SUPPORTING OUR SCHOOLS AND OUR COMMUNITY!

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HOMEBUYERS SPRINGING TO LIFE?

It's true! Anything under $700,000 is flying off the shelves. Agents can't keep enough properties listed to meet the demand. Home sales for the 22 business days ending April 17th (all of April is not yet available), showed total resale houses sold at 1,916 for Orange County, up 16.1% from 2011. Condominium volume was up nearly 12%. One zip code in the city of Orange was up 37%, one in San Clemente up 83%. With interest rates hovering around 4% or even a tad lower, and housing at its bottom for likely this century, it's easy to see why the buyers are out for a spring buying fling!

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WHAT WERE THE ACTUAL NUMBERS?

The total number of sales for July was 2,527. That number includes 1,628 single-family resale, 769 condo resale, and 130 new home sales. The total number is down 26.2% from June. (Remember the tax credit lapsed.) And it was also down 19.2% from July of ’09. Of course July was when the investors really started cranking last year, and has been busy ever since. In fact, the distribution of sales over price ranges would indicate that the housing market does, in fact, have some legs, somewhere. All price ranges were off in volume, but mostly on the lower end. The higher end was barely off, less than 5%. This means that move up buyers, buyers with cash and ability are staying in the market and they are buying homes.

The actual breakdown is as follows: a) under $400,000 – 1,026 sales b) $400,000 to $500,000 – 404 c) $500,000 to $600,000 – 305 d) $600,000 to $700,000 – 243 e) over $700,000 – 514. Adding up the properties that would qualify for “Jumbo Conforming” loans and you have nearly half the total sales at over 1,000 properties. This would seem to indicate a more robust market than economists would have you believe. Well, its food for thought anyway.

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TROUBLE SPOTS AND OTHER INTERESTING TIDBITS

Notices of Default grew slightly in July compared with June to 1,462. However to keep things in perspective, let’s remember that it is 50% lower than a year ago. And that speaks as loudly for the positive side of housing, as the slow down in sales may spark negative rumor. The adjustable rate percentage is appropriately low at 8.3% meaning nearly 93 of every 100 loans closed is a fixed rate mortgage. Why not? With rates at below historic rates, and still going down, we find ourselves in a refinance boom, considering how many people have been left out of it due to equity issues. Maybe one of the most telling statistics for the month that validates the money is out there, is that even with FHA supposedly funding way more loans than they want to, the average down payment in Orange County is 19.2% or if you forget stats, 20% conventional loans are happening.

California Association of Realtors has reported that in Orange County a minimum income of $70,670 is needed to afford a starter home at $428,810, slightly below the median price. That means the county has a 54% affordability index right now, a little below the statewide 64%. A reminder of where we came from… the affordability index was 11% in 2006. So, back to the question of half empty or half full… optimist or pessimist? This author believes in the strength of housing, the diversity of an albeit wounded economy, and resilience of all of us together working it out.

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