91 people turned out at the Hotel Huntington Beach last night to learn what’s going on with home prices, mortgage rates and all the rest of the craziness that we lovingly call The Real Estate Market. It’s part of our regular Red Carpet Events. The next one’s in Carlsbad on September 24th- you can RSVP here.
In the Huntington Beach Area, the interesting news in the last two months’ sale-to-list price data is that Fountain Valley houses were selling for 101.8% of list price. Data is below, and here are the full slides.
Fountain Valley Houses: HOT.
You could get a better deal in Balboa, selling at 86% of list (note there were only two sales in this date range), but you’d have to come up with about $5 million for a home.
Huntington Beach Area Houses Sold July 7- Sept. 7 2008
Area
# Deals
Final v. List
Average Price
Balboa Peninsula Houses
2
86.5%
$4,447,500
College Park East Houses
7
96.3%
$731,000
East Bluff – Harbor View Houses
20
89.5%
$1,770,575
Fountain Valley / Northeast HB Houses
8
101.8%
$519,238
Lower Newport Bay – Balboa Island Houses
6
92.1%
$2,751,667
Newport Heights Houses
6
94.7%
$2,141,250
Northwest Huntington Beach Houses
58
96.4%
$824,971
Seal Beach Houses
37
94.0%
$321,919
South Huntington Beach Houses
44
98.5%
$626,357
West Bay – Santa Ana Heights Houses
15
92.8%
$1,302,733
West Huntington Beach Houses
69
95.8%
$994,319
West Newport – Lido Houses
12
93.3%
$2,192,708
Huntington Beach Area Condos Sold July 7- Sept. 7 2008
Forget becoming a doctor or a lawyer. If you really want to make money in this world, you should aspire to become a chief executive. Is there any other job where you stand to make millions of dollars a year, regardless of your performance? And where, if they decide they don’t want you anymore, you get an outrageous severance package to make you go away?
Take, for example, the chief execs of Fannie Mae and Freddie Mac. Here are two quasi-companies that basically led the way in irresponsible lending throughout this decade, and, as a result, went bankrupt and had to be taken over by the government. The companies’ lax lending standards could still lead to a collapse of the banking system, and at a minimum have caused massive damage to the economic health of this country.
So what about the two leaders who essentially ran these companies into the ground? Have they been tossed out onto the street with the doors slammed shut behind them and the locks changed? Are they being sued, forced to pay back the millions they earned while they were committing this carnage? Heck, no!
In fact, the executives are apparently entitled to millions in compensation. If this weren’t an election year, this would probably slip right under the radar. But this New York Times story reports that both presidential candidates, Barack Obama and John McCain, are uncomfortable with the ousted execs’ exit packages.
Together, Daniel H. Mudd of Fannie Mae and Richard F. Syron of Freddie Mac are eligible for as much as $24 million in severance, retirement benefits and deferred compensation.
“Under no circumstances should the executives of these institutions earn a windfall at a time when the U.S. Treasury has taken unprecedented steps to rescue these companies with taxpayer resources,” Mr. Obama wrote.
McCain, the Republican presidential nominee, has said on the campaign trail that the government rescue of Fannie and Freddie should not turn into a bailout for their top executives and Wall Street investors.
The amount of money these execs earned and are entitled to isn’t nearly as much as some private-sector CEOs might get, but it’s still considerably more than, say, most doctors make. And CEOs aren’t responsible for life and death — not directly, anyway.
The story says that both Syron and Mudd are anticipating scrutiny and have hired legal and P.R. help. Interestingly, Syron is paying for his own counsel, but Mudd’s high-profile lawyer, Robert B. Barnett, is sending his bills to the federal government.
Such a deal. And think of all the other perks people in these positions get. Yes, if your conscience can stand getting paid millions, regardless of the fate of your employees, your customers and the world, this is the job for you.
Right off of LaPaz and McIntyre sits the Missions neighborhood. It’s just half a mile away from the 5. If you have young kids this is your place since it’s right near shopping, parks and schools are all within walking distance. Just like everyone else values have been falling. Below are some samples of what’s on the market, and what homes in this neighborhood were once selling for.
On the Market 25202 Champlain Rd
3 beds / 2 baths / 1,483 Sq Ft
Listed For: $550,000
I’ve seen a lot of price reductions… and yet they all still fascinate me. What makes them so varied? Why do people increase their price only to reduce it later? Who decides that a 2% reduction is good? …And the list of questions continue. Below is sampling of all of these different scenarios. One is just plain bizarre (I’ll let you be the judge of which one). Why do some people slash their price while others just shave it? Are more reductions (regardless of size) better?
