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We’ve moved! is a post from: Lansner on Real Estate

We are all on the same page that it is a seller’s market today in Orange County real estate. Not enough listings to feed the appetite of well qualified buyers aching to take advantage of historic low interest rates.  You’re with me, right?

If you are a buyer or a seller in today’s market, you’ll be having discussions with your Realtor to look at the comparable sales (same neighborhood, floor plan, size, number of bedrooms, condition, and location.) Your Realtor will call them “the comps.” So you’ll know what your home will sell for if you are selling, and you’ll know what you’re going to have to pay if you’re buying.

With that in mind, here are the top four things you need to know to gauge the current market value today.

1. Pay close attention ONLY to the comps that have actually closed in the last six to eight  weeks. Prices are trending up right now and you want the most recently closed sale you can get your hands on. The ones that opened escrow six to eight weeks ago and have already closed would be an even better indicator of current market value. You’ll see why in a minute.
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2. Make sure you know the whole story. Was there a short sale negotiator that the buyer had to pay that isn’t reflected in the closed price?  Were there back due taxes or HOA dues that the buyer had to pay?  Did the seller pay some of the buyers’ closing costs?  Your Realtor can dig under the surface to help you see the whole picture. You’ll see how in a minute.

3. More about those Short Sales. Make sure you know when they opened escrow. If it was eight months ago, the buyer got a smoking hot deal and that price cannot be compared to the homes that just opened escrow six to eight weeks ago. It is not a valid comp. Don’t get emotionally attached to it – it just might lead you far, far astray.

4. Check into the current comps that are in back-up and pending status. You’d be amazed how helpful Realtors can be – and still be within the boundaries of their fiduciary responsibility to their clients. I love checking into these – you’ll likely find out how many offers they received, if they do have any back-up offers (not a bad strategy in today’s market,) if they received any cash offers and how much over the list price the offers were.  Meaning, of course, your Realtor will find out as much as she possible can to help you be successful.

What’s the big secret to digging deeper to really understand the current market value today? Two things – that your Realtor reads the secret, for-agents-eyes-only remarks on the comps – because that’s where a ton of information can be found. And you won’t see it on Realtor.com, Trulia.com or Zillow.com. And secondly, having the gumption to call and ask what the story is. Haven’t had anyone hang up on me yet.

4 ways to gauge current market value is a post from: Lansner on Real Estate

Even without the tax windfall, however, the firm doubled its profits from year-ago levels, thanks to rising home prices and increased demand, company officials said in a fourth-quarter earnings report.

“We saw significant market improvement during 2012, translating into higher prices and higher sales,” Company President and CEO Scott Stowell said Friday during a conference call with stock analysts.

“As we head into 2013, these positive trends – along with falling unemployment, historically low interest rates and high affordability – should continue to bolster the confidence of the numerous home shoppers, who are recognizing that it is a good time to buy a home.”

Standard Pacific reported net earnings of $486.9 million in the quarter ending Dec. 31. But that included a “deferred tax asset valuation” of $454 million tied to losses during the housing market crash.

Several homebuilders, including Lennar Corp., Toll Bros. and Pulte Group, have claimed a similar tax benefit in recent months.

Excluding the tax benefit, however, Standard Pacific net earnings still totaled $33.1 million, vs. $15.3 million in the fourth quarter of 2011. That amounts to 8 cents per share of stock, compared with 4 cents a year earlier.

With this latest report, Standard Pacific has had five consecutive quarters of net gains, after five years in which 16 out of 20 quarters were in the red. That company was on the verge of bankruptcy when it was bought out by MatlinPatterson Global Advisers LLC with a half-billion-dollar infusion of cash.

During the final three months of 2012, the company said also that:

• Revenues from home sales increased to $377.7 million, up 29 percent from the final three months of 2011.
• The average selling price of a Standard Pacific home increased 4 percent, to $388,000 in the seven states where the company operates (California, Arizona, Texas, Colorado, Florida, and North and South Carolina).
• Closed home sales increased 24 percent, to 973.
• Sales contracts jumped 60 percent, to 983.
• Cancellations decreased to 15 percent of contracts, down from 19 percent.

A little context …
MARKET TRENDS	INDUSTRY NEWS

Builder Standard Pacific Homes’ profits soar on price, sales gains is a post from: Lansner on Real Estate

Real estate news and views from around the globe that make you go, “Really?”

