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cdog
11-17-2004, 11:53 AM
From The OC Reg..............Home sales decline across the region By HANG NGUYEN November 17, 2004
October sales fell from a year ago in all six Southern California counties. For O.C., the 25% drop-off marked the seventh straight month of declines.
Orange County's housing blues spread to the rest of Southern California.
For the first time in more than four years, year-over- year home sales fell in all six Southern California counties, according to data released Tuesday by market-tracker DataQuick. The slowdown even hit the hot Inland Empire market – San Bernardino and Riverside counties – long seen as a refuge from Southern California's higher-priced housing.
In Orange County, builders and real-estate agents sold 3,508 homes in October. That's about 25 percent fewer homes than a year ago – a tad better than Ventura County, which had Southern California's biggest drop-off, with 26 percent fewer homes sold in October vs. a year ago.
Cooling demand has not resulted in significantly lower prices in Orange County. Last month's median price of $532,000 was $1,000 off September's value and $11,000 off August's peak. However, O.C. home prices are still up 21 percent from a year ago.
"Everybody is watching Orange County," said DataQuick analyst John Karevoll, where the sales pace has fallen from a year ago for seven consecutive months. The past three months have been particularly ugly, with home sales declining at a 25 percent annual rate - or worse.
"Trends emerging in Orange County could emerge elsewhere soon," he adds.
Like many experts, Karevoll isn't sure if Orange County's significant pullback in home sales could translate into a serious, long-term price decline - or just be a temporary lull.
Here's some questions that surround Orange County's housing market:
Q. Why are home sales slowing?
A. Many experts think it's an affordability issue.
By one measure, the affordability rate slightly improved from August to September. But it was still near 16-year lows.
In September, only 13 percent of Orange County households could afford a median-priced home, according to the California Association of Realtors.
Mortgage rates near 40-year lows haven't helped much. A typical O.C. buyer's monthly mortgage and tax payments are up 17 percent in a year to $2,314 in October, DataQuick says.
Q. Are certain kinds of homes getting less attention from shoppers this year?
A. The slowdown appears to be widespread. Real-estate agents sold about 23 percent fewer traditional homes and 25 percent fewer condos in October vs. a year ago.
Builders' selling has slowed at a 30 percent annual rate, DataQuick says. So it seems that shoppers are turning away from both the pricey stuff as well as cheaper housing.
Q. Just how do buyers afford these high prices?
A. Adjustable-rate mortgages and fat down payments.
In October, 79 percent of buyers chose an adjustable-rate mortgage, which initially offers lower rates than traditional fixed-rate loans. That's the highest usage of adjustable deals since 1988.
Also, buyers in October put down 22 percent of the purchase price, or about $118,000, which was close to $23,000 more than last year.
Q. Isn't a 21 percent year-over-year price gain pretty hefty?
A. Yes. But the local housing market is not has hot as it was. In May, home prices were appreciating at a 36 percent annual rate.
Q. How do O.C. price gains compare to other counties in Southern California?
A. October's 21 percent annual gain in home values was the lowest in Southern California. San Bernardino County's 30 percent was the biggest boost in price.
Q. These DataQuick statistics are for October. What has happened in the local market since then?
A. Falling prices and a growing selection of homes for sale has kept many shoppers waiting on the sidelines.
The supply of traditional homes and condos on the market has more than tripled from last year. However, it dropped 2 percent for traditional homes and 1 percent for condos from Oct. 31 to Nov. 16.
If now is a good time to cash out. Let me know. I'm a realtor in OC.

HOOTER SLED-
11-17-2004, 01:25 PM
Prices drop, prices drop. OC here I come. :D

NashvilleBound
11-17-2004, 03:52 PM
Glad I got out when I did!

