I was curious, so I spent a few hours the other day looking at the history of home prices here in RSM. Take a look....

It's my opinion that we are very close to the bottom of this market. With low interest rates and pricing bottomed out, this is a great time to purchase!

Thinking of buying a home in Rancho Santa Margarita? This may be the best time in a LONG time. Mortgage rates are down, way down. Home prices may continue to fall for some time to come, or this could be the bottom. No one knows for sure. It's a pretty safe bet that if you purchase a home to live in, and stay there 5 years, it will increase in value. Stay 10 and there is a very good chance that it will double in value based on history.

There is a condo in Rancho listed for $149K - it's listed as a short sale, but with bank approval. That's amazing. I sold a similar condo in December for $205K and thought we were selling it pretty cheap.

Have we reached the bottom?

Yep- or very close.

Thinking about buying something myself as an investment.

You agree?

Oh, by the way, I was doing a BPO in Fountain Valley last week. There, home prices have been steady for the last year!! (source = Data Quick).

Thinking about buying a rental - call me, I have seen a lot of them.

Paul

Ok, so maybe Golden Oak has fallen out of favor with the masses, but I still like my Golden Oak kitchen cabinets.

I'd like them more if they weren't beginning to show their age.

The cabinet under the sink was the worst. Little drops of water over the years had taken its toll on the cabinet's finish.

Anyone that has read my blog in the past knows that I am a total do it yourselfer, but the thought of sanding my cabinets down to bare wood, was unbearable (pun intended).

So, for the last couple of weeks I have been trying to think of a simpler way to "repair" the finish. I thought about painting them, but I haven't liked the oak cabinets I've seen that have been painted. The grain always seems to show through.

Here is my formula -

Remove the doors and drawers. Take one of the fake (faux) drawer fronts from under the sind, down to the local big box depot.

The first step is to find a stain that is as close to what you already have as possible.

Next, get some scotch bright pads (that's the scratchy stuff on the back of most kitchen sponges).

Get some paint thinner.

Look for a new product from Minwax. It's a poly urathane, water based, that you apply with a rag. I know, you think, "that can't work" - but it works great, it dries super fast, and gives a great finish.

As an alternative, you can use spray on poly urethane, but that take forever to dry. I used the spray on the front before I tried the rub on. I will probably never go back to the spray.

I actually built the Oak Cabinets in my last house, so I am not totally cluess about finish work.

Buy some 100 or 120 grit sand paper (get some additional finer paper if you want an extremely smooth surface. 120 grit was fine for my project.

Now, figure out the sheen your cabinets have. Not what they used to have, but what they have now, so you can blend if necessary.

Ok, go home, take one of the door fronts that really looks bad.  Grab your scotch bright and paint thinner, have some paper towels handy. Now rub down the entire door with the scotch bright and paint thinner.

Anywhere the wood is exposed, the paint thinner will darken, but once it dries, it will lighten back up.

The object here is to clean the wood, and to remove any of the really loose finish.

Let them dry, then go over them with the sandpaper. This time to smooth the existing finish, but not to remove any more than you need to.

Wipe the wood down real well with the paper towels, or blow it off with compressed air like I did.

Now you are ready to stain. I put it on with a brush, let it stand about 5 min, then removed it with the paper towels. If you did it right, the stain should blend in very well with the existing stain. You'll want to cover the entire surface, but the stain will only darken the exposed wood where the finish has warn off. Don't try to only paint the stain on the areas that are bare, just stain the whole piece, then wipe it all off.

Follow the directions on the stain. I had to wait 8 hours before I could poly coat mine. They do make a waterbase stain that I have used in the past, but they didn't have the right color at Lowes, so I used the slow dry stuff (Minwax again).

Once the stain was dry, I sprayed the fronts of two doors and faux drawer fronts.

Once those were dry, I turned them over and did the other side with the wipe on poly. That stuff is great. I used the same process on the cabinet frames.

Mine were actually falling apart, so I had to do some rebuilding, but in the end, the cabinets I repaired look better that those I haven't gotten to yet. In the mean time they blend in very well

Please note that there are many finishes out there and I can only say that my instructions worked for me. If you decide to try this, do so at your own risk, but enjoy the outcome if it works out for you.

 Good luck!

Paul

Since the first of the year, our Century 21 Superstars office has listed more homes that have sold in Rancho Santa Margarita, than any other brokerage. In fact, we listed 59 of the 650 homes sold since the first of the year. The runner up only listed 47, next in line listed 36, then 21, 17 and so on.

There were a lot of companies that only sold 1 or 2.

We have approximately 150 agents in our office alone.

