NFL Real Estate Rundown

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.

Mission Viejo Open Houses & Trendwatch

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

Good Eats!

Maybe it was the pregnancy hormones.  Maybe it was the fact that we seemed to be house hunting right near mealtimes.  Whatever it was, when we were looking for our current home I was all about the restaurants.  My husband peered out the car windows as we drove through the area scoping out the details, landscapes and busyness of the local roads.  I, on the other hand, had my head hanging out the rear car window, tongue panting like a dog trying to savor any smell of food.  If it flashed “eatery”, “delicatessen”, or “restaurant” within walking distance of the home we were looking at my radar went off!

 So you say that food and housing don’t mix, but I tell you that they are one in the same.  I have often plugged my area to young moms touting the fact that I can walk to not only parks, but Chuck E Cheese in order to let the bambinos burn off some energy.   Yes my friends, culinary delights are essentialy when looking at the area.  So what’s new in our area?

According to the OC Register, Mission Viejo is getting two new chains and Laguna Hills has one new local grill to grab some grub. 

At the shopping center off of Alicia, right near Via Fabricante (just southwest of Jeronimo is a shopping area acquiring two new places to feast your tastebuds in the near future!

First is Rubio’s.  Any local resident knows that dinner doesn’t come much cheaper on Tuesday afternoons/evenings when you hit up Rubio’s for some $1 fish tacos on Taco Tuesdays.

The second restaurant is a chain, but not quite as well-known in the area:  Gandolfo’s.  After checking out their website, I’m trying to justify an Italian feast of meats on a hoagie roll for breakfast.  The menu looks good and the reviews I found sing the deli’s praises.

But fear not you Laguna Hillians, there is a new place for you to nosh as well.   The Register also reports on a new place to grab some quick food – Bbop Grill.  This is no chain, but the reviews I read are good.   Located in the shopping center on the northeast corner of Paseo de Valencia and Alicia the Bbop grill claims to serve up Korean grilled delights.   Relatively healthy (they report to not use MSG or trans-fat oil according to the Register) and reasonably priced I can’t wait to head over there with my kids to try something other than the same old, same old we usually dine on.

So there we have it folks – new dishes, new diners and hopefully some new memories as you check out what our cities have to offer.

Just How Bad Is It?

When I told family and friends our family was relocating to California, there were many jokes about the end of the world.  “You just wait!” they told me.  “One day there will be an earthquake and California will break of into the ocean causing a massive tidal wave and it will be the end of the world.”

I laughed it of dismissively, but seriously folks I’m wondering about just how bad it is.  I mean, this weekend I had a half-serious conversation with a friend regarding converting all our savings into yen in order to protect assets, the bailout/rescue plan gets passed, and Beverly Hills Chihuaua is number one at the box office. 

Not to mention that tomorrow’s Bloomberg news (in Asia) reports that, ”Japan’s stocks fell, sending the Topix index toward a five-year low, as the global credit crisis deepened in Europe and the U.S. lost the most jobs in five years.”

These are strange times my friends!  Strange times indeed.

We’ve obviously heard all the talks of the bail out/rescue plan and there seems to be varying views on why it is or is not going to work.  But what I haven’t heard is what it really means to us and the real estate market in particular.

Bloomberg had a great bit of FAQ’s from regular taxpayers.  Here are some excerpts that might give you some guidance on the issues surrounding the bailout/rescue and how it affects you.

What will the program do for people in danger of defaulting on a mortgage?

The bill contains vague language encouraging the Treasury to implement plans to help endangered homeowners. Many mortgages, through the securitization process, were broken up into pieces and sold off, making it difficult for lenders to alter them so homeowners can afford rising payments.

“This bill does little to remove the existing obstacles that have made it all but impossible over the past year for the housing industry to help enough people avert foreclosure,” said Kathleen Day, a spokeswoman for the Center for Responsible Lending in Washington.

Will taxpayers lose or make money on this deal?

The assets the Treasury purchases could increase in value, allowing the government to sell them later at a profit. In addition, in return for buying the impaired investments, the Treasury will receive warrants, or contracts allowing it to purchase shares in participating companies at a preset price. If those companies’ stocks rise, taxpayers could benefit.

The non-partisan Congressional Budget Office estimated the net cost of the plan will be “substantially less than $700 billion but is more likely than not to be greater than zero.”

If, in five years, taxpayers have lost money, the president will have to submit legislation — most likely some kind of fee on financial institutions — to recoup losses.

How will it affect my taxes?

