Lansner on Real Estate

Home bargains hard to catch in Costa Mesa

Jon Lansner — Sat, 07 Nov 2009 10:00:55 +0000

Ask: $1.07 mil

Ask: $550,000

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: 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. We advise them not to be just a headline reader because when a news article raves about there being “a 10% increase in the amount of homes closing escrow,” this might have nothing to do with their market. There are still a number of home owners that are having a difficult time with their current mortgages in Costa Mesa. There could very well be more properties coming on the market within the next six months, should the loan modifications not be successful. The appraisals have been a real issue and unless the home merits an increase in price from the last comparable sale, you probably are not going to get it. It is my opinion, and the statistics seem to verify, that the lower-priced homes have probably reached their bottom.

Other Insider Q&As …

Post from: Lansner on Real Estate

Really? Foreclosure flood hits Northwest

Jon Lansner — Sat, 07 Nov 2009 02:00:44 +0000

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

DREARY: Foreclosure rate in Seattle-Tacoma-Bellevue area up 37% from year ago. (Seattle PI) MORE HERE!
MESSY: Seattle neighbors left with dirty work from foreclosed homes (King5.com) MORE HERE!
BUSTED: Foreclosure bus maps Seattle real estate bust (Seattle Times) MORE HERE!
GLOOMY: Foreclosure rate for Portland climbed 78% from a year ago. (Portland Biz Journal) MORE HERE!
PEAKED: Foreclosure Hot Spots Spread to Idaho and Utah (UPI.com) MORE HERE!

Check HERE for our coverage of real estate troubles of ‘Real Housewives of Orange County’

Post from: Lansner on Real Estate

Obama signs homebuyer tax credit extension

Jeff Collins — Fri, 06 Nov 2009 20:05:26 +0000

President Barack Obama signed the homebuyer tax credit into law today, extending the popular $8,000 credit for first-time homebuyers.

The credit, which was to expire at the end of this month, will be available through next June as long as the buyer signs a binding contract by the end of April.

The program is expanded to include a $6,500 credit for existing homeowners who buy a new place after living in their current residence for at least five years.
Read more about the measure: HERE!
For a technical explanation of the bill, CLICK HERE!

Reactions:

Dick Gaylord, RE/MAX Real Estate Specialists in Long Beach and 2008 National Association of Realtors president:

“I think it’s great. … Our economist talked about the thousands of people who were able to buy a home because of it. I think it’ll continue to fuel the first-time buyer market. Also, individuals who own a home are going to be able to avail themselves of it. … I think that will be very, very helpful to the market.

… I’m on my fourth first-time buyer, and the reason they want to buy is the tax credit.”

Jean Tietgen, Star Real Estate, Huntington Beach and the 2010 president elect of the Orange County Association of Realtors:

“I’m happy. … I’m working with a couple of first-time buyers, and I know it will be a tremendous incentive for them. … For my clients’ sake, it’s beneficial.”

As for the new provision extending a tax credit for repeat homebuyers: “It might stimulate the housing market a little bit.”

James Liptak, president of the California Association of Realtors:

“C.A.R. applauds our federal representatives for realizing the benefits of the federal tax credit and the role it has played in the ongoing economic recovery. More than 1.4 million first-time home buyers nationwide were eligible for the initial credit. We expect that number to increase dramatically in the months ahead.”

Rep. Jim McDermott, D-Washington:

“The homebuyers’ credit has helped pave the way for stabilization in the housing market and contributed to three consecutive months of rising home prices. Its extension will continue to make homeownership more affordable and bring confidence to a housing market and economy that remain fragile.”

Charles McMillan, president of the National Association of Realtors:

“The substantial rise in home sales we’ve seen over the past few months proves that the tax credit is working and is being used by buyers who were waiting for the right opportunity to get into the market. This important incentive is helping to stabilize the housing market, stimulate the economy and create new jobs in communities all across our great nation. Extending and expanding the home buyer tax credit will enable even more families to take advantage of current low interest rates and affordable prices to invest in their future through homeownership.”

Opinions …

What will renewed, bigger U.S. homebuying tax credit do for housing?

