According to DataQuick, the home sales tracking company, home pricing in Orange County is moving in some odd directions!

In all of Orange County in the time ending August 27th the number of homes sold has decreased by almost 16%!

At the same time, the pricing in Orange County has remained relatively stable, and in fact has increased 3.4% to date.

What does this mean?  Well, in one regard, its anyone’s guess - when the sales decline, this usually is a leading indicator for price reductions, while a higher sales price indicates that the market is coming off of a stronger level. 

Well, as the summer comes closing in, we continue tracking the real estate market and statistics in the city of Laguna Niguel.  Generally, we’ve been optimistic about the market place and about inventory over the summer, and honestly we still are!  (The picture looks different…)

At this point, inventory is on the rise - this is dangerous for Sellers, since increasing inventory brings increasing competition in attracting buyers, and this means that Sellers are truly in a beauty contest and a price war! 

The inventory this week is very precise - there are 417 Active Listings in Laguna Niguel.  Of those active listings, there are 296 Regular Sales, and 121 Short Sales. 

There are 200 In Escrow listings, of which only 74 are Regular Sales.  There are 126 Short Sales in Escrow. 

The monthly inventory (the number of months to sell all active listings if no other homes were listed), therefore, is 296/74 = 4 MONTHS OF INVENTORY exactly.

The inventory has therefore increased by approximately 18% - this makes for a much softer market as the number of motivated sellers increases.  This is to be expected since the market has increased, allowing a number of sellers to sell without taking a loss, which has opened the door for more listings.

As a buyer, the time is ripening - keep watching for good deals!

OFF WE GO!!!

Well, as the summer moves on, we are reminded again that the real estate market is cyclical and varied.  The market statistics follow, as well as an analysis of what this means for you for the rest of the summer and ‘fall’.

As of today, there are 395 ACTIVE listings in Laguna Niguel, ranging in price from 180K to well over 6 Million.  Of those homes, 112 are SHORT SALES leaving 283 regular sales. 

Further, there are 209 IN ESCROW in Laguna Niguel, and of that number, 130 are SHORT SALES, leaving 79 regular sales in escrow.

So what does this information mean?  Well, you’ll notice that the ratio of active to in escrow short sales is much greater - 79 to 395 regular sales in escrow versus 130 to 112 short sales in escrow.  This would indicate that the properties in escrow are dwindling as the market slows into the summer months.  The numbers of properties that are entering escrow are slowing, and the pricing of regular sales is being rejected by the wider marketplace.  This would indicate that the real estate market in our area is entering the expected seasonal summer doldrums. 

What does this mean for the longer term?  Well, honestly, that’s anyone’s guess.  With the market still selling, and low interest rates and some well-priced homes, the time may still be right to jump on a sale and unload that old rental property, etc..  Further, in a market climate like this, moving up is fantastic!  The percentage changes make the gains very tempting. 

For market questions and statistics, email us anytime at Stats@JonRonRealEstate.com.

Mortgage lenders are concerned with your ability to repay the mortgage. To decide if you qualify for a loan on a new home, they will consider your credit history, your monthly gross income and how much cash you will be able to accumulate, or have accumulated, for a down payment. So how much house can you afford? To know that, you need to understand a concept called “debt-to-income ratios.”

Debt-to-income ratios

The basic types of debt to income ratios are known as front end and back end ratios.  The front-end ratio is the amount of house debt versus the total gross income.  The back-end ratio is the total debt management with house and all other debt versus monthly gross income.

Front-end ratio: The housing expense, or front-end, ratio shows how much of your gross (pretax) monthly income would go toward the mortgage payment. As a general guideline, your monthly mortgage payment, including principal, interest, real estate taxes and homeowners insurance, should not exceed 28 percent of your gross monthly income. To calculate your housing expense ratio, multiply your annual salary by 0.28, then divide by 12 (months). The answer is your maximum housing expense ratio.

Front-end ratio

Maximum housing expense ratio = annual salary x 0.28 / 12 (months)

Back-end ratio: The total debt-to-income, or back-end, ratio, shows how much of your gross income would go toward all of your debt obligations, including mortgage, car loans, child support and alimony, credit card bills, student loans and condominium fees. In general, your total monthly debt obligation should not exceed 36 percent of your gross income. To calculate your debt-to-income ratio, multiply your annual salary by 0.36, then divide by 12 (months). The answer is your maximum allowable debt-to-income ratio.

