interview.

“While some of the downward pressure on negative equity is coming from stabilization in home value trends, the larger factor is the enormous volume of foreclosures occurring within the stock of homes in negative equity,” he said.

Article from MSNBC via Reuters. Written by Julie Haviv

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Dana Point Homes and Condos report.

by vbindi on February 17, 2010

This report is for Active for Sale and Sold statistics for homes and condos in Dana Point . This article is generated by the realtor professionals at eVantage Real Estate here in Orange County, CA. Today, there are 152 detached homes for sale, which have a median price of $1,300,000 with an average price per square foot of $653 . These homes are priced from a low of $410,000 for a 2 bedroom, 2 bath, 927 square foot home situated in the subdivision tract called Lantern Village South . On up to a maximum price of $24,999,000 for a fine home boasting of 5 bedrooms, 8 baths, with 9,700 square feet of living area, and a panoramic ocean view, which is located in the Strand at Headlands Tract.

Currently, for attached condos there are 77 units active for sale in Dana Point . The median price of these condominiums is $495,000 and the average price per square foot is $407 . These Active for Sale condos range in price from a low of $179,000 for a unit comprising of 1 bedroom, 1 bath, 700 square foot, that is found in the Harbor Walk Tract. Up to a maximum price of $2,490,000 for a roomy condo consisting of 3 bedrooms, 4 baths, with 3,318 square feet found in the Sea Villas at St. Regis Subdivision.

For properties currently under contract in Dana Point there are 51 detached homes in escrow, with a median value of $649,000 . These detached homes range in price from a low of $349,000 for a 2 bedroom, 1 bath, 700 square foot property located in the Lantern Village Tract. On up to a maximum price of $5,995,000 for a fine property incorporating 4 bedrooms, 5 baths, with an expansive 5,000 square feet of living area, located in the Dana Point Harbor area.

For condos, there are 44 units now in escrow in Dana Point , with a median price of $339,900 . These pending units range in price from $159,000 for a 1 bedroom, 1 bath, 700 square foot condominium, situated in the Harbor Walk Subdivision. On up to a high price of $749,000 for a fine condo consisting of 3 bedrooms, and 3 baths, with 1,800 square feet, found in the Niguel Beach Terrace Subdivision.

In the past 3 months, there were 43 detached homes that have sold and closed escrow in Dana Point . These sold homes had a median price of $683,100 with an average price per square foot of $350 . These sold and closed homes range in price from a low of $410,000 for a detached home comprised of 2 bedrooms, and 1 bath, with 976 square feet, and is located in the California Homes Subdivision. And a maximum price of $6,200,000 for an estate property comprising of 5 bedrooms, 6 baths, and a spacious 6,100 square feet located in the Ritz Cove Tract.

For the past 90 days, there were 39 attached condominiums that have sold and closed escrow in Dana Point , California. The median price of these attached units was $434,000 and the average price per square foot was $344 . These sold condominiums ranged in price from a low of $125,000 for a 1 bedroom, 1 bath, 490 square foot unit found in the Harbor Walk condo Tract. And the maximum priced sold condo was $923,000 for a nice unit comprised of 2 bedrooms, 3 baths, and 2,000 square feet unit.

If you have any questions regarding homes or condominiums for sale in Dana Point , please feel free to contact our Dana Point realtor expert at: (949) 388-3396, or email us at: Info@eVantageRE.com .

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