• The Priciest of One-Bedroom Apartments — Curbed.com
• Ernest Borgnine’s home in Beverly Crest area sells for $3 million — L.A. Times
• Freddie Mac Extends Evictions, Foreclosure Suspension in Hurricane Sandy — Marketwire
• RealtyTrac names ’20 best places to buy foreclosures — Inman News

Really? One bedroom unit sells for $9 million is a post from: Lansner on Real Estate

ARCHIVE

Should housing market participants be alarmed by the national economic weakness detailed in the “advance” release of gross domestic output numbers for the fourth quarter?

Apparently, U.S. economic growth dropped 0.1% in 2012 Q4 from the quarter before. However, a lot of data is missing in this report. The GDP number is likely to be revised upward in the second release on February 28. We’ll see.

Keeping this in mind, the underlying details are not as devilish as the headline number suggests and this means that the nation’s housing recovery will not be derailed this year. Here are the affirmative details:

• Fourth quarter GDP decline was mainly caused by two factors. One factor was a drop in business inventory, which shaved off 1.27% from GDP. That will likely change in the quarters ahead. The other was a huge 22.2% drop in defense spending in the fourth quarter last year – after a huge 12.9% increase in the third quarter, which happened to be the quarter which affected the election. During the next few quarters, defense spending will be “normal” again and not driven by short term politics.
• The performance in net exports was disappointing and reflects the slowdown in world GDP growth and the recession in Europe. Net exports shaved off 0.25%. Some analysts also blamed Hurricane Sandy for the disruption of some US ports.
• Consumption growth held up very well, growing 2.2 % in 2012 Q4 and adding 1.5% to the final GDP growth number. The biggest growth contributions to GDP in consumption came from cars, furniture and durable household equipment, food services, and health care. The confidence of US consumers during 2012 Q4 was good.
• Investment is an important fundamental. It contributes to growth and tends to modernize the Nation’s means of production. Fixed nonresidential investment grew in the fourth quarter last year by 8.4% driven by a very encouraging 12.4% in software and computer equipment, which had dropped in the previous quarter.
• Encouraging for housing is that residential investments have become a contributor to GDP growth again during each quarter since 2011 Q1. In 2012 Q4 it grew 15.3% and added 0.36% to the final GDP growth number. This doesn’t compare favorably to previous economic recoveries but it is good enough.

So, the GDP report is actually not so bad. The decline is exaggerated and will likely be revised. Encouraging is that consumer spending and non-residential investments are plugging along. Economic growth will continue to support housing, while housing, for a change will help economic growth. The expected continuation of the housing recovery in 2013 will not be derailed by economic fundamentals.

And that’s good news for Orange County.

Analyst: Weak GDP no worry for housing is a post from: Lansner on Real Estate

RATE NEWS SUMMARY

From Freddie Mac’s weekly survey, and on the heels of the 10-year treasury bond closing over 2 percent for the first time in 8 months, the 30-year fixed rate jumped all the way to 3.53 percent and .7 point from last week when it averaged 3.42 percent and .7 point. Mid-September 2012 was the last time we saw fixed rates over 3.5 percent. The 15-year fixed also shot up to 2.81 percent and .7 point, up from last week’s 2.71 percent and .7 point. The 5-year ARM rose to 2.70 percent and .6 point from last week’s 2.67 percent and .6 point.

APPLICATION NEWS SUMMARY

Mortgage Bankers Association weekly survey reports a whipsaw change in mortgage applications plummeting over 8 percent on a seasonally adjusted basis, a whopping 17 percent drop on an unadjusted basis. Purchase borrowers increased to 21 percent of total loan applications. According to Case-Shiller nationally home prices rose 5.5 percent and Los Angeles/Orange County rose 7.7 percent over the past 12 months. Homeownership dropped to 65.4 percent in the fourth quarter of 2012 according to the U.S. Census bureau.

WHAT I SEE: From rate sheets hitting my desk that are not part of Freddie Mac’s survey: Locally, well qualified borrowers can get an 80 percent purchase money loan for investor properties with zero points at a rate of 4.25 percent. The 3 percent down conventional, 30-year owner-occupied fixed rate loan is available at 3.50 percent and 1 point with mortgage insurance being an additional monthly charge. FHA 30-year fixed rates (which require 3.5 percent down) are now at a rate of 3.25 percent and zero points. Investor loan amounts from $417,001 to $625,500 are available with only 25 percent down or 25 percent equity with rates running in the 4.25 percent range with 1 point.