Other real estate trends:

Post from: Lansner on Real Estate

O.C. home pricing near longest rise in 4 years

Jon Lansner — Fri, 06 Nov 2009 18:05:21 +0000

For the 22 business days ending Oct. 16
Slice	Price	Yr. ago	Sales	Yr. ago
Houses	$495,000	+4.2%	2,018	+5.7%
Condos	$308,500	+4.6%	917	+8.8%
New	$500,000	+3.1%	168	-19.6%
All O.C.	$435,000	+3.6%	3,103	+4.8%

For the 22 business days ending Oct. 16 – DataQuick’s latest homebuying report — Orange County saw …

$435,000 median selling price that is $6,000 above September (+1.4%) and would mark the 6th consecutive month of price gains — longest winning streak since 7 up months ended Aug. 2005.
Price is +3.6% vs. a year ago and -33% below June 2007’s peak of $645,000.
The most recent median is 18% above the cyclical low hit in January 2009 at $370,000 — a current bottom that was -43% below the peak.
Prices fell on a year-over-year basis from Sept. 2007 through August. (Worst at -31.5% in August 2008.)
Single-family homes resell for 33% less than their peak pricing (June ‘07) while condos sell 34% below their peak in March 2006. Builder prices for new homes are 42% below their February ‘05 top.
In this most recent period, O.C. shoppers bought 3,103 residences — that is +4.8% vs. year-ago buying activity. (From 1997-2006, monthly sales averaged 4,304 per month.)
September was 15th straight month of sales gains vs. the year-ago period. That follows 33 consecutive months where sales failed to beat the previous year’s pace.

How did your neighborhood fare? Check our ZIP-by-ZIP data HERE!

“Other real estate trends:
”

Post from: Lansner on Real Estate

Home sales rise in 45 O.C. ZIPs

Jon Lansner — Fri, 06 Nov 2009 17:40:27 +0000

For the 22 business days ending Oct. 16 – DataQuick’s freshest stats — Orange County homebuying patterns showed:

32 of O.C.’s 83 ZIP codes had gains in their respective median selling price. Overall, prices were +3.6% vs. a year ago.
6 of 83 O.C. ZIPs had median sales prices above $1 million in the period vs. 11 million-dollar ZIPs when the county median price peaked in June 2007.
Since that pricing pinnacle, there’s been a -33% drop in the countywide median price!
45 of 83 O.C. ZIPs had year-over-year sales gains in the period.
Overall, countywide sales were +4.8% vs. a year ago.
7 of 83 O.C. ZIPs has sales gains of 100% or more in the period.
NOTE! 15 local ZIPs had both sales gains and price gains in the period. (Highlighted in green below!)
For a detailed report on the countywide price moves, CLICK HERE!

Here’s a look at the 83 ZIPs and how they fared in terms of median selling price and total sales for this period:

