What are your real estate dreams? I am a realtor who is genuinely interested in helping you to reach your unique real estate goals.  Realistically speaking, the market has changed significantly in the past 2 years.  Where a lot of people look at today’s market and just see negativity, I see individuals. 

I see one client who would like to downsize and enjoy the benefits of a smaller house but something closer to the beach.  I love the look on his face when I find him the perfect property for this new phase in his life.

I see a family who is interested in selling their home and wants to buy something larger to accommodate their growing family.  I revel in the moment when they receive the keys to their new home with a larger, lush back yard perfect for the barefoot patter of little feet.

Everyone has their passion.  I am passionate about helping people realize their real estate dreams.  If you have a dream that involves real estate, whether it be buying property or selling it, please give me a call.  Let’s realize the dream together!

The Real Orange County - County of Orange California

From the desk of Dr. John Spencer Ellis:

I have lived in Orange County, CA my entire life - a good life. Growing up down the street from Disneyland is likely a dream from many kids. The irony is that after a while, the "mystical" part slows and it's just a cool place to live.

I also attended several schools and colleges in Orange County including Golden West College, Irvine Valley College, California College of Physical Arts, California Coast University and Modern Technology College. Orange County has well over 30 colleges and universities. There is unlimited opportunity for personal and professional growth in Orange County. Orange County has a recent history of great educational expansion.

Orange County Real Estate is always a good investment. Sure it has ups and downs, however time shows it makes people millionaires. Buying a home in Orange County is one sure-fire way to increase wealth in the long run.

Orange County has numerous restaurants that are world class. You can select cuisine from around the world. I partnered with one restaurant, Tutto Fresco, to develop an incredibly healthy lunch called the John Spencer Ellis Fitness Wrap.

Several years ago I developed the Orange County Adventure Fitness Boot Camp for Women. It is now the largest fitness boot camp in the world (300+ cities, 9 countries). You may have seen Adventure Boot Camp featured on Bravo's "The Real Housewives of Orange County on season 3". I've has the unique opportunity to appear on many episodes of Housewives on season 3 and 4. What a blast!

Preceding Real Housewives, I wanted to create a TV show exclusively for Orange County. I did just that. I created, produced and hosted "The OC Body" talk show which aired for two seasons on the Healthy Living Channel. I also have the joy of being a regular expert contributor for Orange County's only TV network, KDOC (Daybreak OC).

Today, my Orange County companies offer health, fitness, wellness and education for OC residents and people in over 45 countries. We are based in South Orange County (Rancho Santa Margarita).

If you love the outdoors, Orange County Park and Recreation opportunities are limitless. You can enjoy hiking trails, mountain biking, swimming, surfing, health clubs, skating, tennis, golf and all activities in between. It is all here! My companies help people become healthier and better able to enjoy these OC pleasures.

If you like Orange County movies, please visit TheCompass.tv. The Compass is a documentary film I produced about human achievement. Much of it was filmed in Orange County, Big Bear and Palm Springs. The premiere is at The Grove of Anaheim.

So, this is one man's life in Orange County. "The OC" is it's now known, is a wonderful place to live and thrive.

Sincerely,

John

When a property is sold through a foreclosure auction, its owner usually owes more to the lender than the market value of the property itself. This is often a barrier to selling the property, and sometimes such foreclosure auctions do not draw any bidders. As a result, not many foreclosure auctions end with the sale of the property, rather the title reverts back to the financial institution holding the lien. Properties in this category are referred to as REO (Real Estate Owned) properties.

After the bank takes possession of the property, the mortgage loan disappears and the financial institution deals with any items owed by the prior borrower, such as homeowner association fees. The financial institution also tries to get the IRS to remove any tax liens against the property. The current owners are usually evicted and often repairs are made to damage on the property in order to make it more attractive to potential buyers.

The best parts of buying a REO property are that buyers have significant leverage and may be able to turn the property around quickly, making money by speculating on above average returns. Banks are trying to get the maximum return when they sell an REO property directly. They want to sell them quickly for two main reasons: first, they don't want to tie up their money in capital reserves they are required to set aside for a foreclosed property, and second, the management of such properties is a headache they would rather not have.

However, banks are very sophisticated when it comes to managing REOs and foreclosures, often having a department dedicated to them. The selling process starts when a potential buyer makes an offer to the financial institution, which is gone over by its management. Often, the institution will make a counteroffer, and the buyer may respond with another offer. After they have agreed on the price, terms, and conditions, a contract for the sale can be made.

When preparing to make an offer, a potential buyer needs to look at what comparable properties in the area are worth, along with the cost of any needed repairs. Financial institutions usually sell such properties as-is, which makes the buyer's inspection even more important. If they discover damage that they did not anticipate, which the institution will not repair, they can then cancel the transaction.

Investors dedicate much to buying REO properties in terms of funds (often cash), work, time, and effort, thus the price needs to be far enough below market value to justify the risk. Foreclosures are properties that already have had problems that often include tax issues, a lack of maintenance, substantial repairs, and often needed improvements that cost a significant amount of money, and any investor looking to buy such a property needs to keep this in mind at all times.

Investing in foreclosures and distressed property is only as successful as the information you have available to you. That is why you need to work with a company like Covenant Realty who has the skills and experience in negotiating these types of property.

For more information or questions, please e-mail scott@cov4homes.com, call me at ((800) 353-1610, or visit our website at www.cov4homes.com

But today, as I was looking through the Orange County Register's Friday new homes advertising section, it suddenly hit me:

Prices on most So Cal new construction have either already hit bottom, or will be hitting bottom between now and December 26.

So, if you've always wanted to live in a new home, I suggest you start doing your research now.

Why now?

Simple: Supply and demand. New home permits have been way down for over a year now. Most developers may be as addicted to building as a drug addict is to dope, but they aren't crazy. And even if they are, their bankers aren't. There just isn't that much additional inventory coming onto the market.

In most segments, we're in the final phases of a clearance sale, and the stores haven't been ordering new inventory for some time. Essentially, they're going of business--some permanently, others temporarily. And the "going out of business sale" is winding down.

Exactly which new construction?

In the developed areas of Orange, San Diego and Los Angeles Counties, the lower end of new construction will probably hit bottom first, as may also be the case in resales. That would include almost all starter homes, especially condo/townhomes/lofts and "C" neighborhood detached homes. As Lyon Homes reported today, the lower end homes are now the bulk of their sales, allowing them to sell out these tracts earlier.

In the outlying areas, it's a bit trickier due to the impact of high commuting costs and economic problems from the building slowdown itself. The areas with shorter commutes will most likely bottom first. High end, move-up tracts may have further down to go as well. Do your homework and look for desperate builders or whole tracts that are now bank-owned.

What about resales?