Back-end ratio

Maximum allowable debt-to-income ratio = annual salary x 0.36 / 12 (months)

Example

Take a homebuyer who makes $80,000 a year. The maximum amount for monthly mortgage-related payments at 28 percent of gross income is $1866. ($80,000 times 0.28 equals $22,400, and $22,400 divided by 12 months equals $1866.66.)

Summer Fun Contest Winners!!!!!  JonRon Team

Top cash prize winners - Ami McGloon  $225,  William Anderson $150,  Celeste Gonzalez $105.

$20 In and Out Burger Gift Cards: 

Joanne Fitz, Rosie Flores, Lyle Radeleff, TJ Van Dusen and Carole Wood.

 Wasn’t that fun?  Enter our next contest soon - “Back to School” by mail or on our website - JonRonTeam.com.

THE BEST BUYS ALWAYS COME WHEN OTHERS ARE NERVOUS OR CAN’T BUY. 

Check out this mortgage advice.  See the linked article on mortgage rates and new loan regulations.  Apparently some banks are offering “deeds in lieu” to more distressed homeowners.  For most short sales are a good option.

When you are ready to buy or sell be sure to call the JonRon RE Team at Keller Williams Realty.

BE THANKFUL FOR YOUR FREEDOMS THIS WEEKEND AND BE THANKFUL TO THE ONE WHO GIVES THEM.

I understand ABC (American Broadcasting Company) is somewhat embarrassed by the flag of the USA.  Please remember that FREEDOM ISN’T FREE.  To do our part as Realtors we put 1200 American flags in Laguna Niguel today to help boost the spirit. 

The man I never knew - That man was my uncle who was killed in the Battle of the Bulge in WWII along with three of his gunnery mates.  He and his crew protected a bridge in the Bastogne area just long enough for the retreating GI’s to get to safety and then blow up the bridge.  Thanks to all the vets for their service and for the fact that we are speaking English instead of German or some other language.   Display your colors this weekend and be thankful to God for our freedom.

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The market in Laguna Niguel is doing the normal summer shift again - it appears that much of the buyer pool purchased during the period of time when the federal tax credit was in place up until April 30th.  Why do we say that?  Check out the numbers below and see for yourself.

AS OF APRIL 28th, 2010:

ACTIVE - 298; IN ESCROW - 260

AS OF JUNE 28th, 2010:

ACTIVE - 364; IN ESCROW - 205

It may be that the market is changing, or that the normal summer inventory increase as well as the additional buyers which were pulled from the market because of the tax credit have made the market appear to be changing.  However, either way you cut it, we’re in a softer sellers market in Laguna Niguel than we were 60 days ago. 

THAT BEING SAID - the inventory is still less than HALF of what it was at the peak in 2006!!  Depending on your read of the future TODAY may be the best time to sell in the next year.

For calendar month May – DataQuick’s freshest stats — Laguna Beach homebuying patterns showed:

• Homebuying +54% vs. a year ago.
• Laguna Beach’s median selling price was $960,000 – that’s +113% vs. countywide pricing.
• A year ago, that Laguna Beach home-price “premium” was 156% vs. the countywide median selling price.

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Lending standards remain tight, and lenders have been picky even with the best-qualified borrowers. If you’re buying or refinancing the mortgage on your primary home, you’ll need a minimum down payment of 5% to 10% for a conforming loan or 10% to 15% for a conforming jumbo loan. With 20% or more down, you avoid private mortgage insurance, which typically costs 0.5% to 1.5% of your loan amount per year. Fannie Mae and Freddie Mac, which set the standards for mortgages they buy from lenders, require a minimum credit score of 620; you’ll get the best rate if your score exceeds 720. The Federal Housing Administration requires a minimum credit score of 580 to qualify with a down payment of 3.5%, but FHA lenders often impose a higher minimum score of 670. (If you apply with a spouse, lenders will probably base your rate on the lower of your scores.)

Lenders will also scrutinize your ratio of debt to income. Monthly housing expenses (principal, interest, taxes, hazard insurance, private mortgage insurance and association fees) shouldn’t account for more than 28% of gross monthly income. Total debt shouldn’t exceed 36% of gross income, but in some cases lenders stretch the maximum to 45%. Borrowers with the strongest credit profile may push the housing ratio a bit farther.

We have a team of awesome mortgage lenders who can help you to REFINANCE your current mortgage, or help you find out if its possible to buy.  With rates so low, now may be the time to move up!!