Grace and Ray‘s Blog 10/18/2016
Your Chosen Real Estate Team Grace and Ray
Is Fall not a good season to sell?
Many sellers believe that the best time to put houses up for sale is in spring or summer. However, the answer is that this is not altogether true. Much depends on local market trends which may flaunt conventional beliefs.
It is true that more real estate activity takes place during the summer months because students in families with children are on summer break. Even though autumn is a slower time in the real estates market, there are families that don’t like to move in spring and summer months when students are on holiday break, and, of course, not all people in the market for real estate have children in school at all. However, contracts do need to be established in October through mid-November in order to close a sale in December before X’mas and New Year holidays.
With 3.5% ultra-low interest rate of Sep. of 2016, won’t last long. potential buyers are out in full force attempting to cash in on this exceptional rate. Sellers who are serious about selling a house have a month-and-a-half to take advantage of current housing activity in order to close by the end of this year.
One of the most important reasons that people buy properties is as an investment for their children’s education. Parents should not wait long to invest in a new home or rental property for this purpose. It takes time to build equity and for upward value trends to take place. Actually, semester breaks at holiday times can also be good times to make a move without disruption of students’ education. Furthermore, if a seller is going to sell a house in order to size up or down to fit family needs, any time is a good time to sell. Because a seller is likely to be a buyer at about the same time, the market trend balance the income lost or profit gained. It is appropriate to take action to fulfill your family needs whenever necessary. One should consider, what might be lost and what might be gained. If one can sell high and buy low, that’s super! However, opportunities to take advantage of such an ideal market are low because only those whose needs correspond with giant market shifts and who have the ability to wait out the times between shifts can be blessed with such a situation. Few can be so adaptable and prescient as to manage that game. Realizing this, many sellers put their homes up for sale in autumn. Thus, we have see the housing supply in the fourth quarter increase for years. More sellers on the market create keener competition; as a result, reduced prices become more typical in the fall. This is not to say that every house put up for sale in the fourth quarter will be offered at a reduced price in order to open escrow. We have represented some sellers who sold homes at prices that put big smiles on sellers’ faces. We are not fortune tellers, nor magicians; however, we are trained and well informed to master the market trends in order to recognize a reasonable range of market values. With this foundation, we are able to work out a successful market strategy.
The market value of a property is the price that both buyer and seller agree to. Any surveys which claim a certain time is a good time for selling are risky, not only because the market itself is unpredictable, but also because real estate is a locally determined market. We believe in hard numbers, figures which analyze the local housing market itself.
First Team Real Estate has an exclusive market trend analysis system to indicate the best times for selling. Accurate advice is based on an objective system, which shows housing market data down to county, city, zip code, community, and even tract. Such scientific data analysis guides our business whether the market is up or down. We are also aware from this system that housing markets change approximately every two weeks. We share this inside information with our clients.
If one has a serious physical problem, he doesn’t want to consult with a neighbor but with a professional, a doctor. There are so many details to take care of. Anything that seems to be minor in real estate transactions can swiftly deteriorate into troublesome situations. This is why a trained real estate agent is of immense value to clients. After all, the most important thing is the peach of mind that comes to both buyer and seller when they can feel confident that there will be no legal problems involving the sale in the future.
Grace and Ray know the latest local market trends. Take advantage of our real estate professionalism, and choose the team of Grace and Ray to insure a secure transaction and peace of mind. Call Grace and Ray at (949)838-4379 for free consultation.
Grace and Ray‘s Blog 10/7/2016
Your Chosen Real Estate Team Grace and Ray
How to identify a perfect property?
People need a roof over their heads. Property is as a necessity as well as an investment. A property may appreciate over time and generate equity for the owner, while others depreciate or making little or no profit. A good house is a blessing to its owner one which has been uncared for or poorly located may become a disaster.
Before explore the features characteristic of a good home investment, we should understand that houses are built for different purposes – one of them is to live in, another is to produce wealth in the long run and a final reason is to generate profit for the builder. Properties are designed differently according to the purpose of the builder.
We can easily distinguish houses into these two categories. As experienced First Team Real Estate Hall of Fame Honorees, we can easily determine the category to which is a prospecting property belongs. We can provide the advice to prevent a very expensive mistake.