WHAT I THINK: What I wonder is where is our leadership and why do we have no national plan when it comes to housing policy? A few weeks ago the Consumer Finance Protection Bureau released a lawyer’s dream when it comes to leaving the door wide open for lenders to be potentially liable for granting a loan and the borrower later defaulting. The underwriting standard of a 43 percent maximum debt ratio for the lender safe harbor has more holes and exceptions than a honeycomb.

An even bigger issue is exactly what will the minimum down payment requirement be? We still don’t know because the question was never answered. Yet the FHA announced this week that any very high balance FHA loan will have a new downpayment requirement of 5 percent. And, you think the FHA was killing consumers before with the FHA mortgage insurance charges? Now those high balance $625,500 and above loan amounts will have a 1.75 upfront mortgage insurance charge and an increase to a 1.55 percent monthly mortgage insurance charge added to your interest rate.

The Federal Reserve keeps rates low to support more affordable house payments. The consumer bureau limits retail loan origination points to 3 percent but allows lenders to mark up mortgage rates as much as they want over the cost of the Fed-supported Fannie Mae, Freddie Mac and FHA cheap wholesale rates they enjoy. If that doesn’t open the door for predatory practices, what does? And if that’s not enough salt in the wound, each and every Fannie or Freddie loan funded has a hidden tax called a G-fee that adds about a half point cost to your loan. These ridiculous patchworks of nonsensical policies need to end. We deserve leadership. We deserve better.

Mortgage rate jumps to 3.53% is a post from: Lansner on Real Estate

Real estate news and views from around the globe that make you go, “Really?”

• Beatles’ Former London HQ Planned as Abercrombie Shop — Bloomberg
• John Lennon’s Nutopian Embassy Returns to Market for $4.25M — Curbed.com
• Do You Recognize Any Buildings In This 1896 Manhattan Skyline? — Gothamist
• Judge refunds $1M deposit to Rushmore building buyer — The Real Deal
• When Good News for Real Estate Is Bad – Wall Street Journal

Really? Beatles HQ becoming a clothing store is a post from: Lansner on Real Estate

Click to enlarge

DataQuick reported today that 3,631 Orange County homes sold for $1 million or more in 2012, the highest number since 2007.

That’s up 34 percent from 2011′s tally of million-plus sales, compared to an increase of 17 percent for sales of all homes in the county.

Statewide, million-plus sales increased 27 percent to 26,993, vs. an 8.2 percent increase for sales in all price ranges. A record number of California buyers — 7,791 or 29 percent — paid all cash for their mansions, DataQuick reported.

In addition, four Orange County ZIP codes ranked among 25 in the state with the most million-plus sales: Newport Beach’s back bay area (92660) had 362 $1 million-plus home sales, the report said. Laguna Beach (92651) had 307, Corona del Mar (92625) had 256 and Newport Coast (92657) had 228.

DataQuick attributed the increase in luxury sales to a recovering economy, rising home prices and a record number of cash purchases. And one local agent has said that confidence in the market has returned to high-end buyers.

“Buyers and sellers in the prestige market tend to respond to different motivations and incentives than the rest of the market,” said DataQuick President John Walsh. “Job security, down payment sizes and mortgage interest rates don’t play the same role. Returns on investments in a low interest-rate financial environment and safe-haven investing do play a role.”

Last year’s pace of luxury buying in Orange County was the fifth-highest of the last 12 years. The record was set in 2005 when 8,169 million-plus sales occurred.

Orange County accounted for a fourth of all million-plus sales in Southern California’s seven counties and was second only to Los Angeles County — which has three times Orange County’s population — in million-plus sales in the region.

Orange County had at least 20 homes that sold for $10 million or more last year, the priciest of which was the waterfront home on the north edge of Newport Harbor that sold for $22 million, according to the real estate site Redfin.com. The Bayshore Drive home, which had 8,355 square feet, once belonged to actor Nicolas Cage, who sold for a record $35 million in 2008.

One other home, located on the front row of the beach-front Montage Laguna Beach resort, sold for $20 million. The 17,000-square-foot Villa del Lago mansion was the county’s third priciest sale at $19.4 million, although the unfinished home was sold as is during a bankruptcy court-approved auction.

Click for priciest homes!

The most expensive confirmed purchase last year was an 8,930-square-foot, four-bedroom, 4 1/2-bathroom home in Woodside. Built in 2005, the nine-acre property sold in November for $117.5 million.

The state’s largest million-plus home  sold last year was a 20,248 square-foot, seven-bedroom, 13-bathroom mansion in Bel Air.

