Irvine Real Estate News

 

Nov. 23, 2021

When will the Irvine housing insanity end?

 

Housing Insanity

The residential housing market has been at an unrelentingly insane pace since July 2020, and it seems like nothing will slow it down.

Interest Rates are Juicing the Market

Unless you've been living under a rock, by now you know that our local Irvine real estate market is going absolutely bananas. We know that we’re currently in an aggressive sellers market, and the numbers from the past couple months this year compared to those of last year prove it.

Historically low rates have led to the Expected Market Time dropping to 23 days, the lowest level for this time of year since tracking began in 2004. 

For buyers waiting for the market to slow and turn more favorably towards the home shopper, there seems to be no light at the end of tunnel. 

Housing has been lining up in favor of sellers since 2012. Many thought that the pandemic would slow housing, create a deep recession, and erode home values, giving buyers that much desired edge. Instead, rates plummeted to record lows, demand escalated, the inventory of homes available plummeted to unfathomable depths, and home values soared to unbelievable heights. 

The pandemic led economic recession lasted only two months, and it did not touch the Orange County housing industry, and certainly not Irvine's housing industry!

Values have climbed more than 20% year-over-year and the pace of Orange County housing has not slowed much at all this year. The Expected Market Time (the amount of time between hammering in the FOR-SALE sign and opening escrow) is not measured in months any more - it is measured in days, and often in hours!

A Hot Seller’s Market is defined as a market time below 60-days, the lower the level, the hotter the market. Today, Irvine sellers cannot keep their homes on the shelf - they go almost immediately.

Interest rates although still super-low, are rising. As rates rise further, many buyers will put their home-buying plans on hold because as monthly mortgage payments rise, affordability diminishes. As a result, the inventory will rise with fewer buyers in the marketplace, and the Expected Market Time will rise too. 

The market will transition first to a Slight Seller’s Market, between 60 and 90 days of inventory, then to a Balanced Market, between 90 and 120 days, next to a Slight Buyer’s Market, between 120 and 150 days, and finally, to a Deep Buyer’s Market, greater than 150 days.

Active, (for sale), inventory dropped 9% in the past two weeks and today there are only 85 homes listed for sale in the whole of Irvine

The prices of Irvine active listings range from $448,000 to $49,950,000!, (for a 7-bedroom, 12-bath Shady Canyon estate).

A lot of people who are considering selling their home but don’t want to deal with the pressure of buying in this market, what with prices going up, are holding off on selling - for the fear of being homeless or hoping to exit at the top of the market. Who knows when the to of the market will be here?!

Even in this crazy market you need a plan. Let's structure your plan together.

Whether it’s making an offer on a home, or figuring a list price for your present home, it’s important to understand what’s really going on and what the data is showing us.

My team and I are always here to answer any questions. If you or someone you know plans to buy or sell in the next 12 months or so, give me a call, shoot me an email or text, and let’s chat.

 

Posted in News
March 10, 2021

Not like 2008

Last March, many involved in the residential housing industry feared the market would be crushed under the pressure of a once-in-a-lifetime pandemic. Instead, real estate had one of its best years ever. Home sales and prices were both up substantially over the year before. 2020 was so strong that many now fear the market’s exuberance mirrors that of the last housing boom and, as a result, we’re now headed for another crash.

However, there are many reasons this real estate market is nothing like 2008. Here are six visuals to show the dramatic differences.

1. Mortgage standards are nothing like they were back then.

During the housing bubble, it was difficult not to get a mortgage. Today, it’s tough to qualify. Recently, the Urban Institute released their latest Housing Credit Availability Index (HCAI) which “measures the percentage of owner-occupied home purchase loans that are likely to default—that is, go unpaid for more than 90 days past their due date. A lower HCAI indicates that lenders are unwilling to tolerate defaults and are imposing tighter lending standards, making it harder to get a loan. A higher HCAI indicates that lenders are willing to tolerate defaults and are taking more risks, making it easier to get a loan.

The index shows that lenders were comfortable taking on high levels of risk during the housing boom of 2004-2006. It also reveals that today, the HCAI is under 5 percent, which is the lowest it’s been since the introduction of the index. The report explains:

“Significant space remains to safely expand the credit box. If the current default risk was doubled across all channels, risk would still be well within the pre-crisis standard of 12.5 percent from 2001 to 2003 for the whole mortgage market.”

