Latest Headlines on OCRegister.com
[x] Close
Lansner on Real Estate ~ The latest news about the housing market from Orange County Register columnist Jon Lansner.

Archive for the 'Insider Q&A' Category

« Previous Entries

What to be thankful for in real estate

November 21st, 2009, 12:01 am by Jon Lansner

The federal tax credit extension, lower foreclosure rates, rising home prices, increased revenue and some rosy forecasts. Has real estate — after four years of slumping sales and prices –  hit bottom? These thoughts may be some of the things evoking smiles on the recession-weary faces of real estate types this year. Insider Q&A asked some real estate insiders what is there is to be thankful for this in the real estate business this Thanksgiving …

thanksgiving“We are thankful for the message the consumer has provided to us as an industry and as a company.  As a 33-year-old company, we have been witness to several business cycles, but nothing like we have experienced in the last four years.  The devastation to home values, to people’s lives and to their finances has humbled our industry and our firm. The consumer has drawn the proverbial line in the sand and is demanding much more from us an industry and as a company.  It is no longer, get a license, sell a home.  It is now, understand the very client you serve, meet their needs and most of all, with education and integrity.  I am thankful for the line in the sand and those companies in our industry that miss this wonderful opportunity to assist buyers and sellers of real estate in a new and meaningful way, will not survive the current market.  As we look to the future, there is an end to every cycle and we believe that the end to the current cycle is in site.” – Michael Hickman, Seven Gables Real Estate

thanksgiving“I’m thankful that housing in Orange County has become affordable again to first-time homebuyers.  After being priced out of the market for so long, prices have dipped to a level that people can again afford to buy their first home and building for the future.  Many Realtors have re-discovered the simple joy of handing a first-time homebuyer the keys to their first home and to the American Dream.” – Tom Pelton, Prudential California Realty

thanksgiving“This year gave hope to many folks priced out of the housing market, from the artificial price run up back to the beginning of this century. Some families are grateful they can now qualify for a home in more realistic price ranges. Government intervention with their loan modification efforts have saved thousands of borrowers homes from foreclosure, giving them a chance to preserve their home ownership.” – Tom Moon, Pacific Moon Real Estate Read the rest of this entry »

Posted in: Brokers, builders, etc. • Insider Q&A • • | 37 Comments »

Realtors ponder bottom, bust and WalMart

November 14th, 2009, 12:05 am by Jeff Collins

Realtors from throughout the nation descended on San Diego Friday for the four-day National Association of Realtors convention.

Insider Q&A queried a handful of attendees about the state of the market, lessons learned from the housing meltdown, if any, and whether Wal-Mart should be allowed to make loans to ease the credit crunch. A sampling of responses:

Us: Has the housing market hit bottom?

Marsha Holmes, sales agent with Birmingham Guaranty Realty, Birmingham, Ala.: “I’m hoping we hit bottom. In my area, sales have picked up 3% or 4% over the same time last year. Every little bit helps. I think a lot of it is the public fear is not prevalent. … I don’t think lending has loosened at all.”

narpatpaulsonw

Paulson

Pat Paulson, sales agent with Exit Lakes Realty, Minneapolis, Minn.: “We have hit bottom at the low end, but not hit bottom at the high end. Sales have been up since the sometime in ‘08. We hit the peak in supply in ‘08 as well. … Foreclosures are selling faster than they come on the market, but we are very weak in the upper price ranges.”

Nancy Koo, listing agent with Watson Realty Corp., Maitland, Fla.: “I think we just about hit bottom, and the Obama stimulation package really helps. The 2009 stimulation encourages the first-time buyer; so the lower-priced housing (sells) quick.”

Rick O’Sullivan, economist with Change Management Solutions, Arnold, Md.: “I think it’s hit bottom, but I don’t think it’s going to turn up anytime soon.”

Anthony Mendez, broker for AM & Associates in Downey and Cypress: “It hasn’t yet because there’s a large shadow inventory that the banks are holding. … I would say (prices will come down) another 10% to 15%.”

Us: Are short sales getting any easier?

Vicki Cox Golder, 2010 NAR president: (Short sales are easier) “because people are becoming more educated about it, and we’re more educated about being able to advise our customers about what to expect. … But I don’t think it’s easy on anybody when you have to go to a short sale.”

Holmes: “No, they’re not. They are very challenging. Even with all the inventory that (banks) have, short sales are very challenging. The banks just make you wait and wait and wait, and when people are ready to buy, they don’t want to wait anymore.”

Wong

Wong

Betty Sun Wong, broker-associate with Prudential California Realty, San Francisco: “I haven’t been successful with a short sale yet. It’s not any easier at all. Many agents don’t know what they’re doing.”