Agents selling Bank Owned properties led the pack by a huge margin.

I expect prices to firm up based on the number of sales.

Thinking of selling?

Please give me a call.

Paul McDuell

So, here I am, minding my own business, but wondering if there really were more homes sold last month (Oct. 08) than last year (Oct. 07).

Are you sitting down?

Are you ready for this??

Last month there were 78 sales in RSM - that includes condos and SFRs.

There were only 28 homes sold in Oct. of 2007!!!

That folks is a 278% increase - that is HUGE!!!

Ok - but what about prices you ask?

Well - The average price per sqft in Oct. of 07 in RSM was $348.42

In Oct. of 08, that price dropped to $274.96 a SqFt.

That's equal to a 21% drop in value. That's a LOT, but not nearly as bad as many would have us believe.

So, what is the prediction?

I see it this way, demand is WAY up - When demand is up, prices go up.

There will be a lag, and who knows how long that will be.

But with the number of sales up this high, it's only a matter of time before prices start to go up again.

Thinking about buying an investment property????

Call me - There are 2 bedroom condos in Mission Viejo now for $180K!!!!!

The nonsense loans that were introduced in the first few years of this century are the main reason Real Estate prices shot up the way they did. All of the sudden EVERYONE was able to buy. Now that those loans are gone, and the families purchasing today are buying homes they can TRULY afford, home prices have fallen dramatically.

Imagine for a minute that those nonsense loans had never been introduced. Prices would have gone up gradually since 2001 or so, at maybe 2~3% per year.

Actually, that's kind of what is happening now. Home prices had inflated much faster than they should have, so until the levels get back to where they should be by now (had those nonsense loans never been introduced), we are going to see prices fall.

Well, we are almost there. Take the 01, 02 prices, and in 3~6% per year for appreciation, and you have the value that homes SHOULD be at.

Just a guess, but it makes sense to me.

What do you think?

Did you know that you can use your IRA to purchase investment Real Estate? Yep, the IRA OWNS the Real Estate, no need to take an early disbursement. There are some rules like you can't live it while the IRA owns it, and you can't rent it to anyone linearly related to you (grandparents, parents, kids, grand-kids), but brothers and sisters are OK. You can even borrow money to make the purchase, but the loan must be non-recourse which means it cannot be sold on the secondary mortgage market and dramatically reduces your choices when seeking a lender (but there ARE lenders out there). Also, if you do borrow to make the purchase, the % of the purchase that is financed is subject to taxation (unless you use a 401K, which is exempt for the tax!). The bottom line is, it can be done, it's not complicated, there are MAJOR tax advantages, but you must follow the rules.

Please consult your tax professional for tax advice. Be sure that any tax consultant you rely on is very familiar with Self Directed IRAs and their use in purchasing Real Estate. Many are not aware that this is permissible.

Got a Question?

Give me a call or shoot me an email!

Paul McDuell

Good news, loan rates have dropped. 30 year fixed conforming (up to $417,000) with one point is at 5.875%, and 6.25% with no points (they were MUCH higher last week). Homes prices have dropped, but the number of home sales have gone up dramatically. 62% increase in the number of sales from Sept. 07 compared with Sept. 08 AND that average includes new home sales which have actually dropped dramatically. If you look at only resale home statistics, you'll see that sales have increased over 80% when compared to the same period last year.

                But what about Dove Canyon. Some of you have been receiving my stats on Dove Canyon for almost a year now. We've seen the average price per square foot go from slightly over $300 to $283 this period. On a 2500sqft home that translates to a difference of about $42,500. That's a lot of money, but when you consider the price of the homes in this size range are over $700K it doesn't seem like as much.

                With the number of sales increasing the way they are, it's only a matter of time that prices will follow. The California Association of Realtors predicts that home prices should start to recover in the second quarter of next year.

                If you are considering a purchase, this may be the time to make your move. If you are thinking about selling to retire (not purchasing a replacement home), you may want to hold off until prices recover, but if you plan on purchasing a replacement home, lower prices can actually work in your favor, after all, the taxes you'll pay on your next home will be based on the purchase price.

                This is pretty much what I have been predicting, that is that home prices will fall to the point of where they were before they started making the "non sense" loans. Now that we are practically there, we are seeing a predictable increase in sales volume for two reasons. First, because many people are becoming aware of the great values, and secondly because more and more buyers are qualifying to purchase homes.

                If you have any questions about Dove Canyon Real Estate, or any Real Estate in South Orange County, please give me a call or shoot me an email!!

Home buyers and Sellers, if you are interested in acquiring a copy of my Dove Canyon report, shoot me an email and I will send you one.