In Santa Ana, properties that have been on the market 120+ days, are most likely to have at least four price reductions. However, those that are new to the market are most likely to have zero price reductions. So, who’s right? Well, without diving into a full analysis, my gut (and Redfin’s “Science of Real Estate“) say that it’s better to price your home correctly from the start. This means an aggressive price. If you find out that it’s the wrong price, then you should rectify the situation asap, not do these piddly reductions which just take time. Just look at where the reduction junkies are… they’re not sold, I’ll tell you that much.
To begin, the first vintage plane for the planned air museum has arrived. As with many features planned for the Great Park, the air museum is ment to be a reminder of Irvine’s past (and we need those reminders in Irvine). he plan is for the plane to be restored and eventually take a spot in the air museum. Great Park boardmember Bill Kogerman is in talks with military officials at the Naval Aviation Museum in Pensacola. The officials have expressed to Kogerman some willing to turn over the plans for building and maintaining an aircraft museum. In addition to being a member of the Orange County Great Park board, Kogerman is a retired aviator (Lieutenant Colonel USMC) who served at El Toro.
Next, Lennar has made available some pictures of the July 12 Great Park festivities. This event was a celebration of the third anniversary of the Navy’s transfer of the Great Park land to the City of Irvine and Lennar. To see these pictures and get a sense of what is planned for the Great Park, click here.
The next Great Park board meeting will be held at 10 am on September 18 at Irvine’s City hall. If a trip to city hall is not possible, you can watch on ICTV or on demand through the City’s website.
If you are interested in following the sustainability aspects planned for the Great Park, the Environmental Coalition is hosting a talk at 7 pm on Friday, September 12, at the Irvine Water Ranch District headquarters (15600 Sand Canyon, Irvine).William Morrison, Senior Project Manager for the Great Park, will discuss sustainable elements planned for the park’s early construction projects as well as those planned for the whole park. Also, Great Park directors Larry Agran and Sukhee Kang will talk about the City of Irvine’s sustainability programs. For more information, contact Stephanie Pacheco at stephaniepa@socal.rr.com or 714-963-1658.
And, of course, you can read my Redfin blog. I will provide updates about once a month.
Financial markets reacted favorably to the news that the U.S. was taking over beleaguered mortgage lenders Fannie Mae and Freddie Mac. But what are the takeover’s long-term implications?
Analysts predict the vicious cycle where housing, credit and financial problems force Americans to hunker down further – hobbling the economy and in turn aggravating those very troubles – won’t be easily broken.
“The negative psychology has become embedded and will take time to unwind,” said Brian Bethune, economist at Global Insight. “It is not instant coffee.”
The same story notes that prices will continue to spiral down.
When Freddie Mac reported second-quarter earnings in August, chief executive Richard Syron said he expects home prices nationwide to fall 18 percent from peak to trough, according to its measure. Syron, who is being replaced at the helm of Freddie Mac, said the market is only halfway through the descent.
New-home builders are still reeling:
Builders, reeling from the record-high foreclosures and a glut of unsold homes, will keep cutting back for the foreseeable future, which will continue to be a major drag on national economic activity.
The bailout of Fannie Mae and Freddie Mac threatens the financial health of several dozen of the banks that bought shares in the two companies, regulators say.
The good news for consumers is that mortgage rates are expected to fall as a result of the takeover. But lending standards could remain strict for the near future, according to this WashPost article:
Fannie and Freddie want borrowers with a 750 credit score and a 20 percent down payment, Cecala said. But the government takeover could prompt the firms to bend a bit, he added. If that happens, borrowers could see a shift by the end of the year.
In Orange County, the uptick in sales, particularly among lower-priced homes, is encouraging. Prices are coming down, and will continue to come down, which will allow more people to buy homes. So maybe things won’t improve overnight, but maybe they won’t get much worse, either.
An article in Sunday’s Wall Street Journal picked up by the OC Register caught my eye: “Don’t Bet Against Your House.” At first, I thought, duh… but then it hit me, the majority of us do just that. We’re basically gambling when we hope that our homes will increase in value… it’s all one big poker game. What cards we are dealt include the house, how the market if performing, all of those variables. What we bet is based on our income/savings, confidence in the market, etc.
The President of FiLife.com, a personal-finance website, Dave Kansas writes in his WSJ article some pointers on how to deal with these falling home prices and not bet against your house. Here are some excerpts I thought were of interest:
Take a Deep Breath
“Perspective, not panic, is always the first step in assessing the situation. Despite the scary headlines, the vast majority of homeowners are still sitting on decent gains, even if the value of their homes has declined over the past couple of years.”
“… homes are the great investments over time that many homeowners believe… the average return on a home is about 3% a year, roughly on par with inflation.”
Focuse on Your Portfolio
“For starters, rather than worry about your home, focus on the rest of your portfolio as an overall hedge against falling home prices. This would require steering clear of real-estate-oriented stocks such as real-estate investment trusts, home builders, mortgage companies and home-improvement stores.”