Paulson: “Still taking a long time. The buyers and their agents tend to avoid short sales. The buyers need to have some certainty in the homebuying process, and short sales don’t provide that certainty.”

Us: Are there any lessons to be learned from the economic bust? What things did Realtors do that should be avoided in the future?

Golder: “For a Realtor to put someone in a property they can’t afford is something we never do. We don’t have to do any soul searching because our code of ethics is solid.”

Holmes: “I don’t think agents did anything to cause (the meltdown). Lenders pretty much control who gets the loans. We may have facilitated some transactions, but that’s all we are is transaction brokers.”

Paulson: “The blame … can be spread throughout the whole system. With regards to Realtors and mortgage loan originators, those who work face-to-face with the buyers did not do their buyers a service when they let them get involved in poor-quality loans. They said, ‘Don’t worry about this. You can (refinance) out of the loan in three years.’ I would call that poor-quality advice.”

Wong: We all need to take responsibility. Realtors need to get more training, take a class. … (Realtors erred) because they’re hungry and just want to get a listing at any cost.”

Us: Should NAR rethink its stance against allowing WalMart and other commercial firms to enter banking as a way to relieve tight credit?

Holmes: “I’m not sure that’s the answer. Retailing need to do what retailers do. Not that lenders are perfect. But I feel better with someone who does loans for a business rather than someone who sells toys for a business.”

Mendez: “I believe so. If anybody has enough liquid cash and can bring it into the market, I’m for it. … If WalMart wants to get into lending, I’m for it.”

Paulson: “I do not think they should rethink the stance. … I think the banks should do banking, … and I don’t think Wal-Mart should get into banking.”

Other Insider Q&As …

Posted in: Brokers, builders, etc. • Insider Q&A • Outlooks • • | 60 Comments »

Home bargains hard to catch in Costa Mesa

November 7th, 2009, 2:00 am by Jon Lansner

cm-listing-1841-tahiti-drive

Ask: $1.07 mil

Costa Mesa: Monroe

Ask: $550,000

Ask: $325,000

Ask: $325,000

Insider Q&A knows that real estate is a local-local business and that market conditions can vary by city and even neighborhood.

In that spirit, we went “micro” this week … chatting with Valerie Torelli of Torelli Realty about what’s up — what what’s not — with housing in her specialty area: Costa Mesa. Click on photos above of 3 sample properties from the city for larger images and house details …

Us: In general, how does the city market look?

valerie-headshot-photo2Valerie: The Costa Mesa market is fairly healthy with just under 150 units currently listed in the Multiple Listing Service: 114 are single family, the rest condos. The amount of homes for sale under $500,000, which is where there is the highest demand, is in very short supply with only 22 single family homes for sale. The catch is that almost every one of them is a short sale and the price listed may or may not be the price that the lender will ultimately sell for. In fact, many of these wind up being “teaser prices” and get bid up. The first-time buyer or lower-priced buyer has the most difficult time finding a property to even bid on. The homes over $800,000 — about 30 with the majority located in Eastside Costa Mesa — are sitting out there with not a lot of activity. Unless the property truly has something special going for it, these homes tend to linger on the market longer. The homes over $1,000,000 have very few takers in this market.

Us: Geographically, do any neighborhoods look stronger than others?

Valerie: The Eastside and Mesa Verde areas of Costa Mesa are still the most sought after, mostly due to what those neighborhoods have to offer: proximity to Newport Beach, and golf courses, respectively, and larger type homes. These two areas are usually high on buyer’s priority lists, and still remain so, but with the larger price tags it prohibits many entry-level buyers. With price-to-value being very high on both the buyer’s and lender’s radar, the central areas, South Coast Metro and Westside have fared quite well. We expect to see continued demand in these areas because of their relative affordability.

Us: What are you telling Costa Mesa sellers?

Valerie: We are telling Costa Mesa sellers not to become greedy, under no circumstances. This tactic is not going to work. Read the rest of this entry »

Posted in: Insider Q&A • Local-Local • Top tale • • • | 25 Comments »

13 spooky trends that haunt real estate

October 31st, 2009, 2:00 am by Jon Lansner
uclaprice-oct-091 uclasales-oct-091 uclapermits-oct-091

It’s the time of year when forecasters — both inside and outside of the real estate business — look into boiling cauldrons of economic data and speculate what they think next year may look like for hosuing, office towers, apartments, etc.