FREIND OF AA AND TA
11-17-2004, 04:48 PM
Dont forget to call me for the great discounted homes in Santa Clarita all the way to Ventura and now serving Santa Barbara

throwerb
11-17-2004, 05:06 PM
Glad I got out when I did!
Won't be long now :D

al cole'holic
11-17-2004, 05:07 PM
This market ain't going anywhere :D

CA Stu
11-17-2004, 05:16 PM
It's approxiamtely an 8 year cycle. '05 will see a lot of foreclosures, I reckon.
Interest only loans + real estate bubble + time = Foreclosure city
Smoke and mirrors are just smoke and mirrors, man.
If you don't think a correction will happen, you're a lot smarter than me (or a little younger).
Cheers
CA Stu :wink:

randy77zt
11-17-2004, 06:10 PM
how many people took out 2nd mortgages to pay for a boat on a house that they bought 2 years ago.can you say upside down in a house?house will be finnanced for more than market value.somebody will have to pay or house will be foreclosed.market swings in cycles.most people buy on impulse though.

Rexone
11-17-2004, 06:13 PM
From The OC Reg..............Home sales decline across the region By HANG NGUYEN November 17, 2004
anyone know if this is a relative of Havasu Hangnguyen?

Kilrtoy
11-17-2004, 07:13 PM
Prices are dropping in the Valley

boatnam2
11-17-2004, 08:11 PM
im really not sure what everyone thinks is going to happen.prices are just going to increase until a little shack in oc is 2 million.i dont think so. i remember in 88-91 era my buddie had just bought a little 3bd pad in lakewood 285k i couldnt belive it,he told me i better hurry or i will never be able to afford a house around there.year or so later he lost his job house wouldnt even sale for 155 with the upgrades he had done.i bougth in 93 same area for 135.prices are so far overpriced it is not funny.

Mandelon
11-17-2004, 08:32 PM
Its a cycle, and seasonal. We are at the end of the busy season as well as just past the top of the market. Market times are increasing, and asking prices will be coming down to meet demand. Interest rates are starting back up......which eliminates more buyers.
Prices are out of reach for 75% - 85% of the residents... :eek:
I used to rehab foreclosures. The banks were losing money on 50% LTV loans. Rental properties could be had for $35,000 to 50,000 a door. If the stock market continues to rise or really heats up, money will leave Real Estate for the market......
If it happens, buy as many as you can. Anything with positive cash flow.....pick it up! It will make you wealthy. It just takes time.

summerlove
11-17-2004, 08:34 PM
Interesting...the San Diego U-T had an article this past Sunday that claimed home sales are still hot, and that the past year say a average 26% increase over the past year.

Kilrtoy
11-17-2004, 08:35 PM
im really not sure what everyone thinks is going to happen.prices are just going to increase until a little shack in oc is 2 million.i dont think so. i remember in 88-91 era my buddie had just bought a little 3bd pad in lakewood 285k i couldnt belive it,he told me i better hurry or i will never be able to afford a house around there.year or so later he lost his job house wouldnt even sale for 155 with the upgrades he had done.i bougth in 93 same area for 135.prices are so far overpriced it is not funny.
I agree, Hit the nail on the head......

Kilrtoy
11-17-2004, 08:36 PM
Interesting...the San Diego U-T had an article this past Sunday that claimed home sales are still hot, and that the past year say a average 26% increase over the past year.
Very true, but I see the market is already cooling off........
and prices are dropping quicker than girls tops at the sandbar

Propchecker
11-17-2004, 08:37 PM
The price of raw, and/or subdividable (sp?) land is officially up, therefore the log jam ....in this state anyway....

C-2
11-17-2004, 08:39 PM
Foreclosures were insane in the early to mid 90's. Our office handled all the bad loans for Home Savings and at it's peak, about 45-50 would come across our desk each day, and that was only for So Cal.
Damnit, was thinking about selling.

totenhosen
11-17-2004, 08:47 PM
Its a cycle, and seasonal. We are at the end of the busy season as well as just past the top of the market. Market times are increasing, and asking prices will be coming down to meet demand. Interest rates are starting back up......which eliminates more buyers.
Prices are out of reach for 75% - 85% of the residents... :eek:
I used to rehab foreclosures. The banks were losing money on 50% LTV loans. Rental properties could be had for $35,000 to 50,000 a door. If the stock market continues to rise or really heats up, money will leave Real Estate for the market......
If it happens, buy as many as you can. Anything with positive cash flow.....pick it up! It will make you wealthy. It just takes time.
Exactly! I'm waiting for it to happen and I'm going to make a killing.