“Interest rates remain low and you may be eligible for a refinancing, which is something a shrewd homeowner should always consider. If you are carrying expensive debt, such as credit-card debt, using a refinancing enables you to substitute cheaper debt for more expensive debt.”
Ride It Out
“… talk to your bank. While bankers are in a stingy mood, many will talk with you about reworking your mortgage if you are under particular stress… Banks would prefer to work something out, if possible, and keep you in your home rather than foreclose.”
“In addition, get creative about extracting more cash from your home. An obvious way is to rent out the basement or a room. Defer putting in that new kitchen, instead putting that money into your investments to build a larger cash cushion to weather the hard times.”
We all know the odds in gambling. You’re more likely to turn over you hard-earned cash to the “house” than to go home with a new wad of cash. These folks in Tustin all bet on their house, and, big surprise, the “house” won.
Turn on the news or the radio and you’ll be blasted with the news – the federal government has bailed out our friends (foes?) Fannie Mae and Freddie Mac. There’s no sense in me spending time discussing the events as they have been heavily covered by all media outlets.
No, today I want to look at what people are saying about what this means. So without further aideu, what’s the fallout from such a maneuver.
According to the LA Times: It “Doesn’t Change Anything”. Peter Viles implies that this just rescues these two groups and leaves many banks vulnerable as we wait to see who fails next.
early indications from overseas markets show that the move will be received very favorably. In fact, it could change the landscape in the financial markets. It’s far too early to say this out loud, so I’ll just whisper it very softly: there’s a possibility that we’re at the beginning of the end of the long credit crisis.
Bloomberg predicts lowered mortgage rates will probably result and that, “The federal bailout of the mortgage giants may temper the slide in home prices.”
The Telegraph in the UK notes how the US looks to be far more socialist with the revelation of the interrelationship between the state and financial institutions.
It seems everyone has a different take on the fallout or lack thereof to everyman/woman. Of course, the dollar rose, foreign markets and the US market saw gains so at least if our homes aren’t going to give us much value you might have made some gains on stock investments and on every dollar sitting in your account. But as far as tangible effects, we don’t see huge ones yet.
University is one of the three districts into which the Irvine police department has divided the City for its geopolicing program. The University district is bordered by the San Diego Freeway (I-405) on the north, Laguna Canyon Road (I-133) on the east, the San Joaquin Hills Transportation Corridor (SR 73) on the south.
The University district includes the following Irvine neighborhoods or, as they are called in Irvine, villages:
Irvine Business Complex (IBC) The IBC, which includes both commercial and residential, is bordered by the San Diego Creek on the east, Barranca Parkway on the north, the Newport Freeway (I-55) on the west, and MacArthur Boulevard on the south. The area is often listed as the airport area on real estate maps. The San Joaquin Marsh locale is also included as part of this area.
To see pricing and inventory information for these villages in Irvine’s University district, click on the links provided above. This will bring you to Redfin’s Community Overview Page for that village (if you prefer, you can also enter zip codes or city names).
In addition to pricing and inventory information, the Community Overview Page provides the most recent listings, open houses, recently sold, most expensive, least expense, and price reduction information as well as community and school information for these villages.
To see what homes are available in each village, type the village name (for example, Turtle Ridge or University Park) in the Search Listing box at the top, left of the page. This will bring you to a Redfin map that is populated with homes that are currently available in that area.
Note: Following real estate by the neighborhood in Costa Mesa and Irvine is something that I have wanted to do for some time. Redfin’s new inventory and pricing tools that are provided on Redfin’s Community Overview Pages has given me a convenient way to do this. In the future, I’ll be expanding on the Irvine village information that I have provide here, and I’ll be make this an ongoing blog feature.
It seems the market’s starting to settle a bit from the spring/summer “rush”. Well, if by rush you mean a slight nudge. Usually we see a significant increase in market activity during the summer months. I’d say this year it was like taking a soccer ball and kicking it through 3 inches of mud. The sucker just slips forward very quietly about an inch and stops.
In fact, the inventory is definitely smaller. For the first time I searched all active listings in Laguna Hills and they all fit onto the map at one time (note map above). In fact there are only about 289 homes & condos on the market in Laguna Hills right now. Sure it’s down from last month but we’re not quite back to April inventory yet either. My guess it inventory will stay a little higher because homes weren’t getting snagged up quickly as often seen in the summer peak. On average it’s taking about 91 days to sell your property in Laguna Hills.
So what’s going on? Here are a few recent price reductions.
22445 Caminito Grande 3 beds /2 baths /1,200 Sq Ft
Previously Listed: $399,000
Currently Listed: $359,900
% Reduction: 10%
24632 Creekview Dr
4 beds / 3 baths / 2,808 Sq Ft
Previously Listed: $629,000
Currently Listed: $599,000
% Reduction: 5%