At least seven California communities had minimum home prices of $1 million or more: They include Santa Monica, San Marino, Rancho Santa Fe, the Marin County town of Ross, Los Altos, Atherton and Hillsborough.

Newly-built homes accounted for 4.9 percent of last year’s $1 million-plus sales, down from 5.9 percent in 2011. Condo sales made up 9.2 percent.

The median-sized home that sold for $1 million or more was 2,641 square feet, with four bedrooms and three bathrooms. The median price paid per square foot for all million-dollar homes in 2012 was $641, up 5.5 percent from $607 in 2011.

For the overall California market, the square-foot median was $162 last year.

Related Story: A rising tide in luxe home sales

A little context …
MARKET TRENDS	INDUSTRY NEWS

$1 million home sales hit highest level in five years is a post from: Lansner on Real Estate

Real estate news and views from around the globe that make you go, “Really?”

• In Rockaways, Marketing Hurricane-Wrecked Properties ‘As Is’ — N.Y. Times
• Home Prices Rise, but Will a Recovery Last? — Time
• 13 Cats Photobombing Real Estate Listings — Huffington Post
• Full Disclosure Laws: Janet Milliken Sues Seller, Realtor Over Home’s Notorious Past — AOL Real Estate
• How ‘Transformer’ Apartment’s 1 Room Does Work of 6 — AOL Real Estate
• Alexander Haig Estate On Sale for $5.495 Million — Wall Street Journal
• Empire State Building REIT Said to End Archaic Structure — Bloomberg

Really? Sandy-damaged homes sellng ‘as is’ is a post from: Lansner on Real Estate

Click to enlarge

Home prices in the Los Angeles-Orange County area rose 7.7 percent in November, according to the S&P/Case-Shiller Home Price Index released Tuesday.

November was the fifth consecutive month of home-price gains in the region, boosting prices back to January 2004 levels, the survey shows. Despite those gains, home prices still are 36 percent below the September 2006 price peak.

The Case-Shiller report is  the last, and most conservative, of four key price reports for November.

DataQuick, The California Association of Realtors and CoreLogic likewise showed hefty percentage gains in home prices, ranging from 8 percent to almost 16 percent in November.

Although Case-Shiller and CoreLogic reports lag other home price indexes, experts believe that both more accurately reflect changes in home values because they compare a home’s latest sale price to its price the last time it sold.

Nationwide, prices were up in 19 of 20 metro areas included in the Case-Shiller survey, with prices up 4.5 percent in a composite of 10 metro areas and up 5.5 percent in a 20-city composite.

Home prices got their biggest bounce in Phoenix and Las Vegas, two of the hardest-hit markets during the housing market crash. Phoenix home prices shot up 22.8 percent in November from the same month in 2011, while Las Vegas prices were up 10 percent.

Three other metros had double-digit price gains: San Francisco, up 12.7 percent; Detroit, up 11.9 percent; and Minneapolis, up 11.1 percent.

The only annual decline occurred in New York, where home prices dropped 1.2 percent from year-ago levels.

A little context …
MARKET TRENDS	INDUSTRY NEWS

Case-Shiller: L.A.-O.C. home prices up 7.7% is a post from: Lansner on Real Estate

Thomas made “an attempt to divert and conceal assets from the creditors” of his real estate firm, Beneficial Services Inc., trustee John M. Wolfe alleged in a bankruptcy court lawsuit filed Friday. The company did business as the Altera Real Estate chain in South Orange County.

The payments included $199,497 paid to Thomas. His sons Timothy Thomas, Beneficial’s chief financial officer, received $135,962, while Steven Thomas, the executive vice president, received $242,819, according to the lawsuit.

“Defendants knew or should have known that they were not entitled to these funds,” the lawsuit states.

Gary Thomas responded that the $578,000 was salary paid during the final year before the 2011 bankruptcy, adding that he stopped taking a paycheck as his company’s finances worsened.

Both Gary and Steve Thomas denied there was any effort to divert funds out of their real estate chain before the bankruptcy filing. Both stated that the collapse of their business left them broke after going through personal bankruptcies.

“If we had enriched ourselves, we would have money,” Gary Thomas, a Mission Viejo resident, said Monday during a break from a National Association of Realtors meeting in Washington, D.C. “We wouldn’t have had to file bankruptcy. No way we enriched ourselves.”

Read the full report HERE!

Trustee: Realtor president diverted funds is a post from: Lansner on Real Estate

Real estate news and views from around the globe that make you go, “Really?”

