Archive for October, 2008
October 28, 2008
Dear Orange County Sweet Digs Readers,
As part of changes already announced two weeks ago, Redfin is changing up Sweet Digs to focus the format on proprietary, leading-edge indicators of what is happening to home prices in Orange County.
We had initially tried to provide a personal review of individual homes for sale in the area, but as a broker and an MLS member, we were not in an ideal position to be objective about other brokers’ properties. Since Sweet Digs was so local, it was also hard to keep pace with Redfin’s growth across the U.S.
The new format will largely focus on what Redfin does best: hard data, delivered in a freakishly compelling way:
- Broker-only data on transaction-volume, median-price and inventory trends;
- Broker-only data on sale-to-list ratios by neighborhood;
- Redfin-only price-drop data, showing what neighborhoods have the highest fraction of price-reductions;
- Redfin-only reports on shifting search traffic patterns and price parameters;
- Local agent round-ups about how current-week offer dynamics anticipate pricing shifts;
- Analysis of Case-Schiller, Census and National Association of Realtor data.
It’s good stuff.
We’ve been preparing a change in format for several months, informed by a survey many of you completed earlier this summer, so we have reason to believe that you’ll like the new Sweet Digs.
For now, we just wanted to say thanks to the folks who helped us get Sweet Digs this far, for your dazzling wit and insight, your verve and dedication to your craft. And thanks to our readers for your steady support!
The new, more analytical blog posts start later this week. If there’s a particular type of analysis you’d like to see, just leave a comment to let us know. We’ll definitely be listening.
Regards, Glenn
Glenn Kelman, Redfin CEO
October 14, 2008
That’s the opinion of Jon Haveman and Christopher Thornberg, partners in Beacon Economics. The pair offered their grim prediction at a Bay Area meeting last week, according to the Contra Costa Times.
“The housing market will not resume growing until 2012,” Haveman said in an interview after his presentation. “Then it will just sit there for a few more years. We won’t see any significant appreciation in the housing market in the East Bay and California for five years.”
I agree that this downturn will last around 10 years. During the last one, prices started down in late 1990 and didn’t return to 1990 levels until 2001 or so. This slump started in 2005, so five years from now sounds about right — although, given the severity of this recession, it could be longer.
However, that doesn’t mean no one will be buying houses for five years. People are buying houses now. This weekend, I visited several open houses in West L.A. All of the properties had received recent offers, and one had five offers on it.
The agents said that financing problems were causing many properties to fall out of escrow: Credit is extremely tight, with most lenders requiring 25% down, excellent credit, and six months’ payments in the bank.
Lenders are being cautious because they fear that prices on many properties are still too high. Does that mean no one should buy a house now? Not necessarily. Well-priced, well-located properties are getting plenty of action. And if you’re sure you won’t need to sell for at least five or six years, you can comfortably afford it (using a fixed-rate loan!), you don’t care if it goes down in value, and you love it, then buying could make sense for you.
Anyone buying now should look at a house as a place to live first and an invesment second. Actually, that advice should hold true in all market conditions.
The crazy appreciation we saw in the 2000s was an aberration. If you buy a great home and hang on to it for a long time, you’ll build equity and eventually own it free and clear. With that approach, the ups and downs of the market will be someone else’s concern.
Recent Redfin posts:
NFL Real Estate Rundown
Get Your House Ready to Sell: Tips from Home Stagers
Home Builders Looking to Bail In After the Bailout
October 13, 2008
As we knew would happen today, there have been several fires around Southern California. Some less predictable than others. The North Tustin fire… somewhat predictable. The Newport Beach fire… a little less predictable. The interesting thing about the two areas that these fires are in is that both areas are made up of upscale communities. In Newport, Spyglass Hill (Harbor Ridge Estates) is being threatened, which is a gated community of nice homes, most with a view (and all well over $1M). Now, over in North Tustin’s Panaroma Heights, you’ve got another nice area where a fire was reported this morning, but was quickly put out. Homes here are less expensive. While the structures are similar, we’re talking differences in zip code, weather, proximity to the beach, gated community, proximity to other affluent communities, and…. you guessed it, likelihood of being affected by wildfires.
So, what would you do? Go for the gusto (and price tag) in Newport Beach? Or, “settle” on something in North Tustin? Take a look at these recently sold and currently listed properties. And, good luck to anyone being threatened with these fires. The Newport fire is less than two miles from where I grew up… scary stuff, indeed.
