Bob's Blog

New graphs and statistics regarding Orange County real estate activity.

Bob Phillips (Altera Real Estate) — Sun, 14 Sep 2008 14:33:27 -0500

Here's a link to the latest report on real estate activity in Orange County, as prepared by the president of my company: http://www.OurAgentSpot.com/sthomas/MarketTime-Sep-4-08.pdf This report is chock full of graphs and statistics to support his findings.

For a brief synopsis, Orange County's inventory of houses has leveled off a bit - stopping a 5 or 6 month steady decline. That can pretty much be attributed to this time of year. In addition, the number of new escrows has also leveled off - much higher than the previous two years at this time, but about the same number as last month. This is also a seasonal situation.

Our local real estate market gradually improved for the past 6 or 7 months, and has been regularly been reported in this blog. Some readers, who noticed this trend months ago, were able to take advantage of some remarkably lower prices than the previous year or two.

The good news is that there is still a high number of distressed properties coming onto the markets, and that these represent more excellent opportunities, for the astute buyer/investor.

If you are looking to buy or sell a property in South Orange County, I began my career in this area almost 32 years ago, and have been through numerous cycles, some just like this one. I would be pleased to be your Realtor of choice.

Send me an email ( agent.BobPhillips@cox.net ) or give me a call.

Bob Phillips, Altera Real Estate, 949-643-2100.

An early Fall update on South Orange County real estate activity

Bob Phillips (Altera Real Estate) — Sun, 14 Sep 2008 14:21:28 -0500

Hello again, and welcome to the Fall Season,

Real estate in our area - South Orange County - continues to follow a path that was established early in the year, where a significant majority - definitely more than 50% - of business going on is the sale of distressed properties, mostly lender repossessions.

The good news in that scenario is that there are some exceptional buys within those distressed inventories, and frankly, many people are taking advantage of them. Most of those buyers are non-contingent, and are striking great deals, in their purchases. These buyers typically either sold their previous house long ago - the past few years, and have been renting a while - or, perhaps have been transferred by a company who helped them with their moving expenses, or, the most prevalent situation, have made their previous house into a rental, since the rental market is fairly strong, right now.

The question arises "What about selling our present home, in order to purchase our next one?" I hear this all the time. There are a couple of answers here. One, is your house in the upper 10-20% of the houses in your neighborhood, in terms of condition, amenities, and most importantly, location? If it is, there are some normal houses selling at this time, also - not all the sales are distressed properties. The problem is, you still have to consider those neighboring distressed properties as competition - because your prospective buyers certainly will.

That means you will have to be competitive. Not necessarily lower, but at least competitive. Buyers will look at the distressed houses and calculate how much it's going to cost to bring them up to "snuff". Most of these lender repossessions are sold "as is", and that is usually a bit shabby.

Some buyers don't like to fix up a property - if yours is pristine, they will pay more for yours, than for the lower priced fixer down the street. In addition, a higher percentage of lender repos are in less desirable locations, so, again, a buyer might pay more, if yours has a superior location.

Here's where you, and/or your potential agent, have to be honest. Is your house REALLY in better condition, or in a better location? The easiest way I've found is to actually take my clients out to look at the competition, as if with buyer's shoes on, and then go back to compare their present house. If theirs is indeed superior, then they stand a good chance at selling - as long as they are still priced competitively.

If your house is more of an average house in an average location, AND, if you have plenty of equity, plus probable additional funds for your purchase, then it may be better to rent out your present house for a couple of years until the sales prices become better again. As I stated earlier, the rental market is fairly strong right now, and I can assist you in finding a good tenant.

What if you're in a problem house with a problem loan? You're having difficulty making the payments and the loan amount is higher than the home's new lower value? If it is indeed a hardship, you are probably a candidate for a "short sale" - selling at a price lower than the loan amount, but getting the lender to go along with the sale - rather than have to foreclose. I have experience in such situations, since the original short sale days back in the mid 90's, and can guide you toward successful options. The main problem with selling on a short sale, or being foreclosed out of a house is that you generally have little or no cash left, to move somewhere else - usually not enough to buy, which makes becoming a tenant pretty likely.

Whatever your situation, I have been dealing successfully with similar scenarios since 1976 - just short of 32 years. Click agent.BobPhillips@cox.net to send me an email, or give me a call at (949) 643-2100. I look forward to being at your service. Bob Phillips, Realtor, Altera Real Estate.

Mid-summer update on Orange County, CA, real estate activity.

Bob Phillips (Altera Real Estate) — Sun, 10 Aug 2008 16:41:14 -0500

Here's a link to the latest report on real estate activity in Orange County, as prepared by the president of my company: http://www.OurAgentSpot.com/sthomas/MarketTime-Aug-7-08.pdf The report is chock full of graphs and statistics to support his findings.

For a synopsis, Orange County continues to show improvement in two areas - the number of houses going into escrow has continued to climb, while the number of houses on the market - the active inventory - has continued a steady decline.

This situation has gradually improved for the past 3 or 4 months, and has been regularly been reported in this blog. Some readers, who noticed this trend a few months ago, were able to take advantage of some remarkably lower prices than the previous year or two.

The good news is that there is still a high number of distressed properties coming onto the markets, and that these represent more excellent opportunities, for the astute buyer/investor.

If you are looking to buy or sell a property in South Orange County, I began my career in this area over 31 years ago, and have been through numerous cycles. some just like this one. I would be pleased to be your Realtor of choice.

Send me an email ( agent.BobPhillips@cox.net ) or give me a call.

Bob Phillips, Altera Real Estate, 949-643-2100.

Another good milestone for Orange County real estate!

Bob Phillips (Altera Real Estate) — Thu, 03 Jul 2008 23:34:37 -0500

Good news! The available housing inventory has now dropped below 06 and 07 totals. This is good news for both prospective buyers and sellers of Orange County real estate. For sellers it means less competition, and for buyers it's an indication that the local housing market is close to the bottom.

Click on the link below for the latest Market Report, from the President of my company. It will to illustrate why the local real estate market has been improving every month, so far, this year.

http://www.OurAgentSpot.com/sthomas/MarketTime-Jun-26-08.pdf

So, now is an excellent time to be looking at properties. Even though the inventory has declined over the past month, there are still some exceptional opportunities - especially with lender owned houses.

For extraordinary real estate service, please give me a call or an email. I have been serving this area since 1976 - over 31 years! Let's talk about real estate.

Send me an email ( agent.BobPhillips@cox.net ) or give me a call.

Bob Phillips, Altera Real Estate, 949-643-2100.

A positive update on prices & interest rates for Orange County, California

Bob Phillips (Altera Real Estate) — Sat, 14 Jun 2008 15:02:46 -0500

Here is a link to the latest, bi-weekly Market Report produced by the President of our brokerage:

http://www.OurAgentSpot.com/sthomas/MarketTime-Jun-12-08.pdf

For a synopsis of the report, the news for O.C. real estate continues to get better in almost every respect. Sales are up, while inventory is declining. What USUALLY happens in such a scenario is that prices is that prices become stable, and the market becomes more balanced between sellers and buyers. That definitely seems to be the case at the moment. These are signs that the recent market downturn is slowly, but surely grinding to a halt.

As an aside, the problem in this recent real estate downward cycle has never been interest rates. It's been overleveraging by home owners, unsustainable price increases relative to local incomes, and a tightening of lending guidelines - not rising interest rates. Remember during the 2004-2006 boom years the average 30 year fixed loan was about 6.25% - just about where it was today - and just about where it will be in December. By the way, the "temporary" High Cost Area Jumbo Conforming and FHA loan limits are already in the process of becoming permanent. Expect extensions of the provisions of the Stimulus package to be completed by November of this year.

So, interest rates are "OK", and there is still a good selection ( albeit declining.) of properties to choose from, and prices seem to be bottoming out. This just might be a great time to be looking for property, at least in Orange County, California.

If you've been thinking of buying a house in South Orange County, give me a call and let's talk real estate. I've been helping my friends and neighbors with their real estate decisions for over 31 years!

Send me an email ( agent.BobPhillips@cox.net ) or give me a call.

Bob Phillips, Altera Real Estate, 949-643-2100.

Here's good news for homeowners with "problem" loans.

Bob Phillips (Altera Real Estate) — Fri, 06 Jun 2008 01:06:30 -0500

Hope Now, the private sector alliance of mortgage servicers, counselors, and investors that is working to help prevent foreclosures, announced today that mortgage servicers provided loan workouts to approximately 183,000 homeowners in April 2008, the highest monthly amount since the program was begun in July 2007. Since July 2007, the industry has helped almost 1.6 million homeowners avoid foreclosure through workouts which include loan modifications and repayment plans.