That depends on what the next president does. The initial borrowing of funds for the program will add some $2,300 in government debt for every American. Yet the Treasury will get assets for its money, many of which may increase in value as the housing market and economy improve.

“Much of the $700 billion is expected to be repaid, and there could even be a profit made by taxpayers,” said Alex Brill, an economic consultant at Washington law firm Buchanan Ingersoll & Rooney and a former policy director for the House Ways and Means Committee.

Photo courtesy movieblog.com

HOA Continued

My last post discussed how the economy was affecting Home Owner Association (HOA) fees.  I had never thought much about then since coming from the midwest most HOA’s are relatively cheap and don’t really make much of a difference in the purchasing of a home.

 Not so much here in sunny So Cal.  Here are some listings and you can see just how much a month will be tacked on to the monthly expenses due to the HOA fees. (note:  all dues are estimated based of MLS listings and are based on an approximate range)

25402 Gallup Cir
4 beds / 5 baths / 5,000 Sq Ft
Listed For:  $1,999,000
Neighborhood:Nellie Gail
HOA Range:  $75-115

24706 Monte Royale St
4 beds / 3 baths / 4,100 Sq Ft
Price:  $999,000
Neighborhood:  Brighton Ridge
HOA:  $70

Those are the single family homes so they are smaller fees each month since you’re responsible to cut your own lawn, etc.  But in a shared area like condo/townhome owners the price is much higher.

26038 Sunnyglen Ave
3 beds / 4 baths / 1,800 Sq Ft
Listed For:  $375,000
HOA Range:  $255-285

26532 Merienda
2 beds / 1 bath / 1,125 Sq Ft
Listed For:  $435,000
HOA:  $240

Another Slam For Homeowners

As if homeowners aren’t taking hits left and right, it seems there is another hit to try and dodge – HOA’s.

One thing localites have to deal with here are HOA fees.   The OC Register reports: 

Homeowners associations exist to manage the common property shared by a group of homes or condominiums. About 11 million Californians, or a third of the state’s population, live in homes with homeowner associations, according to the Laguna Hills-based California Association of Community Managers.

It seems no matter where you live they are there, ready and waiting for us.  The article reports a new problem – delinquent HOA fees.  They reported an increase in delinquencies from Merit Property Agency, and I can only guess it’s the same at other agencies.  Even if you’re not delinquent, this affects you. 

When accounts go delinquent the HOA hurts.  They lose interest on the amount they would be putting into savings to accrue interest.  Projects that are in need of funds get put on the back burner.  What can be done?  Not much.  As we’re seeing today, lots of markets are frozen until the economy starts to pick up.  So if you’re ready to send another brash email to your HOA management company about that tree that’s been needing trimming for some time now, be nice.  They’re probably just as annoyed as you are!

Beyond The Bailout

If you can look past all the “rescue plan” “bailout” buzz there’s another hot topic – short sales.  Both the OC Register and The LA Times posted stories on their real estate blogs discussing the state of short sales and their influence on the current local market.

Both outlets take different approaches to the issue and come up with the same results – short sales are the drain on the current market.  The abundance of short sales are making the market difficult for buyers to get into it and navigate it as well.

A UCSD professor Ryan Ratcliff gave his firsthand experiences with the foreclosures to the LA Times and they concluded:

As short sales relate to the question of a housing rebound, he [Ratcliffe] concludes, that they “have temporarily hijacked the market mechanism” and that “the near-term course of the housing market will be determined more by the procedural timelines of foreclosures and short sale approvals than any notions of a magic price that will clear existing inventory.”

The OC Register quoted UCLA’s forecast as stating:

A realistic forecast of the bottom of the housing market needs to explicitly acknowledge that short sales have temporarily hijacked the market mechanism: the near-term course of the housing market will be determined more by the procedural timelines of foreclosures and short sale approvals than any notions of a magic price that will clear existing inventory. After our housing mega-bender, we will be suffering inventory indigestion for some time to come.

No matter how you slice it – the short sales are having a huge impact on our market.  Until the short sale issue is resolved we will not see any resolution as far as this “bottom” we are all searching for. 

Some local short sales contributing the problem:

25081 Linda Vista Dr
4 beds / 3 baths / 2,900 Sq Ft
Listed at:  $565,000

26701 Quail Crk
2 beds / 2 baths / 1,200 Sq Ft
Listed at:  $275,000

25042 Mustang Dr
4 beds / 5 baths / 5,010 Sq Ft
Listed at:  $1,600,000

22655 Napoli
4 beds / 2 baths / 1,335 Sq Ft
Listed at:  $399,000

Bail Out, Bail Out, Bail Out

I don’t know about you but I’m pretty tired of the “bail out” blare out.   It seems that the bail out, err, I mean, rescue plan, continues to move forward, but with very little support.  This bandaid seems to only be effective to stop some of the bleeding, but there will be quite a scar for years to come if we add an additional $700 billion of debt to the current crisis.