This is nothing like the last time.

2. Prices aren’t soaring out of control.

Below is a graph showing annual home price appreciation over the past four years compared to the four years leading up to the height of the housing bubble. Though price appreciation was quite strong last year, it’s nowhere near the rise in prices that preceded the crash.There’s a stark difference between these two periods of time. Normal appreciation is 3.8%. So, while current appreciation is higher than the historic norm, it’s certainly not accelerating out of control as it did in the early 2000s.

This is nothing like the last time.

3. We don’t have a surplus of homes on the market. We have a shortage.

The months’ supply of inventory needed to sustain a normal real estate market is approximately six months. Anything more than that is an overabundance and will causes prices to depreciate. Anything less than that is a shortage and will lead to continued appreciation. As the next graph shows, there were too many homes for sale in 2007, and that caused prices to tumble. Today, there’s a shortage of inventory, which is causing an acceleration in home values.

This is nothing like the last time.

If you’re concerned that we’re making the same mistakes that led to the housing crash, take a look at the charts and graphs above to help alleviate your fears, then give me a call to discus.

Posted in News
Dec. 24, 2020

What Turns a Home into a HAPPY Home?

For years I've talked about why it makes financial sense to buy a home, rather than rent one, but more often than not, we’re drawn to the emotional reasons for homeownership.

Happy Irvine home

It doesn't matter if the living space is tiny or huge, whether the home is on the modest type, or one with a lot of wow factors, the feeling of a home means different things to different people. Sometimes it’s a certain pleasant aroma in the air, or the feeling one gets when relaxing in the patio, comfortable and pleasant connections to our own homes are typically more important to us than the financial ones. Here are some of the reasons why.

 

1. Owning your own home is something you've achieved and is worth celebrating
You’ve probably worked very hard to achieve your dream of homeownership, and it doesn't matter whether it’s your first home or your tenth, congrats to you! You’ve earned it.

 

2. There’s no place like home
Besides not having a landlord who might ask you to leave one day, you'll own your own place for as long as you like. Security and peace of mind is important to most of us. Owning your own home also offers safety and a comfortable place where you can simply relax and kick-back after a long day. Sometimes, that’s just what people need to feel recharge their batteries and feel truly content.

 

3. You can find more space to meet whatever needs you have
Whether you want more room in your home for your changing lifestyle, (maybe you're working from home, need space for the kids' virtual school, or you need a spot to work out), or you just would rather have a larger outdoor space for keeping your distance while entertaining in these pandemic times, you can invest in a location that truly works for your changing needs.

 

4. YOU decide what upgrades and other changes you want
So you want to copy one of those ideas you saw on Pinterest? Well, go for it - remember there's no landlord here, so no need to ask anyone for permission. Thinking of getting a four-legged member of the family? Well, again, there's no permission needed and you certainly won't be paying any pet deposit! of paying an additional pet deposit for your apartment building? You can do a lot more when you own a home, compared to when you're somebody's tenant.

 

Buying a home for the first time? There are programs for you! Maybe you'll be selling your home and moving up, or downsizing. Relocating to Irvine? Whatever the new chapter in your life is going to read like, now is a great time to think about all the things that turn a home into a HAPPY home.

Posted in News
Sept. 21, 2020

Why is it SO IMPORTANT that you are PRE-APPROVED at the beginning of the HOMEBUYING process?


If you’re like most people, you’ve probably heard that getting pre-approved for a mortgage loan is the first step in the homebuying process. But do you know why this is so important?

It’s so easy to fall in love with a home that is outside your budget when you start looking for a property to buy. That home then becomes the benchmark, and you compare other homes to that one.

You’ll agree that it makes sense know your price range, before you start house-hunting. Then you’ll be comfortable with your monthly payments and there is less chance of any surprises later. You can get a pre-approval letter from the mortgage department at your bank, or perhaps you already know and trust a mortgage loan consultant. If not, ask me to put you in contact with a really smart mortgage consultant who has helped many of my buyer clients.

According to a recent survey from realtor.com a lot of buyers are making the mistake of NOT getting pre-approved at the start of the homebuying process:
“Of over 2,000 active home shoppers who plan to purchase a home in the next 12 months, only 52% obtained a pre-approval letter before beginning their home search, which means nearly half of home buyers are missing this crucial piece of paperwork.