Here is a link to the entire article, detailing some recent success for the program: http://hopenow.com/upload/press_release/files/Homeowner%20Workouts%20Reach%20Record%20Level%20In%20April.pdf

For more information on HOPE NOW, and to see the full membership of the Alliance, please visit www.HOPENOW.com.

If you know someone who is having difficulty making their mortgage payments please send them a link to this blog, or have them give me a call ( 949-643-2100 ) or an email: agent.BobPhillips@cox.net

Serving South Orange County since 1976 - Bob Phillips, of Altera Real Estate.

Continued good news for Orange Co., CA real estate!

Bob Phillips (Altera Real Estate) — Tue, 03 Jun 2008 11:29:16 -0500

Here's a link to our company president's bi-weekly market report for Orange County, California:

http://www.OurAgentSpot.com/sthomas/MarketTime-May-29-08.pdf

For a synopsis, the number of houses going into escrow - demand - has increased dramatically so far this year, to a point better than the past two years. Fueling this growth has been three significant factors.

First, the number of foreclosures and other types of distressed sales has continued to increase. These properties represent more than half of properties going into escrow.

Second, the emergence of all those distressed properties has contributed to significant price declines, throughout our area. Depending on the neighborhood, there have been reductions, from the highs of a year or two ago, ranging from 5% to over 25%.

Third, because of these price reductions, properties have again become much more affordable, especially for first time buyers, who make up more than half of those going into escrow.

This is a great time to be looking for property in our area - there are still some exceptional opportunities out there. The only down side at the moment is that because it's such a bad time to be selling, if you have to sell your present house in order to buy your next one, this isn't a good time for that.

There are two ways to make that a positive experience, however. First, in most cases you'll be getting a terrific buy on your purchase, so a loss on your sale makes it all pretty much a wash. Second, if you're in a position to make your present house a rental, instead of selling it, the rental market is good in our area right now - so, lease your house out for a couple of years, and then sell it in a better selling market.

For any help with any of these scenarios, or just to talk about the possibilities, drop me an email or give me a call. I've been helping my friends and neighbors successfully navigate the local real estate market for over 31 years. Bob Phillips, Altera Real Estate, at 949-643-2100, or click agent.BobPhillips@cox.net .

Thinking of buying a foreclosure or short sale, in Orange County?

Bob Phillips (Altera Real Estate) — Wed, 21 May 2008 15:33:32 -0500

A lot of my clients are asking about foreclosed houses - houses taken back by the bank - or short sales - houses listed for less than the total of loans on the property. Such properties make up an increasing percentage of both active listings, and houses presently in escrow.

The big difference between the two, is that the bank has already completed the foreclosure process on the first type, and so, a faster, more definite escrow can take place. Foreclosures account for less than 20% of present listing inventory, but more than 35% of current escrows.

Short sales are a different type of animal. These are typically houses where the owner is behind in payments, but hasn't lost the house - yet. Most short sales, especially in price ranges under $700,000., are deliberatly UNDERPRICED in order to encourage multiple offers, and to bid the price higher. The MLS is now struggling to deal with a phenomenon wherein the listing agents of these properties already have up to 5 or 10 offers on these properties, but they are still presenting them as an active, available listing.

Obviously, only one of the offerers is going to eventually be the successful bidder - MAYBE. Here's the rub. Apparently, in about 50% of the short sale listings, the listing agent, in spite of their zeal to earn a fee, is not successful in navigating the plethora of offers through the lender's system, and the house eventually gets foreclosed, anyway, negating ALL the previous offers. In the half that got foreclosed, the property usually eventually reappears on the market, frequently priced higher than it was as that seductively priced, potential short sale.

Unfortunately, this experience leaves a pretty bad taste in the mouth of the numerous "buyers" who had spent time trying to purchase the short sale listing - frequently, a lot of time. Some of these listings spend months, supposedly in escrow, only to fall completely apart, when the bank opts to foreclose, instead.

Is there good news here? I think so. First, there are a LOT of distressed properties on the market, ( in almost every price range! ) and there appears to be more on the way. Second, most bank repossessions ( REOs, or, Real Estate Owned.) sell like a normal transaction, presumably to the first, qualified buyer to offer a price agreeable to the lender - usually a pretty good buy. Yes, there might be multiple offers, but not nearly as likely as with a short sale listing.

Third, there are some agents, myself included, who know the system with short sales, and who know how to more effectively, and expeditiously get a property through the lender's system, for approval. In the 50% of short sale listings that actually get approved, most of them are excellent buys, as well.

In any case, make sure that the property you are targeting thoroughly meets your needs, either as a place to live, or an a good investment ( rental.) property. Location is still the primary criteria to hold to. Also, this is NOT a time to be thinking of "flipping" a property - buying low, to fix up, and sell for a profit, in a few months. That's NOT likely to happen - not in Orange County, anyway.

If you are thinking of buying one of these properties, OR, know someone in distress, who needs to be selling, please give me a call or an email. It would be my utmost pleasure to be at your service!

Send me an email ( agent.BobPhillips@cox.net ) or give me a call.

Bob Phillips, Altera Real Estate, 949-643-2100.

Talk to you again, soon.

Real Estate Activity Continues to Improve in Orange County!

Bob Phillips (Altera Real Estate) — Sat, 17 May 2008 23:37:09 -0500

Here is the latest Orange County Market Report as compiled by the President of our company, Steven Thomas:

Market Time Report: May 15, 2008 Demand Far Exceeds 2007 Levels

Good Afternoon!

Demand is not only dramatically surpassing 2007 levels, it is just shy of matching 2006 levels. The big difference in comparing current demand to demand over the past two years is that it has been improving unabated throughout 2008. This is so contrary to the constant stream of negative news regarding the housing market. That is due to the fact that the media is only provided with SOLD data, which is a snapshot of demand a couple of months ago. As a matter of fact, Dataquick, the company that provides the statistical SOLD and median price data to the media, is going to release the figures for April next week. Orange County housing demand did not exceed last year's demand until the beginning of April, which will not reflect in the SOLD data until May's data at the earliest. With that in mind, expect next week's sold data to fall short of exceeding last year's levels. The disparity will be closer than last month's comparison, but it will still fall short. This is not due to escrows falling apart; it is because in March of this year there were fewer homes placed into escrow compared to March in 2007. So, it is a matter of time before the data that the media is supplied catches up to the story of today: demand is much stronger than last year. Demand, a snapshot of the prior 30 days of escrow activity, has continued its ascent by adding an additional 118 escrows in the past two weeks, bringing the current total to 2,658. Just last year demand was at 2,010 escrows, 648 fewer than today, off by 26%. Two years ago demand was at 2,741 escrows, 83 additional compared to today, or 3% more.

"Steady as she goes" is this best way to sum up the current active inventory. After the active inventory dropped by 604 homes on January 1, 2008, a normal, cyclical phenomena, from 15,328 to 14,724, since reaching 15,363 on January 30^th, the inventory has only grown by an additional 94 homes, or six-tenths of one percent. That does not mean that only 94 homes have come on the market within in that time period; instead, it means there are almost an equal number of homes coming on the market as there are coming off. During the same period of time last year, the active inventory grew by 4,193 homes, or 35%. In 2006, it grew by 4,628, or 57%. The current active inventory is now at 15,457 homes, 20 additional homes compared to two weeks ago. Last year, there were 631 additional homes and climbing at a steady rate. Two years ago there were 2,761 fewer homes on the market; however, if it continues along its current, persistent trajectory, the inventory will be less than the 2006 mark by the end of July of this year.

With steadily increasing demand and a stable active inventory, the expected market time has continued its 2008 descent. Starting the year at 15.6 months, the market time has dropped significantly to 5.82 months today. This is the first drop below the six month mark in 14 months. Last year at this time the market time was at 8.0 months and two years ago it was at 4.63 months. As can be seen below, the expected market time is not following any trends of the prior two years other than the initial beginning of the year drop. If demand continues to improve and the inventory remains steady, the market time can continue to improve.