It is also true that a buyer will often become a seller. Even if the owner is an investor, need to wearing a future buyer’s shoes before making a current offer. Besides resale value what a buyer must consider what this property offer to people who live in it. Ideal homes do have some features in common according to our experiences as professional real estate agents.
1. Perfect home standard is personal as well as general. Thus a typical American home image is a single family home with a beautiful lawn. However, might not be ideal for those who don’t or can’t worry about mowing a lawn. Some people’s primary ideal home is one that provide privacy. Others are looking for security despite frequent and lengthy absences. Single family home owners need to take care of plumbing, gardening, insurance, and more. Condo owners follow the home association rules and pay dues which take care of most of these responsibilities for the home owner. A home must also satisfy a buyer in terms of size, community feature, and the owners’ life styles.
2. Location, location, location: Location is always king when talking about real estate. Properties located in a low crime rate neighborhoods, with easy access to freeways, shopping, better ranking schools, and park and community amenities are good choices.
3. Exterior conditions must be evaluated carefully as well. Are roof, exterior structure, and condition in good shape? Has the house been well-maintained? If applicable, does the home owners’ association keep the community neat and clean? Does trees trimmed? Are trees trimmed? Is the ground unleveled? Do electrical line presents a danger? There are numerous details to consider in order to protect house values.
4. Check the house’s functions: a property built to make profit will satisfy several living necessities. If the house lacks a yard or the yard is too small to function well, it will not be satisfactory for most families. If the home lacks a dining area or the living room is too small for family use, the house will not satisfy buyers. Other unsatisfied factory details include steep or awkwardly located stairs, poor lighting, lack of closet or storage space, no A/C, small rooms, too many rooms or only 1 or 2 bathrooms, etc. Has the house been remodeled and are permits available to verify conformity to building codes? How long has it been since the house was re-painted? How old are the appliances? Are the doors and windows original or updated replacements? A buyer needs to image whether he or she could live in the house–comfortably or uncomfortably?
5. A fifth factor to consider for a buyer is potential for growth or changing needs: Think about future needs in advance. One bedroom on the first floor is always a plus. Many home owners cannot afford to move up because of aging. When a buyer purchases a home which has one bedroom or junior master suite on the first floor, an aging home owner will not face losing the home or suffering from climbing pains. Generally a three bedroom house is a better investment than a one or two bedroom one because it can meet a family needs for a longer time accommodating different kinds of needs over a long period.
6. Be practical about your budget: One must know what he or she can afford and what has a chance of being a reasonable bid. (Often owning a dream home can be achieved over years in several moves when budget is a concern.) Work out HOA dues, mello roos requirements, property taxes, mortgage rates and terms, insurance, and prorated maintenance fees to come up with a number to assess the affordability. This is how to avoid foreclosures or short sales.
7. Finally, newly built properties are not always a good choice. New construction is attractive, of course. However, builders sell a house with “standard” appliances, which means extra costs will be incurred for any upgrades and special needs or desires. Also a newly built home with front and back yards, generally requires at least $70,000 investment in landscaping. Some builders even require that the owner pay for flooring. If a prospective buyer is willing to re-build himself or even to tear down a fixer-upper from the slab up, there are many opportunities available. Purchasing a home can be a daunting project; it requires time to plan and budget for such a purchase.
Real estate is an ideal investment tool because though the housing market goes up and down, the trend has reliably risen over the decades. Owners generally make money out of properties eventually if they do not face disastrous life changes or emergencies. Real Estate has been historically the most reliable investment people make. After all, it is an investment you can live in. There is no perfect such a perfect home for everyone, of course. However, a perfect house could be a house that fit in majority buyers’ dream home bracket. After all, housing value is determined by demand and supply.
Take advantage of Grace and Ray’s experience to start your hunt for an ideal home. We know housing trend intimately.
Free consultation: Grace and Ray won’t waste your time. Call (949)838-4379 or (949)232-4737. The key to your future home will be easy to find.
Grace and Ray Blog 9/19/2016
Your Chosen Real Estate Team Grace and Ray
Is it a Buyer’s Market?
Some clients ask us if it is a buyer’s market? The answer is Not Yet.