The glut of bargain basement new homes needs to be cleared out to stabilize resales, so this would be a step in the right direction. There are two additional problems facing resale housing:

1. The glut of foreclosures and "short sales," especially on the low end.
2. The lack of the normal buyers for move-up homes, because most owners of starter homes either already moved up during the boom or else have had their equity disappear during the plunge. For example, last weekend we held open a beautiful Los Alamitos five bedroom, three bath pool home. Over 50 people came through, and most of them fell in love with the home. Unfortunately, almost all of the potential buyers had another home they needed to sell first. In most cases, that home had been taken off the market because they couldn't sell it at a price that they felt they needed to make the move, including one family that was making a lateral move back to California from Florida. (The first Florida summer will do that for you!) Same problem that Lyons is having with move-up homes. On the flip side, prices have been "stickier" on most move-up resales, due to both a lack of competition from foreclosures and the ability of their sellers to wait out the downturn.

For resales, we're sticking for now with our latest projections (see"An optimistic update on our projections of a home price bottom"). In short, we think the odds are for a bottom either this coming winter or next, but it's too close call as to which.

What to do?

• If you've got your heart set on a new home, start looking now and be ready to close before year's end.
• If a resale will do, get your "ducks in a row" by figuring out what you'll qualify for and what your home might sell for if you're moving up, or if you'd be better off refinancing out your down payment now and renting it out. (You'd need to close escrow on it within 3 years of moving out or you lose your tax free $250,000/$500,000 exclusion of capital gains.) This winter should be good--prices have already dropped more than I've ever seen in my 28 years as a Realtor and broker. But prices might be better in winter of '09-'10.

We think the deciding factor should be your personal situation. For more, check out our classic post on "What to do when nobody knows what's next." Of course, we'll try to answer any question you leave in the form of a comment below. You can also feel free to go to "About Us" and scroll to the last few lines to get our phone numbers, or simply put "contact me please" in the comment section below (click the word "comments" below if there's no box to complete).

Times of great opportunity are ahead. For many new home buyers, they've already arrived, and quite possibly for resale buyers as well. Praying for wisdom might be a good place to start!

Be that as it may, everybody wants to take their best guess at what's coming next, and recent developments are making us think it may be time to update our projections.

The Housing Relief Bill

A big reason for our increasing optimism is President Bush's pragmatic decision this week to accept $3.9 billion for cities to buy up and fix foreclosed properties as a trade-off for federal guarantees for Fannie Mae and Freddie Mac which should calm both the stock market and stabilize lending.

Although the additional deficit spending the bill may create will put some more upward pressure on interest rates, we do think it will go a long ways to reducing the glut of foreclosures. On the whole it seems to be a surprisingly good example of well-crafted, bipartisan legislation.

Besides the money to buy up foreclosures, other features in the bill that we like include:

1. A permanent increase in loan limits for Fannie, Freddie, and FHA to $625,000 in the highest cost areas like much of Southern California.

2. A tax credit of up to $7,500 for first time buyers who close escrow between 4/9/08 and 7/1/09. (We think this will increase demand, and recommend first time buyers contact us now so we can set them up with a personalized "web portal" which allows them to search, save, and categorize properties on the SoCal Multiple Listing Service. 562.822.SOLD.)

3. $11 billion in tax free municipal bond authority for states to set up low interest loans to first time buyers.

4. It tightens regulations to avoid future repeats of the recent mortgage meltdown.

5. Making FHA mortgages more available, especially for "work outs" of over encumbered ("upside down") borrowers who qualify and whose lenders will participate by writing down the loan to 90% of the home's current market value (details in the article below).

6. The complex but intriguing arrangement that encourages loan workouts instead of foreclosures or "short sales." The lender reduces the loan amount to 10% below current market value in exchange for getting the loan off their books. The borrower agrees to share that 10% and future equity with the taxpayers. And we the taxpayers (also known as the government) guarantee the new loan through FHA, provided the buyer can qualify.

The total revised package is expected to sail through the Senate and Bush has now promised to sign it. While dangers of inflation and unemployment still threaten, we think the housing bill will have a more positive impact than we originally thought. Combine that with the fact that the market seems to be finding a bottom in terms of price, and we're hopeful the positives will outweigh or at least neutralize the negatives of the normal summer slowdown, foreclosures, and shaky employment.

With that in mind, we're now revising our projections as follows:

Our Current Best "Guestimate"

40% chance: Bottom sometime between now and the end of winter:

We think the limited time offer of $7,000 tax credits for first time buyers will provide a significant stimulus to a market where we're already seeing multiple competing offers on well-priced bank REOs. At the same time, cities will begin bidding for some foreclosures, and others will see favorable workouts with the lenders which the bill makes possible.

Some of the bills provisions don't kick in until October, but the tax relief is retroactive. We think the bottom will most likely coincide closely with our normal seasonal cycle, which bottoms in December or January. (We're talking about escrows that open in December or January, which would close in February or March be reported by DataQuick a couple weeks later. See "Predictions 101: Our 2 market cycles" and "Two big problems with DataQuick's monthly median price reports.") However, it's possible that the bottom may actually come earlier.

Of course, nobody will know for sure it's a bottom until prices start rising in the months following. Then we'll be wondering if it's a false bottom through the following winter.

Which So Cal County will bottom first? All real estate is local, and we think Southern California's Coastal Plane will hit the bottom first, followed by the desert and Inland Empire areas possibly a year later. This is due to the impact of gas prices on outlying areas plus overbuilding and more foreclosures there. Of the larger So Cal counties, we expect Orange County home prices to bottom first because it's the most built-out and has the lowest percentage of starter homes. We expect either Los Angeles or San Diego County home prices to hit bottom next, followed by Riverside and San Bernardino Counties.

Of the smaller counties, Santa Barbara looks like it's already bottomed, with June foreclosures there hitting a 14 month low. Ventura County homes may be nearing a price bottom, while the smaller inland counties are largely in the same boat as the Inland Empire.

The other 60%: There are at least three challenges to a bottom this winter:

1. Inflation pushing interest rates up and reducing affordability.
2. The economic slowdown that we seem to be entering, with major job losses in automotive, construction, finance and real estate.
3. The continuing onslaught of foreclosures and resulting REOs.

40% chance: Bottom next winter. If the economy stabilizes and foreclosures slow down by year's end, we could hit a bottom this winter. This is still the most common pick by most economists--recovery sometime in 2010, and has been consistently for the past year. We think the recent sharp decline in prices may speed things up. What would help even more would be a resumption of safe oil drilling offshore and in Alaska, with an excess profits tax being used to spur energy alternatives industries.

Again, we're talking about the Coastal Plane areas of L.A. Orange and possibly San Diego Counties, with the Inland Empire and desert regions bottoming sometime in the following 14 months.

20% chance: Bottom later than next winter. Either a lengthy recession, or a bottom late winter of 2010-2011.

What to Do?