Mandelon
11-17-2004, 08:47 PM
Foreclosures were insane in the early to mid 90's. Our office handled all the bad loans for Home Savings and at it's peak, about 45-50 would come across our desk each day, and that was only for So Cal.
Damnit, was thinking about selling.
I rehabbed soooooo many of those houses down here.......it was great! 10 day turnover. Fanie Mae, Freddy Mac, Home Savings, Downey, Long Beach Mortgage, Northeast Savings, World Savings, Wells Fargo.....oh the list goes on and on. I wish they'd come back....... :notam:

voodoomedman
11-17-2004, 09:20 PM
I rehabbed soooooo many of those houses down here.......it was great! 10 day turnover. Fanie Mae, Freddy Mac, Home Savings, Downey, Long Beach Mortgage, Northeast Savings, World Savings, Wells Fargo.....oh the list goes on and on. I wish they'd come back....... :notam:
I had my eye on a new house that was supposed to be a half mil and turned out to be 3/4 mil when done. I actually told them that it was overpriced and I would be buying it in 3-5 years when somebody has already landscaped and upgraded it and then because they had an interest only loan or negative amortization and just lost their job and got forclosed upon. I've got a problem with prices like that. I like to eat... Let alone spend ridiculous amounts of money to fill up the Ultra with 80 gallons of gas.

Dr. Eagle
11-17-2004, 09:24 PM
Hmmmmmmmmmmmmm I think I remember saying that as interest rates rose the market would cool, like over a year ago. It doesn't surprise me, but it is still a pretty strong market, just not as strong. Now if rates go up another two or three points... lookout... I think things will grind to a halt and prices will reverse...
but that begs the question: what the hell do I know? :hammerhea

voodoomedman
11-17-2004, 09:29 PM
but that begs the question: what the hell do I know? :hammerhea
Certainly alot more than those getting in over their heads and getting foreclosed upon in a couple of years.

Kilrtoy
11-17-2004, 09:37 PM
Now if rates go up another two or three points... lookout... I think things will grind to a halt and prices will reverse...
but that begs the question: what the hell do I know? :hammerhea
if it goes up that high, prices will drop BIG TIME.........

Propchecker
11-17-2004, 09:39 PM
if it goes up that high, prices will drop BIG TIME.........
True Dat

CJ
11-18-2004, 07:43 AM
I doubt rates are going to go up quickly. The Fed is afraid to move quickly after the tech crash. I could see a couple of points over the next few years, but we are at historical lows so a couple of points can't really hurt . . . UNLESS you are overextended with a interest only, adjustable rate, or negative amortization loan. You payment could go up dramatically. Be careful.

RiverOtter
11-18-2004, 07:52 AM
Interesting thread. I wonder if the same will happen in FL. The prices are going up 20% to 30% / quarter.

CustomCruiser
11-18-2004, 08:23 AM
Sold my house here in Temecula in just two weeks. The lender for our new house is pushing very hard for me to take the interest-only loan. He must be getting some major kickbacks from the bank for these loans. Interest-only for the first 10 years, then variable thereafter. I asked him about the upcoming market correction. He had a blank look on his face and said "...but most people don't stay in their house for more than 10 years". No way in he!!. I'm sticking with the fixed loan.