Town	ZIP	Price	Yr. chg.	Sales	Yr. chg.
Aliso Viejo	92656	$375,000	-13.8%	87	+0.0%
Anaheim	92801	$306,500	-1.1%	51	+21.4%
Anaheim	92802	$350,000	+1.4%	19	-29.6%
Anaheim	92804	$316,000	-7.3%	60	-11.8%
Anaheim	92805	$325,000	-1.5%	81	+2.5%
Anaheim	92806	$392,500	-4.8%	13	-55.2%
Anaheim	92807	$478,000	-5.8%	36	+5.9%
Anaheim	92808	$500,500	-17.3%	32	-13.5%
Brea	92821	$445,000	-16.0%	33	+3.1%
Brea	92823	$458,000	-28.1%	7	+75.0%
Buena Park	90620	$380,000	+1.3%	54	+0.0%
Buena Park	90621	$357,500	-1.9%	22	-12.0%
Corona del Mar	92625	$1,410,000	-16.7%	27	+35.0%
Costa Mesa	92626	$517,045	-6.0%	45	+12.5%
Costa Mesa	92627	$437,500	-0.6%	43	+53.6%
Cypress	90630	$407,500	-19.1%	40	+73.9%
Dana Point	92624	$475,000	-50.8%	4	-20.0%
Dana Point	92629	$655,000	-5.5%	29	-12.1%
Foothill Ranch	92610	$395,000	+19.7%	20	+33.3%
Fountain Valley	92708	$600,000	+10.1%	36	-21.7%
Fullerton	92831	$380,000	-24.0%	27	+22.7%
Fullerton	92832	$280,000	-17.6%	16	-33.3%
Fullerton	92833	$345,000	-14.8%	64	+36.2%
Fullerton	92835	$518,000	-7.5%	24	-22.6%
Garden Grove	92840	$352,000	+5.1%	45	-19.6%
Garden Grove	92841	$350,000	-4.9%	22	-21.4%
Garden Grove	92843	$290,000	-17.1%	30	+7.1%
Garden Grove	92844	$247,500	-28.8%	21	-27.6%
Garden Grove	92845	$465,000	+6.9%	17	+0.0%
Huntington Beach	92646	$477,000	-13.6%	59	+40.5%
Huntington Beach	92647	$530,000	-2.9%	32	+10.3%
Huntington Beach	92648	$693,500	-6.3%	46	-4.2%
Huntington Beach	92649	$668,500	+13.8%	31	+6.9%
Irvine	92602	$775,000	+17.4%	31	+24.0%
Irvine	92603	$668,000	-10.9%	30	+3.4%
Irvine	92604	$530,000	+9.3%	42	+180.0%
Irvine	92606	$537,500	+21.8%	15	+7.1%
Irvine	92612	$520,000	+7.2%	24	-27.3%
Irvine	92614	$460,000	+2.2%	19	+11.8%
Irvine	92618	$644,500	+33.6%	25	+150.0%
Irvine	92620	$542,500	-19.0%	48	-5.9%
Ladera Ranch	92694	$505,000	-1.9%	52	+15.6%
La Habra	90631	$325,750	+6.8%	59	-4.8%
La Palma	90623	$517,500	-1.4%	15	+87.5%
Laguna Beach	92651	$1,180,000	-14.5%	37	+60.9%
Laguna Hills	92653	$449,000	+3.9%	31	-24.4%
Laguna Niguel	92677	$515,000	-8.0%	109	+39.7%
Laguna Woods	92637	$216,000	-10.0%	27	-15.6%
Lake Forest	92630	$437,500	+37.6%	58	-23.7%
Los Alamitos	90720	$770,000	+28.9%	18	+200.0%
Midway City	92655	$360,000	-4.6%	7	-22.2%
Mission Viejo	92691	$450,000	-9.0%	60	+15.4%
Mission Viejo	92692	$475,000	+3.3%	72	+33.3%
Newport Beach	92660	$850,000	-29.2%	37	+76.2%
Newport Beach	92661	$1,695,000	+78.4%	11	+266.7%
Newport Beach	92662	$4,075,000	n/a	1	n/a
Newport Beach	92663	$810,000	-11.0%	30	+114.3%
Newport Coast	92657	$1,725,000	-7.4%	25	+257.1%
Orange	92865	$430,000	-12.2%	33	+37.5%
Orange	92866	$432,500	+9.5%	10	-16.7%
Orange	92867	$479,500	+2.0%	41	-2.4%
Orange	92868	$330,000	+2.3%	14	+0.0%
Orange	92869	$427,000	+4.1%	39	+14.7%
Placentia	92870	$479,000	-2.2%	44	+22.2%
Ran.S. Margarita	92688	$331,250	-26.6%	73	-7.6%
San Clemente	92672	$550,000	+7.0%	40	+135.3%
San Clemente	92673	$660,000	-9.0%	49	+4.3%
San Juan Capo	92675	$370,000	+15.2%	38	-13.6%
Santa Ana	92701	$161,500	-6.1%	48	+4.3%
Santa Ana	92703	$230,000	-15.1%	56	+1.8%
Santa Ana	92704	$283,000	-0.7%	59	-26.3%
Santa Ana	92705	$567,000	+14.0%	41	+51.9%
Santa Ana	92706	$410,000	+12.6%	29	-12.1%
Santa Ana	92707	$252,500	+7.0%	46	-39.5%
Seal Beach	90740	$825,000	+23.1%	10	-23.1%
Stanton	90680	$250,500	-8.1%	29	-12.1%
Trabuco/Coto	92679	$671,750	+6.6%	44	-12.0%
Tustin	92780	$455,000	+13.8%	47	+6.8%
Tustin	92782	$580,000	-5.3%	38	-9.5%
Villa Park	92861	$1,000,000	-11.9%	8	+33.3%
Westminster	92683	$419,500	-3.6%	66	-4.3%
Yorba Linda	92886	$575,000	-3.0%	58	+56.8%
Yorba Linda	92887	$572,500	+1.8%	28	+12.0%
Total O.C.		$435,000	+3.6%	3,103	+4.8%

Post from: Lansner on Real Estate

Pac 10 has priciest college-town housing

Jon Lansner — Fri, 06 Nov 2009 10:00:53 +0000

Coldwell Banker Real Estate every fall has a little fun with the real estate data, digging into the numbers to create its “College Home Price Comparison Index” to track comparative house-buying costs in various college towns in big-time football leagues. Benchmark residence for the study is a single-family, 2,200 square-foot house with four bedrooms, two and one-half baths.

The Pac 10 conference — home to USC and UCLA football — had the priciest housing. Here’s the rankings, sliced by the major conferences, based on the average selling price this year …

Mid American: $182,322

Conference USA: $210,882

SEC: $222,479

Big East: $237,366

Sun Belt: $242,213

Big 12: $244,431

Mountain West: $251,876

Big 10: $279,787

WAC: $356,528

ACC: $378,062

Independent: $411,444

Pac 10: $747,180

Other findings …

Cheapest college town? Akron, Ohio (U. of Akron) with a typical cost of target home was $121,885.
Priciest? Palo Alto (Stanford U.) at $1.49 million.
2nd priciest? LA (UCLA and USC) at $1.35 million.