We still think market timing shouldn't be as important as your personal situation in making housing or maybe even investing decisions. (See "What to do when nobody knows what's next.")

Sellers: Act now or be prepared to wait--maybe several years.

Buyers: There's a significant chance that what we're seeing now is as low as prices are going to go. But we're saying there's an equal chance that the bottom won't hit until a year from this winter. And we're also saying nobody can know for sure.

If you're in a position to buy, start looking now & if you see something that works for you, make an offer at a price you can afford. You can use the MLS links in the right hand column to directly access any MLS in Southern California.

As a minimum, buyers should start saving your down payment (new concept, I know--check out wikipedia or google it) and get your credit in order (another new concept for some of us, but necessary now.) Do your Christmas shopping & card writing now, & see how the economy's doing in November--it may be time to start writing lowball offers. Or to wait another year.

Although predicting a 40% chance of a bottom in the next five months hardly echos NAR's "buy now!" theme, it's dramatically more optimistic than we were just a few weeks ago. Of course, new developments could reduce or encourage our optimism. Stay tuned, & we'll keep giving you our best projections based on what we're reading, what we're seeing on the front lines, & our experience of over 30 years in this amazing, interesting, and unpredictable business.

What Would Really Help

The "Housing Bailout Bill" seems like a pretty good example of Congressional give-and-take for the common good. We think there are two logical but somewhat radical additional steps our politicians need to take now to protect our economy and our way of life:

1. Modest steps to federal deficit reduction, specifically, reducing “pork.” I’m thinking of wasteful spending to get Legislators re-elected, like Alaska’s famous “Bridge to Nowhere.” Passing a bill eliminating such Congressional “earmarks” and also giving the next president a line-item veto would be a very simple step in the right direction. I'd also favor a mandatory deficit reduction bill that would impose across-the-board spending cuts and tax increases if our politicians couldn't come up with budgets that meet a long term schedule to reduce the federal deficit. Taxing our great grandkids is the ultimate in "taxation without representation," which our forefathers rightly considered tyranny.

2. Reduce the trade deficit by allowing careful new drilling for oil, but with a catch. The U.S. is sitting on more untapped oil reserves than any country in the world. I say use the revenue from that oil to create the best clean, renewable energy industries in the world. Open up more areas for safe drilling but dramatically increasing leasing fees on federal lands. Then split the billions in increased federal revenue between federal deficit reduction and renewable energy innovations.

That would undoubtedly strengthen the dollar, stimulate the economy, reduce the trade deficit, and lead to a cleaner environment. In the case of Alaska’s Arctic refuge, drilling would sacrifice less than .01% of ANWR to actual exploration in return for a $137 - $327 billion reduction in our trade balance (see Wikipedia, “Artic Refuge drilling controversy.”) We can keep sending our the money to the Saudis, or keep it here and use it for high paying jobs, deficit reduction, and energy innovations. Seems like a no-brainer to me, but I am a Realtor. . . .

We welcome your questions or comments

According to a report from Voit Commercial Brokerage, “The first half of 2008 has been characterized by a significant reduction in office development in Orange County.” 

“The total space under construction in Orange County at the end of the second quarter is 325,276 square feet,” said Jerry Holdner, vice president of market research for Voit Commercial Brokerage. “The total amount of construction is 90 percent lower than what was under construction at the same time last year.”

A drive down the 405 Freeway in Irvine shows dozens of stalled high-rise office construction projects.

Perhaps another indicator of the bust in office construction are the recent closings of several high-end restaurants in the Irvine Spectrum, which had relied substantially on business lunches. 

The slowdown in new office construction in Orange County means that more jobs will be lost in the building sector, and indicates that few companies plan to expand, or move to, this affluent and still high-priced Southern California county, which had served as the epicenter of the subprime mortgage industry.

On the other hand, the lack of new construction will likely mean that the vacancy rate for Orange County offices, which has been climbing steadily, will come down.

The vacancy rate is at 14.46 percent this quarter, which is significantly higher than the 8.95 percent vacancy rate recorded in the second quarter of 2007.

The Volume of Sales will increase above the level of 2007.  (Wrong!)

• For the period of Jan 1 through June 30 2007 : 11,532 properties closed
• For the period of Jan 1 through June 30 2008 :  9,732 properties closed

Year-to-date volume is down by almost 16%.  Much of this is the result of the lack of financing due to so many major lenders dropping lending programs, or going out of business. 

Lending standards have also continued to tighten even for solid borrowers.  Appraisals are routinely questioned, or the values discounted (even though the appraiser already discounted from the last comp) and borrowers are burdened with much more documentation that we have seen for a long time. 

Prices will decrease - both listing price and sale price (Correct!)

The average price for homes sold fell from $768,931 to $632,638, a decline of 18%.   (Some price ranges are down by 30% and some are off by only 2%.)  I will review the average price declines by price range in another post in the near future  

The mortgage market will settle down.  (Wrong!)

Fannie Mae & Freddie Mac need to be bailed out, IndyMac just tanked this week, BofA took over Countrywide, many other institutions are hanging on by a thread.  Underwriting standards are tightening, or overtightened in some cases, appraisals are being reduced due to "declining market" conditions even though the appraiser already included that fact in his calculations!  Congress has not yet approved the final FHA reform bill, or extended the increased loan limits that are currently set to expire on 12/31/08.  We have a long way to go before the mortgage market will be stable! 

A lot of real estate agents will leave the business.  (True!)

The actual statistics won't show until next year when annual dues get collected, but there are a lot of agents getting 2nd jobs, or leaving the business altogether now. 

The real estate industry will continue to become more “transparent.”  (True)

("Transparent" is a current buzz word!  I interpret it to really mean "open and honest".)  Consumers are more knowledgeable and demanding the answers to lots of the "hard questions."   There is more information available every day for buyers and sellers to do their own research of listings, including pricing history, past sales, average values, advice about buying, selling, financing, staging and the merits of different marketing programs.  Delivering notepads, refrigerator magnets and calendars is no longer the way for agents to market themselves to consumers.  They need to prove that they have something of value to provide to their clients, instead of pointing to a "I'm #1 Agent of the WeekTrophy"

Conclusion : Ok, so I already said my crystal ball is cracked.  I am an optomist, or I couldn't stay in this business.  I believe that there are a lot of very cautious people who would really like to buy a home, but they keep getting mixed signals.  We have come a long way in a short time compared to the market declines of the 1990's.  There is no doubt that prices got totally out-of-control and unreasonables due to the easy financing of recent years, but once we get back to something resembling fundamental values (for California!), we should begin to see pricing stabilize.  It may take some more time to get there, but I believe that it will happen.

If you have any questions, or need any help with real estate decisions, please call me (or choose a button below!)

The report also shows that one in every 501 U.S. households received a foreclosure filing during the month.