There just is not enough inventory to tip the market in the buyer’s direction. When we observe the supply and demand of housing market. It is one in which buyers and sellers may need to negotiate at length in order to close a deal. An additional complication is that different communities within the same city zone are likely to have different markets because real estate is a local business.
Housing markets do not move at a steady pace, of course; they move radically up and down. At present, there are signs that the market is slowing down. Houses for sale may languish on the market for prolonged periods. Open house directional signs often flood busy intersections. The Orange County inventory has remained low for years. OC housing values have risen dramatically in the past several years and the expected market time has remained below 90 days, a seller’s market. Currently in the county, properties may be on the market for 2.59 months, or 78 days, a slight seller’s market. The expected market time for properties in the lower price ranges is faster, however, for all properties below $750,000 is fifty-one days; in the luxury ranges, one can expect 385 days on market for homes priced above $2 million.
One of our couple buyer insists that OC housing price is too crazy to correct. This potential buyer is sitting on since cashing out his 1300 sq. ft. condo in 2014 and is leasing an apartment at present. They pay $2500 in monthly rent and have not been willing to present offers because housing value have actually appreciated. Many buyers believe that the housing market is about to experience a correction and that market will at last favor. Holding this emotional belief, buyers choose to pay their landlord’s mortgage, not their own. Buyers can afford to get a mortgage to take advantage of today’s historically low interest rates and decision to rent instead of buying is a great waste of money.
Homeowners are not putting their homes on the market as they did in 2008. Today’s market is much slower in offerings of inventory. The number of homes that would need to be added to current inventories to “correct” the market is more than 8000 homes for a sustained period. This level of inventories last happened in August of 2014 for one month; then the market reversed direction quickly. Today, average numbers of houses on the market for sale is at 7040, and the number is dropping. Unsuccessful sellers from the spring and summer markets are throwing in the towel and dropping out of the housing market. Inventories are likely to drop for the remainder of the year. Supply is not expected to top 8000 homes anytime soon which indicates that the OC housing market is far from being a buyer’s market at present.
Demand is another decisive factor in housing market. Current demand has dropped by 4%, a level not seen since the beginning of March, 2016. However, demand is still stronger this year compared to last year when there were 3% fewer offerings than today. The expected market time increased from 77 days two weeks ago to 78 days today, times which will not reverse the market trend.
Average current mortgage interest, at 3.75% creates more qualified buyers or homeowners. Let’s do a simple calculation: To purchase a $695K home, medium range single detached home in July this year, with 20% down, the monthly payment would be $2575 with a 3.75% interest rate. If the interest rate were at the historically average of 8%, buyers would pay a monthly average of $3707 to buy a $695K home. These figures indicate that the better choice financially is to buy a home, thus saving in terms of tax deductions and benefitting as well from appreciation in home values. Those who are renting do not benefit at all from those factors and instead suffer rapid increasing in rents and fees. At present financially stressed home owners can refinance at lower interest rates so they don’t need to put their homes on the market for sale. Distressed homes, both short sales and foreclosures combined, make up only 1.8% of all listings and 3.3% of demand. That is 125 total distressed homes on the market, decreasing by 9 in the past weeks. Please note that last year there were 232 total distressed sales. Lower mortgages rate have resulted in fewer market offerings for Orange County.
The average list price for luxury home across all of Orange County is $1.5 million. The luxury end, all homes above $1 million, accounts for 37% of the inventory and only 15% of the demand in the past couple of weeks, alone there has been a 10% drop in luxury home inventory. As a result, the expected market time dropped from 5.72 months to 6.17 months, a slowdown that is a direct result of the transition from the summer to autumn markets. The indication is the luxury properties have been experiencing a dramatic slowdown, especially those priced above $2 million.
When will the market shifts from seller’s market into a buyer’s one? When the economy improves and interest rates eventually rise to a point that eliminates some buyers and homeowners who no longer qualify for a mortgage, only then will demand be reduced and supply be increased. Only then will the market finally lean in favor of buyers and housing prices fall. However, this is not yet in sight, nor is it likely to occur soon.
We, Grace and Ray, would like to sit down with you to discuss your preferred community market to empower you with scientific data to line up your journey of purchasing/selling your dream home. Please feel free to call us at (949)838-4379 or (949)232-4737 for free consultation.