Despite a recent slowdown in the California real estate market, the C.A.R. is confident the market will continue to gain ground next year.
In the C.A.R.’s 2014 California Housing Market Forecast, sales are expected rise by 3.2% next year, reaching 440,000 units, higher than 2013’s previous forecast of 430,300. In addition, 2013 is expected to close out the year with 2.1% less sales than 2012, which saw single-family existing home sales totaling 439,400 units.
30-year fixed mortgage rates are predicted to rise further next year, but not at the pace seen recently and they are expected to cap out at 5.3%.
The median home price in California is also forecasted to rise, reaching $432,800, and rising by 6%.
Further improvement of the market could be attributed in part to the return of prospective buyers who had been pushed out of the market by low inventory and aggressive investors, increasing homeownership demand as a result. Housing inventory is also expected to become less scarce next year, as more homeowners come out from underwater and choose to sell.
Looking to buy or sell a home in 2014, in the Orange County or Los Angeles markets? Contact Blue Pacific Property – we can help!
Although the rise in home prices in Southern California has been great for market recovery as well as sellers and homeowners, it has also affected home affordability for the average Los Angeles buyer.
On average, only 24% of homes on the market are affordable to a home buyer with a median income. Considering the skyrocketing prices in Los Angeles County during the past year – earning it the title of the nation’s third most expensive city – the selection for these homebuyers in is minimized by home prices.
Median home prices in the six-county Southland has risen by 24.6% in the last year to $385,000 in August. In Los Angeles County, it has risen even higher, shooting up by 28.1% to $429,000. At the same time, the county’s individual income hasn’t seen the same explosive growth. With the 2012 LA county median annual income of $53,001, a house selling for around the $271,000 price point is all many can afford.
The gap between affordability and average income can be attributed not only to home value appreciation, but also to increasing mortgage rates and reduced inventory, as investors sweep up lower cost homes. For homebuyers, the recent cooling of the Los Angeles market will be a welcome turn of events.
Need help finding a home within your budget in the Orange County or Los Angeles areas? Contact Blue Pacific Property today – we’re here to help!
Fears of another housing bubble diminished in September, as the Southland real estate market continued its cooling phase.
For the third month in a row, the median home price in Southern California remained almost flat at $382,000. According to DataQuick, only 19,112 houses sold during September in the six-county region, making for an unusually steep month-over-month decrease in sales activity. The fall season typically sees a decline in market activity; average regional sales decreased 9.3% from August to September, but this year sales in the local market fell by 17.1%.
This steep slowing trend was echoed nationwide, with the majority of the 20 major metro areas tracked by the July S&P/Case-Shiller report showing similar declines in home price appreciation. Much of the national cooling trend can be attributed not only to seasonal factors, but to buyer fatigue in the wake of rapid price increases and rising mortgage rates, as well as cash-investors pulling out of the market.
In addition to dismissing fears of another housing bubble, the cooling trend shifts the market to be in favor of buyers. With less competition on the market, sellers need to offer more incentive to potential buyers, such as reducing the asking price or ensuring a home is in a complete state of repair.
However, next spring is expected to return to an even hotter market pace by some analysts, making now the perfect time to buy in Southern California.
Looking for a home in the Los Angeles or Orange County areas? We can help – contact Blue Pacific Property today!
Foreclosures continued to plummet in the third quarter of this year – down 7% quarter-over-quarter, and down 29% from the previous year.
This represented the largest annual decline in foreclosures since the second quarter of 2011, and the 36th consecutive month with a year-over-year decrease in foreclosure activity. September’s steep drop in foreclosure activity, which saw a 27% year-over-year decrease, played a large role in the Q3 foreclosure decline.
Foreclosure starts also saw a substantial decrease across the nation, marking a seven year low. Q3 foreclosure starts were down 13% from the previous quarter, and down 39% year-over-year. California was one of the 38 states that saw year-over-year decreases in foreclosure starts, dropping by a substantial 59%. On the other hand, 11 states experienced year-over-year increases, with some states like Oregon seeing an immense spike of 252% in foreclosure starts.
Facing foreclosure and not sure where to go next? Contact Blue Pacific Property today!
