I have had this up before but now it is starting to come true!  When the media says we have bottomed and the rates are low then everyone will want to buy.  At that point buyers are facing much more competition!  It will now be more difficult to get a home because the inventory is low and more buyers are competing.  All this will push prices up.

 Told you so.  Call me today at 949-456-0505 or email at Ron@JonRonRealEstate.com.

www.JonRonTeam.com

  2011 Laguna Niguel Housing Stats

   The Real Estate Facts for 2012 in Laguna Niguel

I was chatting with a fellow in the grocery store line last week and he gave me his “facts” for bank-owned and short sale properties which at least for Laguna Niguel were off by 100%. So I looked it up again on the MLS system. There were 303 standard sale detached homes that sold in 2011 at an average of $312 per square foot and 97 DOM (days on market). For short sales there were 119 sales which made up 25% of the sales. The price per square foot was $276 and the days on market averaged 192. That gives a discount of 11% off the standard sales. For bank-owned or REOs the price per square foot averaged $262, which is a discount of 16% off the standard sales. Bank-owned properties also averaged 75 days on the market.

The highest-priced bank-owned property to sell in Laguna Niguel was $1.8 million, while the highest-priced short sale to sell was $3.5 million. The highest-price standard sale to sell in 2011 was $4.4 million.

A lot of people today are finding their properties online, then approaching the listing agent. One point to remember before having a discussion with the listing agent is that, by law, he works for the seller. Anything you say as a potential can be shared with the seller. If you want to be represented by the listing agent make sure you sign a “dual agency” with him first, making the agent a neutral facilitator rather than an agent. I have often said that a dual agency could be the best or the worst transaction you ever have depending on how neutral and ethical the listing agent behaves.

And last but not least – Happy New Year from the JonRonTeam

Patience With Short Sales Will Pay Off for Buyers In Laguna Niguel so far this year there have been 884 home sales of all types (attached and detached). Bank-owned foreclosures have accounted for 16% of these sales, short sales accounted for 29% and standard equity sales have accounted for 55% of sales. As you might expect, there are a larger number of distress sales in lower price ranges and a fewer number in higher price ranges. That makes sense, because those in higher price ranges generally had greater amounts of equity when they were purchased. Short sales are not easy from a Realtor’s® or a buyer’s perspective but they do have rewards for buyers who are patient. It seems like I spend half my time as a Realtor® these days explaining to my clients or potential clients all the pitfalls of short sales. Buyers will ask, “Don’t the banks want to get rid if these bad assets? Why do they take so long?” There are so many nuances with short sales it would take a dissertation to explain it but suffice it to say some of the best “deals” are had by patient buyers in short sale transactions. In August I assisted a cash buyer in making an offer on a short sale that had been on the market for over a year. Buyers had come and gone and the seller had even tried to sue the bank for letting him have such a bad loan. In the end, as the date of trustee sale loomed, our offer was presented, accepted in a week and closed fourteen days later. On the other hand, in June I assisted another buyer in placing an offer on a short sale that had been in and out of escrow for over a year. Since the short sale had been previously approved, we estimated that my buyer could be opening escrow within thirty days. This week we got formal approval and opened escrow. The time frame of six months was excruciating for my buyers but the value was worth the wait.  Needless to say if you need to buy and move quickly short sales are not usually going to be your first choice. But those buyers with time and patience can reap the rewards.Buyers and Sellers can call the JonRon Team today at 949-364-0400.

Timing the Bottom of the Real Estate Market                        Don’t be Late! Simply put, before the bottom of any cycle you will have more selection, more desperate sellers and less buyer competition.  After the bottom is announced in the media you will have much more competition from fellow buyers.  Smart real estate investors are buying now.    Every year someone predicts we are at the bottom of the cycle.  Is this the year?Consider this.  We are now at a point of balanced price to earnings ratios.  That means that investors can buy a property with the traditional 25% down and rent it out with a positive cash flow.  We are beginning to hear this from the pundits and from NAR (national association of Realtors).  Wealthy cash buyers figure real estate is a solid investment with monthly returns and upside potential.  Someday the “millenials” will have to move out of Mom’s house. In addition 2012 will be the sixth year of the cycle.  That is about the normal length of a real estate cycle.  Real Estate News Letter

