Archive for the 'Eyeball '09' Category
January 10th, 2009, 12:01 am by Jon Lansner
After we finished Eyeball 2009 last week — 19 days of Orange County real estate outlooks (Entire series is  HERE!) — we realized we didn’t discuss the local condo market. So to make up for that ommission here’s a bonus Eyeball with …
Realtor Veronica Hicks of CondosEtc.
 Eyeball: What’s the OC condo outlook for 2009?
Veronica: 2009 is going to be another good year for buyers; but not a hot year for condo sellers. Prices are continuing to decline and distressed condo inventory has grown to more than 50% of the active inventory. On the average most condo owners stay in their condos on an average of 3 to 5 years, so most would-be sellers will have purchased peak of market or pre-construction condos. Most of the condo owners that purchased a condo between 2004 and 2006 will look to sell within the next couple years, so supply will continue to outpace demand over the next couple years. High-rise condos will take a bigger beating than any other segment of the condo market because of cost of ownership and the difficulty to get a loan in these buildings, especially with the new loan guidelines. Many of the high-rise buyers are buying second homes may not be willing to plop down the 30% to 35% down payment requirements many lenders are requiring and are certainly being cautious about overpaying in any event.
Eyeball: What’s the chance we bottom in 2009?
Veronica: As much as I would like to believe the condo market will bottom in 2009 it is more than likely to be 2010. The condo market tends to lag the Single Family Housing in its recovery. As single family home prices drop, and inventory builds, buyers will look to get into a single family house before a condo if it is affordable causing condo inventory to run a little higher.
Eyeball: What do you fear the most about the real estate market?
Veronica: I fear the impact of the limited mortgage products available and the tougher guidelines in the lending segment of the real estate market. The lack of available stated income and “low down payment” programs for first time homebuyer and second homeowners will have a negative impact on re-sales. As first time buyers have more difficulty buying, sellers who would otherwise trade-up to a house will find themselves locked into their condo. Mortgage products are going to require tougher guidelines for owner occupancy and delinquencies in HOA dues, making it harder for first time buyers to get loans on these products.
Eyeball: What gives you hope?
Veronica: That the market is going to become more affordable and equivalent to rental cost which will allow more first time buyers in the market and many of the loan products out there will cater to that buyer group. That is a really fun group to work with because they know what they want and they are excited about getting into their first home. They really appreciate the work that we do and that makes the job worth it.
Eyeball: What surprise will we be talking about at a year from now?
Veronica: Don’t be surprised if twice as many short sales happen in 2009 than in 2008. More condo owners are being affected by their community short sales and tighter lending guidelines on communities with higher delinquencies and a higher percentage of rentals will take a bigger toll on sales. 70% owner occupancy rates and 15% or less in HOA delinquencies may be tough for communities who had so many speculators, especially the condos built between 2002 and 2007. The lower prices go, the less likely condo owners can dig into their pockets to avoid a short sale or foreclosure. The numbers of condos purchased in 2004, 2005 and 2006 were more than twice the number of 2008 condo re-sales. Those are the owners that are more than likely needing or wanting to move and that will in turn slow down the single family residence sales.
Here’s the 19 other O.C. outlook interviews that made up Eyeball — in order of reader popularity, as measured by our click counter …
- CSUF dean Puri eyes no home-price rebound until 2011
- Pimco’s Simon eyes O.C. home price bottom in late 2009
- Consultant Gollis eyes flat-at-best O.C. housing market
- Outgoing Realtor prez Gaylord eyes O.C. rebound by summer
- Realtor group prez Cambria eyes housing’s opportunities
- Tenant advocate Levy eyes falling O.C. rents
- Property investor Brunswick eyes new, cautious paradigm
Posted in: Eyeball '09 • Meltdown • condos • CondosEtc. | 34 Comments »
January 8th, 2009, 7:00 pm by Jon Lansner
What will happen in 2009 for local real estate? We’ll gave you 19 opinions to help you for your own guess. Local insiders — and keen observers — told you what they thought lie ahead for Orange County housing in our third annual holiday-time forecast explosion, “Eyeball 2009.”