But the real question is, what do OC’ers think of all of this?

Jon Lansner’s blog had a survey asking OC’ers what they thought about the ability of the President’s team to fix the mess.   The results:

The OC Metblogs (our local “to the left” e-publication) implores everyone, regardless of party line, to tell their Congress person about their questions regarding the proposed plan. 

They note,

No matter what your political persuasion, our children and our grandchildren will be paying for risks that private companies chose to make.  Nobody put a gun to their head and forced them to bundle shaky mortgage loans along with regular stocks and investments, or even to offer these loans to people who obviously did not qualify.  And a lot of people got rich off of those.  But now the taxpayers are expected to help them out.

It seems that Americans aren’t very confident about the plan that is trying to be pushed through – regardless of party affiliation.  Of course, both candidates have given their disapproval for at least parts of the plan.  The hardest part about this is that no one likes the plan, but no one can come up with anything better. 

What are your thoughts and criticisms of the “rescue plan”?  Will it work?  Is it worth the risk?  What are the biggest problems? 

BFYB Laguna Hills Style

Home values continue to slip.  This week we received more news indicating that the median value of homes continues to fall.  But for someone buying into the market right now, this may not feel like all bad news.  The Redfin chart shows a really interesting trend.   It seems that the asking prices have leveled out a bit, but what the homes are actually selling for continues to plummet.

So what does constitute for a good Laguna Hills BFYB?  Check out these listings to see the best prices per square foot in the city.  And it seems there’s one for every price range!

26701 Quail Crk #245
1 bed / 1 bath / 700 Sq Ft
Listed For:  $99,900
$/ Sq Ft: $143

25651 Indian Hill Ln #D
2 beds / 2 baths / 1,069 Sq Ft
Listed For:  $318,900
$ / Sq Ft:  $298

25222 Pike Rd
4 beds / 2 baths / 2,066 Sq Ft
Listed For:  $494,900
$ / Sq Ft:  $240

24706 Monte Royale
4 beds / 3 baths / 4,100 Sq Ft
Listed For:  $999,000
$/ Sq Ft:  $244

When Is The Bottom, The Bottom?

About a month ago we started seeing some gains in the market.  Houses were moving and the prices of homes seemed to be stabilizing.  Thus began the bottom talk.  “We’ve hit bottom!” many analysts cried.  But I, no, I denied.

This month we’re seeing gains in the movement of the market.  John Lansner’s reporting on rebound buying.  He notes,

O.C. homebuyers gobbled up 2,731 residences in August, 19% above year-ago levels. That’s the second straight month that the local buying pace exceeded the year-ago tally.  This boost is a noteworthy switch, considering it follows a 33-month streak of slumping sales. We wonder what to make of this shift in momentum.

I found this striking since this morning I was speaking to a Realtor/property manager I happen to know who obviously makes his living all things real estate (flipping, selling & renting).  He swears this is the bottom and it’s a great time to buy.  I keep hearing echoes of the same thing from others around me.  

It seems Lansner’s readers don’t agree with such talk.  He posted a poll on this page and most voted for, “It’s just a blip,” when asked what they thought of these recent gains in the market.

I have to agree – a blip indeed.  I still stand by my conviction that we’ll see another flurry of foreclosures and short sales unless something intervenes because more and more people are going to see higher mortgage rates and arms and short -term interest rates expire in the near future.

Many are calling on us to look at the stock market and explaining if that’s in that bad of shape the real estate market must be terrible.  While I don’t think there’s a direct correlation between those two I do think it’s showing us something we all need to remember.  We have a very sick housing market and it’s not going to be recovering our rebounding fully in a weak economic state.  With the exception of a few sectors, pretty much all industries/sectors are taking a hit. 

To expect a strong change in direction of the housing market when other economic areas are weak and barely sustainable is like hoping a goldfish can live in murky water.  There’s nothing sustainable to encourage a liveable environment, Americans are too strapped for cash to do much buying/investing, and everyone’s just waiting to see what the government is going to as far as new regulations, safeties and instituting more checks and balances into the system.

I guess all we can do is wait and see.  But I don’t think we’ll be seeing huge surges in the local real estate market anytime soon.