CSUF Predicts 20% Drop in Orange County Real Estate Prices

Orange County real estate prices could drop by as much as 20% in next two years according to Cal State Fullerton researchers report released yesterday (which was also reported in the Orange County Register)

"There's no question (Orange County home prices) are going to come down" by 10 to 20 percent according toAnil Puri, the co-directory of CSUF's Institute for Economic and environmental Studies.

Orange county real estate prices have doubled in the last four years, partly due to low mortgage rates so a home price decline of 20 percent would take homeowners back to Spring 2003, although this won't make recent home buyers happy or long term homeowners who remember Orange County in the 1990's.

The news along with recent news of Orange County real estate listing inventory rapidly building and the lowest sales volume in 8 years may mean some trouble ahead... or it's simply due to mortgage rates increasing over the summer.

Search Orange County Real Estate Listing from the MLS, FSBO's and Orange County Foreclosures.

Thanks for Reading.
Jessie J. Beaudoin

New Home Sales Unexpected Gain Due to Low Mortgage Rates?

The Census Bureau reported new home sales that were unexpectedly up from the previous 1,165,000 home sales pace of August 2003.

The new home sales were up in all regions of the country expect the West... (Las Vegas slowing and the high price of California's new homes?) which was down .8%. Interestingly the median sales price of new homes was also down about 3% to $197,000.

I believe the main reason for the surprise increase is due to the low mortgage rates of the previous three months which came down for over 6%. This makes homes seem much more affordable and many will enter into a contract.

A major difference of the new homes sales report is that it is based on sales contracts... not closed transaction. That means that these properties may still take months before being completed and may eliminate some of the contracts if mortgage rates climb and borrowers no longer qualify for a loan.

This is the second housing report that came in higher than expected. The NAR report indicated increases in existing home sales also.

Thanks for Reading.
Jessie J. Beaudoin

California Real Estate Prices and Sales Drop As Inventory Increases

21% was the median price increase of existing homes sold in California in September from last years according to the California Association of REALTORS but prices are lower than August's high.

The median price of a single family home in California for September 04 was $465,540 down from $473,360 in August but still up over 21% from September 03.

September closed sales in California came in at a seasonally adjusted annualized rate of 626,220 which is down .09% from 631,880 in September 03.

"The higher inventory of homes for sale has mitigated some of the upward pressure on home prices," said Leslie Appleton-Young, C.A.R.'s vice president and chief economist. "Year-to-date sales are up 4.5 percent, in line with our expectation that sales for all of 2004 will post and increase above 2003's record levels."

Here is some of the local real estate data with links to search the local mls listings:

Statewide, the 10 cities and communities with the highest median home prices in California during September 2004 were:

• Manhattan Beach, $1,425,000
• Beverly Hills, $1,380,000
• Laguna Beach, $1,300,000
• Coronado, $1,295,000
• Los Altos, $1,264,250
• Saratoga, $1,259,000
• Burlingame, $1,227,000
• Palos Verdes Estates $1,189,000
• Carmel, $1,131,500
• Newport Beach, $977,750.

Statewide, the 10 cities and communities with the greatest median home price increases in September 2004 compared withs the same period a year ago were:

• Beverly Hills, 66.5 percent
• Nevada City, 61.9 percent
• Yucaipa, 59.3 percent
• Truckee, 55.7 percent
• Patterson, 54.3 percent
• Port Hueneme, 51.4 percent
• Paramount, 51.4 percent
• Rialto, 50 percent
• Inglewood, 50 percent
• Auburn, 49.2 percent

Thanks for Reading,

Jessie J. Beaudoin

Existing Home Sales Up 3.1%

Existing home sales in September reached a seasonally adjusted annual rate of 6.75 million units in August which is up from 6.68 million from Sept. 03 as reported by the NAR.

This is the first increase after two months of decreases which may be attributed to higher mortgage rates from over the summer. Now that mortgage rates have decreased slightly many home buyers got back into the market.

The West increased 7.8% in September to 1.93 million units annually which is 4.3% increase over the previous year. The median priced home was $266,400 up 14.9% from 2003.

View all home sales data.