If you missed any of Eyeball, here’s the 19 interviews (in order of popularity, as measured by our click counter) ….
- CSUF dean Puri eyes no home-price rebound until 2011
- Pimco’s Simon eyes O.C. home price bottom in late 2009
- Consultant Gollis eyes flat-at-best O.C. housing market
- Outgoing Realtor prez Gaylord eyes O.C. rebound by summer
- Realtor group prez Cambria eyes housing’s opportunities
- Tenant advocate Levy eyes falling O.C. rents
- Property investor Brunswick eyes new, cautious paradigm
Your opinion is important, too.
O.C. median price in 2009 ...
And, when we say median, we mean the DataQuick’s all-residences sales-price midpoint, December ‘09 vs. December ‘08!
Finally, if you’re a history buff …
- See what we found in Eyeball ‘08 HERE!
- … and in Eyeball ‘07 HERE !
Posted in: Eyeball '09 | 9 Comments »
January 6th, 2009, 11:00 am by Jon Lansner
Eyeball 2009 — two weeks-plus of daily Orange County real estate outlooks — comes to an end this day! (Entire series is HERE!) Hope you enjoyed it! Our 19th and final guest is …
Gary Watts, the controversial Mission Viejo broker/forecaster who’s either hated or loved, depending on the market cycle or your own view on the real estate world. (His 2007 Eyeball IS HERE; 2008 IS HERE!)
 Eyeball: What’s the O.C. housing outlook for 2009?
Gary: 2009 will be Phase II of rebuilding the real estate price structure in Orange County. This war-torn market began building Phase I, the foundation, in the 4th quarter of 2008. Properties under $250,000 have firmed up and are experiencing multiple offers. Phase II will be the process of building on this base. Even now, we see the market between $250,000 and $300,000 moving quickly. This will be the next building block to firm up the market, probably by the spring of 2009. These building phases will continue throughout the coming years, as each higher price level begins to build on the previous price foundation.
Eyeball: What’s the chance we bottom in 2009? What might it look like?
Gary: The “bottom” of real estate will be in phases. I expect we will firm up the prices below $500,000 before the end of 2009. However, prices above $500,000 will still not see a bottom in 2009.
[ More Eyeball '09 HERE | Eyeball '08 | '07 ]
Eyeball: What do you fear the most about the real estate market?
 • Click to vote on '09 pricing! Gary: By the end of January, we should get a report from the Orange County Tax Collector letting us know how many homeowners failed to pay their first installment of property taxes. The long-term average of missed payments has been around 3.5%. In the past two years, it has increased to approximately 5.6%. If the percentage of homeowners not paying this first installment is much higher, it would be a leading indicator that there will be more “depressed properties” coming onto the market in 2009. This coupled with increased unemployment would continue to put downward pressure on housing prices, and severely delay the rebuilding — price structure — process.
Eyeball: What gives you hope?
Gary: What gives me some hope for 2009 are the declining interest rates for home loans. When you combine these low rates with the current housing prices, it becomes a great “one-two” punch for homeownership! This should bring more buyers, who were previously priced-out of the market, back. It will also be a tremendous benefit to the first-time homebuyer. For existing homeowners, who still have equity in their property, it will allow them to restructure their financing at a lower rate.
Eyeball: What surprise or surprises will we be talking about a year from now?
Gary: We can’t take any more surprises!
Before you go, give us some feedback on Eyeball 2009 …
Overall quality of this outlook series?
Posted in: Eyeball '09 • Meltdown • Top tale • Eyeball '09 • Gary Watts | 45 Comments »
January 5th, 2009, 12:19 pm by Jon Lansner
It’s the next-to-last chapter in Eyeball 2009, our holiday gift in the form of a series of outlooks on local real estate conditions! (Series is HERE.) Today’s Q&A is our 18th in Eyeball 2009. We welcome …
Lender Norm Bour, owner of Mortgage Accelerator Plus of Laguna Hills.