The pre-approval letter shows sellers that you’re a qualified buyer, and the letter must accompany your offer to buy an Irvine home.

Right now, the Irvine housing market is hot, with inventory being arguably the biggest challenge for today’s buyers. There are a lot more active homebuyers than there are sellers, therefore things are in the sellers’ favor.

With limited inventory nationwide, homes are getting an average of 2.9 offers for sellers who negotiate, causing bidding wars.

Danielle Hale, Chief Economist for realtor.com notes:
“For ‘a buyer in a competitive market, it’s typically essential to have pre-approval done in order to submit an offer, so getting it done before you even look at homes is a smart move that will enable a buyer to move fast to put an offer in on the right home.’”

In addition, today’s housing market is also changing from moment to moment. Interest rates are the lowest ever seen.

Banks and other lenders are tightening-up their requirements so don’t delay beginning the pre-approval process – the lender may well be asking for documents you hadn’t thought of. They’ll be looking at your loan application and credit report, as well as info about your debt, work history, down payment and even your residential history.

In a competitive market with low inventory like the Irvine housing market, a pre-approval letter is a game-changing piece of the homebuying process. If you’re getting ready to buy, let’s connect before you start searching for a home.

Posted in News
July 29, 2020

Why We Won't See a Rush of Irvine Foreclosures This Fall

Irvine foreclosures

The health crisis we face as a country has led businesses all over the nation to reduce or discontinue their services altogether. This pause in the economy has greatly impacted the workforce and as a result, many people have been laid off or furloughed. Naturally, that would lead many to believe we might see a rush of foreclosures like we saw in 2008. The market today, however, is very different from 2008.

The concern of more foreclosures based on those that are out of work is one that we need to understand fully. There are two reasons we won't see a rush of foreclosures this fall: forbearance extension options and strong homeowner equity.

1. Forbearance Extension

Forbearance, according to the Consumer Financial Protection Bureau (CFPB), is when your mortgage lender allows you to temporarily pay your mortgage at a lower payment or pause paying your mortgage. This is an option for those who need immediate relief. In today's economy, the CFPB has given homeowners a way to extend their forbearance, which will greatly assist those families who need it at this critical time.

Quite a few homeowners opted to pause their mortgage payments but of course they'll have to pay back that amount later. Many banks are saying that they want the paused payments to be repaid in one lump sum but are offering other repayment options. 

Under the CARES Act, the CFPB notes:

"If you experience financial hardship due to the coronavirus pandemic, you have a right to request and obtain a forbearance for up to 180 days. You also have the right to request and obtain an extension for up to another 180 days (for a total of up to 360 days)."

2. Strong Homeowner Equity

Equity is also working in favor of today's homeowners. This savings is another reason why we won't see substantial foreclosures in the near future. Today's homeowners who are in forbearance actually have more equity in their homes than what the market experienced in 2008.

The Mortgage Monitor report from Black Knight indicates that of all active forbearances which are past due on their mortgage payment, 77% have at least 20% equity in their homes (See graph below):

Knight notes:

"The high level of equity provides options for homeowners, policymakers, mortgage investors and servicers in helping to avoid downstream foreclosure activity and default-related losses."

So while many think that we may see a rush of foreclosures this fall, the facts just don't add up in this case. Today's real estate market is very different from 2008 when we saw many homeowners walk away from their homes when they owed more than their homes were worth. Not many of that happened in Irvine but there were certainly some cases, and many short sales. This time, equity is stronger and plans are in place to help those affected weather the storm. 

There is only one Irvine foreclosure on the market today. You can buy this Irvine REO for only $6,795,000

With a low supply and strong demand, the Irvine real estate market has not been this hot since 2013. This is the situation in Irvine now:

Thankfully my Irvine listings aren't taking long to sell.

🙂

 

 

Posted in News
July 20, 2020

Should you invest in an Irvine rental property?

Have you been thinking about becoming a property investor, and wondering why you should buy a rental? Here are some signs to look for if you are on the fence about investing in a rental.

“If you don’t own a home, buy one. If you own one home, buy another one, and if you own two homes buy a third and lend your relatives the money to buy a home.” John Paulson.

Low Interest Rates
When mortgage rates drop, it is much easier to find a property that will make you income. Mortgage rates just fell below 3% for the first time ever! The best place to figure out what kind of interest rate you will get for an investment property is with a mortgage lender. Check with your bank or ask me who a lot of my buyer clients use to get excellent service and great rates.