“June was the second straight month with more than a quarter million properties nationwide receiving foreclosure filings,” said James J. Saccacio, chief executive officer of RealtyTrac. “Foreclosure activity slipped 3 percent lower from the previous month, but the year-over-year increase of more than 50 percent indicates we have not yet reached the top of this foreclosure cycle. Bank repossessions, or REOs, continue to increase at a much faster pace than default notices or auction notices. REOs in June were up 171 percent from a year ago, while default notices were up 38 percent and auction notices were up 22 percent over the same time period.”

Nevada, California and Arizona continued to document the three highest state foreclosure rates in June.  Florida, Michigan, Ohio, Colorado, Georgia, Indiana and Utah were other states that made the top ten.

For the third month in a row, California and Florida cities accounted for nine out of the top 10 metropolitan foreclosure rates among the 230 metropolitan areas tracked in the report.

RealtyTrac noted that "Foreclosure filings were reported on 8,713 Nevada properties during the month, up nearly 85 percent from June 2007, and one in every 122 Nevada households received a foreclosure filing — more than four times the national average."

"One in every 192 California properties received a foreclosure filing in June, the nation’s second highest state foreclosure rate and 2.6 times the national average."

"One in every 201 Arizona properties received a foreclosure filing during the month, the nation’s third highest state foreclosure rate and nearly 2.5 times the national average. Foreclosure filings were reported on 12,950 Arizona properties, down less than 1 percent from the previous month but still up nearly 127 percent from June 2007."

"Foreclosure filings were reported on 68,666 California properties in June, down nearly 5 percent from the previous month but still up nearly 77 percent from June 2007. California’s total was highest among the states for the 18th consecutive month."

"Florida continued to register the nation’s second highest foreclosure total, with foreclosure filings reported on 40,351 properties in June — an increase of nearly 8 percent from the previous month and an increase of nearly 92 percent from June 2007. One in every 211 Florida properties received a foreclosure filing during the month, the nation’s fourth highest state foreclosure rate and 2.4 times the national average."

"Foreclosure filings were reported on 13,194 Ohio properties in June, the nation’s third highest state foreclosure total. Ohio’s foreclosure activity increased 7 percent from the previous month and 11 percent from June 2007. The state’s foreclosure rate ranked No. 6 among the 50 states. Other states in the top 10 for total properties with filings were Arizona, Michigan, Texas, Georgia, Nevada, Illinois and New York."

"Seven California metro areas were in the top 10, and the top three rates were in California: Stockton, with one in every 72 households receiving a foreclosure filing; Merced, withone in every 77 households receiving a foreclosure filing; and Modesto, with one in every 86 households receiving a foreclosure filing. Other California metro areas in the top 10 were Riverside-San Bernardino at No. 5; Vallejo-Fairfield at No. 7; Bakersfield at No. 8; and Salinas-Monterey at No. 10."

"The top metro foreclosure rate in Florida was once again posted by Cape Coral-Fort Myers, where one in every 91 households received a foreclosure filing — fourth highest among the nation’s metro foreclosure rates. The foreclosure rate in Fort Lauderdale, Fla., ranked No. 9. LasVegas continued to be the only city outside of California and Florida with a foreclosure rate ranking among the top 10. One in every 99 Las Vegas households received a foreclosure filing in June, more than five times the national average and No. 6 among the metro areas."

"Metro areas with foreclosure rates among the top 20 included Phoenix at No. 12, Detroit at No. 13, Miami at No. 15 and San Diego at No. 17"

RealtyTrac does not expect foreclosure activity to ease up until 2009.

Among the key findings of the latest report from Radar Logic:

• The broad housing slump continued as consumers showed persistent lack of confidence and difficulty in financing home purchases.
• April 2008 continued to exhibit price per square foot (PPSF) weakness compared to last year in almost all markets. One MSA showed net year-over-year PPSF appreciation, one was neutral, and 23 declined.
• The Manhattan Condo market showed a 3.6% increase in PPSF year-over-year coupled with an increase in recent transactions despite a modest decline of 0.7% in month-over-month prices.
• Charlotte’s increase of 1.5% in year-over-year PPSF moved its rank among the 25 MSAs to number 1. This represents an increase over the 0.1% year-over-year PPSF appreciation last month.
• Columbus showed year-over-year PPSF appreciation of 0.2% for April 2008, which is an increase from last month’s year-over-year decline of 4.3%.
• New York declined 3.0% year-over-year in April 2008, its second decline in Radar Logic’s published history (beginning in 2000).
• Sacramento, the lowest-ranking MSA, showed a 31.7% decline from April 2007, which is consistent with last month’s decline of 30.6%.

 The ten biggest declines in per-square-foot values from last year were in these markets:

Sacramento (-31.7%)

Las Vegas (-29.9%),

San Diego (-28.1%)

Phoenix (-25.6%).

Los Angeles/Orange County (-23.4%).

Miami (-22.4%).

St. Louis (-19.8%).

San Francisco (-19.7%).

Tampa (-16.6%).

Detroit (-16.1%).

You can read the full Radar Logic report here.

Single Family Median Home Price:

2006 ~ Monthly

$690,000 = Feb
$695,000 = Mar
$705,000 = Apr
$705,000 = May
$700,000 = Jun
$699,000 = Jul
$685,000 = Aug
$680,000 = Sep
$665,000 = Oct
$660,000 = Nov
$665,000 = Dec

2007 ~ Monthly

$675,000 = Jan
$675,000 = Feb
$695,000 = Mar
$720,000 = Apr
$695,000 = May
$734,000 = Jun -- Peak of O.C. Housing Bubble
$718,000 = Jul
$710,000 = Aug
$655,000 = Sep
$650,000 = Oct
$655,000 = Nov
$600,000 = Dec

2008 ~ Weekly ~ Monthly

$600,000 = 01/07
$595,000 = 01/15
$595,000 = 01/23
$583,250 = Jan
$585,000 = 02/07
$575,000 = 02/13
$575,000 = 02/22
$575.000 = Feb
$580,000 = 03/07
$575,000 = 03/14
$567,000 = 03/20
$570,000 = 03/26
$570,000 = Mar
$553,750 = 04/08
$565,000 = 04/14
$563,000 = 04/22
$550,000 = 04/28
$555,000 = Apr

The most recent DataQuick stats from April 2008 show a $500,000 median selling price. 

The last time median home prices were this low in Orange County was March 2004.

Perhaps even more disturbing: nearly four out of every 10 homes sold in Southern California last month was a foreclosure.

I have begun using tips from this show (as well as other HGTV shows) to sell the homes I represent in Orange County.  I find myself constantly amazed by the creations that these home stagers come up with and just how much money they save.

I’d now like to share with you some of my favorite tips from this show.

1. De-clutter - Serious.  Nothing else matters without it.  Not your version of de-clutter, either.  A professional organizers seal of approval is what's going to get you an offer in.
   