 Eyeball: What’s the O.C. housing outlook for 2009?
Norm: The cliché “I have some good news and I have some bad news” will continue onward into 2009. For buyers with good credit, decent jobs with decent income and a little bit of money they will be joyful. They have not seen any decent inventory or choices for many years. As the prices continue to drop (that’s the bad news) they will have to make a commitment: Do they wait for prices to drop more? Do they try to catch interest rates at the bottom? Or do they decide to become homeowners again, or perhaps for the first time? FHA financing every month will become more prevalent, getting jumbo loans ($625,000 and up) will remain difficult. Creative financing will fill some of the void and the real estate agents will continue to exit their profession so only the strong will truly survive. The short end of the stick goes to all homeowners and sellers who can only watch in dismay as their equity erodes month by month. Most anyone who bought in the last 5 years — or anyone who refinanced greater than 60% loan-to-value — are all under water.
Eyeball: What’s the chance we bottom in 2009? What might it look like?
Norm: The real estate bottom I believe will not be hit until the very end of 2009; or more likely into 2010. That has been our prediction for the past two years. And there is nothing that I see to sway me. The SPEED of this
downward spiral has boggled my mind — and the DEPTH is not at the resistance level yet. Had we said last year that prices would drop 30% or more we would have been made out to be fools. And “bottom” is a very difficult target to hit. There will be areas to hit bottom before others, like the beach vs. the Inland Empire.
[ More Eyeball '09 HERE | Eyeball '08 | '07 ]
Eyeball: What do you fear the most about the real estate market?
• Click to vote on '09 pricing! Norm: That is a great question. I started saying back at the tail end of 2007 that
this down cycle was scaring the tail off of me and nothing has made me change my mind. This is my third recession, and yes, we were calling it a recession already in the forth quarter of 2007, GNP be damned. The government bean counters and media spinners put up a valiant front, but the die was cast a long time ago and nothing can unwind the damage quickly. On to your question. What really scares me is that prices will continue to drop beyond all “normal” expectation, possibly due to outside circumstances. If the Middle East really starts to escalate and oil does go ballistic again, and if the world economy does get even worse and if interest rates do start
going up and jeopardizing our improving Affordability numbers, then what is already bad could get worse. A pretty dark picture I admit, but it’s a lot darker as we end 2008 than anyone ever would have visualized. I label myself an optimist, but a realist from 28 years in this industry.
Eyeball: What gives you hope?
Norm: The resilience and resolve of Americans. We as a nation and as individuals have faced tough times. We’ve had wars that took our youth and our innocence, economic times that rocked us to our core, and an attack on our biggest city. Yes, we’ve seen bad times before, and people will be hurt, and lives and families will be damaged, make no mistake about it. I believe that we will come out of this crisis leaner and meaner, smarter and more unified. Family will become important again and relationships will strengthen as we all lean on each other for moral support. Maybe that sounds hokey or storybook, but for many years we were spoiled, whiny spendthrifts who thought that we were kings of the world; we could do not wrong, we were infallible investment geniuses. We are kings, but we’re humbled now.
Eyeball: What surprise or surprises will we be talking about a year from now?
Norm: I’d be surprised if I had any! I can only hope and pray that we will find some ray of light and hope in this coming year and this new administration does not try to put Band-aids over decapitated limbs. These bailouts have become epidemic and businesses and individuals must remain accountable and not depend on taxpayers to redeem their image.
And you’ll want to come back …
- TOMORROW’S FINALE: Realtor/economist Gary Watts
- All of Eyeball 2009 to published date is HERE
Posted in: Eyeball '09 • Top tale | 26 Comments »
January 4th, 2009, 12:00 pm by Jon Lansner
Eyeball 2009 is our holiday gift to you: Two weeks-plus of outlooks on local real estate conditions! A new vision every day of the week at noon through Jan. 6! Our 17th guest is …
Steve Thomas is president of Altera Real Estate in Aliso Viejo and produced a biweekly O.C. market report that this blog tracks regularly!
 Eyeball: What’s the O.C. housing outlook for 2009?