North Tustin’s Panorama Heights
12502 Circula Panorama, North Tustin 92705
4 bed/3 bath; 1,509 sq ft; built in 1974
Sold for $862,500 on July 30, 2008
12801 Bonita Heights Dr, North Tustin 92705
5 bed/6 bath; 5,936 sq ft; built in 1982
Listed fr $1,195,000
Newport Beach’s Spyglass Hill
7 Yorkshire, Newport Beach 92660
6 bed/4.5 bath; 5,678 sq ft; built in 1979
Sold for $3.5M on August 8, 2008
23 Narbonne, Newport Beach 92660
5 bed/6 bath; 6,700 sq ft; built in 1980
Listed for $5,795,000
October 12, 2008
Any of you football fans are probably near asleep after the emotional afternoon spent perched on the edge of your couch cushion watching the nail-biting fourth quarter and overtimes from this afternoon. So I thought it would only be fitting to attempt to take two things I love – the NFL and real estate and put them together with an OC perspective.
As a Chicago Bears fan let me tell you that if there’s one name that makes me imagine melting a block of cheese in a microwave it’s Brett Favre. Sure, he’s a great quarterback 
and I hear he’s a fantastically nice person, and let’s face it, he does a good job of endorsing Sensodyne (apparently big bad football player is afraid of itty bitty ice cream cones! Thank you Zimbio.com for the fabulous photo). According to Luxist.com the QB’s ditching his ice cube laiden digs in Green Bay and putting it on the market. What’s he selling it for? $475,000 (click link for pics)
Yep, you read that right.
Sure it was only his football home, but let’s face it he’ll be paying a much steeper price in New York. Just what could he get in Mission Viejo for that price?
27794 Inverness - a 2 bed/2 bath / 1,257 Sq Ft condo
or
27931 Calle Casal - a 2 b3d / 2 bath /1,257 Sq Ft home in Casta del Sol. He is old enough to live in the 55+ retirement community right? Well he’s close enough anyway!
Let’s just say he’s got it better than the East Coast’s most famous pretty face in football – Tom Brady. Let us all feel pity as he had to reduce the asking price of his home as Luxist continued in their report, “Quarterback Tom Brady has cut the price on his Time Warner Center apartment from $18.29 million to $17.75 million. ”
There’s nothing nowhere near that in the Laguna Hills or Mission Viejo market. The closest is the Laguna Hills Castle in Nellie Gail which has been on the market for over a year and has not reduced the price (and is asking more than the last sale price as well). This 7 bedroom, 11 bathroom palace is probably much roomier than the Bradster’s “apartment”.
So yes, I have proven that you can fit two wonderful things like football and real estate into the same post. Enjoy and you know where I will be tomorrow evening – sacked out with my boys and ESPN watching the Browns and the Giants.
October 12, 2008
In a recent post, I wrote about the opening of the Diamond Jamboree Shopping and Dining Center in the Irvine Business Complex (IBC), Irvine’s evolving, mixed-use neighborhood. For both Irvine residents and those beyond that want to take advantage of the diverse shopping and dining available at the Diamond Jamboree Center, 745 parking spaces are available on the street and in a parking structure. However, a shuttle, which is currently free, is another option.
The iShuttle is available from 5:30 am to 7 pm on weekdays. Two of the three iShuttle routes originate at the Tustin train station and make stops at various IBC locations. This includes a Route A stop at the John Wayne Airport. The third route (Route C) makes a loop around the core of the IBC during midday. Other options include OCTA bus routes 53, 76 and 86.
October 12, 2008
“As market conditions continue to soften, even the builders who have already filed bankruptcy are licking their chops – anticipating what will certainly become the land buying opportunity of this generation. In preparation, they’re lining up new equity partners and waiting for the banks to sell assets. But, for a variety of reasons, the banks have been able to avoid declaring a lot of construction loans delinquent, presenting an ongoing frustration for the opportunity funds.”—John Burns Real Estate Consulting
In a recent post, I wrote that I am not going to claim that I fully understand the pros and cons of the $700 Rescue/Bailout Plan. Likewise, I am also not going to claim that I fully understand the workings of the building industry. But I find this John Burn’s statement disturbing. A statement like this is an example of why so many are outraged by the bailout or, if you prefer, rescue plan. The big guys can just declare bankruptcy and then jump back on the money wheel without much trouble. The lowly homeowner takes more of a hit. However, since the lowly and not-so-lowly homeowners are not necessarily blameless in this situation, even that is an over simplification. Greed was present at all levels. Although individual exceptions may exist, all groups that participated in this financial Ponzi scheme carry some of the blame.