What other trends can be discerned from the current data? First, it is safe to say that the current market is much different than the past two years. There is tremendous activity for all homes below $500,000. This range now accounts for 47% of the current active inventory and 58% of demand. Last year, this range accounted for only 26% of both the active inventory and demand. Foreclosures only account for 7% of the current active inventory, totaling only 1,082, but they account for 25% of current demand. The expected market time for foreclosures has dropped to 1.61 months, a deep sellers market. Thus, it makes sense that foreclosures are not only fetching multiple offers, many are selling for above their asking prices. Short sales, where the homeowner owes more than the current market value of their home, total 29.7% of the current active market, 4,596 homes, but only 19% of demand. The expected market time is 8.94 months. HOWEVER, these statistics are extremely misleading as most buyers and all agents can attest to. A large portion of these active listings already have secured an acceptable offer, and in many cases, multiple offers, signed by both the buyer and seller and submitted to the bank, or banks, because they are "subject to lender approval." Yet, they remain on the market as active listings. This is permissible as long as there is a signed "short sale agreement" that allows the seller to continue to actively market their home until formal lender approval occurs. The reports from the streets are that close to 50% of all short sale listings have mutually signed offers that are in the lenders hands for their approval process. This process can take anywhere from a few weeks to months. With 77% of all short sales below $500,000, demand is under stated. So, there is a boat load of activity in the lower ranges in Orange County. The bottom line is this: short sales and foreclosures have enabled housing prices to drop substantially since demand peaked in the first half of 2006. At the beginning of the current cycle there was a stalemate where buyers did not want to buy and sellers did not want to come off of their pricing perches. But, with the implosion of the subprime market and, subsequently, the financial market and lending liquidity, the housing landscape changed significantly. The housing boom had been underwritten by adjustable, subprime loans that began to rapidly reset in the second half of 2007. An unprecedented number of homeowners defaulted on their loans. This trend will continue until the end of 2008 when subprime loan resets will significantly diminish. Currently, 36.7% of the active inventory is either a foreclosure or short sale. Demand increased considerably as prices dropped to levels not seen in years. We are currently experiencing a wave of first time home buyer activity. Almost every Realtor® is working with a first time home buyer. Two years ago nobody was working with a first time home buyer and parents were wondering if their children would ever be able to afford a home in Orange County. First time home buyers have been priced out of the market for years and now that affordability has greatly improved, demand has skyrocketed. The new FHA loan limit of $729,750, allowing buyers with some credit issues who can afford the payment to put as little as 3% down, has helped fuel demand in the lower ranges as well.

Where's the demand in the upper ranges? Finally we are seeing a bit of relief from the affects of the financial market. The disparity between the old $417,000 conventional loan limit and the new $729,750 limit has dropped from three-quarters of a percent to one-eighth. That is a major shift in financing which should increase demand up to the $800,000 level. The disparity between the old conventional loan limit and the new super jumbo loan limit, loans above $729,750, has improved from 1.5% down to 1%. These disparities should continue to improve as the year progresses, and should reach much more comfortable levels by the end of the Summer. So, demand in the upper ranges should slowly improve as liquidity is slowly restored this year. Also, there was a six month lag between the slowdown of the lower and upper ranges in 2007. It stands to reason that a similar lag would apply in the improvement in demand. Demand in the lower ranges really did not surge until the end of February. That would place an increase in demand for upper ranges at the end of August. ( End of report.)

This all seems like great news for our area. If you, or a friend of yours, is considering buying a house, selling a house, or both, please give me a call. With over 31 years of service to South Orange County clients and friends, it would be my pleasure to be of service to you. I'll talk to you again soon.

Send me an email ( agent.BobPhillips@cox.net ) or give me a call.

Bob Phillips, Altera Real Estate, 949-643-2100.

The number of escrows is up, but prices are still soft!

Bob Phillips (Altera Real Estate) — Sun, 11 May 2008 21:07:11 -0500

A third of the year has come and gone. As you may have noticed, a few more listings are coming onto the market. At the same time, the number of houses going into escrow has also grown. There are increasing signals that we may be close to the bottom of our real estate downturn.

The new higher limit "conforming" loans are now taking better shape. For the first month, as lenders tried to get a feel for them, they were priced substantially higher than the "old" conforming loans - $417,000., or less. In recent days, however they have come down to similar pricing, making them a much better deal, as the Government planned, when they raised the limits. ( From the former cap of $417,000., up to $729,500., as they are today.)

The effect this will have remains to be seen, but one plus factor should be this: Current borrowers, paying on an adjustable rate loan that has had its payments increase considerably over its life, might be able to more easily refinance out of it, with better current rates, and much lower payments - in many cases staving off a foreclosure, and enabling them to keep their houses, rather than be forced to sell them or lose them to their current lender. This will most likely happen in time to save a bunch of distressed owners, from losing their houses.

Another positive result from all this good lending stuff now emerging, is the ability to purchase one of the presently low "good buys" that I've been talking about, before they are all snapped up. This snapping up process has already started but there are still some excellent buys out there. Most of them are short sales, lender repossessions, or corporate relocations.

If this is truly the bottom of the market, as I personally see it, most of the good buys will be gone within a month or two, and then we will settle ( by mid summer.) into a fairly normal market, with buyers and sellers being more equally poised - neither having a big advantage, but FAR from the buyers market that has been in place for the past 2 years.

To the seller's advantage, there should be fewer foreclosures, and lender owned properties to compete with. To the buyer's advantage, there will still be a good number of houses to choose from - and play against one another - just at slightly higher prices than some properties that are currently available.

I realize some of this "news" may be contrary to articles you're seeing in today's newspapers, or on the Internet. Here are a couple of huge reasons why: First, most media is reporting data that is MONTHS old - at least 2, sometimes much more. By comparison, I am reporting based on things that are happening right now - this week, last week, etc., much more up to date.

The second factor that helps the media misinform you is that in the vast majority of cases they are using data that is statewide or even nationally based - not the least bit relevant to South Orange County. Do YOU care that the vast majority of California foreclosures are taking place in the Inland Empire, Stockton, or Sacramento? ( or those in Detroit, for that matter.) Again, it isn't really relevant to what is happening locally.

The opinions that I'm sharing with you are based on local information, from someone who has been working in this area, selling local real estate for over 31 years.

When the dust settles ( again, probably by this summer.) from this current housing "crisis", values in South Orange County will probably have gone down somewhere between 10 and 25% from their highs in the spring of 2005, but no where near the 40, 50, even 60% drop predicted by some experts, whether local, or national.

It seems that more and more people ( insert the word: buyers.) are becoming convinced that the market is about to turn around, and not go down much further, if at all.

When I say turn around, that is not to say that prices will start going up again, or that we'll go back to a seller's market, anytime soon. What will probably happen, though, is that prices will firm up, making today's few "good buys" look like absolute steals. I personally expect to have a fairly flat market, with a good equilibrium of buyers and sellers for the next couple of years - before prices start to go up again - which has always happened, ever since I began, 31+ years ago.

If you, or someone you know, is sitting on the fence, waiting for the bottom to "magically" appear, I implore you to get serious. When the bottom does come there is not going to be a bell ringing to announce it. It will only be obvious when it has long passed. By the time the media proclaims a "bottom", it will be 2 or 3 months after the fact, and much too late, to take advantage of.

If you look for the signs, and take what the media is saying with a huge grain of salt, it will become quite obvious and clear. The bottom could very well be here, right now, and the good buys of today might be the lowest prices you'll ever see. If I'm wrong, prices might go down another 4 or 5% ( Maximum! ) this year, but if I'm right, you could be in that preferred investor's position of buying low. Only time will tell.

If you ARE a prospective buyer, I have an exciting new program to share with you - directly from the MLS. It's the latest method of looking for houses, with little assistance needed from your Realtor. You can tweak parameters to your heart's content, for properties pretty much anywhere in California. It is far better than programs you may have been using up to a month ago - like I said, it's new, improved, and easy to deal with. If you would like to check it out, visit http://coto.listingbook.com/?node=3 to set up your own account, or drop me a line and I'll be happy to set one up for you.

If you are thinking of buying or selling real estate in South Orange County, it would be my extreme pleasure to be at your service.

Send me an email ( agent.BobPhillips@cox.net ) or give me a call.

Bob Phillips, Altera Real Estate, 949-643-2100.

Thanks for reading.

Is it getting to be a better time to sell?

Bob Phillips (Altera Real Estate) — Sun, 11 May 2008 21:00:42 -0500

Ah, the good old days. For years and years I could repeat the following mantra, for South Orange County real estate: Around Super Bowl time buyers would start coming out in droves, and their activity ( opening and closing escrows.) would increase from February 1st, through about the end of July. Last year was a notable exception, in that things were going great - for about a month and a half - until the sub-prime mortgage mess hit Wall Street and Main Street, in mid March. So much for history repeating itself.

This year started off the old usual way, with a couple of startling exceptions. First, there were way fewer buyers, than usual, and second, there were considerably more houses on the market. So, while there was positive sales activity, and houses were selling - it just wasn't a great time to be a "normal" seller. Allow me to define a normal seller. In a normal market, there's an equilibrium between buyers and sellers, unlike today's higher number of sellers, to buyers.