• Dubai Suitcases of Cash Circumvent Loan Rules — Bloomberg
• California still hasn’t bought land for bullet train route — L.A. Times
• Six Housing Forecasters Who Got Things Right in 2012 — Wall Street Journal
• Is This Report a Bad Sign For the Housing Recovery? — Wall Street Cheat Sheet
• Dow Jones family puts home on market — U-T San Diego
• Century 21 Super Bowl Commercial: Real Estate Agency Says ‘I Do’ to Wedding Spot — Huffington Post

Really? Suitcases of cash used to buy property is a post from: Lansner on Real Estate

Sadek lost the home when the property was foreclosed in April 2011 for $2.9 million. The bank resold it in October 2011 for $2.5 million. The house, in Pelican Ridge Estates, hit the market again last month. It’s now listed at $4.49 million.

Read more here

Home once owned by subprime king: $4.5M is a post from: Lansner on Real Estate

Photo by Leonard Ortiz

New homes are selling again in Orange County. The problem is, developers aren’t building them fast enough to meet demand.

Buyers opened 2,926 new-home escrows in Orange County last year, more than half of them in the last six months of 2012, according to MarketPointe Realty Advisors, a San Diego research firm that tracks the new home market.

That’s up 74 percent over 2011, boosting sales to the highest tally in six years. Twenty-two projects had sales of 50 or more homes last year, compared to just three projects in 2011, MarketPointe reported.

But shoppers would have made many more deals if builders had more homes to sell, experts say.

For example, the inventory of homes for sale fell 46 percent last year from 2011 levels, MarketPointe figures show.

According to Irvine housing consultant Mark Boud, Orange County new home sales accounted for 4 percent of all residential transactions last year. That’s up from 2.6 percent in 2011, but it’s still far below the norm of 12 percent.

“The demand is there,” Boud said. “We would be selling more homes if they were built.”

Read the full report HERE!

New home sales surged in 2012 is a post from: Lansner on Real Estate

Congratulations! You persevered in the battle for Orange County homes and emerged victorious. Now you’re in escrow with a chunk of change out of your bank account and into the escrow account. It’s time for your home inspection. Brace yourself. This could either be a roller coaster or a walk in the park. Most home inspections will reveal three kinds of problems: Small, medium, and large.

Here’s what I mean.

1. Small problems – Most home inspectors will let you know that a window screen is missing, a light does not come on, a switch plate is missing, and that the latch on the gate is difficult to operate. In my opinion, these are small problems. Get some new light bulbs, a screw driver, and a can of WD-40 and usually you’ll be good to go. I say usually because I certainly do not want to ever minimize what might be a symptom of a larger problem. You shouldn’t either.
Ask your inspector (you are going to show up for the home inspection) what he suspects the cause of the item noted to be. Inspectors know tons of stuff – they can really help you sort the issues they discover into these small, medium and large buckets.

2. Medium problems – Heating and air conditioning system issues, electrical wires improperly installed, and non-functioning appliances are what I’d categorize as medium problems. Bigger than the small stuff, but not a disaster. Get a heating, ventilation and air conditioning tech to give you a quote on the heater, have an electrician look at the faulty wiring, and price out what a new dishwasher will cost.

3. Large problems – Mold, chimney damage and roof damage are the biggest problems I’ve run across lately. Mold, because it has to be identified by taking some samples and sending them to an independent lab for analysis. And because the removal of contaminated material and cleaning should only be done by a trained and certified mold abatement professional or certified microbial consultant this process is usually complex and costly. But rest assured, mold can be remediated.

Chimney damage tends to be a large problem as well. Depending on the type of problem and the size of the chimney, this could also become complex and costly to repair. And roof damage that has gone undetected is such a risk for more damage inside the house if water is allowed past the roof’s barrier material. Another potentially costly repair.

What’s the point of sorting your problems into these categories? So you can size up what you’re facing in terms of time and cost to repair. So you can figure out which ones you are willing to tackle yourself and those you’d prefer to ask the seller to fix. So you can write up a clear, specific, and detailed request for repairs for the seller. And then cross your fingers and hold your breath and pray the sellers agree.

If they don’t, you’ll have the information you’ll need to figure out if you want to stay in the deal or move on – a tricky question in a market like the one we’re in now where there are so few houses to choose from. As the Chinese proverb (some may call it a curse) goes, “May you live in interesting times.’’

Home inspection woes: Small, medium and large is a post from: Lansner on Real Estate

Real estate news and views from around the globe that make you go, “Really?”