Note: Warren Buffet, as shown by an appearance on Charlie Rose, is on the pro side of what some would call the $700 Billion “Rescue” Plan. Economist Chris Thornberg of Beacon Economics and a frequent guest on AirTalk is on the con side of what some would call the $700 Billion “Bailout” Plan.
October 10, 2008
In a recent post, I wrote about staycations by the pool. If you want to take your own staycation by the pool, here are some homes in Costa Mesa that would allow you to do that. These homes are in various price ranges and are located in various Costa Mesa neighborhoods. Also, both detached homes and condos are included. The current median price per square foot for detached homes and condos combined in Costa Mesa is $310.
Asking Price: $284,00 ($258 per square foot)
Where: 3170 Chemin De Der Way, South Coast Metro Costa Mesa, 92626
What: 1964 condo, 3 beds/3 baths, 1100 SF
Notes: assication pool, Ad states that this home is approved and can close escrow in 30 days; nearby services and amenities; Dues: $209/month
Asking Price: $349,900 ($336 per square foot)
Where: 2253 Republic Avenue, Southwest Costa Mesa, 92627
What: 1956 detached, 3 beds/2 baths, 1100 SF
Notes: private pool, bank-owned property; nearby services and amenities; Dues: none
Asking Price: $485,000 ($400 per square foot)
Where: 1845 Anaheim Avenue #14, Westside Costa Mesa, 92627
What: 1963 condo, 3 beds/1,75 baths, 1212 SF
Notes: association pool and spa; nearby services and amenities; Dues: $250/month
Asking Price: $699,900 ($300 per square foot)
Where: 2840 Andros Street, Central Costa Mesa, 92627
What: 1959 detached, 4 beds/3 baths, 2336 SF
Notes: private pool; nearby services and amenities; Dues: none listed
Asking Price: $769,500 ($340 per square foot)
Where: 3368 Corte Levanto, South Coast Metro Costa Mesa, 92626
What: 2004 detached home, 3 beds/3 baths, 2263 SF
Notes: Ad states “Beautifully landscaped back yard and patio is perfect for entertaining or for outdoor play. This small gated community is very friendly and offers a beautiful pool and spa for all residents.” nearby services and amenities; Dues: $147/month
Asking Price: $1,099,000 ($458 per square foot)
Where:460 Cabrillo Street, Eastside Costa Mesa, 92627
What: 1955 detached home, 4 beds/3 baths, 2400 SF
Notes: private pool and spa, with new heater, pumps, and filter;
nearby services and amenities; Dues: none listed
October 10, 2008
Getting your home ready to sell is not high on anyone’s list. If you’re lucky, you can hire a home stager to come and do it for you. However, if you’re not so fortunate, you’ll either be doing the brunt work yourself or having troubles selling your house for the price you want. Granted everyone is having trouble selling their homes these days, but it’s all the more reason to make your house the shiniest on the block attractive to those small number of buyers.
What can you do on your home to get your house ready? I’ve gone to the masters of home staging, professional home stagers, to get tips to help the DIY sellers.
> Declutter, depersonalize. This is one that all the professionals would agree on and I think is an obvious one. Treasures to you are junk to others. Don’t take it personally, just get all that stuff out of there!
> Stage the second bedroom of a two-bedroom home/condo as a bedroom. According to Nickie Rothwell of the Home Staging Blog, you should stage your second room as a bedroom, not an office. People with kids would want (need) to see how it works as a bedroom.
> It’s okay to decorate for Christmas. Jeannett Fisher, Interior Design Psychology and Home Staging Expert that writes the Home Staging Tips blog, responded to a question from a seller wondering if it is okay to put up a Christmas tree. The very PC seller didn’t want to offend any potential buyers with his display of his religious beliefs. Fisher tells people to decorate your home for you and your family and friends. She just warns about putting up too much and recommends scaling back on your usual decorations. As for offending buyers, she thinks it’s not a big deal. According to her, buyers are used to seeing Christmas decorations and holiday traditions everywhere they go.
> Get that bathroom shining. Lisa LaPorta, the designer on the HGTV show Designed to Sell (one of my favorite designers), has several DIY tips for making your bathroom better. After all, how does the famous saying go? Kitchen and bathrooms sell homes. Her tips include…
- Get rid of surface mold. Mix one part water and one part bleach. Spray on wall and wipe. Fresh coat of paint helps, too.
- No need to replace the gross shower door, “just scour it.” Mix one part muriatic acid and 10 parts water. Scrub with steel wool.
- Paint ugly old tile. Coat tiles with high-adhesion primer. Brush on special ceramic expoxy covering. (Not sure I agree with this one… if you don’t get it just right, it could look hideous and like you’re trying to cover up something. All I have to say is be careful with this one).