Real estate trends:

Post from: Lansner on Real Estate

Really? No quick fix for big property owners

Jeff Collins — Fri, 06 Nov 2009 02:00:14 +0000

There’s been more hand-wringing of late about the state of commercial real estate, with growing concern over mounting mortgage defaults and questions about when that sector will recover. Amid all this gloom and doom, one index is providing a glimmer of hope …

Survey says U.S. commercial real estate to bottom in 2010 (Reuters and Bloomberg) HERE and HERE!
Grim reality still grips U.S. commercial real estate (Reuters) HERE!
Commercial Real Estate Loans A Growing Problem For Banks (Investors Business Daily) HERE!
Commercial Real Estate Investors Turn More Gloomy (BusinessWeek) HERE!
U.S. commercial property loans fall 54%, bankers say (Bloomberg) HERE!
U.S. shops and apartments head for record vacancies (Bloomberg)HERE!
Denver’s commercial real estate taking a hit (9news.com) HERE!
Index shows rise in commercial real estate values (Dallas Morning News) HERE!

For a list of commercial and developer defaults in O.C., CLICK HERE!

Post from: Lansner on Real Estate

O.C. builder gets 43% less for Calif. homes

Jeff Collins — Thu, 05 Nov 2009 19:45:50 +0000

William Lyon Homes of Newport Beach reported that it’s getting closer to operating in the black, but it still wasn’t there in the third quarter.

The firm reported a net loss of $11.6 million during the three months ending on Sept. 30. That compares to a net loss of $41.1 million in the same period a year ago — a period that also included $21.9 million worth of “impairments,” or paper losses caused by the market downturn. There were no impairments in the just-completed third quarter, a company statement said.

In addition, the company reported:

The average home price was down but sales per development were up.
In California, the average selling price of a William Lyon home was $276,300 in the third quarter, down 43% from the same period a year ago.
The average price companywide — including homes sold in Arizona and Nevada — was $245,700, down 33.4%.
The overall number of sales was down because the number of developments with homes for sale dropped to 24 from 39 a year ago. The company sold 246 homes in the third quarter, compared to 264 a year ago.
But sales were up per development. The company averaged 10.3 sales contracts per development this past quarter, compared to 6.8 a year ago.

In a conference call later today, company officials said average prices have dropped due mainly to a switch to selling smaller, cheaper homes. Lyon Homes currently has no homes for sale above $500,000, one company official said, a trend that started several years ago.

“It’s definitely bearing some fruit in this market where jumbo (loan) financing is challenged,” said one official (hard to tell which one was speaking, company President Bill H. Lyon or Colin Severn, interim CFO/controller).

Company officials said also that Lyon Home’s Ivy development in Woodbury East has been so successful that they’ve raised the price by $10,000 in that project’s last release of homes and discontinued all discounts except for a financing incentive. The Ivy attached townhomes, with prices starting below $400,000, was relaunched last summer after a delay caused by the housing slump.

Nevertheless, the Ivy project won’t be a huge help to the company’s profit margins because of a profit-sharing arrangement with the Irvine Co., the company official said.

“I don’t think it had a huge impact on the numbers necessarily. The Irvine Co. deals are generally underwritten at 6%, and there’s a profit participation split with 70% going to the Irvine Co. over that. But honestly, (high sales there) helps a little bit. … Sales activity continue to be good there.”

(Update: Post expanded twice to include comments from today’s conference call.)

Related news:

Post from: Lansner on Real Estate

Weak home remodeling still best in West

Jon Lansner — Thu, 05 Nov 2009 18:21:37 +0000

The latest National Association of Home Builders’ Remodeling Market Index for the third quarter says its survey of remodeling contractors found …

The index for current remodeling market conditions rose in the West to 47.3 from 40.5 in Q2. That makes West the nation’s best but scores below 50 shows more remodelers say market conditions are getting worse vs. improving conditions.
Elsewhere, Midwest up, too, at 43.2 vs. 38.3. Down, though, in the Northeast (33.7 vs. 36.9) and South (38.6 vs. 39.7).
Nationwide, current market conditions index up to 39.8 from 38.1, third straight quarter of improvement.
“Some remodelers are receiving more calls for bids, but it is still extremely difficult to close a sale,” said NAHB’s Greg Miedema from Tucson, Ariz. “Financing continues to be an impediment with many home owners not able to secure home equity loans or other lines of credit.”