2. Make it yourself.  In this economy, your elbow grease can pay off.  go ahead, Use that scrap wood to make a clutter container, a mantle, a masterpiece!
   
3. Improvise.  If you want affordable design, you can't be set in your ways.  I loved the way they sewed together 3 bathmats to make a rug.  There is always a cheaper solution if you are creative enough to improvise.  And that MDM wood is a great option too!
   
4. Recycle.  I love the flea market dumpster diver approach!  One mans trash truly is another’s treasure, so don't be afraid to take something, fix it up, and make it yours.  Plus it’s the green thing to do!  Also, if you're doing demo remember to call habitat for humanity.

Should you have any questions about these tips or if you’d like to share your tips with me, please contact me.

The Orange County Register reports that as of last Thursday, 2,540 existing homes and condos had been placed into escrow in the past 30 days, a gain of 677 homes over 2007 and only 161 homes short of late April 2006.

This means that it is possible that Orange County's record of 31 straight months of declines in home sales will come to an end.

Also, Orange County currently has a 6.8 months inventory of homes for sale -- still high, but a big improvement over the 8.33 months inventory of a year ago.

Surf's up! 

UPDATE:

See our more recent post on the decline in Orange County home prices.

For instance, right now is a buyers’ market.  When you buy a home in the Orange County real estate market now, you get it for a LOW, LOW price.  In 5 or 10 years, the home you buy today will probably be double what you paid for it.  That’s a huge profit.  So if you buy today at a low price and sell in a few years when the market is once again booming, you can really make a ton of money.

Whether or not you’ve ever thought about buying a home, if you want financial security and are looking for a great investment, buying a home in the Orange County real estate market is your best bet right now.  No other investment is going to give you the kind of return that real estate can.  The best way to get started is to get pre-qualified for a home loan.  It takes a few minutes to get a pre-qualification and will give you a price range for the properties you can afford.  Even if its not much, any investment is better then none.

Once you know what you can afford, you can start looking ASAP.  Check out available Orange County homes on my web site, or shoot me an email at Angie@AskAngie.com if you have questions.  And remember, NOT taking advantage of this slow market could cost you thousands and thousands of dollars.

When banks foreclose on a property, their goal is to recoup as much of their money as possible, and to do it quickly.  Sitting on a home for months does the bank no good – especially when they have thousands of Orange County CA foreclosures to deal with.  That’s why right now is a great time for buyers to get into the market.  Not only can you already find reduced home values in general, but if you choose an Orange County bank-owned home then you will most likely pay an even further reduced price.

Since there are tons of Orange County foreclosures on the market right now, it's really in your best interest to get the help of an Orange County realtor to help sort through which properties hold the best potential and value for your future.  You’ll want to make sure you know exactly what you’re getting – so CALL a REALTOR TODAY!

You can also get a list of all Orange County foreclosures, Orange County CA REO homes (real-estate-owned), and Orange County CA auction homes to get you started.  Just shoot me an email at Angie@AskAngie.com with your contact info and I will be glad to get a list to you.

The data shows that 12,808 new and resale homes and condos sold in Southern California Los Angeles, Orange, San Diego, Riverside, Ventura, and San Bernardino Counties in March. 

Although that figure was 18.8 percent higher than the 10,777 sales reported in February, it was down 41.4 percent from March 2007.

In addition, while DataQick's statistics show an average seasonal increase of 38 percent in sales between February and March for the last 20 years, the 18.8 percent increase for March 2008 was the lowest seasonal sales boost in DataQuick's records, which go back to 1988.

As expected, the data showed a continued increase in foreclosure resales and a decline in median sale prices.

More than one out of three Southern California homes that resold last month, nearly 38 percent, had been foreclosed on at some point in the prior year.  Last year such sales were only 8 percent of the market.  At the county level, foreclosure resales ranged from 28.8 percent in Los Angeles County to 56.4 percent in Riverside County.

The median price for a Southland home last month was $385,000, the lowest since $380,000 in April 2004. Last month's median was down 5.6 percent from February's $408,000, and down a record 23.8 percent from $505,000 in February 2007.

Significantly, the psychology of the current real estate market is creating its own downward drag on prices, as potential sellers are waiting for the market to hit bottom and potential buyers are waiting for prices to fall further. 

DataQuick president Marshall Prentice explained: "We continue to believe a lot of people who could be buying or selling right now are opting to sit tight until they sense we've hit bottom. Often what we're left with, especially in inland areas, are sales driven by foreclosure or the threat of it."

Here's what we know:

Those who can hold on to their property are holding.

Those who can buy are waiting.

Like scene before the climax in an old Hollywood Western, the California real estate stand-off continues...

Or as Commander Bart Mancuso says in The Hunt for Red October: "The hard part about playing 'chicken' is knowing when to flinch."

Well luckily there is a new, free service called Vow2Save that helps brides and grooms save for a new Orange County home.  Vow2Save is an online down payment registry service that allows you to “register” for a new home and invite guests to donate to the cause in lieu of other, more traditional gifts.  It really is a great way for Orange County brides and Grooms to quickly make their dreams of home ownership a reality – and after all, isn’t a new home better then a toaster oven or a crock pot.

Check out Vow2Save today for all the cool details about setting up a registry.  And as always, if you have any questions, shoot me an email at Angie@AskAngie.com.

One thing that concerns us is this week's release of California's Foreclosure stats for March, however (see "So Cal Defaults Up Again & What it Means"). has got us reconsidering. But there are a couple hopeful possibilities we're also keeping our eyes on. We're watching to see what Congress might do next, and keeping another eye on the ever-surprising Fed.

So stay tuned for further developments. In the meantime, we still think this is as accurate a description of where we're at & where we're going as we can write. For now.

We concluded our last post ("Two Problems with DataQuick's Median Prices," with our observation that the actual drop in So Cal home values from top to current bottom is about 25 - 30% (less in higher end areas, more in condos, starter areas, and areas with lots of new construction).

The obvious question is, "How Much More Should So Cal Prices Have to Correct?"

25 - 30% may well be about the right amount of correcting--nobody knows for sure, as we keep saying (see "How Low will Prices Go?").

But the market will almost certainly overcorrect, especially with all the current negativity, all the foreclosures still in process, and the difficulties getting mortgages continuing.

Ben Bernanke, the Fed Chairman, thinks governmental actions already in place will begin to kick in later this year, and things will slowly begin improving from there. He hopes, but he's not sure. (See "Bernanke predicts bottom later this year" for excerpts from his Wednesday testimony with our English "translation"/summaries.) Remember, however, that part of his job seems to be keeping an optimistic spin going.

But UC San Diego's Nobel Prize winning economist, Clive Granger, thinks the U.S. economy has already been in a recession for about four months. He expects the current recession to last an additional 2-6 months, depending on what occurs in the housing and financial markets. Like Bernanke, that puts the bottom later this year.