A heads-up for you that lenders charge more for “non-owner occupied” transactions than for one where the buyer will actually live in the home.

Let’s discuss how the process of buying an income-producing home is started, and I’ll send you properties to view virtually initially, (3D virtual tours, floor plans, viewing info and photos online and property walk-through videos), and then when you think you’ve seen one you may want to buy, I’ll arrange an actual tour of the property.

Home Equity
Check in with me to see how much your current home is worth! Some investment properties require a high down payment, but low-interest rates, refinancing and knowing your home value can make a difference. For example, if you need to borrow 10%, many homes in good markets can appreciate 10% of their value in just a year, depending on the condition and the location.

Chat with a lender to see if you can qualify, and check in with your current mortgage company to discuss your plan.

Scarcity of Units
You probably know that Irvine rental homes are in high demand. This is because Irvine is growing and the demand for a space to rent is higher than the available properties, unless renters want to live in one of the Irvine Apartment Communities. Therefore now is the best time to find an Irvine property to buy for rental purposes.

Return Rate
Do you know if the rate of return in Irvine is growing? Let’s talk. It’s important to know that if you’re thinking of investing in an Irvine property. There is potential to make significant gains over time.

Ultimately, talking to professionals can help you decide if now is the right time to invest in Irvine rental properties!

Posted in News
June 26, 2020

The key to selling your house

The key to selling your house is to price it just right.

 

Let's connect to make sure your house is priced to sell this season.

Posted in News
June 1, 2020

Real Estate is Virtual Now

Whether it's an initial home wish-list analysis as a buyer or a listing appointment as a seller, we can get the process started remotely and we can create a plan together.

I’ve become even more innovative since March, (when the stay-at-home orders were issued), using newer technology that allows buyers to virtually look at
homes, meet with mortgage lenders and consult with me throughout the buying or selling process.



I’ve always had 3D Virtual Tours in my marketing arsenal and now they’re used more often, by more agents, what with the ban on Open Houses and everyone’s concerns about Covid-19.

Experience the 3D Virtual Tour of this Irvine home and while you’re there, try out the “Dolls House View” and look at the “Floor Plan” by pressing the button on the bottom left.

Virtually shopping for homes
“But what if I want to virtually look at a listing which isn’t one of yours Debbie?”, you might ask. Well hopefully the listing agent would have invested the money in providing a 3D Virtual Tour, but if not, I’ll do a Walkthrough Video Tour of the property for you. I can either do these live via Video Chat or I can upload it to YouTube for your exclusive viewing.

While of course buyers still prefer to physically see and walk through a home, virtual home tours and accurate listing information top the list of tech specs buyers find most helpful in today’s process.

According to Google Trends, which scores search-terms online, searches for real estate increased from 68 points the week of March 15th to 92 points last week. So it seems to me that more potential homebuyers are looking for homes virtually.

Virtual tour


Today's everyday reality is quite different compared with less than three months ago. I know that most people have been working remotely, and engaging with friends and business associates virtually.


I’m thankful that Video Conferencing is so simple and user-friendly these days. My initial consultations are held via Zoom or Facetime, and I’ve found that most people welcome not having to tidy-up and have me physically in their homes at this first “meeting”. I’m also thankful to still be in a position to help families make important moves.

Document Signing is usually being done digitally for all offer, counter-offer and disclosures paperwork, and more, right from a computer or smart phone. If my buyer or seller clients aren’t comfortable to sign electronically, they can physically sign the paperwork. In these cases, I courier the documents to them, or drop them off at their front door.

I think that most people already know that Spending Money can be done from the comfort of their homes too. Buyers can pay for an inspection or appraisal digitally, and both buyers and sellers can wire money into escrow from home, if their bank offers it, and most do. In case you’re wondering “Why Sellers?”, they would sometimes need to wire money into escrow, for example to pay for Irvine Home Owner Association documents. 

So as you can see, if you need to move today, technology can help make it happen safely.

Let's touch base today to discuss your situation, so you don't have to put your real estate plans on hold. Yes, let’s do it via Zoom!

Posted in News
March 20, 2020

Real Estate in a Virtual World

 

Providing exceptional real estate service has always been my top priority, but right now, with this deadly virus threatening us all, it's the health and safety of my clients, family, friends, and our community as a whole. At Coldwell Banker®, we already have a very strong digital platform in place, so I am well-equipped to serve my clients virtually, even during these challenging times.