So far, the outlooks we’ve seen have a common theme: A modest continuation of the mild housing recovery we’ve witnessed in recent months (click on UCLA forecast charts above for larger images) — and continuation of pain for commercial real estate markets.

witchBut in dicey times like these there are no guarantees. In the spirit of Halloween, Insider Q&A asked around town what was spooking 13 real estate watchers about the current real estate climate …

  1. “The spooky thing is the substantial lack of  inventory on the market in the conforming loan price ranges. Potential buyers get  discouraged when they find they are competing with 20 other buyers for  the same property.” – Rich Cosner, Prudential California Realty
  2. “What is spooky is the overall economy and  unknown factors that could end all the exuberance.  Rising interest rates and  unemployment are the biggest factors that could impact the housing  market and there will be a further negative effect if the federal tax credit is not renewed.” – Tim Kane, MBK Homes
  3. “Three unanswerable questions spook me: (1) What’s REALLY going to happen to all the foreclosure inventory that hasn’t brought to market by banks? (2) Does how that overhang is handled really matter? (3) Will government continue to be heavily involved in making sure lending is affordable and accessible?” – Justin Esayian, The Hoffman Company
  4. “Although housing market appears to be recovering, the combination of millions of properties currently in default — but not yet foreclosed — and the tidal wave of resets on “option” payment mortgages over the next year is spooky.” –   Clyde Kendzierski, FSG
  5. “What spooks me are the big unknowns on the foreclosure front: Some struggling homeowners are still waiting for a response from their lender or servicer, while others are amidst an attempted loan modification or short sale. What’s scary is there’s no way to know how many of these cases will ultimately end up in foreclosure, or when.” — Andrew Lepage, DataQuick
  6. “Unbelievably, the one thing that ’spooks’ me about the current real estate market is the fact that there is very little fresh, new inventory below $500,000.This housing downturn has been full of surprises and this year’s ’spooky’ twist has been an unexpected drop in the inventory.” – Steve Thomas, Altera Real Estate
  7. “What appears to be a residential real estate recovery — locally and nationally — may have lulled us into a comforting feeling about the market. Should we be ’spooked’ about next year? Yes! The segment that really ’spooks’ me for next year is all the “Jumbo Option Arm” loans exploding and depreciating values and no financing liquidity.” – Phil Immel, Immel Team
  8. “Spooky? See-through commercial buildings with the lights off in The O.C.” – Chriss Street, county treasurer/tax collector
  9. “My instinct is that the bottom of the housing market was in the second quarter of 2009 for a wide variety of reason.  My fear … the end of the federal and state subsidies to buyers result in the market againfreezing.” – John Husing, Economics & Politics Inc.
  10. “A few things that spook me about real estate: The coming wave of commercial real estate defaults and related illiquidity; a complete vacuum in the secondary mortgage market hindering a residential recovery; but, without a doubt, the thing that spooks me the most is unemployment. Left unchecked, it will drag out any sort of real estate recovery.” — Jason Perrin, Greencrossing Real Estate
  11. “‘Animal spirits’ continue to haunt homebuyers and sellers.  Fear — ginned-up by so many hysterical headlines — keeps some qualified buyers from taking advantage of historically low interest rates, rising affordability, and an $8,000 federal tax credit.” – Mary Jane Cambria, president of the Orange County Assocation of Realtors
  12. “As a self-fulfilling prophecy, as commercial real estate losses are recognized, there will be limited life insurance companies, pension funds and commercial banks to refinance additional loans which will lead to further defaults.  This downward spiral of commercial real estate property values is what gives me the ’spooks.’” — Barry Gross, Developers Research
  13. “Since I have been here before — during my 30 years in real estate — it spooks me if I don’t purchase enough real estate now like I did from 1990 to 1995, of which I profited very well over the last few years.” – Bill Plattos, First Team
2010 O.C. home pricing will be ...
View Results

Other Insider Q&As …

Posted in: Insider Q&A • Top tale • • | 49 Comments »

Developer gambles on Irvine condo tower

October 24th, 2009, 2:00 am by Jeff Collins
Plaza: Room Plaza: Tower Plaza: Roof pool

The high-rise condo market got off to a rocky start in Orange County, fueled mainly by speculators gambling that the idea would catch on here. The boom has fizzled, and around 50 condo towers on the books in O.C. since have been scrapped or mothballed.

3000 The Plaza, a 15-story luxury condo tower in Irvine featuring a roof-top pool, was the latest casualty. It was headed for foreclosure and bankruptcy when a minority owner, developer Geoffrey Edmunds & Associates of Scottsdale, Ariz., bought out the majority owner, Opus West, an Arizona builder in bankruptcy.

Restructuring loans and debts gives Edmunds two years to finish sales at the final slice of a three-tower complex on Jamboree Road. He reported Thursday that he has sold 19 of the 55 vacant units during the past two months, four of them in the past week.