HUD recently announced changes to its Federal Housing Administration short sale requirements, effective October 1, 2013. In order to be eligible for a short sale, the borrower must first meet several requirements, in addition to other restrictions further on in the process. Some key points:
- The property cannot be listed with, or sold to, any close or business relations – this is known as an “arm’s-length” transaction
- The mortgage must also be in default when the short sale closes
- Any additional liens against the property must be released before closing
- Servicers must use a Deficit Income Test to ascertain the homeowner’s financial hardship for a standard pre-foreclosure sale (which is eligible only to owner-owned properties)
- Property appraisal should be completed within about ten business days, but may take more time if approval is required by the investor or FHA
- Before the sale closes, a final payment may be required, and will reduce the deficiency balance
- Owner-occupants may be eligible for incentives of up to $3,000
- The revised addendum must be signed and dated by all parties.
As the weather outside cools down for the Fall season, so does the real estate market. Although cyclically a slower time of year, there are some positive numbers coming in for the Orange County real estate marketing:
- Median home price rose in August, up 25.8% from the year before
- The average median sales price is at $560,000
- Rental costs are up 2.6% versus one year ago and it was the 34th consecutive month of year over year increases
- The average 30-year mortgage rate is down to 4.22%, down for the third consecutive week
- Home sales were up 4.2% from a year ago
- Housing inventory nearly doubled in six months, up to 6,298 listings at the end of September (see chart)
- Foreclosures were up 20% in September from the month before, but down 53% from July 2012
- Rental costs are up 2.86% in Southern California as a whole, with Orange County rents the most expensive at an average of $1,572 per month.
The Tustin Tiller Days event is a celebration of community as well as Orange County’s agricultural heritage. It is an opportunity for nonprofit organizations, like Outlaw Dogs, to raise funds for a variety of local needs.
The carnival opens this weekend on Friday, Friday, October 4 at 4:00 pm and continues until Sunday, October 6 at 10:00 pm. There is also a parade along Main Street and Prospect Avenue on Saturday, October 5 at 10:00 am.
Outlaw Dogs is a nonprofit organization location in Orange County that rescues dogs from kill shelters, owner surrenders, and strays from the street. They provide all the food, vet care, medication, supplies, and more. The organizations relies solely on fundraising, donations and volunteer efforts.
Visit us at our Tustin Tiller Days booth and help support Outlaw Dogs!
The carnival is located at the corner of Irvine Boulevard and Prospect Avenue in Tustin.
Visit the Tustin Tiller Days website for more details on the parade and carnival.
As home price increases in the area continue to force first-time homebuyers out of the buyer’s market, the rental market has become increasingly clogged and renters in Southern California (including Los Angeles, Orange County, San Diego Counties and the Inland Empire) are facing increasingly tight competition. Although around 6,700 new multifamily units were constructed between the spring of 2012 and 2013, almost 11,900 were absorbed at the same time.
Over 3,000 new apartments came on the market in Los Angeles over the course of the year for a 120% increase, but still were unable to outpace the 5,800 apartments absorbed as the vacancy rate dropped to 3.2%. In addition, the Los Angeles rental market is predicted to only grow more competitive in the future, with a 1.3% rent increase likely between the spring of this year and the next, and a 3.8% increase expected in the next two years.
On Thursday September 26, 2013 Blue Pacific Property participated in a Health and Lifestyle expo which was held at Baxter Healthcare Corporation in Irvine. Baxter is a global healthcare company with expertise in medical devices, pharmaceuticals and biotechnology.
During the expo, Baxter’s employees were provided with preventive health care information, free health screenings, and incentives from local health and wellness companies.
Blue Pacific Property was invited to provide Baxter’s employees with information on their fiscal health, regarding residential real estate. Matt Carr, Shireen Ferguson, and Winnie Leung participated by providing the Baxter employees that the most important function of a real estate agent is negotiating a good deal on behalf of the buyer/seller and educating the client about the market.
Bill Daniels, Broker/Owner, and Marcial Fernandez, Business Development Director/Corporate Recruiter were also in attendance.
Despite recent increases and record highs, 30-year fixed mortgage rates fell substantially this week. According to Zillow, the rate fell to 4.17% Tuesday morning, down from 4.38% the week before. Mid-week, the rate fell to 4.24%, then remained stable for the rest of the week. This week it fell again, marking a drop of 32 basis points.
Mortgage rates hadn’t been this low since mid-June, but rates are predicted to remain generally flat over the next week. The falling mortgage rates come as positive news for the market, as any additional surges in mortgage rates this year have been expected to slow a cooling market at a much faster pace.
With mortgage rates dipping to lows not seen since earlier in the year, now is the perfect time to buy a home. Looking for real estate in the Orange County or Los Angeles markets? Contact Blue Pacific Property today!