Additionally, in a normal market, prospective sellers are usually out looking at bigger or better houses, eager to become move-up buyers. Since there is usually an abundance of prospective buyers for their present house, they feel confidant that they will sell with no problem, making it easier to buy up. Such buyers and sellers steadily move up the normal housing food chain.

The big problem this year has been this: While there are plenty of first time buyers down at the bottom of the totem pole, a high percentage ( over 50% of transactions, in my area.) of them are buying short sales or foreclosures, where there is NO move-up seller, looking to become a bigger house buyer. Many of those former owners are either moving away, or becoming renters, instead of local, move-up buyers.

The problem for a normal prospective seller, in this market, is that he has to vigorously compete with the short sales and REOs ( Lender owned properties.) that comprise 50% or more of his competition, and most normal ( read non-distressed.) sellers don't want to compete at such drastically reduced prices. That's why the majority of normal sellers are leaving the market, unsold, after testing the market, trying to attract a normal buyer, for a month or two, or six.

Yes, there ARE some normal buyers out there - buyers who just want to get into a home, don't want to hassle with fixer-uppers, multiple offers, or being a bottom-fisher, and who offer a normal seller, a normal value, for their nice house. The number of such transaction happening in today's market? Probably somewhere around 10-20% of all transactions. Not very good odds.

Think your house is special? That it will buck the odds because of a superior location, a great view, sensational decorating? Well, some do buck those odds, but usually they need a whole bunch of those amenities to attract that normal buyer. And the bottom-fisher buyers out there couldn't care less - they're just looking for a bargain.

So, when will this market change, to one that's more equal? It's really difficult to predict, but probably when the number of distressed sellers starts to become significantly smaller. Until then, your best alternative to selling, may very well be becoming a landlord - renting your house to one of those foreclosed out former owners, if their credit hasn't taken too big a hit.

In many cases, if you've lived in the house for 5 years or more, there will be sufficient equity to borrow against, ( if needed.) to help purchase a bigger house, while having a break-even or positive cash-flow, on your new rental property. Make no mistake, this IS a great time to buy, especially one of those distressed listings.

I have been helping my neighbors in South Orange County navigate such transactions for over 31 years, through good markets, and through markets even worse than this one. Drop me an email or give me a call, if you'd like to talk about the possibilities.

Bob Phillips, Altera Real Estate, Serving South Orange County Since 1976!
Direct phone: 949-643-2100, Email: agent.BobPhillips@cox.net Website: http://BobPhillips.net

Good news for bigger loans and refinances!

Bob Phillips (Altera Real Estate) — Sun, 11 May 2008 11:42:02 -0500

The Economic Stimulus passed in February allowed FNMA and FHLMC (FannieMae and FreddieMac) to purchase High Cost Area Conforming Jumbo (HCACJ) loans from lenders. Loans made between $417,000 and $729,600 started closing in March of this year, but no one was willing to buy them. FNMA had not yet created bundles of mortgage securities for these HCACJ's, nor clear guidelines on how to sell the loans in the first place.

In late April these agencies contracted with several banks to accept an HCACJ loan which is why pricing for these products have dropped. What was a 6.5% 30 year fixed HCACJ in April is now at or under 6%. Good news indeed. If you are a buyer with 20% down on a $1,000,000 priced home you can get a $700,000 1^st at about 6% and, if needed, possibly a $100,000 HELOC 2^nd at about 5.75%. Interest rates on jumbo loans are no longer the biggest stumbling block in front of home buyers today.

One catch: borrowers must come up with 15 percent down on a purchase.

However, if Fannie already owns the loan, it will allow a refinance up to 120 percent of the home's current market value to give homeowners a break if property values have plummeted in their neighborhood and they have kept current with their mortgages. (No ‘cash-out' refinances allowed.)

This should be good news, indeed, for both buying a bigger house, or refinancing one out of a "problematic" loan.

As always, give me a call or an email if I can answer any questions about the home buying or selling process.

Bob Phillips, Altera Real Estate, Serving South Orange County Since 1976!
Direct phone: 949-643-2100, Email: agent.BobPhillips@cox.net Website: http://BobPhillips.net

This months continued good news for Orange county real estate!

Bob Phillips (Altera Real Estate) — Mon, 05 May 2008 00:24:41 -0500

This is a report issued every two or three weeks, by the President of our company.

Market Time Report, May 1, 2008: The First Time Wave is Growing

Compared to last year, demand is stronger, there are fewer homes on the market and the expected market time is much lower. The first time home buyer wave continues to grow and plant the seeds to an eventual recovery.
The reports from the streets of Orange County are unanimous: first time home buyers are fueling a surge in activity that continues to flourish and has been steadily growing since the middle of February. Multiple offers in the lower ranges, homes priced below $500,000, are now quite common throughout Orange County. The numbers illustrate how demand has not only surged past the 2007 level, but is quickly approaching the 2006 level. Until just four weeks ago, year over year demand had not been stronger than the prior year since September 2005, the beginning signs of the current slow cycle. Demand, a snapshot of the prior 30 days of escrow activity, has climbed by an additional 166 escrows in the past two weeks to 2,540. Last year at this time, demand was at 1,863 escrows, 677 fewer than today. Two years ago it was at 2,701, or 161 additional escrows.

The active listing inventory has remained steady in 2008. In the prior two weeks, the active inventory has dropped by 119 homes to 15,437. We started the year with 14,724 homes, 713 fewer than today, but that was after shedding 1,050 homes in December 2007 with sellers pulling their homes off the market for the holidays. Still, that only represents a 5% increase so far this year compared to a 37% increase in the inventory last year. Two years ago there were 3,481 fewer homes on the market; however, the inventory was growing at an extremely rapid rate in 2006. The inventory had already increased by 65% to this point and it continued to grow by another 34% until reaching its peak of 16,006 homes back in August 2006. Today, the active inventory has steadily remained just under 16,000 homes and appears as if it will continue along that path.

With steadily increasing demand and a stable active inventory, the expected market time has dropped like a rock. Starting this year with a market time of 15.6 months, a deep buyers market, the market time has improved to its lowest mark of the year to date at 6.08 months, a 61% drop. Last year the market time was at 8.33 months and climbing at an alarming rate that would spook any buyer considering purchasing. Two years ago the market time was at 4.43 months and climbing. By the end of June 2006, the market time had blossomed to 6.33 months.

So, it is safe to say that the Orange County housing market has definitely changed gears this year. The lower ranges and the flood of first time buyers are entirely responsible for this change. What changed? The answer is quite simple: the significant drop in prices has allowed buyers that have been sitting on the fence to finally afford to buy once again. After being priced out of the market with rampant appreciation earlier this decade, affordability is finally improving and inviting buyers that have been waiting a long time to finally purchase.

Properties priced below $500,000 account for 47% of the entire active inventory and 56% of demand. Last year, this same range accounted for only 26% of the active inventory and demand. Detached homes below $750,000 are actually experiencing a slight sellers market, below the five month mark. The volume of distressed homes in the lower ranges has provided the fuel for the decline in pricing. 77% of all distressed properties are priced below $500,000 and 94% are priced below $750,000. Short sales and foreclosures now make up 36% of the current active inventory versus 35% two weeks ago. There are now 5,576 distressed properties on the market. The overwhelming majority, 81%, are short sales, sellers with loan balances that exceed the current market value and are "subject to lender approval." For short sales, there are currently 4,504 active listings and demand is at 544 escrows. The expected market time is at 8.28 months, dropping from 9.86 months two weeks ago.

But, this statistic is extremely misleading, just ask a buyer searching for a home. A large portion of the 4,504 active listings already have secured an offer on the property signed by both the buyer and seller, yet they remain active on the market. The reason is that there is also a signed short sale agreement that allows the seller to continue to actively market their home until formal lender approval occurs. This process takes anywhere from a couple of weeks to months. Unfortunately, there is no way of knowing which short sale listings already have an agreed upon offer submitted to the bank other than contacting the listing agent directly for their verbal answer.

So, true demand in Orange County is actually understated. The word on the street is that close to 50% of all active short sale listings already have an agreed upon offer submitted to the lender. If those were to be truly changed to "pending escrow" status, the demand count would increase considerably, the inventory would drop and the market time would drop as well. Unfortunately, not all short sales with offers submitted for lender approval are actually approved. Roughly 1 out of 3 are accepted. Many are rejected because they are priced too far under their true market value. With increased demand comes more realistic pricing of short sales. As this year progresses, expect the lender acceptance rate to grow closer to 1 out of 2.

