When you are looking to buy a home in Orange County, or anywhere else for that matter, it is critical to drill down into the numbers for the sector of the market that you are looking at. Orange County numbers are wonderful benchmarks to know, but our market is made up also of submarkets within the OC. It's important to understand Absorption Rates, Average Days on Market, price per square foot, sale price to list price, etc.
For every buyer I'm working with, I try to do an analysis that really tells the story of the market they are hoping to buy in. This allows them to have a realistic picture of the market and compete effectively for the home they hope to buy.
If you are a seller, these numbers will be important to you too. Even if you are not a buyer or seller right now, hang in there. This may seem dry, but I'll try to make it fun. There is a story told by the numbers every time! :)
Today, I did some research for an investor I am working with in Rancho Santa Margarita. She is looking for a condo around $250,000 that has at least 2 bedrooms and 1 car garage. I looked at the numbers for Rancho Santa Margarita between $200,000 and $300,000, with a minimum of 2 bedrooms and 1 garage - Active, In Escrow, and Closed Sales going 90 days back. (I recently did this analysis for a Mission Viejo buyer and only included sales over the previous 30 days, but in this instance that would have been swayed too heavily by the holidays). Here's what I found for this submarket:
Active Inventory - 47 Listings
- 34 Short Sales or 72%
- 9 Bank Owned or 19%
- 4 Traditional Sellers or 9%
In Escrow - 22 Listings
- 9 Short Sales or 41%
- 9 Bank Owned or 41%
- 4 Traditional Sellers or 19%
Closed Sales in the Last 90 Days - 27 Listings
- 10 Short Sales or 37%
- 10 Bank Owned or 37%
- 8 Traditional Sellers or 30%
Analysis of Closed Sales
- Short Sales: Average Days on Market - 96, Sale Price to List 102.17%, $256.47 price per sq. ft.
- Bank Owned: Average Days on Market - 35, Sale Price to List 98.89%, $248.17 price per sq. ft.
- Traditional Sellers: Average Days on Market - 33 (there was one outlier here that if removed would have made it 14), Sale Price to List Price 96.43%, $263.35 price per sq. ft.
Hey wake up! This is fun - really!
So what does all this tell us?
I'm a little surprised to see that some short sales are getting done in this price range. We still have a large swing in the percentage of active inventory versus closed sales within the short sale market, but maybe the banks are starting to pull it together. I'll be watching.
It's also still clear that the traditional seller is able to secure a slightly higher price. The swing was much greater in the Mission Viejo analysis I did earlier, but it is still there. Why? I think buyers still love to have full disclosure from a real seller. They also tend to be properties in slightly better condition. And the best part - you submit an offer, and a real live person actually responds in sometimes as soon as 24 hours! Wow!
Still the best 'deal' going is the bank owned home. Just beware, is it still a 'deal' if you have to put in a lot of money after the close? Maybe yes, maybe no. Each property will require individual analysis to make sure that one is really getting a good value for the home.
Hope this helps my investor - and you. If you ever are in need of a little Microscope on the Market - just let me know. Just make sure you've had your coffee first.
Originally posted on OC Real Estate Voice