Slightly more pessimistic is Freddie Mac Chief Economist Frank Nothaft. (He was also the panelist from last October's CAR Expo who formed the basis for our belief that nobody knows what will happen next with his remarks that "we're in uncharted territory.") (Obviously, that belief hasn't stopped us from making our best guesses at what's next.)

Maybe Dr. Nothaft now thinks the picture's becoming a bit clearer. Last week he told a lunch audience that he expects that life should begin to return to the housing sector late this year or early next but says prices may not recover significantly until 2010.

Then this morning DataQuick released figures for OC showing prices were still dropping but sales volume is continuing to rise, as we've been predicting (see the Register's R.E. blog for details). (Also bear in mind what we said yesterday about DataQuick's numbers being several months behind, among other things.

Then this afternoon the Register blog put up another post quoting a South OC Realtor who does a lot of number crunching saying what we basically said a month ago, that activity's picking up.

Now remember what we said about those two So Cal real estate market cycles on Wednesday. Annual cycle: up in the spring, down in the fall. Add in these predictions that the economic cycle may be nearing a bottom, and what do you get? Could it be we'll hit bottom this winter, not a year later as we had been thinking?

Maybe, but what about today's increase in unemployment to 5.1%, with economists particularly worried because the drop was so broadspread, no longer limited to housing and construction.

This morning I spoke with one broker I've known for 30 years about activity in his office. Yeah, he said, sales (opening of escrows) were up in February, but then they dropped a bit in March, and the last few weeks have been especially slow. The March slowdown he attributed to actual competition for houses, citing one agent who had presented 8 offers for one buyer who needed help with closing costs. There were enough competing offers and enough buyer activity that the sellers were no longer making those concessions.

The cause of the slowdown over the last two weeks , however, was harder to figure out. "Dave, there's just so many cross currents," he told me. "The market's just in flux."

That flux may mean that we're nearing a bottom. Or it may mean the mini-upturn we saw in February and March is turning down.

Or it may just mean it's still too early to tell what's going on.

This post was intended to update our projections. So I looked up our most recent forecasting post, March 24's "What's Next for Southern California Housing."

Here's what we said in summary back then:

"We continue to expect a window of opportunity for sellers for the next several months, followed by opportunities for buyers through this winter. We still thing there’s a significant chance (20%?) of a major price collapse of an additional 15 - 25% , but there’s also a possibility that the worst is behind us."

"Sorry the picture isn’t clearer, but we’d rather tell you the truth than make something. up"

Looks like there's not a whole lot to update, although there are some things I might tweak:

• That window of opportunity for sellers may already be starting to close.
• An additional price decline of 5% - 10% through this winter is probably the most likely scenario, but by no means a certainty.
• There's a significant possibility that the market will bottom this winter, but it's still to early to really know.
• There's also evidence that real estate's woes may spread through the economy and pull prices down much further, into a recession that might last for years.
• Washington is becoming increasingly proactive, which could be good. . . or bad, depending on what specific steps are taken.
• One thing hasn't changed at all:

Sorry the picture isn’t clearer, but we’d rather tell you the truth than make something up.

What to do? Guess it's time to again refer to our December 1 post, "What to do when nobody knows what's next."

Sorry the picture isn’t clearer, but we’d rather tell you the truth than make something up.

We'd love to hear your thoughts, especially what you see happening in your corner of So Cal.

April 10 note: As of this morning, we're beginning to think the bottom's probably at least 20 months off, rather than the 8 we've been hoping for recently. Those foreclosure stats we mentioned really have us concerned, but we may be overreacting to one item. Because you never know for sure what's going to happen next!

We expect sales will be up from February, but down from March '06. Some analysts will be surprised. Prices will be down from a year earlier, but not down nearly as much as expected from a month earlier. In fact, the median price for Orange County might actually be up slightly from February.

But it's not really news. And it's not even what you think it is.

It's not news because they'll be reporting what took place back in January and early February, when those homes that closed in March actually went into escrow, as we explained in "Market Predictions 101: Our Two Real Estate Cycles." By the time "DataSlow" reports them, they'll be almost 3 months old.

"DataSlow's" median price numbers aren't what you think because any average, median or mean (for you mathematicians), can be skewed by shifts between market segments, as was so clearly pointed in a recent statistical study by Zillow's number-cruncher.

For example, let's say DataQuick started reporting "median grocery prices" at your local Vons. In November, when lots of people are buying expensive items like turkeys, that median would go up. Now the prices of things might actually be down (at least in our hypothetical, if not in the real world right now. Turkey might be cheaper than it was a month earlier. But because more people were buying turkeys instead of hamburger, the median price would still go up.

Same thing in the real estate market. When there are more first time, low end, buyers the median goes down. When there are more high end buyers, it goes down.

That's why through most of 2006 DataQuick's median price kept moving up, even as prices in most neighborhoods were dropping. As subprime loans stated to dry up, activity was switching from the low end to the middle and higher prices. So the median average moved up, since more of the sales were in higher priced neighborhoods, even as the prices in those neighborhoods fell.

More recently, there's been an increase in lower end sales as lenders foreclose on many subprime borrowers in starter homes, then quickly unload the property at whatever price the market will bear. Meanwhile, most high end homeowners moved up and put a substantial down payment into their home, so there are far fewer foreclosures and distressed sales in the higher neighborhoods. Instead, those homeowners for the most part have decided to just wait out the current down turn.

In 2006, DataQuick's median price was going up while actual prices were dropping in most neighborhoods. Lately, DataQuick's median has been dropping faster than actual prices in most neighborhoods. We believe the actual drop in So Cal home values from top to current bottom is about 25 - 30% (less in higher end areas, more in condos, starter areas, and areas with lots of new construction).

In our next post, which should be out soon, we'll combine that last little nugget of information with our Bernanke post and our Predictions 101 post to update our own predictions.

In the meantime, your thoughts and questions are always welcome. If there isn't a "Leave a Comment" box below, then click on the "0 comments" or "2 comments" comment-counter just below this paragraph on the right. Make up a "Name" or just use your first name, as that will be public. Your e-mail will remain entirely confidential, but we can use it for a confidential response if requested. Thanks for visiting!

Early April 1, before I went to the Westminster Justice Center for a day of Jury Duty (details later this week), we put up our most popular post yet, "Major Housing Breakthrough Near?"

"It looks like our leaders may finally be setting aside their egos and personal agendas to work together for the common good," we wrote two days ago.

"Behind-the-scenes discussions between Congressional leaders and the Bush administration may be about to bear fruit. And that fruit would be a pragmatic Housing Relief Act of 2008 which combines the best ideas from partisans of all stripes to provide both immediate relief and long term reform."

So guess what's the top story on Los Angeles Times' website this morning? "Senate advances mortgage relief plan."