Where's the demand in the upper ranges? The financial crunch is still impacting liquidity in the upper ranges. Demand is off by more than 30% compared to last year for all homes priced above $750,000. Remember, the conventional loan limit and FHA loan limit were both just raised to $729,750. However, there are now three tiers of loan rates: the old conventional loan limit up to $417,000, $417,001 up to the new limit of $729,750 and then $729,751 on up. The original intent was to expand the lower interest rates of conventional loans to higher ranges in areas with much higher prices, like Orange County. Historically, major changes in federally backed loan programs were carefully put together for the better part of a year. This time, the financial industry was given about a month to create and implement a significant change.

The credit markets are just now adapting to the new loans. Part of that adaptation is the three tier system. Until the entire secondary market becomes more comfortable with these changes, the discrepancy in interest rates between each tier will be sizeable. There is about a three-quarter point differentiation between each tier. As the market adapts to the new program and liquidity is restored in the financial markets with investors once again purchasing pools of loans, the discrepancy between the tiers will shrink to about a quarter of a point. The experts are predicting that there will be considerable improvement by the end of the third quarter of this year, by the end of the summer. Currently, for loans above $729,750, the interest rates, loan qualifications and down payment requirements are extreme barriers to entry. That does not bode well for homes priced above $800,000, where the rate is approximately 1.5% above the $417,000 rate. This has impacted the upper range dramatically. All ranges above $1 million are experiencing market times above ten months; the higher the range, the higher the expected market time. Not surprisingly, the areas in Orange County that are impacted with market times above ten months are Corona Del Mar, Coto de Caza, Laguna Beach, Newport Beach and Newport Coast. These areas should all improve by the end of the summer with improvements in the financial markets.

With demand off in the upper ranges by more than 30%, do not be surprised when the media reports a significant year over year drop in the median sales price. With the lower ranges hot and the upper ranges not, the median value will be much lower. The average pending sales price a year ago was at $869,000 compared to $605,000 today. This is partially due to the decline in prices, but it also has a lot to do with a major decline in demand in the upper ranges. For the first three quarters of 2007, prior to the beginning of the financial crunch, the number of sales above $1 million in all of California was only off by 3% compared to the prior year. For homes below $1 million, sales were off by almost 30%. A month after the start of the financial crunch, September of 2007, sales above $1 million were down 26% compared to the prior year. The upper ranges have been impacted ever since. As liquidity is restored in the upper ranges, do not be surprised by an increase in demand in the upper ranges and an increase in the median sales price. ( End of report.)

Presented by Bob Phillips, Re/Max Real Estate Services, Serving South Orange County Since 1976!
Direct phone: 949-643-2100, Email: BobPhillips@Remax.net Website: http://BobPhillips.net

More good news for Orange County real estate!

Bob Phillips (Altera Real Estate) — Sun, 20 Apr 2008 01:53:58 -0500

Here is the latest report from the President of our company:

Market Time Report: First Time Home Buyers are Back - April 17, 2008

Current housing demand continues to outpace last year and the reemergence of first time home buyers is a major factor. If you listen to or read all the recent reports regarding "sold" statistics for March, one would quickly come to the conclusion that the real estate market is continuing to sputter along at a slow pace. However, this could not be further from the truth. Sold activity is a snapshot of the past, about a month and a half in the past to be precise. So, March "sold" statistics are really a snapshot of the second half of January through the first half of February. The market did improve during that time but was still extremely anemic as demand, a snapshot of the prior 30 days of escrow activity, grew from 989 escrows in mid-January to 1,630 escrows in mid-February, a gain of 641 escrows. Since then demand has continuously grown to its current height of 2,374 escrows. Last year at this time demand was at 1,925 escrows, 449 fewer than today. This recent escrow activity will translate to sold data reported in the months to come. The big story will be that the year over year sold statistics will be better for the first time since the Autumn of 2005. Demand already crossed that threshold two weeks ago. Some skeptics attempt to discount the uptick in demand, claiming that many will fall out of escrow. That is simply not statistically true. The data does not support their claim. Yes, some escrows do fall out; however, the snapshot of 30 day escrow activity misses some escrows that have already closed because they were less than 30 day escrows. The average escrow is about 45 days, but we do have one, two and three week escrows that won't show up in the data for long. So, the less than 30 day escrows offset most escrows that fall out. The bottom line: the market is improving. Market time has dropped from 15.6 months at the beginning of the year to 6.55 months today, not as deep of a buyer's market. The active inventory grew by only 82 homes in the past two weeks to 15,556 homes. The active inventory has not changed much this year and has actually dropped by 61 homes over the past month. Last year at this time the active inventory was only 745 homes fewer homes than today and it was growing at a rate of 700 homes every two weeks.

The majority of the upswing in demand is in the lower ranges. Our agents in the trenches are unanimously reporting that there is a large wave of first time home buyer activity. First time home buyers had been priced out of the market and dwindled in numbers during the last couple years of the housing boom. But, prices have finally fallen to a point where they can now afford to purchase and that is precisely what they are doing. One year ago there were only 408 condominiums priced below $250,000 compared to 1,263 today, more than triple. One year ago there were only 343 detached homes priced below $500,000 compared to 2,848 today, more than eight times. The market time for detached homes below $500,000 is at 4.61 months, a slight seller's market. It is not a coincidence that 75.7% of all condominiums and detached homes below $500,000 are either a foreclosure or a short sale. This fact has provided many opportunities for first time home buyers to finally enter the market. The first time home buyer activity is the seeds to the rebirth of the Orange County housing market. That does not mean that the market is going to right itself overnight. But, it is the first positive step in the recovery process. It was the lower ranges that were hit hard last March with the beginning of the subprime meltdown and it makes sense that it would be the first to take a step in the right direction. Many homes and condominiums in the lower ranges are receiving multiple offers. Foreclosures and short sales are not only securing multiple offers, they are closing above their asking price.

The upper ranges remain sluggish due to the financial crunch. The financial system is still not functioning properly. Lenders are still having liquidity issues and their lending requirements and interest rates for loans in the upper ranges are too rigid and are deeply cutting into demand. For example, the market time for homes priced between $1 million and $1.5 million is 10.89 months compared to 7.47 months one year ago. The upper ranges will remain sluggish until the financial markets start buying pools of mortgages once again. Since the beginning of the financial crunch in August of 2007, the financial markets have refused to buy any pools of mortgages. But, there are some signs that their appetite has been growing. First, a major national lender attempted to sell a pool of only the best of the best loans at the end of January, but the financial markets would only purchase them for a discount. They repeated their effort in March and the financial markets bought it at "par." The logjam in the financial markets should begin to ease by the end of the third quarter, as will the disparity between conventional loans up to $417,000 and the new loan limit of $729,750, as well as jumbo loans above $729,750. Currently, there are three tiers of mortgages. The cheapest rates are for loans below the old conventional loan limit of $417,000. Rates for loans between the old conventional limit and the new $729,750 limit are three-quarters of a point higher. And, lenders tack on an additional three quarters of a point for loans above the new limit. As the financial markets' appetite for pools of loans increases, these disparities will begin to diminish. This will be the second big positive step towards recovery. At that point, demand at the upper end of the Orange County real estate market will increase.

Buyers, what to do? First, it totally depends upon the area and price range on the approach. Naturally, in dealing with foreclosures, short sales and the lower ranges, be prepared for much more competition than any headlines would lead you to believe. There is a strong probability that you will be competing with other buyers in writing an offer on a home. In some cases it will take an offer to purchase above the asking price to secure a home. Due to the sluggishness in the upper ranges, buyers are more in control of their destiny with less competition. For those buyers looking for a deal in the higher ranges, keep in mind that only 5.7% of all distressed homes, foreclosures and short sales, are found above $750,000. Be prepared for increased activity on these properties too because every buyer is looking for a "deal." Also, it is important to point out that lenders are in the driver's seat when it comes to foreclosures. Currently, the market time for foreclosures is 2.05 months, a deep seller's market. It is important to point out that the low interest rates should remain intact throughout 2008, but pressure is mounting for the Federal Reserve to raise rates as they grow more concerned about an increase in inflation. Rates have been favorable for a long time, but do not get comfortable with today's interest rates, they WILL eventually increase. As soon as the economy starts humming along again, expect the Federal Reserve to reverse course and push rates up higher. By the way, for every 1% that interest rates increase, it erases approximately all of the benefits of waiting for property values to decrease 10%. The payments are virtually identical.

Sellers, what to do? It is extremely difficult to navigate in the current Orange County real estate market. Now more than ever it is essential to have an experienced Realtor® guide you throughout the process. There are numerous variables and market changes to continuously watch for: area short sales, foreclosures, local trends, detached versus attached pricing, etc. Be prepared to constantly reevaluate your pricing position within the market. The key ingredients to a successful sale are an excellent price and excellent condition. In arriving at price, the condition and location increase or decrease the market value. This market can also test a seller's patience and you must be as prepared for a showing on day 120 as you were the first week. Stage your home for success: turn all the lights on, have soft music playing in the background, open all of the shutters and blinds to allow in natural light, turn on the air conditioning on hot days, box up and store all clutter and your home should be neat as a pin from top to bottom. ( End of his report.)