- Replace your vanity with a pedestal sink. LaPorta says pedestal sinks are “a big hit with buyers.” (Again, not sure I agree. For guest bath, sure, but for a master, I’d wonder where I’d put all my stuff.)
> Put on soft music for your showings. Debra Gould, “the Staging Diva,” urges sellers to carefully consider music. She believes in soft background music to create a soothing environment and “camouflage” neighbor and traffic noise. However, she warns to make sure the volume is very low. She also warns that “blaring TVs are definitely a no-no.”
Other home staging posts:
Home Staging Revisted — Does it really help?
Everyone’s Doing It: Home Staging
October 9, 2008
How do I know this? Because, according to this blog post on the O.C. Register’s Lansner on Real Estate blog, 43.3% of homes on the market in Orange County are distressed — that is, either REOs or short sales. Whoa!
At the same time last year, the same source — Steve Thomas of Altera Real Estate — reported that distressed properties made up just 12% of the O.C.’s housing inventory. That’s a huge jump in just 12 months.
Many of the short-sale homes will no doubt enter foreclosure, then come back on the market at greatly reduced prices. This means that prices have farther to fall, and that there will no shortage of bargains on the market in the next one to two years, at least.
Not surprisingly, distressed properties are highest in the less-popular areas and lowest in the most sought-after areas. Here’s a chart from the blog with more details. Some highlights:
- 64% of all O.C. homes for sale under $500,000 are distressed. The percentage decreases dramatically as the sales price rises: For example, only 20% of homes priced between $500K and $750K are distressed.
- The cities with the most distressed properties are Santa Ana (79%), Anaheim (75%) and Garden Grove (71%). The cities with the least: Corona del Mar (2%) and Seal Beach (3%).
- Condos and townhomes (51%) are more distressed than single-family homes (39%).
Three-quarters of all homes for sale in Santa Ana and Anaheim are distressed? That’s a huge number. You can see the enormity of the situation yourself if you go to redfin.com and type in an Anaheim or Santa Ana ZIP code. It will take no time at all to find properties that are listed for hundreds of thousands less than just two years ago. Like this Anaheim house, sold for $535,000 three years ago and now on the market for $309,000.
Sad for the people who are losing their homes, but good news for those who are priced out. The overpriced and underwater homes have to work their way out of the market before it can return to any kind of normalcy.
Recent Redfin posts:
The Evolving IBC—Diamond Jamboree Center Comes to Irvine’s Live-Work-Play District
Just How Bad Is It?
Tustin: Follow-Up on New Parking Ordinances
October 9, 2008
As everything has unfolded with the economy the last few months I’ve started to notice an interesting trend with the Open Houses. With markets pretty much frozen for the average person, we’re seeing more of an increase in higher end homes utilizing open houses as a sales marketing tool.
But Sheila, you wonder, why is it then that we are still seeing such a sale of smaller/lower priced properties? I mean, the value of the homes continues to drop so smaller homes are still selling. Yes they are, but not to Mr. and/or Mrs. First-time Homebuyer. Many of these sales are REO’s and short sales and are going to the experienced buyer or investor not looking to flip, rent or invest in these homes. Open houses are simply not an effective tool for this clientele.
But for Mr. and/or Mrs. Looking to Find My Retirement Home it’s effective. They are taking their time to buy, waiting for prices to round out close to the bottom. So they look, look, look and strategically make their next move.
With the tanking of the market this week and the economic chaos I wouldn’t be surpised if we see the market temporarily slow to an almost halt as people gather their senses and develop a personal investment plan (or how to recoup their investments that have just shrunk significantly). In the meantime, here are some of the Open Houses I found available for the weekend. As you’ll see, there aren’t many that are on the lower end of the current pricing spectrum in each city.
Mission Viejo
22201 Stillwater
4 beds / 3 baths / 3,307 Sq Ft
Listed For: $1,099,000
Open Sat 1-4
10 Arcata
5 beds /3 baths / 3,000 Sq Ft
Listed For: $975,000
Open Sat 2-5
26112 CAMINO ADELANTO
4 beds / 3 baths / 2,085 Sq Ft
Listed For: $650,000
Open Sat 12-4
26562 El Mar Dr
4 beds /3 baths /2,200 Sq Ft
Listed For: $599,000
Open Sun 2 -6
Laguna Hills
27482 Lost Trail Dr
5 beds / 5 baths /4,500 Sq Ft
Listed For: $2,150,000
Open Sun 1-5