      Happy Thanksgiving from the JonRon Real Estate TeamSome recent news on the loan front may help some home buyers.  FHA loan limits which dropped back to traditional limits this September will be raised back to $729,500 in our area if the president signs the bill passed by the House and Senate this month.This does not apply to Freddie and Fannie backed loans.  The higher FHA limits may help those buyers buying homes over 650,000 with down payments of less than 20%.  However for FHA loans you will have an upfront 1% MIP payment (mortgage insurance) and a monthly insurance of up to 1.1%.I read that in 2006 there were 279,000 mortgage broker shops and today there are around 44,000.  One would assume only the best are left.  Our Realtor population has dwindled as well.  In 2006 there were 1,357,752 Realtors nationally and today there are about a million.  Remember that it is quite easy to get a real estate license (probably too easy) so check out the experience and skill level of any Realtor you interview.  In addition to selling residential real estate, I mentor new agents getting into the business.  One of my mentorees this week said, “The problem is that as a Realtor I have to be proficient at so many differ skill sets.”  I am sure that is true for many small business owners.  The professional Realtor must be good at listening, handling objections, contracts, marketing, lead generating and accounting as well as being personable, patient with clients and current with prevailing market conditions.  Have a blessed Thanksgiving and Thank The God who revealed Himself in the Bible.The JonRon Real Estate Team 949-364-0400.

 Competition makes levels the playing field.

    COMPETITION IN THE REAL ESTATE MARKET As a Realtor® working with buyers and sellers every day I run across a lot of different stories that seem too good to be true. In most cases they are too good to be true.  Buyers will say they hear about homes being purchased at fifty cents on the dollar, which would be very rare even on the courthouse steps. When a home is foreclosed on by the bank it goes to sale on the courthouse steps in the county in which the home is located. The foreclosing bank’s trustee will put in a minimum bid. The cash investors at the sale will decide if they wish to outbid the bank or pass and let the bank have it. If the home goes back to the bank then it will be emptied and relisted with an REO agent. If the bank’s minimum bid is low then the investment companies will bid but if high they will abstain. Where does competition come in? In the first scenario the bank’s asset manager will decide if he wants to sell the home in rough condition or if he wants to rehab the property with minimum of paint and carpet. If the asset manager elects to price the property 10% to 15% under market value, then a bidding war will generally ensue on the open market. Market forces and sometimes just plain hype will bring a reasonable price for the home. Many asset managers want to make sure the home is fairly exposed to the market so they won’t review offers until a minimum time period passes.  In the second scenario the investment companies will generally bid each other up.In Orange, Riverside, Los Angeles, and San Diego counties there are a good number of “regulars” at every sale. These regulars are seasoned professionals who know the market and are able to buy several homes with cash at the sale site. All of these people are savvy and are looking for a reasonable profit after they rehab the property. These investors have regular rehab crews that can do the rehab cheaper than you or I. The point is that they don’t want to buy a foreclosure with any less than about 15% profit after rehab. That being said, many investment companies are getting stuck with losses because the banks have not responded to the current market conditions and the investors are buying too high in order to keep crews busy. Again we see good old-fashioned competition at work. More than ever you need to use an experienced Realtor® to help you compete in this market place. Ron Buck, Realtor®

           Home Sales Activity A Mixed Bag            Count the cost when buying a distressed property.    What has happened in the last sixty days in the Laguna Niguel housing market?     Today there are 316 homes on the market in Laguna Niguel - 185 detached homes and 131 attached homes. There have been 71 sales of attached homes in the last sixty days of which 44% have been distressed sales. There have been 71 (interestingly) sales of detached homes in Laguna Niguel in the last sixty days of which 26.5% have been distressed sales.     How does this break down for detached sales in the last sixty days? Of the 71 sales there were 52 standard sales, 12 short sales and 7 bank-owned (REO) sales.  Standard sales averaged 95 days on market (DOM), short sales averaged 194 DOM and bank-owned averaged 69 DOM.     Is it worth it to buy a distressed property? It depends on your needs, patience and talents. The average price per square foot for detached homes was $311 while the price for short sales was $258 and REOs was $254. So your savings (theoretically) was 13% for a short sale and 18% for an REO.  Sounds okay to me but be sure to count the cost!  Distressed property is sold “as is,” usually with no termite or dry rot repair. The time and cost of repairs, permits and contractors can add up. Just a note, always get the proper city and HOA permits and you will be thankful when it is time to sell.

     We Realtors® like to calculate the “inventory supply” on the market.  Currently for detached homes under $700,000 there is about 3.5 months’ worth of supply.  For homes $700k to $1 million there are 6.5 months of inventory.  For homes $1 million to $2 million there is 7.5 months’ supply and for homes over $2 million there are 20 active with 2 sold in the last sixty days which yields 20 months of inventory. Remember, the real estate market is a moving target and is affected by the interest rates, job market and general mood of the country.  It doesn’t get better than living in Laguna Niguel.