Steve: The Federal Reserve announced this week that they were willing to employ “all available tools” to battle the current economic recession. They cannot reduce the federal fund rate any further, so now they are going to embark on a road of “quantitative easing.” The Federal Reserve is going to do whatever it takes to get the frozen financial markets free flowing again and are willing to buy “pools” of loans to make sure that there is liquidity. We have already seen an appreciable drop in interest rates by their actions over the past couple of weeks and with this latest announcement, rates dropped further. Interest rates are starting to drop below 5%. All of the ingredients for a market recovery are there: low interest rates, lower prices, the reemergence of the first time home buyer, FHA financing up to $625,500 with smaller
downpayment requirements. Demand will be stronger in 2009.
Eyeball: What’s the chance we bottom in 2009? What might it look like?
Steve: With the Federal Reserve, the new Obama Administration and Congress working in unison to tackle the recession, the housing market and the general economy is going to receive a lot of stimulus. After our new
president is sworn in, there will most likely be foreclosure abatement with real teeth (thus far no teeth) embedded in what is being coined as the “New, New Deal” with tones from President Franklin D. Roosevelt.
With all of this stimulus, there is a high potential for a bottom in Orange County real estate by mid-2009.
[ More Eyeball '09 HERE | Eyeball '08 | '07 ]
Eyeball: What do you fear the most about the real estate market?
• Click to vote on '09 pricing! Steve: I think President Roosevelt said it best, “the only thing we have to fear is fear itself.” We have moved passed the “information age” to the “over-information age.” PDA’s, emails, Internet, cable news, blogs, etc., have made it all too easy to spread the flames of negativity. We have also moved onto the “herd mentality” within our economy, where swings up and down are over exaggerated. Take a look at the Internet bubble, the housing bubble, the Wall Street bubble and the international
financial bubble, all great examples of the “herd” moving markets too swiftly. Where’s the stock market today… you will have to wait until the last half hour to see which way the herd moved. So, my biggest fear for housing and the rest of the economy is fear itself.
Eyeball: What gives you hope?
Steve: The first-time home buyer who now looks at homeownership as fulfilling a dream and not at all as a short-term buy on Wall Street gives me hope. The good news, almost every one of our agents has a first-time homebuyer, or two, or three, that they are working with. They will invest knowing that real estate is a great “long term” investment, especially right here in Orange County.
Eyeball: What surprise or surprises will we be talking about a year from now?
Steve: The surprise for 2009 will be the higher volume of sales in Orange County compared to prior years. That will be the end result of over-stimulation.
And you’ll want to come back …
- NEXT UP: Lender Norm Bour
- THEN, OUR FINALE: Realtor Gary Watts
- All of Eyeball 2009 to published date is HERE
Posted in: Eyeball '09 • Top tale • Altera Real Estate | 80 Comments »
January 3rd, 2009, 10:00 am by Jon Lansner
Welcome to Eyeball 2009! This is our holiday gift to you: A 19-part series of local real estate conditions! A new vision every day of the week at noon through Jan. 6! Our 16th guest is …
Kerry Vandell is UC Irvine’s Merage School Business’ director of its Center for Real Estate. He came to UCI two years ago from the University of Wisconsin’s real estate program and got his PhD from the MIT-Harvard Joint Center for Urban Studies.
 Eyeball: What’s the O.C. housing outlook for 2009?
Kerry: I believe prices will start to feel bottom beginning in mid-to-late 2009. It will be a soft bottom for some time to come, however. My guess is that it will be another 2 to 3 years before we start to see clear recovery after we hit bottom. The bottom will depend greatly on the state of the capital markets. The banks need to begin lending again, especially in the “jumbo” sector of the market, and a secondary market needs to re-form. At first, underwriting will be very conservative, with low payment-to-income ratios and high downpayments required.
[ More Eyeball '09 HERE | Eyeball '08 | '07 ]
Eyeball: What do you fear the most about the real estate market?