• Woodside Home Sells for $117,500,000 — SFLuxe
• Did Nine Acres of Silicon Valley Really Sell for $117.5M? — Curbed
• Squatting in style: 23-year-old occupies empty $2.5 million Boca home — South Florida Sun Sentinel
• Next to Break Ground on a Pop-Up City? Surprise, it’s Kenya — Curbed
• See the ‘New American Home,’ a Vegas-Style Homage to FLW — Curbed
• Crowdfunding for Real Estate: Buy a Slice of a Skyscraper — Businessweek
• Miami’s condo king on the luxury real estate comeback — Marketplace

Really? Silicon Valley home sells for $117.5 million is a post from: Lansner on Real Estate

ARCHIVE

The California housing outlook is very positive for 2013.

All the recent indicators, including rising home prices and sales activity, declining mortgage distress, the return of homeowner equity, new home sales and months of unsold inventory point to the right direction. Of course, underlying these positive housing trends is the economic recovery throughout California, which has recently spread from its coastal communities to its interior.

Closer to home, housing trends in Orange County saw annual double-digit home price appreciation by December 2012, and under water homes had dropped by 15,000 units in 2012 Q3 from the end of 2011. Most encouragingly, we are finally seeing more listings by existing homeowners in Orange County’s resale market, which should help its move up market.

Of particular interest in the context of a housing recovery is that according to RealFacts, a respected data vendor for apartment information, rents “hit the wall” during 2012 Q4 in the primary apartment leaders in coastal California. (Check table at left!)

Many analysts have been looking for a so called “switching point” from a consumer preference for rentals to ownership, since rents have been rising so rapidly during the past two years. All kinds of ratios between rents and home prices were tested largely to no avail, because what really counts is behavior.

The data suggests suggest that consumer behavior may be on the cusp of change, where rentals may lose their luster with the younger, hipper population in California’s coastal communities. It’s entirely possible that we may be witnessing a psychological turn with this important first-time home buyer segment, for whom homeownership may just now become fashionable again – thanks to rising home prices. This would be the most significant event for housing in recent years.

If this interpretation is correct, California and Orange County will experience a good housing year with strong sales activity and double-digit home price appreciation in 2013.

However, home price increases will eventually create affordability problems again, at which point consumers might switch back to rentals, because they will run into income constraints. Also, the risk of rising mortgage rates looms large, when the economic recovery speeds up. That prospect of rising interest rates probably will not materialize until next year. A good reason for everybody to enjoy the year 2013.

Analyst: Rising rents turning renters to buyers is a post from: Lansner on Real Estate

So, Jeff …

RATE NEWS: From Freddie Mac’s weekly survey the 30-year fixed rate moved up to 3.42 percent and .7 points from last week’s 3.38 percent and .7 point. It’s the highest rate seen in this survey since Sept. 29. The 15-year fixed also rose to 2.71 percent and .7 point from last week at 2.66 percent and .7 point. For the third week in a row the 5-year ARM was unchanged at 2.67 percent and .6 points.

BOTTOM LINE: In the past year — assuming a well-qualified borrower received the average 30-year conforming fixed rate on $417,000 — the savings would be $133 on his new monthly payment of $1,853 compared to one year ago when rates averaged 3.98 percent. The 15-year monthly payment of $2,821 would be a savings of $107 compared to last year’s rate of 3.24 percent.

APPLICATION NEWS: Mortgage Bankers Association weekly survey reports mortgage applications increased 7 percent on a seasonally adjusted basis. Purchase borrowers remain unchanged at 18 percent of total loan applications. Adjustable loans increased to 4 percent of loan applications written. The National Association of Realtors reported that home sales increased 9.2 percent for the 2012 year compared to 2011, estimating 4.65 million homes changed hands. Locally, another sign of a healthier economy to support the housing market is that Orange County bankruptcy filings were down 17.4 percent for the 2012 year compared to 2011.

WHAT I SEE: From rate sheets hitting my desk that are not part of Freddie Mac’s survey: Locally, well qualified borrowers can enjoy the continued low payments of the 30-year fixed rate loan which is available at 3.125 percent and 1 point, or 3.5 percent and zero cost. The 15-year fixed rate is available at 2.5 percent and 1 point or 2.875 percent and zero cost. FHA 30-year fixed rates are 2.75 percent and 1 point or 3.25 percent and zero cost including the upfront MIP being paid. You can still get FHA loans with a credit score as low as 530. Loan amounts from $417,001 to $625,500 (aka agency jumbos) are available on a 30-year at 3.375 percent and 1 point or 3.75 percent and no-cost. True jumbo 30-year fixed are available at 3.625 percent and 1 point or 4.125 percent at zero points up to $2 million.

