Archive for February, 2016

Do you want free money?  If you buy a home from a homebuilder without an agent, you pay full price. If you buy a home with us as your agent, you get 1.5% back. Same house, but 1.5% of the purchase price refunded back to you. It’s free money! Take it!  As a bonus, you get full agent representation. Did you know many items in a builder’s sale contract are negotiable? Do you know which options are better installed by the builder and which ones are better done by others later? In addition to helping negotiate a better price, we also prepare detailed reports showing the cost of ownership of your new home. Why put yourself at the mercy of…[READ MORE]

IRVINE, Calif., February 1, 2016 – OC Housing News Orange County Housing Market Report: February 2016 Historically, properties in this market sell at a 0.6% premium. Today's discount is 3.1%. This market is 3.8% undervalued. Median home price is $593,600 with a rental parity value of $615,800. This market's discount is $22,200. Monthly payment affordability has been worsening over the last 1 month(s). Momentum suggests unchanging affordability. Resale prices on a $/SF basis increased from $394/SF to $394/SF. Resale prices have been rising for 11 month(s). Over the last 12 months, resale prices rose 5.3% indicating a longer term upward price trend. Median rental rates declined $16 last month from $2,740 to $2,723. The current capitalization rate (rent/price) is 4.4%.…[READ MORE]

Higher mortgage interest rates will reduce future demand. Today's homeowners will not experience the home price appreciation enjoyed by the previous generation. Many would-be homeowners rush to the market to lock in low mortgage rates out of fear of being priced out forever. They fear that if they wait, houses that are affordable today won't be affordable tomorrow. Perhaps there is some basis for this fear, but if they paused for a moment to consider the ramifications of that occurrence, they might not be in such a hurry to buy after all. If today's homebuyer were to be priced out tomorrow, they probably wouldn't be alone in that predicament. In fact, if a great many people are priced out by…[READ MORE]

Coastal community real estate is more expensive relative to rent than it's ever been. A bubble perhaps? Very expensive real estate dominates Coastal California communities. The narrow strip of land within a mile or two of the ocean is one of the most desirable climates in the world, and many people of great wealth want to live there. The wealthy have done very well over the last 30 years, and the concentration of wealth at the top is so high that the richest 1% of Americans own 42% of all the wealth in the country. As the rich get richer and as other opportunities for investment wane, many are competing for the limited number of prime beach properties, sending prices…[READ MORE]

Rising interest rates and a falling affordability ceiling will limit home price appreciation for a decade or more. There is no free lunch -- at least according to economists. However, if you work for the federal reserve, you truly believe you can have a free lunch. They lowered interest rates to reflate the old housing bubble, and they convinced people nobody has to pay for it. They created wealth out of thin air -- that and printing about four trillion dollars. Unfortunately, there is a price to be paid. It will either be paid by holders of wealth through currency debasement and inflation, or it will be paid by future homeowners through lower levels of home price appreciation. Think about…[READ MORE]

For long-term home occupancy, owning is generally more financially favorable; however, there are strong reasons not to buy and rent instead. Considering the many benefits of home ownership, why would anyone chose to rent? It’s said that the decision to own is emotional whereas the decision to rent is financial. During the housing bubble, renting was a wise financial move because it cost twice as much to own than to rent, but now that prices are much closer to rental parity, there are fewer compelling financial reasons to rent rather than own. Between 35% and 40% of Americans chose not to buy and rent their primary residence instead. The reasons vary, but they all generally relate to commitment and finance.…[READ MORE]

Contrary to popular belief, capturing home price appreciation is not the best financial reason to own real estate. Many people want to own their homes because they believe the property will rapidly go up in value, providing them an endless stream of free money they can spend on anything they want. During the housing mania, lenders allowed anyone to finance up to 100% (or more) of the value of their property, and with "innovations" in mortgage finance, their payments would actually go down! Quite a deal. Unfortunately, those innovations proved to be less than successful, and most people who availed themselves of that free money lost their homes in foreclosure, or they barely hang on through a loan modification, probably…[READ MORE]

Monthly Housing Report

In Memoriam: Tony Bliss 1966-2012