This is a continuation of positive news for the Orange County real estate market.

Talk to you again soon. Have a great weekend!

Bob Phillips, Re/Max Real Estate Services, Serving South Orange County Since 1976!
Direct phone: 949-643-2100, Email: BobPhillips@Remax.net
Website: http://BobPhillips.net

The Equestrian Center at Coto de Caza

Bob Phillips (Altera Real Estate) — Tue, 15 Apr 2008 09:34:08 -0500

Residents in Coto de Caza can enjoy the use of the full service Equestrian Center.

The riding center was used for modern equestrian pentathlon events during the 1984 Olympics in Los Angeles. The Equestrian Center boards about 160 horses and includes five arenas and 47 miles of trails in the surrounding wilderness, complete training and riding facilities. Lessons and trail rides are available. For more information call (949) 589-5700.

The Equestrian Center is located at 23401 Via Pajaro, just behind the Coto General Store, which is at the corner of Vista del Verde and Via Pajaro.

There is a map of the equestrian trail system of Coto de Caza. ( Also a street map of the entire community. Unfortunately I have yet to figure out how to display them here, in this blog.) Just drop me a line or give me a call and I'll email the JPG file to you.

Bob Phillips has been a resident/specialist for Coto de Caza for more than 20 years. He would be honored to introduce you to this exceptional community.

Bob Phillips, Altera Real Estate, Serving South Orange County Since 1976!
Direct phone: 949-643-2100, Email: agent.BobPhillips@cox.net Website: http://BobPhillips.net

A brief opportunity to appeal your property taxes!

Bob Phillips (Altera Real Estate) — Fri, 11 Apr 2008 14:08:26 -0500

If you have purchased a property in Orange County ( or elsewhere in California, for that matter.) over the past year or two, there's a chance that the "softening" or decline of values for O.C. properties is affecting you. Perhaps you've already discovered, but there is an appeal process that you can use, to try to lower your property taxes.

Actually there are two different processes, and the deadline for one, has just been extended and is fast approaching - April 30th. ( Sorry, I just got the news this morning.) If you file an appeal by that date, you can get a jump on appealing your next year's tax bill, which starts on July 1, 2008. I think it is called an informal review. Here is a link to the Orange County Assessor's website, and his appeal form, along with instructions:

http://assessmentappeals.ocgov.com/aa/userregistration.jsp ( the page has links for other areas of California.)

I believe that it's a fairly simple process that includes getting a few nearby comparable sales figures - something that I can assist with.

In case that deadline is happening too soon, don't fret. You can also begin an appeal from July 2nd, through September 15th, 2008. ( The same link can be used for that window of time, as well.) All these dates are for appealing your 2008-2009 tax bill which covers the period from July 1st, through June 30th, each year.

I'm sorry to say that it is my understanding - meaning I could be incorrect - that you cannot go back to appeal previous years, such as the 2007-2008 tax year. Also, if you purchased your California property before 2005, your assessed value may be too low to warrant an appeal - but it sure wouldn't hurt to check out.

Let me know if I can be of any assistance, to you, or someone you know, who might want help with nearby comparable sales figures.

Bob Phillips, Altera Real Estate, Serving South Orange County Since 1976!
Direct phone: 949-643-2100, Email: agent.BobPhillips@cox.net Website: http://BobPhillips.net

The Orange County real estate market is picking up dramatically!

Bob Phillips (Altera Real Estate) — Fri, 04 Apr 2008 20:25:54 -0500

Here is the latest real estate report from my company:

Market Time Report, Dated April 3, 2008:

Housing Demand ( Number of homes in escrow.) Stronger than a Year Ago

Good Afternoon!

Today marks the FIRST time since September 22, 2005 where demand is better than one year ago. The sold statistics, which garner front page headline attention in most media outlets, will not reflect the year over year statistics until May or even June of this year. So, you are hearing it here first, demand is actually better right now compared to last year. You can hear it in our offices too. Here's the scoop from the trenches: increased showing activity, increased open house activity, buyers are writing more offers, multiple offers in the lower ranges and significantly more first time buyer activity. And, most of this activity was already in the works prior to the new FHA and conventional loan limits taking root in the marketplace. Buyers have been methodically entering the market since the beginning of the New Year. We started the year with demand, a snapshot of the prior 30 day escrow activity, at 944 escrows. There were only 1,473 total escrows on January 1^st in all of Orange County with 14,724 homes on the market. That was an inventory of 16.45 months! Since then, demand has increased to 2,286 escrows within the prior 30 days, a 142% increase. Now there are 3,066 total escrows throughout Orange County, a 108% increase from the beginning of the year. Additionally, the active inventory has only grown by 750 homes since we sat on our comfortable sofas and sleepily watched the Rose Parade, bringing the inventory to 15,474 homes. Expected market time has dropped substantially to 6.75 months. Remember, the new FHA and conventional loan limits of $729,750 are just hitting the market now. We are achieving the increase in demand despite a major liquidity problem in the financial markets, meaning loans above $417,000 have been extremely challenging to put together unless a borrower had a lot of money to put down and cream of the crop credit scores. The new loan limits will have a powerful impact on demand. At 10% down, the old $417,000 conventional limit only covered 37% of the current active inventory. The new limits now encompass a stunning 75% of the inventory. The old $367,000 FHA loan limit covered only 23% of the active inventory. The real estate market also has the added benefit of Washington D.C. and every major player that has anything to do with the financial markets focusing programs and legislation aimed at further increasing demand and restoring the financial engine that runs our economy.

Last year there were1,464 fewer homes on the market, but demand was lower by 159 escrows. Demand was dropping fast last year due to the beginning effects of the subprime meltdown that started in March of 2007. Expected market time was almost the same at 6.57 months. Two years ago, the active inventory was at 10,714, demand was at 2,958 and market time was at 3.62 months. Bank owned foreclosures and short sales, homeowners that owe more on their home than the current value, now account for 34.5% of the active inventory. That figure was at 26% at the beginning of the year and 32.8% a month ago.

What about all of the distressed properties in the market place? Bank owned foreclosures are HOT and growing hotter by the minute with an expected market time of just 1.67 months. Two weeks ago that figure was at 2.11 months. Foreclosures only account for 20% of the total distressed market and only 7% of the entire active inventory. Thus, foreclosures are in demand and lenders are calling the shots with multiple offers and no emotional attachment to their "assets." Their market is similar to the heydays of 2004 and 2005 for all of Orange County. Statistically, short sales have an expected market time of 10.60 months compared to 12.05 months two weeks ago. But, these numbers are not a true reflection of what is really going on in the marketplace. The numbers are grossly understated. Short sales are a totally different animal and should be treated as such. Realtors® out in the field keep a home on the market as an active listing through the Multiple Listing Service until they have formal lender approval of an offer already accepted by the seller. Even when a seller and a buyer agree upon the terms of a contract, escrow is not technically opened until formal lender approval occurs. The lenders have to determine whether or not they are willing to take less than the full loan amount currently encumbering the property. And, if there is more than one loan, each and every lender must sign off on the deal in order for an escrow to proceed. Short sales are "subject to lender approval" and can take anywhere from weeks to months. One of our associates reported from the trenches that they just closed a short sale after a seven month delay in a formal approval. That's not even the worst case scenario, as many go unapproved and are instead foreclosed upon, wiping out any and all offers currently written on the property. So, when a buyer climbs into a car and finds a short sale that they have interest in, chances are that the home already has an accepted offer that is somewhere in the "lender approval" process. They too can add their offer to the mix and play the waiting game. Many of these short sales are priced at levels to attract buyers, discounting well below the true market price. In this case, the odds of "lender approval" on even full price offers are slim to none. As a consumer, it is best to do a bit of homework and write an offer closer to the market value, above the asking price, increasing the odds of lender acceptance. With more and more homes acquiring multiple offers, that is exactly what is occurring in the market: offers are being submitted for bank approval above the list price.

Everybody needs to keep in mind some fundamental statistics regarding distressed homes. 75% of all distressed properties, foreclosures and shorts sales, are below $500,000 and 94% are below $750,000. Santa Ana accounts for 20% of the entire distressed market in Orange County, 1 in every 5. Anaheim accounts for another 15%, 3 in every 20. The top 5 in total numbers, Santa Ana, Anaheim, Garden Grove, Orange and Lake Forest, account for 49% of all distressed properties, virtually 1 in every 2. With the exception of Orange, all have average list prices below $500,000.