WHAT I THINK: Patience paid off big time for one home shopper in May 2012 who made a cool $100,000 of property appreciation in just 8 months. He bought a Lake Forest short sale with 5 percent down. Now, because his home improvement efforts and the equity spike, he’s able to ditch the mortgage insurance in addition to his big equity gain by refinancing the existing loan. Santa Ana-based Corelogic did some number crunching and concluded that in the third quarter of 2012, 17.5 percent of all OC homes were underwater. More importantly, 12.9 percent of all OC homes have zero to 15 percent positive equity. There are approximately 754,811 single family and 1-4 unit homes amongst a burgeoning population of almost 3.1 million folks in this county. The home ownership appetite of the growing population will only increase. If it were me looking for a hard-to-find home in this fiercely competitive marketplace, I’d focus on those zero to 15 percent equity owners. Either directly solicit them, or put your Realtor to work finding these folks and penciling this out. The seller could assume no commission or up to a 4 percent sales commission if an agent is working with you. Other settlement costs might be in the 1 to 2 percent range. The point is that a seller with very little equity could walk away with 5 to 10 percent for a down payment on another home. He won’t need closing costs either as anywhere one shops, no-cost loans are everywhere. All you have to do as a starting point is plant the seed in the sellers mind. You are bound to get some sellers that might agree to sell to you with as little as 3.5 percent down. Maybe 8 months from now you too might hit the equity lottery!

Mortgage rates at 4-month high is a post from: Lansner on Real Estate

Sales dollars by month, in billions

Last year was the best year dollar wise for homesellers since the housing boom ended, figures from the Realtor-run California Regional Multiple Listing Service show.

In 2012, buyers spent $17.5 billion purchasing Orange County homes – the most for any year since 2006, according to the service.

“The reason is we have very little inventory,” said Orange broker Al Ricci, president of the Anaheim-based Pacific West Association of Realtors. “People were scrambling to get what little inventory we had.”

The amount of money spent buying Orange County homes last month  topped $1.64 billion, the highest revenue tally for a December in at least eight years.

Three other months — June, August and October — had even higher revenue tallies last year, MLS figures show.

August’s total — $1.76 billion — was the highest for any month since March 2007. The average generated from Orange County home sales for all months since 2005 is $1.4 billion.

The California Regional Multiple Listing Service, based in San Dimas, manages the real estate database in which agents post details about homes they’re offering for sale.

Ricci said that December “was the cleansing month,” with virtually all homes on the market selling.

Low mortgage interest rates are fueling buyer interest. Rising prices also are spurring buyers to act.

“Homebuyers see sales prices going up, so they jump in,” Ricci said. “They don’t want the market to run away from them.”

After years of subpar earnings, rising revenue translates into a much-delayed boost in income for brokers and the other businesses that rely on real estate transactions — everything from termite firms to home inspectors and escrow companies.

December’s revenue translates into a payday of approximately $98.8 million in real estate agent commissions (assuming that the typical commission is plus or minus 6 percent). That’s $31.5 million more than was generated in December 2011.

For 2012, home sales likely generated almost $1.1 billion for Orange County brokers and their sales agents. That’s $223 million more than 2011′s commission total.

“The Realtors are having the best year they’ve had (in awhile),” Ricci said. “We have an open house, and we have more than 20 people go through. That’s good for us.”

A little context …
MARKET TRENDS	INDUSTRY NEWS

OC home sales generated $17.5 billion in 2012 is a post from: Lansner on Real Estate

Real estate news and views from around the globe that make you go, “Really?”

• New Lives for Nazi-Era Bunkers — Wall Street Journal
• 10 U.S. cities with the most bed bugs — MarketWatch
• LEDs Emerge as a Popular ‘Green’ Lighting — N.Y. Times
• One Way to Bring Life to Abandoned Houses: Nude Photos — Curbed.com
• The Hottest Luxury Real Estate Markets In The US — Zillow
• New look at plan to use eminent domain to seize troubled mortgages — L.A. Times
• How homebuyers can beat cash offers — U-T San Diego

Really? Buyers sought for Nazi bunkers is a post from: Lansner on Real Estate

Those “up” ZIP codes accounted for 95 percent of all sales in the county.

Meanwhile, the annual median home price, or price at the midpoint of all sales, increased in 57 O.C. ZIP codes last year and was flat in six ZIPs. Price drops occurred in 20 ZIP codes, representing just over a fifth of the 2012 market.