Call the JonRon Team at 949-364-0400.

Check out this video of The Club at Rancho Niguel.  The best neighborhood HOA facility bar none.  The club is gated and guarded and is open from 6AM to 9PM year around.  The Olympic size pool is heated year around and there are two pools for kids.  Mom and Dad will enjoy the workout rooms, weight rooms and two indoor racquetball courts.  There are eight tennis courts plus kids playground and many more sports courts.

The Club is located in the middle of the Rancho Niguel Subdivision in the north half of the city of Laguna Niguel.  There are ten tracts of homes that surround this private club. The detached homes run from 1500 sq ft to 4000 sq ft.

The Rancho Niguel subdivision is located close to the 73 with easy access to the freeways.  The taxes are a low 1% with no mello-roos bonds.

There is no other local facility that compares with the Club at Rancho Niguel and it is a benefit of every home in the subdivision.  Plus the Laguna Niguel regional park is conveniently located adjacent to Rancho Niguel.

                                                                                                                                                       Call the JonRonTeam today to see this area and view all the homes for sale at 949-456-0505.

What’s happening in Laguna Niguel Real Estate?

 Active home inventory in LN is down 15% from mid-August.  Homes are selling if they are priced right, especially now, with the super low interest rates.  Believe it or not I saw one lender quoting 2.99% on a 15 year mortgage with 1 point.  Even FHA rates were advertised at 3.75%.  By the way, many complexes have lost their FHA approvals this year, making it harder yet to by a condo.

 Short sales are still having a downward affect on home prices.  Agents list short sales at below market values to attract attention and the buyers offer lower yet.  This sets up a stand off with the banks which becomes a tug-of-war until the bank either forecloses or gives in and there is a new low value for the neighborhood.

For homes under 600,000 the percentage of short sales has been running around 50% but seems to have dropped to 40% right now.  For homes between 600,000 and 1 million the percentage of short sales is quite steady at 15%.  There are 19 foreclosures active on the market under 600 and 5 foreclosures active between 600 and 1 million.

 There has always been a pattern of real estate activity in our area which consisted of a Spring wave of increasing listing activity which tapers down over the summer and then a Fall wave of activity in October and November.  The distressed sale market definitely skews these patterns somewhat. 

  Here are some real estate tips for buyers.  Remember that the list price of a short sale is a fictitious price until the bank comes back with a number.  This number is normally not known until an offer is submitted to the bank and processed.  Secondly, everything in real estate has to be in writing.  If it is not in writing you cannot prove it.  Offers are not accepted until they are signed by the receiving party and returned to the maker.  Anything verbal can suddenly disappear and you will never be able to prove it.  Lastly don’t forget that short sales and foreclosures are generally sold “as is”.

  For expert Realtor help in Laguna Niguel or south OC call the JonRon Team at 949-364-0400.  Short sales listing and REO experts.  www. JonRonRealEstate.com.

                                       THE FACTOR!

   Not the WOW factor but the HOW factor.

     What’s the “factor?”  You might need to know if you are shopping for a home. It is simply a number based on the current interest rate that you will pay for each $1000.00 you borrow. At today’s great interest rates the factor on a typical 80% Loan-To-Value loan is $5.00/month or less. On a $10,000.00 loan your payment will be $50.00 per month.

     This is a handy number when comparing cities. My son and I are Realtors® specializing in Laguna Niguel. Our great city is a wonderful place to live and own property for many reasons. Two BIG reasons are our 1% property tax rate and NO Mello-Roos bonds. (Not to mention the great weather, parks, schools, beaches, etc.) If you look at homes in Aliso Viejo, Ladera Ranch or other newer areas you may see taxes and bonds that push your overall tax rate significantly higher.

     Here’s an example - if a neighboring city has a tax rate two tenths of a percent higher than  Laguna Niguel, and Mello-Roos bonds totaling $2000 per year, the extra burden approaches $3000 per year, or $250 per month, on a $600,000 home. Divide $250 by our FACTOR of 5 and you will see that the purchasing power of that money is around $50,000.00. Your purchasing power just increased by that amount if you buy a home in Laguna Niguel.

     Therefore, when you get your “Good Faith Estimate” from your lender (and your prequal letter), be sure to ask what tax rate and HOA amount was considered in there estimates. Laguna Niguel is a wonderful place to live!

Ron Buck - JonRon Real Estate Team at Keller Williams Realty

Realtor®