• Click to vote on '09 pricing! Kerry: “Wrong-headed” government intervention programs that in an attempt to keep people in homes and reduce foreclosures will re-create the previous problem environment by making too-cheap money available to households who cannot support the loan amount or are deep underwater in terms of equity, thus merely forestalling the inevitable ultimate default.
Eyeball: What gives you hope?
Kerry: The aggressive stance taken by the Fed, the current Administration, and the incoming Obama Administration in recognizing the seriousness of the problem and the potential for worldwide financial system meltdown. Those who have failed to support such efforts are either completely out of touch with the ways of the marketplace; or are so ideologically hidebound that they are willing to sacrifice the economy to maintain their ideological “purity.”
Eyeball: What surprise or surprises will we be talking about a year from now?
Kerry: If I were able to predict, it would not be a “surprise” by definition. However, my guess is that the changes in priorities and “world view” of the new Administration will have begun to take hold among the American citizenry, and in fact internationally. This new set of consumer values and attitudes will begin to usher in a new plane of growth in a new direction under a new set of perceived rules about what creates a healthy economy.
And you’ll want to come back …
- NEXT UP: Realtor Steve Thomas
- THEN: Lender Norm Bour
- All of Eyeball 2009 to published date is HERE
Posted in: Eyeball '09 • Meltdown • Top tale • Eyeball '09 • Meltdown • UC Irvine | 38 Comments »
January 2nd, 2009, 12:00 pm by Jeff Collins
Welcome to Eyeball 2009! This is our holiday gift to you: Two weeks of outlooks on local real estate conditions! A new vision every day of the week at noon through Jan. 6! Our 15th guest is …
David Greminger, division president for California homebuilding for Fieldstone Communities, was 2008 president of the Orange County Building Industry Association. According to his company’s Web site, he’s held various positions at Fieldstone since 2000, including director of land acquisition and project manager. Prior to joining Fieldstone, he was a senior manager in Ernst Young Kenneth Leventhal’s Real Estate Consulting Group.
 Eyeball: What’s the O.C. housing outlook for 2009?
David: I believe we will see the O.C. housing market improve in 2009, although it may not be dramatic turn. New housing starts will remain very low, while we continue to sell through existing inventories. Prices will stabilize, and buyer confidence will begin to return to the market. There is an argument that we will begin to see a supply shortage by the end of 2009 in Orange County.
Eyeball: What’s the chance we bottom in 2009? What might it look like?
David: Very high. I believe many submarkets in Orange County have already hit bottom, or are very near today. The bottom of a market is very difficult to time and once it becomes clear it has occurred, it will have already passed. Buyers who are waiting to know they’ve hit bottom to purchase, may find they miss the best opportunities.
In general, I think the correction will be relatively flat. We are likely to see a small bump at the beginning of the recovery when a large number of buyers jump off the fence, then a period of time when prices stay flat.
[ More Eyeball '09 HERE | Eyeball '08 | '07 ]
Eyeball: What do you fear the most about the real estate market?
• Click to vote on '09 pricing! David: My largest fears center on the overall financial health of our economy. If what we are going though was only a housing correction cycle, I firmly believe we would be thought it. Housing values and mortgage rates are great right now, but when people are fearful of losing their jobs, or their life savings, it has a very negative effect on their confidence in buying a home.
Eyeball: What gives you hope? Why?
David: We are three years into this cycle, prices have dropped significantly, and new home starts are almost non-existent. There is still some supply to work through, but now is a fantastic time to buy a new home. Once the consumer realizes this, I think we will see a very strong and stable recovery.
Eyeball: What surprise or surprises will we be talking about at a year from now?
David: I think that at this time next year we might be talking about growth in our industry. We could have a supply shortage and builders could be hiring again. Housing is most often the industry that leads out of recessions, and I this one won’t be any different.
And you’ll want to come back …
- NEXT UP: Economist Kerry Vandell
- THEN: Realtor Steve Thomas
- All of Eyeball 2009 to published date is HERE
Posted in: Brokers, builders, etc. • Eyeball '09 • Top tale | 30 Comments »
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