Countywide, last year’s sales tally of 34,380 was an increase of 16.9 percent. The median price for all 2012 sales was $439,000, up 3.9 percent over 2011 and the highest annual median since 2008.

On the other hand, last year’s median price remains 30 percent below the peak of $630,000 for 2006. Home sales still were 20 percent below the average of 43,000 for the previous 24 years.

DataQuick’s report shows also:

• The biggest percentage gain in prices occurred in the O.C. ZIP with the lowest median price: Santa Ana’s 92701. The 2012 median home price in that ZIP code was $200,000, up 22.5 percent from the 2011 median of $163,250.
• The biggest percentage gain in sales occurred in the ZIP code with the third-highest median price. Sales increased 100 percent to 84 transactions in Newport Beach’s 92661 ZIP code. The 2012 median price there was $1.46 million. Newport Coast (92657) had 2012’s highest median price: $1.82 million.
• The next highest price gains occurred in Foothill Ranch (92610), which had a 20.3 percent gain to $406,000;  San Juan Capistrano (92675), which had a 14.5 percent gain to $458,000; and Irvine’s 92603, which had a 14.5 percent gain to $925,000.
• The next highest sales gains occurred in Los Alamitos (90720), which had a 52.1 percent increase; Dana Point’s 92629, which had a 48 percent gain; and Anaheim’s 92806, which had a 47.2 percent increase.
• Six of 83 O.C. ZIPs had median sales prices above $1 million in 2012.
• Fifty-three local ZIPs had both sales gains and price gains in the period. (Highlighted in green below.) These double-gainers had combined sales volume equal to 65 percent of the Orange County market.

Below is a look at the 83 ZIPs and how they fared in terms of median selling price and total sales for this period.

Home sales rose in 95% of OC market in 2012 is a post from: Lansner on Real Estate

Real estate news and views from around the globe that make you go, “Really?”

• Eatery neighbors in smell hell — N.Y. Post
• Would You Live in One of Mayor Bloomberg’s 300-Square-Foot Micro-Apartments? — N.Y. Observer
• Inside actor Ginnifer Goodwin’s L.A. Home — Elle
• At Builders’ Show, an Upbeat Forecast for Housing — Wall Street Journal
• Six Reasons Housing Inventory Keeps Declining — Wall Street Journal
• 2012 home sales: Best in 5 years — CNN Money
• Seven Key Points Divorcing Women Need To Know About Real Estate And Real Estate Appraisals — Forbes

Really? Neighbors complain about bakery ‘fumes’ is a post from: Lansner on Real Estate

Click to enlarge

The number of homes for sale in Orange County increased for the first time in 1 1/2 years, rising to3,249 for-sale listings as of Jan. 17, Steve Thomas of ReportsOnHousing.com reported this week.

That’s up from an 8 1/2-year low of 3,161 homes for sale on Jan. 3.

“The drop has stopped!” Thomas said in his report. “It simply had to eventually go up. … More homes are finally coming on the market, just not at the rate customary for the very beginning of the year. Over the past month, there were 16 percent fewer homes that were placed on the market compared to the same time last year.”

Thomas’ figures show that last week’s tally still was the second lowest number of homes for sale in records dating back to June 2004.

Listings have fallen from one report to the next every two weeks since early July 2011. In October 2007, Orange County had nearly 17,800 homes for sale.

Thomas believes that inventory will remain tight.

“The anemic levels are here to stay until the Spring market starts to rev its engine with more homes placed on the market, cyclically around the Super Bowl,” he said. “The inventory will not skyrocket higher though and will continue to be an issue throughout the year. Last year at this time there were 8,080 homes on the market, 4,831 more than today.”

A little context …
MARKET TRENDS	INDUSTRY NEWS

1 1/2-year drop in homes for sale halted is a post from: Lansner on Real Estate

Real estate news and views from around the globe that make you go, “Really?”

• A Composer Envisions a Development Where Only Nice People Need Apply — N.Y. Times
• Developer Plans a Community For Really Nice People, Uncynical Artists in New Jersey  – N.Y. Observer
• Anna Nicole Smith’s Home Sells; Proceeds Go to Daughter — Zillow blog
• More Americans leave parental nest in boost for housing — Reuters
• Builders’ Show Rebuilds Itself — Wall Street Journal
• Real estate’s ‘New Kids’ pitch innovative products — Inman News

Really? N.J. development for ‘nice people’ only is a post from: Lansner on Real Estate