  • New Listings – Our exclusive marketing program enables me to reach potential buyers quickly to get the news out when a new property hits the market, ranging from a property tour video and dedicated property website to online advertising, customized email distribution, mailed property announcements and a digital area REALTOR® notification.
  • Property Showings – I can show properties virtually using video, Video Tours, eBlasts to agents & buyers, 3D Virtual Tours, and apps to keep both sellers and buyers safe while still showcasing a home’s unique features.
  • Your Home's Value – I can send you a detailed report showing your home’s value as well as comparable homes that have sold nearby.
  • Market Updates – If you want to learn more about how real estate is doing in your Irvine area, I can send you a weekly Market Report detailing activity to keep you fully informed.


While our country, and in fact, the entire world faces this challenging situation, Coldwell Banker is prepared and ready to continue to help you reach your real estate goals. Please contact me today if you have any questions or would like to discuss selling or purchasing a property. Call or text me at 949-537-2079 or email me: debbie@sagorin.com

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Affiliated real estate agents are independent contractor sales associates, not employees. ©2020 Coldwell Banker. All Rights Reserved. Coldwell Banker and the Coldwell Banker logos are trademarks of Coldwell Banker Real Estate LLC. The Coldwell Banker® System is comprised of company owned offices which are owned by a subsidiary of Realogy Brokerage Group LLC and franchised offices which are independently owned and operated. The Coldwell Banker System fully supports the principles of the Fair Housing Act and the Equal Opportunity Act. 20VXKK_NAT_3/20
Posted in News
March 19, 2020

Orange County Housing Report: Housing and the Coronavirus

 

Currently, COVID-19 is not having a significant impact on the housing market, yet its effects will eventually be felt in the real estate trenches.

 

The Coronavirus and Housing: Despite all the news swirling about the Coronavirus, the Orange County real estate market is still rocketing forward with an Expected Market Time of 48 days. At first, news of the Coronavirus seemed like a distant crisis on the other side of the world. Then, at the end of January, the first case on U.S. soil was announced. It was not until the end of February when top federal health officials warned that the virus would spread in the United States.

 

Since then, everyone has been confronted with a deluge of information and misinformation. Many mistakenly ran to purchase N95 face masks and now they are nowhere to be found. Others are stockpiling water, toilet paper, canned goods and everyday essentials. The response has been similar to Y2k when the banking system and world economy was supposed to crash due to a computer glitch in ringing in the year 2000, which never materialized.

 

The Coronavirus is beginning to interrupt daily life. There are no more samples at Costco. After the kids’ soccer matches, the handshake has been replaced with a fist bump. Parishioners are no longer holding hands or offering a hand in peace. Starbucks no longer allows reusable cups. There are signs in the grocery store limiting the number of certain items.

 

As the virus began to spread out of control not only in China, but South Korea, Italy and Iran, Wall Street and financial markets around the world panicked and moved their money out of stocks and into long term bonds, United States treasuries. When that occurs, long term mortgage interest rates fall.

 

So, how will the Coronavirus outbreak affect housing? There is no absolute, 100% certain answer. Instead, it all boils down how long this crisis will last and how large of an impact it will have on United States soil and the rest of the world. In China, the number of new cases is dwindling, a glimpse of hope that this too will end. Currently, the data does not indicate any change in the local housing market. The supply of homes to purchase in Orange County is at its lowest level for a start to March since 2013, and demand (last 30-days of pending sales) is at its highest level since 2016. With not enough supply and strong demand, the Expected Market Time (the time between pounding in the FOR-SALE sign and opening escrow) is at 48 days, a HOT Seller’s Market and its lowest level since 2013.

 

As a direct result from the COVID-19 outbreak, mortgage rates have dropped to a record low and will most likely drop even further. There is a chance that they break below 3% and into the 2’s. This inevitably will provoke many more to purchase, juicing demand. For a $750,000 mortgage, today’s 3.25% rate amounts to a $492 per month savings compared to March 2019’s 4.4% rate. That’s a savings of $5,904 per year. If rates drop to 3%, it’s a $594 per months savings, or $7,128 per year. And, at 2.75%, it’s a savings of $694 per month, or $8,328 per year. In doing the math, it is easy to see how lower rates will stimulate demand. The impact on affordability is astounding.

Posted in News