Thanks for Reading.
Jessie J. Beaudoin

Home Sales Data of Million Dollar Califoria Real Estate

According to Dataquick, California real estate sales in the million dollar or more range have soften by 11.4% in the third quarter. Here are some of the highlights of the report:

• 8,985 California homes sold for 1 million of more form July to September.
• Up 53.4% over the same period last year.
• The second quarter of this year was the highest sales count ever in California

Here are some statewide facts from last quarter:

• 41 home sales over 5 million
• 61 in the 4-5 million
• 191 in the 3 million
• 807 in the 2 million
• Remainder in the 1-2 million
• Most expensive home sold was on the Newport Coast for 9.5 million.
• Largest home was 13,949 square feet in Westlake Villiage

The median million dollar home was 2,610 square feet with 4 bedrooms and three baths at an average cost of $505 a foot. Last year it averaged $464 a foot.

Search California real estate listings

Know you may be asking how do these people afford these million dollar homes. Here are some details of the report:

• Average down payment is 28%
• 12% paid cash (5 years ago it was 25% paid cash)

While we are on mortgages. Mortgage rates have come down slightly and are near 6 month lows. Also interesting is the fact that over 31.9% of home buyers are selecting adjustable rate mortgages for financing their homes.

Home equity lines of credit are still a popular option vs. mortgage refinancing the first mortgages as these interest rates are still very low.

Thanks for Reading
Jessie

Hottest Zip Codes in California

Here is an interesting article for FISERV on the hottest zip codes for California real estate. Here is the top area codes with the largest median 5 year gains:

Los Angeles-Riverside-Orange County

City Zip Median Price 5-yr Gain Forecasted Change
_________________________________________________
Los Angeles 90019 600,000 168.90% 10.20%
Los Angeles 90039 550,000 164.80% 13.40%
Gardena 90248 386,000 162.80% 9.20%
Mira Loma 91752 382,000 158.00% 17.90%
Glendale 91203 440,000 156.60% 14.80%
Pacoima 91331 339,000 155.10% 16.10%
Long Beach 90802 415,000 153.10% 12.40%
Santa Ana 92703 370,000 152.90% 13.40%
Capistrano Beach 92624 749,000 152.90% 11.90%
Encino 91316 525,500 152.30% 17.20%

View the article here.

Thanks for reading,
Jessie J. Beaudoin

California Home Affordability to Hit Record Lows in 2005

The CAR forecasted that the median price for a single family home in California is expected to rise 15% next year. This would put the median price home at $522,930 we are already at about 21% home affordiablity assuming the current home prices and low mortgage rates.

If home values continue to climb as forecasted and mortgage rates go up you will see a significant drop in home affordability. Here are some recent quotes from Ann Pettijohn, CAR association president:

"Home buyers next year will face slightly higher mortgage interest rates, approaching 7 percent by year's end, which will make it more difficult for many families in California to be able to afford a home."

"Coupled with rising home prices, affordability in California will fall to an all-time annual low of 16 percent next year."

Something I always found wrong with the affordability index is the fact that it assumes current mortgages and a 20% down payment. I have personally been involved in over 800 transactions and I can say not too many clients have $90,000 - $100,000 for a down payment unless they already own a home that they are selling.

For more information or to search homes for sale in California please visit California Real Estate Center

Thanks for Reading.
Jessie J. Beaudoin

Real Estate Sales of Existing Home Expected to Break Records

According to David Lereah, chief economist for the NAR, existing-home sales are projected to reach a record level of about 6.49 million this year, a 6.4 percent increase over the previous record of 6.1 million set last year.

The national median existing-home price is projected to grow by 7 percent this year to $181,800. Home price appreciation is expected to slow in 2005, but remain above historic norms with appreciation greater than 5 percent.

According to the report, Mr. Lereah expects the 30 year fixed rate mortgage to rise to 6.3% but that is still near 40 year lows.

Thanks for Reading,
Jessie J. Beaudoin

California Construction activity Up... Again

According to the Construction Industry Research Board, California construction is up 11.4% totaling $52.8 billion in the the first 8 months of 2004 compared to last year.

The largest increase in construction has been in Southern California along with San Francisco Bay area and Sacramento Valley regions.

Private building construction, residential and nonresidential, in August, totals $5.37 billion, up 6 percent from July and up 21.3 percent from August 2003. Year-to-date, private building activity totals $40.38 billion, up 14.7 percent from the year-ago period, the board also reported.

Thanks for Reading,
Jessie J. Beaudoin