Here are the first two paragraphs of today's Times' article:

WASHINGTON -- Senate Democratic and Republican leaders reached agreement Wednesday on a multibillion-dollar package to address rampant foreclosures and other problems stemming from what may be the worst housing slump since the Great Depression.

The compromise measure, placed on a fast track by the election-year desire to mollify voters, could be approved by the Senate as early as this week. It would be the first significant intervention by federal lawmakers to aid victims of the mortgage crisis.

Looks like you heard it here first!

Now, we're pleased with our reputation for honesty. Really (see Redfin's post, "A Realtor We Can Trust"). So we'll also have to disclose that we got a couple of "minor" details wrong near the end of our April 1 prophetic post.

Like Congress eliminating earmarks and passing a line-item veto and Bush cutting back on Iraq spending to help fund the bill. And the AARP agreeing to support a one year suspension of social security's cost of living increase. And McCain picking Obama as his running mate in the midst of all the bipartisan unity.

But it was posted on April 1.

By that we mean, it took a couple of days for all the details to come out. Right?

Shoot, our first report on a pending bipartisan breakthrough on housing was posted on March 31 ("Pragmatic White House Ready to Help Out?").

"We think it could be a major step in the right direction–or a major disaster. As always, “the devil is in the details.” We just hope & pray that our employees in Washington (yup–we pay their salaries!) will finally put special interests, dogma, and party politics aside long enough to work for the common good, " we wrote back then.

Who knows, maybe they were listening in Washington.

So maybe that post coming out on April 1 was just a coincidence? What are we going to do if we get some unbelievable, hot info on April 1? Sit on it until April 2, and let the big boys get ahead of us?

In any case, the devil is still going to be in the details, which range from federal mortgage relief bonds to tax breaks for homeowners, builders, and people who buy and occupy foreclosures.

There's still time for partisanship to kill the bill, with hearings in the house scheduled for next week. Wouldn't it be nice if our representatives will use that time to make the bill better for the nation as a whole, rather than to grandstand or advance partisan interests.

Otherwise, the joke might just be on us.

Only we wouldn't be laughing.

Sure, a few years ago you could ask some exorbitant price for your Orange County property and sell your home in no time with a huge profit to show for it.  Unfortunately, that’s just not the case anymore and an overpriced home will simply sit on the market for months and months without a singe offer. 

So how do you price your home for sale?  Well the first thing you should do is find and experienced Orange County realtor to help you understand what homes in your neighborhood are worth.  Your realtor will provide you with a list of homes in your area that have sold in the last few weeks and what they have sold for.  This will help you determine a realistic asking price for your property.  Also, if you’re competing with homes in your area that are foreclosures or short sales, you may find that you have to dramatically lower your asking price to sell.

Remember – your home’s value is not based on what you think your home is worth or on how much you owe on your loan – its worth what buyers are willing to pay.  If you want to sell your Orange Countyhome and you want to do it quickly, call a realtor you trust.  If you need help, feel free to shoot me an email at Angie@AskAngie.com.

According to the article, "The Bush administration is finalizing details of a plan to rescue thousands of homeowners at risk of foreclosure by helping them refinance into more affordable mortgages backed by public funds."

The proposal targets at least some of America's estimated 9 million "upside down" homeowners. Under the plan, the FHA "would encourage lenders to forgive a portion of those loans and issue new, smaller mortgages in exchange for the financial backing of the federal government," according to the article.

This appears to be a modification of a proposal by Massachusetts Democrat Barney Frank, reminding us all that politics, indeed, does "make strange bedfellows." (I'm available, Mr. Letterman. )

We think it could be a major step in the right direction--or a major disaster. As always, "the devil is in the details." We just hope & pray that our employees in Washington (yup--we pay their salaries!) will finally put special interests, dogma, and party politics aside long enough to work for the common good.

In the meantime, if nothing else, it's one more illustration of what we wrote last November in "How Low Will Prices Go?"--we're in uncharted territory this time, and nobody really knows what will happen next! (If you predicted a Barney Frank/George Bush recovery plan, please let me know so I can get your input on my stocks & the Final Four next weekend!)

Unfortunately, experience also has shown us that most sellers pick their agents for the wrong reasons, and they pay a huge price for that mistake.

Yesterday, we listed 5 of the most common mistakes sellers make in choosing an agent. Today we'll identify the top 5, starting with one we've seen a lot of in the last two years, picking their agent based on:

5. Past performance as a buyers' agent, in an easier market, or in another area. These might be good reasons to consider an agent, but they don't prove anything about selling your property in today's market. We could give dozens of examples from our experiences, but we'll settle for just one, from baseball:

Just because Tim Salmon played great outfield for the Angels three years ago doesn't mean he can play shortstop for them today. Let alone Center for the Lakers. Get the picture?

4. "She works my neighborhood." This is called "farming," and we do it ourselves. It's a good way to get to know a neighborhood over time. But the number of notepads left on your porch or postcards mailed to your home proves neither competence nor integrity.

Until the agent's been "farming" your neighborhood for at least four years, it proves nothing. In this market, you'd need to go back 17 years to get to the last major downturn!

Even with 17 years experience, you'd still want to investigate track record, and speak with sellers who've worked with him or her. The fliers or postcards may only tell half the story.

"Neighborhood specialists," or "listing farmers" are like preachers, car salesmen, or Realtors as a whole. Some are ethical, competent, and diligent, but many others are not.

3. Lots of sales. This could be good or bad, but it raises a red flag. Most high volume agents operate with what they euphemistically call a "team," which can also be good or bad.

We have a team--Dave, Blair, a transaction coordinator who is shared with several other agents, and a number of affiliates from escrow officer to termite inspector who are the best we can find. But other teams consist of several licensed and unlicensed assistants who pretty much do all the work for the named agent. You often never see the "superstar #1 agent" again after you've signed the listing.

At one seminar I recently heard the superstar speaker describe running into some poor seller of his in an airport. The superstar had "sold" his home a few months earlier, and he was actually bragging to us that this was the first time he'd ever actually met his "client."

One more true story. A few years ago, the buyer for one of our listings was represented by one of those superstar top producers. When it came time for the walk-through I showed up to keep an eye on things. When the buyers came to the door (alone), I introduced myself as the listing agent. The buyer literally hugged me! "Oh my God! A real, licensed agent--not just an assistant!" she exclaimed. "We haven't spoken with one since we signed the purchase contract seven weeks ago."

Turns out, everything had been handled by unlicensed "assistants," which were pretty much part-time kids. We've seen the same thing with sellers. They were "working" with top producing agents, but they rarely saw them, and weren't happy campers.

2. Great listing packet or presentation. This doesn't prove anything, either. Just because a politician's a great campaigner with good commercials doesn't mean he or she will make a good president or governor. It probably just means they bought a good listing presentation software package. In fact, most agents know they can easily get any listing if they dress nice, are friendly, have a persuasive presentation and, most important if he or she . . .