What are FHA loans? The Federal Housing Administration (FHA) offers loans to consumers with some credit blemishes and/or a small down payment. A buyer can put down as little as 3%, all of which can be a gift. FHA is NOT subprime and has been around for years. This is not a program that the government cooked up to replace the void left by the sudden absence of subprime. Rather, with prior FHA loan limits well below the median sales price in Orange County, subprime filled the void. FHA loans require documentation and the buyer must actually qualify.

Buyers, what to do? Slowly but surely, more headlines are starting to illustrate improved demand and a great time to buy. It will take the better part of the next 60 days for the recent increased activity to start changing the tone of the headlines and stories completely. The facts are the facts; the lower ranges, where most of the junk loans occurred, are turning up the heat first. The increased loan limits should restore demand all the way up to $800,000. As liquidity is slowly restored to the financial markets, the upper ranges above $800,000 will in turn start to gain momentum as 2008 plods along. Demand has slowly improved as value has seeped its way back into the market. The conditions are perfect to purchase now and into the horizon: motivated sellers, plenty of homes to choose from, rates are low, new loan programs are available and there are great values out there right now. As a buyer, do not let price be your only determining factor in choosing to purchase. Price is important, but current favorable rates will not stick around forever. Prior to the financial subprime meltdown and financial crunch, the Federal Reserve was methodically raising rates to counter the threat of inflation. The threat of inflation is now high with all of the easing that the Federal Reserve has had to undertake to jump start the economy and the financial markets. Do not get comfortable with today's interest rates, they WILL eventually increase. As soon as the economy starts humming along again, expect the Federal Reserve to reverse course and push rates up higher. By the way, for every 1% that interest rates increase, it erases approximately all of the benefits of waiting for property values to decrease 10%. The payments are virtually identical.

Sellers, what to do? So far this Spring, homeowners are NOT placing their homes on the market in foolish anticipation of a wonderful Spring real estate market. Thank goodness!!! Quite simply, sellers should continue to bide by a simple rule of today's market: do NOT place your home on the market unless you absolutely must sell and are motivated to do what it takes to procure a sale, with the right price and condition. With only 2,285 successes over the past month, that leaves the vast majority waiting another month or months. In such a competitive market, it is all about price, location and condition. As a seller, you can do absolutely nothing about the location other than take it into consideration in determining price. Sellers do control their price and condition. After carefully determining an asking price, it still may take time, so pack your patience and be prepared to make changes as the market evolves. Unless you are prepared to market your home as a major or cosmetic fixer, great showing condition is imperative in maximizing your proceeds. Last, be prepared on day 100, just as you were during the first week, for a buyer to walk through the door. Set the stage with the lights on, soft music in the background, window covering opens and make sure your home is neat as a pin inside and out.

Have a wonderful weekend.

Sincerely,
Steven Thomas
RE/MAX Real Estate Services

President
"Outstanding Agents! Outstanding Results!"

Brought to you by Bob Phillips, of ReMax Real Estate Services.

Serving South Orange County Since 1976!

Call: (949) 643-2100 or email at BobPhillips@ReMax.net

Here's a link to the Coto de Caza Master HOA

Bob Phillips (Altera Real Estate) — Fri, 04 Apr 2008 17:03:16 -0500

Here is a link to the Coto de Caza Master Homeowner's Association home page:

http://www.czmaster.org/

Located adjacent to the Saddleback Mountains, Coto de Caza is a magnificent 5,000 acre private guard-gated community in South Orange County. Miles of unspoiled natural beauty abound in this community making it one of the most prestigious master-planned communities in the United States.

The community of Coto de Caza is truly "one of a kind" and offers its residents a distinctive way of life through its countless amenities.

Enjoy the sprawling natural landscape, the winding trails that take you to the reaches of the Cleveland National Forest, the countless sports fields and courts complete with recreational activities, clubhouses, golf, swimming, tennis and the tranquil parks that makes Coto one of the most sought after communities to live and play.

Bob Phillips has been a resident/specialist for Coto de Caza for more than 20 years. He would be honored to introduce you to this exceptional community.

Bob Phillips, Altera Real Estate, Serving South Orange County Since 1976!
Direct phone: 949-643-2100, Email: agent.BobPhillips@cox.net Website: http://BobPhillips.net

Golfing at Coto de Caza

Bob Phillips (Altera Real Estate) — Tue, 01 Apr 2008 23:09:56 -0500

Coto de Caza Golf and Racquet offers two Robert Trent Jones Jr. Championship layouts. The North, a 7089 yard gem ,that opened in 1987 to rave reviews from Pro's and amateur alike, boasts 2 of the 18 best holes in Orange County. Eight years later, as Southern OC grew in size, Coto grew along with the area offering another challenge with The South. The South, a slightly shorter 6950,treats Members and Guests to a Golf Course where players meander southward through the Coto canyon never seeing a hole other than the one their playing. Together ,the two layouts offer players of all abilities the chance to test all aspects of their game.

The North Course was named one of the nation's top 25 golf courses built in 1987 by GOLF DIGEST MAGAZINE and is the top rated golf course in Orange County.

With multiple Tee's, and slope ratings ranging from 117 - 147 for the men and 128 - 138 for the ladies, new players as well as the most experienced can test their games to the fullest at Coto. The North courses' forced carry tee shots and large undulating greens treat players to a unique experience. The majestic Saddleback Peak serves as a back drop for a wonderful golf day as players enjoy their journey around the track many believe to be the best course in Southern Cal. The South course, with Hazards bordering most every shot ,has become known more as a shot makers course. Water Hazards, smaller greens, and winding doglegs challenge players to not only hit all the clubs ,but to also use their imagination and play with strategy not only strength.

Looking for a golf course property? Call or email Bob Phillips,

Bob Phillips, Altera Real Estate, Serving South Orange County Since 1976!
Direct phone: 949-643-2100, Email: agent.BobPhillips@cox.net Website: http://BobPhillips.net

Demographics for Coto de Caza

Bob Phillips (Altera Real Estate) — Tue, 01 Apr 2008 14:04:37 -0500

Here is a link to show you various demographic information about Coto de Caza, California:

http://www.city-data.com/city/Coto-de-Caza-California.html

In the heart of Coto de Caza, lies the private Coto de Caza Golf & Racquet Club offering golf, tennis and social memberships. It is the first private 36-hole country club in Orange County and one of only three in metropolitan Southern California. Coto de Caza Golf & Racquet Club's excellent reputation attracts not only resident members but also members from surrounding communities. The name Coto de Caza means, 'Preserve of the Hunt' in Portuguese. The community center consists of a 44,000 square foot 'craftsman style' architecture Clubhouse, two complete 18- hole golf courses designed by Robert Trent Jones Jr., a Racquet Club and an Aquatic Center.

For photos and complete club membership information visit http://www.Coto-de-Caza.com/index.htm

Coto de Caza itself is an upscale enclave of about 4,000 homes on about 4,900 acres, deep within inland South Orange County. First opened in 1976 it reached completion or buildout in 2002, apart from a handful of remaining buildable parcels.

For a tour of the Club, or the community, please contact Bob Phillips. As a resident specialist for over 20 years, Bob knows Coto like the back of his hand.

Bob Phillips, Altera Real Estate, Serving South Orange County Since 1976!
Direct phone: 949-643-2100, Email: agent.BobPhillips@cox.net Website: http://BobPhillips.net

The story of Coto de Caza

Bob Phillips (Altera Real Estate) — Tue, 01 Apr 2008 10:20:56 -0500

It took twenty years for Coto de Caza's market to arrive. When it first opened in 1976 as a master-planned community, it was an isolated corner of Orange County, 12 miles inland and 18 miles southeast of Irvine, in the canyon lands east of Mission Viejo. In the ensuing years, during market downturns and ownership changes, the vision of a woodland-filled, environmentally attuned master-planned community has never wavered. Now that population and employment centers and road access have expanded to its doorstep, Coto de Caza's homesites are nearing buildout, with just a handful of custom lots still available.

Coto de Caza (idiomatically translated from the Portuguese as "The preserve of the hunt") originated as a working ranch in the 1700s, with a hunting lodge and riding center. Actor John Wayne kept his horse, Pretty Boy, at the Coto ranch, and he practiced shooting on its range. In 1970, covenants were drawn up to preserve the rural valley setting of the property as lots were sold for vacation homes. More than 2,200 acres-45 percent-were set aside as open space and wildlife refuges.