cdog
11-18-2004, 09:17 AM
Sold my house here in Temecula in just two weeks. The lender for our new house is pushing very hard for me to take the interest-only loan. He must be getting some major kickbacks from the bank for these loans. Interest-only for the first 10 years, then variable thereafter. I asked him about the upcoming market correction. He had a blank look on his face and said "...but most people don't stay in their house for more than 10 years". No way in he!!. I'm sticking with the fixed loan.
It's really not a bad idea. People always talk crap about the intrest only loans but the average socal household sells every 3-4 years. Why pay $300-400 a month on a loan you'll never pay off. And why would you want to pay it off? You'd loose the write off! Not to mention if you really want you can add or pay down your principal at any time. For some peeps it's a bad idea due to them only having 5% down. They pretty much are praying for equity. If you can leverage you extra cash each month and put it to work then why not? The trick in real estate is to hold onto it long enough to make money and cash out. If the intrest only helps you get into more than one property, you made way more money than you could ever pay off. I've always had an adjustable/arm and have used them to my advantage. I also owe less than half of what my home is worth. The average mortgage in OC is something like $2700 a month.

al cole'holic
11-18-2004, 09:21 AM
It's really not a bad idea. People always talk crap about the intrest only loans but the average socal household sells every 3-4 years. Why pay $300-400 a month on a loan you'll never pay off. And why would you want to pay it off? You'd loose the write off! Not to mention if you really want you can add or pay down your principal at any time. For some peeps it's a bad idea due to them only having 5% down. They pretty much are praying for equity. If you can leverage you extra cash each month and put it to work then why not? The trick in real estate is to hold onto it long enough to make money and cash out. If the intrest only helps you get into more than one property, you made way more money than you could ever pay off. I've always had an adjustable/arm and have used them to my advantage. I also owe less than half of what my home is worth. The average mortgage in OC is something like $2700 a month.
...very well said cdog! You must understand in a market such as ours leverage will put you in a better place in the long term scheme of things and hedge your original investments :D

CustomCruiser
11-18-2004, 09:40 AM
It's really not a bad idea. People always talk crap about the intrest only loans but the average socal household sells every 3-4 years. Why pay $300-400 a month on a loan you'll never pay off. And why would you want to pay it off? You'd loose the write off! Not to mention if you really want you can add or pay down your principal at any time. For some peeps it's a bad idea due to them only having 5% down. They pretty much are praying for equity. If you can leverage you extra cash each month and put it to work then why not? The trick in real estate is to hold onto it long enough to make money and cash out. If the intrest only helps you get into more than one property, you made way more money than you could ever pay off. I've always had an adjustable/arm and have used them to my advantage. I also owe less than half of what my home is worth. The average mortgage in OC is something like $2700 a month.
That's pretty much what my prospective lender said to me, LOL. 5 years ago, I might have considered it. Now, I just don't know. I can see myself living in this new house for more than 10 years. The market has been phenomenal for the last 7 years, but what if it goes in the other direction???

PHX ATC
11-18-2004, 10:24 AM
The problem is developed land is at a premium in the metro Phoenix area. I guess it's not a problem, but the lack of developed land (streets, sewage, electric, etc all ready to go) is causing the land prices to go up. The houses follow, but not with the same extent as the land itself. Try finding a lot to build on in the metro Phoenix area. Good friggin luck. I tried for 4 months to find (granted, we had some pretty tough requirements, but not out of the ordinary) a developed neighborhood with streets (not dirt), no mobile homes (sorry Beaumont peeps), and horse priveleges. You cannot find them to purchase yourself to sit on. All the custom home builders have bought them up because there is no more land that is being developed right now.
The land that has been bought is already developed and all of a sudden the homebuilders find themselves behind the pack with houses coming out left and right, but no future for the homes. Lottery systems are in place for the lots/sections that are opening up. No longer can you walk into a subdivision and think about your lot and purchase for a few days, you better plunk down the $$$ right there and be happy with your lot selection. You snooze, you loose.
AZ usually follows CA by 2 to 3 years in the real estate market. We're having a custom home built on 1 acre, subdivision type property and paying mucho dinero, but then again, our present home has appreciated to help us dump that money into the new property. It's a few years early, but that's my last house, I'm going to retire there and never move, so I don't care too terribly much about the short term upswings and downswings of the real estate market.
After the market does level off, it still will be head and shoulders above what it was 4 years ago or longer.