Big real estate woes:

Post from: Lansner on Real Estate

How $3 million gets you home on O.C. sand

Jeff Collins — Thu, 05 Nov 2009 08:31:10 +0000

With asking prices for ocean-front housing going as high as $40 million, it’s refreshing to see that there’s still some beachfront homes left in Orange County with price tags around $3 million or less.

One of the newest listings of that type is the Seal Beach home at 1601 Seal Way, which went up for sale last month at a relatively humble at $2,995,000 to $3,150,000. (Why that’s just seven times the median home price, instead of 93!)

Even north of Seal Beach pier, you’d be hard-pressed to find any beachfront homes for $5 million or less.

And the “cheapest” homes on the sand in San Clemente, Dana Point and Laguna Beach? According to Register blogger Kelli Hart: Just two are below $3 million, one for $2.75 million, another for $2.9 million. The average price tag for the “cheapest” 13 listings in those three cities is $4.6 million.

But the south side of Seal Beach pier — a strip of flood-prone properties consisting mainly of duplexes and beach rentals — is less ostentatious. Prices there tend to be closer to $2 million, but you sacrifice privacy as strollers, skaters and bicyclists parade by on a summer day.

The single-family residence at 1601 Seal Way, however, is a bit more private. A stucco wall separates the patio from the boardwalk. And a rooftop deck allows sunbathing high above the hubbub (click on photo above to enlarge roof-top view). A bank of glass along one wall of the second-floor family room and adjoining master bedroom provide a spectacular view of the blue Pacific and Anaheim Bay beyond the vast beach. (Click on photos above for larger images!)

Listing agents describe the property this way:

“This custom two-story boasts an open design, breathtaking views and quiet location on the sand. Walls of windows and glass make this home light and bright. Formal entry leads to living room with fireplace, faux finishes and designer touches. … You will enjoy entertaining on the partially covered outdoor patio and the formal dining room with beach views. A large eat-in-kitchen is off the dining room. An office/bedroom with bath is conveniently located downstairs.”

Related news:

Post from: Lansner on Real Estate

Really? Artists encasing Detroit home in ice

Jeff Collins — Thu, 05 Nov 2009 02:00:26 +0000

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

DETROIT HOUSING ON ICE: A photographer and an architect plan to freeze one of Detroit’s thousands of abandoned homes this winter to draw attention to foreclosures that have battered the region. (Associated Press) MORE HERE!
MOTOWN MARK-UP: Hearings are looking into why Detroit Public Schools paid double the appraised value of some properties it purchased. (Freep.com) MORE HERE!
MLS MISSTEP? An FTC opinion accuses Michigan’s largest real-estate listing group of violating federal law by restricting some discount real-estate listings on its Web sites. (Wall Street Journal) MORE HERE!
AND IN SEATTLE, A REPO CAPER: Seattle subcontractors who reportedly hadn’t been paid in full allegedly scaled ladders to reclaim portions of balconies they’d installed. (Seattle Weekly) MORE HERE!

PS: CHECK HERE for our coverage of O.C. real estate troubles

Post from: Lansner on Real Estate

Extra homebuyer tax credits 1 step closer to law

Jon Lansner — Thu, 05 Nov 2009 00:57:56 +0000

Real estate industry got an early holiday gift: Senate passage late today of extended and expanded tax credits for homebuyers …

Says the LA Times …

The Senate today voted to extend and expand a tax credit for home buyers as an added boost for the recovering real estate market, and also approved a provision to continue giving aid to the long-term unemployed. The measure, adopted on a strong bipartisan vote of 98-0, also would extend and expand a tax benefit for businesses with losses. The House is expected to follow suit within days, and President Obama is expected to sign it into law.

Details, from Reuters …

Extends an existing $8,000 tax credit for first-time homebuyers until April 30, 2010.
That credit, which was due to expire on November 30, has helped the housing industry recover from the worst recession since the Great Depression of the 1930s.
Homebuyers who already own a home and have lived there for at least five years would be eligible for a $6,500 tax credit.
More affluent buyers would be eligible for the credit, as it would be phased out for individuals who earn more than $125,000 or families that earn more than $225,000. The current credit is phased out for individuals who earn more than $75,000 and families that earn more than $150,00.
Home purchases under contract as of April 30, 2010, would have to close within 60 days to be eligible for the credit.
The credit only applies to the purchase of principal residences that cost $800,000 or less.
Would cost $10.8 billion over 10 years.

Opinions …

What will renewed, bigger U.S. homebuying tax credit do for housing?

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Post from: Lansner on Real Estate