In 1979, Arvida, the Florida-based resort development company, purchased the property to develop as a hunting lodge resort. Recreational facilities were constructed to support the activities of the hunting- and equestrian-oriented clientele. The riding center was used for equestrian events during the 1984 Olympics in Los Angeles. In 1983, Orange County approved Coto's master plan for a community of approximately 5,000 homes, and three years later, the community officially opened.

At first, Coto remained isolated. That all changed in 1994 when Oso Parkway was extended from Interstate 5 all the way to Coto de Caza's south gate, and in 1995 when the Foothill transportation corridor-a highway and feeder system-opened. The growth of adjacent Rancho Santa Margarita brought with it nearby schools and stores. In anticipation of increasing growth, which the community was already experiencing, homesites were remapped in 1994 to be located on grassy ranchland knolls rather than in the canyons, as originally approved. This resulted in the capture of substantial view premiums, preservation of native oak woodlands in the canyon bottoms, and retention of the rural character of the valley as originally envisioned. The number of homesites was voluntarily reduced to fewer than 4,000 from the originally approved 5,000.

The developers have remained true to the original vision of environmentally sensitive development. The 475-acre Thomas F. Riley Wilderness Park was ceded to the county in 1994. More than 200 oaks were relocated to strategic points to preserve the rural atmosphere. Throughout the course of development, thousands of oaks and willows were preserved. In 1989, a computer-controlled central irrigation system was installed to manage the community's water usage. In conjunction with the introduction of native and drought-tolerant plants, the system saves about $200,000 of water each year; it had paid for itself in two years. Indigenous grasses that had been stripped during centuries of ranch use were reintroduced, with support from the county fire authority, which helped to reduce water usage and to mitigate the possibility of grass fires.

Coto de Caza's reputation as an ecologically oriented recreation community was strengthened by the former Vic Braden's Tennis College and a 36-hole Robert Trent Jones Jr.-designed golf course. The golf course respects the original plan to set aside land for wildlife and riparian refuges. There is a 35,000-square-foot clubhouse, and the equestrian center maintains its Olympic-caliber facilities. Forty miles of hiking and equestrian trails meander throughout the community, linking the 20 community parks within Coto to adjacent parks and wilderness preserves.

In 1996, Orange County-based Lennar Communities took over as development manager. Under Lennar's stewardship, Coto was repositioned to promote more luxurious homes and lower densities, coincident with the regional recovery from the recent recession. The average price of a new home increased from $375,000 in 1996 to $840,000 in 2000, to well over a million dollars, today.

Today, Coto de Caza is widely recognized as one of the country's largest gated communities. Homeowners have been united in their allegiance to the Coto way of life: in 1999, 25 percent of new home sales were to existing Coto residents. That dedication derives from the uncompromising position successive developers have maintained in their commitment to environmentally sensitive development, open space, conservation, and enhancement of the natural environment, despite changing economic conditions. Coto de Caza continues today, as a one of a kind community.

For a tour of our special community call or email Bob Phillips.

Bob Phillips, Altera Real Estate, Serving South Orange County Since 1976!
Direct phone: 949-643-2100, Email: agent.BobPhillips@cox.net Website: http://BobPhillips.net

Info about the Coto de Caza Golf & Racquet Club

Bob Phillips (Altera Real Estate) — Tue, 01 Apr 2008 10:11:20 -0500

For photos and complete membership information visit http://www.Coto-de-Caza.com/index.htm

For a tour of the Club, or the community, please contact Bob Phillips. As a resident specialist for over 20 years, Bob knows Coto like the back of his hand.

Bob Phillips, Altera Real Estate, Serving South Orange County Since 1976!
Direct phone: 949-643-2100, Email: agent.BobPhillips@cox.net Website: http://BobPhillips.net

Could this be the market bottom for South O.C. real estate?

Bob Phillips (Altera Real Estate) — Tue, 01 Apr 2008 00:54:20 -0500

Well, the first quarter has come and gone. As you may have seen or heard, a few more listings are coming onto the market. At the same time, the number of houses going into escrow has grown substantially. There are increasing signals that we may have reached the bottom of the real estate market.

For one sign, the Government has finally made California a higher priced state, like Hawaii and Alaska, by increasing the loan limits for "conforming" loans - those that offer lower interest rates, and somewhat easier qualifying, from the former $417,000., to $729,500.. ( They do usually require at least a 10-20% down payment on a purchase, or 20% equity left, after a refinance, so they shouldn't add to the current sub-prime mortgage mess.)

The effect this will have remains to be seen, but one plus factor should be this: Current borrowers, paying on an adjustable rate loan that has had its payments increase considerably over its life, might be able to more easily refinance out of it, with better current rates, and much lower payments - in many cases staving off a foreclosure, and enabling them to keep their houses, rather than be forced to sell them or lose them to their current lender. This will most likely happen in the next month or two, hopefully in time to save a bunch of distressed owners, from losing their houses.

If this is truly the bottom of the market, as I personally see it, most of the good buys will be gone within a month or two, and then we will settle ( by this summer.) into a fairly normal market, with buyers and sellers being more equally poised - neither having a big advantage, but FAR from the buyers market that has been in place for the past 2 years.

The opinions that I'm sharing with you are based on local information, from someone who has been working in this area, selling local real estate for over 31 years. Not a stock broker in New York, perhaps jealous that housing doesn't whip-saw up and down like the stock market, or some disgruntled snow bound economist based in Minneapolis, wishing he lived HERE, instead of where he's "stuck".

The housing market doesn't "whip-saw" like the stock market because people LIVE in their housing investments. If they didn't, when the bad news began to hit the housing market there would have been a stampede to sell, just like what happens when people find out they own a stock like Enron, Bear Stearns, or similar "investment", that is rapidly losing value. The majority of homeowners merely hold on to their home, riding out the storm.

When the dust settles ( again, probably by this summer.) from this current housing "crisis", values in South Orange County will probably have gone down somewhere between 10 and 20% from their highs in the spring of 2005, but no where near the 40, 50, even 60% drop predicted by some experts, whether local, or national.

I found it intriguing that in a recent Register article ( 1/27/08.) a survey reported that 41% of respondents thought there would be higher prices in 08, and 55% predicted lower. A similar survey just a few months ago predicted far more doom & gloom. It seems that more and more people ( insert the word: buyers.) are becoming convinced that the market is about to turn around, and NOT go down further, if at all.

When I say turn around, that is not to say that prices will start going up again, or that we'll go back to a seller's market, anytime soon. What will probably happen though, is that prices will firm up, making today's few "good buys" look like absolute steals. I personally expect to have a fairly flat market, with a good equilibrium of buyers and sellers for the next couple of years - before prices start to go up again - which has always happened, ever since I began, 31+ years ago.

If you, or someone you know, is sitting on the fence, waiting for the bottom to "magically" appear, I implore you to get serious. When the bottom does come there is not going to be a bell ringing to announce it. It will ONLY be obvious when it has long passed. By the time the media proclaims a "bottom", it will be 2 or 3 months after the fact, and much too late, to take advantage of.

If you are thinking of buying or selling real estate in South Orange County, it would be my extreme pleasure to be at your service. Drop me a line or give me a call. Bob Phillips, of ReMax, at (949) 643-2100, or at BobPhillips@Remax.net. Thanks for reading.

Isn't this usually a great time to sell?

Bob Phillips (Altera Real Estate) — Mon, 31 Mar 2008 15:51:10 -0500

This year has started off the old usual way, with a couple of startling exceptions. First, there are way fewer buyers, committing to a purchase, and second, there are way more houses on the market. So, yes, there is good and positive sales activity, and houses are selling - it's just not a great time to be a "normal" seller. Allow me to define a normal seller. In a normal market, there's an equilibrium between buyers and sellers. ( Unlike today's vastly higher number of sellers, to buyers.)

One big problem today is this: While there are plenty of first time buyers down at the bottom of the totem pole, a high percentage ( 25-50%, in my area.) of them are buying short sales or foreclosures, where there is NO move-up seller, looking to become a bigger house buyer. Many of those former owners are either moving away, or becoming renters, instead of local, move-up buyers.

The problem for a normal prospective seller, in this market, is that he has to vigorously compete with the short sales and REOs ( Lender owned properties.) that comprise 25-50% of his competition, and most normal ( read non-distressed.) sellers don't want to compete at such drastic prices. That's why the majority of normal sellers are leaving the market, unsold, after testing the market, trying to attract a normal buyer, for a month or two, or six.

So, when will this market change, to one that's more equal? It's really hard to predict, but probably when the number of distressed sellers starts to become significantly smaller. Until then, your best alternative to selling, may very well be becoming a landlord - renting your house to one of those foreclosed out former owners, if their credit hasn't taken too big a hit.