1. Tells you what you want to hear. Works every time, and most agents know it. There are even terms for it in the business. When an agent tells you what you want to hear about price, it's called "buying the listing." Happens all the time--then the listing sits for months while the agent tries to get a price reduction. Worked in '04's up market, but not today!

Sellers have words for it, too. "Great rapport!" "We felt so good about her!" "We just really clicked!" "She was so bubbly!"

It's kind of like interviewing three doctors about your medical condition, then going with the one who tells you every thing's fine. Tempting, but not real smart. Better to go with the best doctor, regardless of whether you like with his diagnosis or not.

Telling you what you want to hear (instead of the truth) is amazingly effective. It appeals to the sellers' pride as well as to their wishful thinking. Kind of like flattering them while promising to make their dreams come true. Not that different from how most politicians operate, and you know how good they are at keeping their promises.

If two people agree on everything, one of them is not necessary. If an agent agrees with you too much, they're either lying or incompetent, or you don't need an agent at all. It's probably one of the first two.

You need an agent who knows and tells you the truth. I remember telling an older seller who was "interviewing" us that they really needed to remove the velvet flocked red wallpaper they loved. I knew they didn't want to hear it, but it was the truth. A few days later I got the call. "Dave, we decided to go with Suzy Q. We just had such great rapport, and she really loved our decorating." Guess I'm glad somebody did.

If you want to feel good, go find a friend. But if you want to sell your house for top dollar in any market, especially today, go find an honest, experienced, diligent agent who will tell you the truth.

In another day two, we'll give you some tips on how to do that. In the meantime you can always post a question or give us a call. 562.822.7653.

Unfortunately, Mr. Williams has lots of company. We'd say at least 90% of the today's sellers today are making at least one of ten major mistakes in picking their agent.

These are mistakes people naturally tend to make--and virtually all agents are able to easily take advantage of those tendencies if they choose to. Because they've listed a whole lot more homes than you have!

Here's our list of the most common wrong reasons to pick a listing agent. Read it and weep. We do.

10. Amazing gimmicks. Mr. Williams picked his agent because of his "This House Talks" sign. Uses an 800 number to capture leads & texts them right to the agent's phone. Very impressive to demonstrate to a potential seller.

But a gimmick is just a tool, & it doesn't sell the home any more than the latest lazer level makes an incompetent carpenter into an expert. Selling today takes expert pricing, staging, negotiating, and marketing, plus integrity, diligence, & experience. Not one or two flashy gimmicks. Just ask Mr. Williams.

9. Mr. Williams also liked the agent's warm friendliness. Can't say we blame him--we like the guy too. But he's only been in the business a few years, has never seen a market like this before, and it shows:

Of the 27 listings Mr. Williams' friendly agent has taken over the past 12 months, only 4 have actually sold. 16 have expired or been canceled without selling--4 expireds for every sold! We had zero actual expireds in the last 12 months, but quite a few closed sales. Gimmicks and friendliness alone just don't cut it.

8. Never list with someone from work. Inherently bad decision. Today you need a full time agent who's good enough to make his living from real estate sales alone. If you know her from work, she's not full time, no matter what she claims. Blair and I were both part time once--the first two years of our career, when we were also quite inexperienced. We know a whole lot more now than we knew then! Never, ever, ever list with a coworker, unless you work in a real estate office!

7. Friend or family, especially one who "really needs" the listing (duh!).

I recently met a fellow whose Lakewood home had been on the market for five months without an offer.

"How'd you pick your agent? " I asked.

"Friend of my wife."

"Any idea how many homes she's sold in this tract?"

"Not as many as you."

Actually, that agent had never even listed a home in that tract before. In fact, I just checked the SoCalMLS data base, & she's never listed or sold a home in the entire city of Lakewood. And she's only sold a grand total of one listing in the past 12 months, anywhere! That home in Lakewood's still on the market, but now it's in foreclosure.

Blood lines, friendship, club or church membership, or having a kid on the same soccer team as yours has absolutely nothing to do with being a good agent. Before you even mention your situation with a friend or relative, do some research. (We'll give some tips in a few days.) Otherwise, you may become "obligated" to list with an agent that isn't right for you. It's a great way to ruin a friendship or family relationship. And lose money.

6. Because of the office or franchise. You can't tell a book or an agent by their jacket! Our 30 years of selling hundreds of homes has taught us that their are bad agents in virtually every office. And good ones in some. You're never even going to see the broker, let alone any franchise employee.

Franchises are primarily created to help the broker recruit agents and secondarily to pool funds for generic TV and other old-media ads.

The office we work at is affiliated with one of the most successful franchises in California, but I don't think we've ever once mentioned which franchise it is. You really have to search to even find it on our commercial website. That's because it just isn't that important. We're the ones our clients see & must rely on.

Those are five of the top ten mistakes we've seen sellers make, but this post is getting too long.

For the top five wrong reasons to list, including one that most agents know will get them the listing almost every time, just click here.

As part of the new economic stimulus package that was recently passed, the Orange County real estate market will be seeing far more then rebate checks.  The new package doubles the limits on FHA mortgages and can really be a huge benefit for first-time buyers and low and medium-income buyers.  Here’s how.

Basically, prior to the new stimulus package the max amount an FHA loan could be was just over $360,000.  Well, if you live in the Orange County area, you know how difficult it can be to find a home under that price.  But the new bill has more then doubled the limit for FHA loans and is now capping out at $729,750.  This is an awesome increase that will last throughout 2008 and can really be a huge incentive for people to get out and buy an Orange County home.

Since FHA loans provide lower- to medium-income buyers and first-time buyers with more affordable mortgage options, this new higher limit could really be exactly what spurs people to invest in Orange County real estate.  You will be able to get great FHA loans on a home you really want.  And with interest rates and home values at all time lows, now really is a great time to get in the market.

If you have any questions about the new FHA loan limits, shoot me an email at Angie@AskAngie.com.

Buying a home is a huge investment and most people find the process, especially when doing it for the first time, to be stressful.  While it’s true that home ownership is a huge responsibility, the fact of the matter is that owning real estate is one of the best moves you can make in terms of building wealth and security – just ask any financial expert. 

The world’s wealthiest people own real estate – Donald Trump has built an empire from real estate, even after a bankruptcy.  And while not everyone is in the position to be able to buy a home in the Orange County real estate market, most people are and you could be one of them. 

Think about it.  How much are you paying in rent each month?  Wouldn’t it make more sense to spend that money on a home instead of putting it into your landlord’s pocket?  And there has honestly been no better time to buy a home in the Orange County real estate market.  With low interest rates and rock-bottom home prices, now is the best time to buy – especially if your housing budget is tight. 

Check out the New York Times Rent vs. Buy calculator to see if now is a good time for you to invest in an Orange County home.  If you have any questions or need help understanding how much home you can afford, shoot me an email at Angie@AskAngie.com.