Assuming that escrow closes on all of them, that still leaves 36 units to sell, with a retail value of at least $22 million. We asked him why he thinks he can pull it off.

Us: 3000 The Plaza was in the final stages of construction when the slump hit housing hard, and of course, sales there have been among the casualties. What makes you think you can turn this project around in this economy?

geoffreyedmundsmugGeoffrey: It’s true that the recession has hammered all sectors of real estate. Our optimism comes from the success of the project. We sold out the first two towers of Plaza Irvine and are more than halfway through sales at 3000 The Plaza. The towers have become the benchmark for high-rise living in Orange County because of their quality and location. Buyers want it all, and 3000 The Plaza has it.

Us: What are your tea leaves telling you is about to happen in Orange County, with housing in general and high-rise living in particular?

Read the rest of this entry »

Posted in: Insider Q&A • Top tale • • | 13 Comments »

Slowdown gets O.C. renters unprecedented pricing

October 19th, 2009, 11:01 am by Jon Lansner

With landlords scrambling to lure in tenants to fill empty apartment units by offering numerous discounts, Insider Q&A figured we’d ask “What’s up?” of Judith Legan, executive director of the South Coast Apartment Association. Her association represents more than 95,000 apartment homes in Orange and southern Los Angeles counties.

blog-aptUs: Are rents still falling?
Judith: We’re seeing signs that the market is beginning to stabilize, but it may have been a seasonal bump as summer is generally a busy time, with people wanting to get settled in a new home before school starts or a job change. Like other sectors of real estate, the apartment market is tied heavily to job growth.

Us: Are we seeing new or more incentives?
Judith: Yes. As is typical in down markets, apartment owners are being very inventive in the ways they drive traffic. Western National, for example, offered a “Layoff Protection Plan.” Irvine Company created a special incentive for recent college graduates. Check apartment Web sites, rental housing magazines and housing sections of newspapers to find some clever promotions.

Us: Where is the market the softest, high or low end?
Judith: The apartment market is experiencing the same challenges at the higher end as the rest of the market. Renters are generally looking to cut expenses. What does that mean for consumers? An unprecedented opportunity for those with stable jobs to move up.

Us: What advice would you give renters? Read the rest of this entry »

Posted in: Apartments/Rents • Insider Q&A • Top tale • • | 29 Comments »

Giant landlords desperate for refinance money

October 17th, 2009, 12:00 pm by Jeff Collins

Stan Ross is the board chairman of the USC Lusk Center for Real Estate. In a prior life, he was Vice Chairman-Real Estate Industry Services for Ernst & Young. We asked for his views of what’s happening in the beleaguered commercial development industry — beset of late by defaults and bankruptcies — and asked how some developers might survive this downturn.

Us: We’ve seen several stunning defaults in commercial properties recently as assets end up under water. The St. Regis hotel, Maguire Properties, the South Coast Home Furnishing Center and numerous housing and retail developments that are being sold for pennies on the dollar or given back to lenders. And yet brokers say that the full impact of commercial foreclosures hasn’t hit yet. What’s in store?

lusks-stan-rosscropStan: The commercial sector has not yet fully seen the impact of illiquidity in the capital markets. As a result, we haven’t seen the full magnitude of defaults or foreclosures yet in the marketplace.

What’s in store is that many of these companies (borrowers) will first go into covenant defaults on their bank financing. They will fail to meet certain covenants such as leverage ratios or debt service coverage as a result of market conditions and are in technical violation. While these are non-monetary defaults, it gives the lenders the option as to whether or not they will give a waiver, extension, modification or start foreclosure actions.

A lot of that is taking place quietly behind the scenes, but a number of these companies do not have the cooperation of their lenders and many of these assets will be put in “play” in the market.

In addition to the bank financing, there is a huge amount, almost $200 million of commercial mortgage backed bonds that are coming due by the end of ’09 and about $275 million going into ‘10. Since there’s no liquidity in the market, there is no known direct source of replacing those commercial mortgage backed bonds.

With many of these bonds, it’s difficult, if not impossible, to negotiate with large groups of investors and a number of different classes of their security. The servicers do not have the authority or cannot get the group together to agree on some restructure or loan modification. Many of these companies will have to find another source to refinance out and many of them will be replacing this debt with equity or new expensive debt sources. Many of the REITs have raised equity this year.

So far we haven’t seen a big dumping of commercial portfolios on the marketplace for discounts. But standby.

Us: How will all the tumult in commercial real estate impact the economy and affect the economic recovery?

Read the rest of this entry »

Posted in: Commercial property • Insider Q&A • Top tale • • • | 7 Comments »

« Previous Entries