South Orange County Blog from Bob Phillips

Southern California Rents Are UP

prices-upShould You rent or buy? This is a question many would-be homeowners ask themselves. All too often You are left with the thought that owning is simply unaffordable. Fortunately, I have news for anyone who is “on the fence” about buying or renting; the decision to buy might become a little easier, as a new study from USC  predicts that rents will rise over the next two years.

According to the research performed by USC’s Lusk Center for Real Estate, rents across Southern California are expected to rise significantly by 2016 – the latest reminder of growing affordability difficulties throughout California.

In Los Angeles County, it’s expected rents will jump by 8.2% by 2016, increasing to an average monthly rent of $1,856. Similarly, rents are expected to increase by 8.6%, 9.9% and 6.9% across Orange County, the Inland Empire and San Diego County respectively.

On average, the SoCal region is expected to see an 8% bump, increasing faster than the 3%-4% rise we’ve seen this year, or more than 10% since January 2013.

What impact will higher rent have on the housing market? While the study from USC suggests that rental vacancy rates will slightly decline, many RE professionals are certain that this bump will be enough to drive some renters back into the buying market.

Richard Green, director of the Lusk Center, commented on the matter saying, “Though the economy and employment have improved, renters’ incomes are stagnant. So while net absorption and occupancy rates are moving in the right direction, affordability continues to worsen.”

In South Orange County, we are presently entering the Fall buying season, during which prices tend to become more negotiable. ( I usually recommend this time of year – until the end of January – as THE best time of the year to buy a house.)  Softer, more negotiable prices, combined with historically low interest rates, make for an unusually good environment, for buyers.  If you’re even just in the thinking about it stage, this might be a good time to get serious, and give me a call.

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Moving to a New City? Tips for Finding the Right Community to Buy Your New Home In

Posted in Home Buyer Tips, Real Estate Tips by southorangecounty on October 22, 2014

Moving to a New City? Tips for Finding a Family-friendly Community to Buy Your New Home InIf you’re moving to a new city with children, one of your likely considerations is finding a family-friendly community where you can settle in and call home.

In this post we’ll share a handful of tips that you may find helpful if you’re searching for a family-friendly neighborhood in a new city.

Check Out The Quality Of Local Schools

Schools are one of the cornerstones of a community and high-quality schools are a sign that a community is suitable for your family. When you’ve made your short list of communities that you are considering, take some time to research the local elementary or high schools to see how they stack up against other schools in the surrounding area.

You may also want to connect with the school’s principal or dean to ask about the environment and whether or not it would be suitable for your children.

Look Around For Local Churches And Other Community Groups

Great communities are those which are filled with engaged citizens who are actively working to better the area for everyone. When you drive through a community that you’re considering, look around to see if there are churches and other groups that get local residents together on a regular basis.

You may find that these groups make for an excellent welcoming committee who can introduce you to the area and help to get your family settled.

Parks And Other Gathering Spaces Are A Good Sign

Another excellent way to determine if a community is suitable for raising a family is the number of nearby parks and public gathering spaces. You’ll want to ensure that your children have a nice area to run around and play with your family pet, or that you have a nice park in which to have the occasional picnic lunch to spend some quality time together.

When In Doubt: Ask The Locals

If you’re visiting a community or touring through homes, spend some time talking to the locals to hear their thoughts and opinions on how family-friendly the local area is. If you haven’t yet, you should also connect with a local real estate agent who can share the ups and downs of the community you’re thinking about moving to.

Over the past 38 years, I have watched South Orange County grow up.  When I started my real estate career, there was no Aliso Viejo, Rancho Santa Margarita, or Ladera Ranch.  It used to take me 40 minutes to drive from my house in Lake Forest, out to Coto de Caza, where my daughter got tennis lessons.

Today, when a family tells me they want to do a tour of South Orange County, with my 38 years of local experience, I am uniquely qualified among Realtors, to show them the ins and outs of our beautiful area, and I am proud to introduce them to what I consider to be God’s Country – South Orange County, California.

Hopefully, if you’re moving away from our area, you’ll be able to find an agent equally knowledgeable about the community you’re thinking of moving to.  I can help you find such an agent, and would be happy to research the candidates for you.

Follow these tips and trust your instincts, and you’ll be able to find a great new community that makes a perfect home for your family.

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What’s Ahead For Mortgage Rates This Week – October 20, 2014

WhatsAheadThisWeekLast week’s economic highlights included the National Association of Home Builders (NAHB) Housing Market Index for October. The Commerce Department also released Housing Starts for September. Freddie Mac reported that the average rate for a 30-year fixed rate mortgage dropped below four percent. The Fed released its Beige Book report, and Weekly jobless claims came in lower than expected. Here are the details:

Homebuilder Confidence Slips in Spite of Lower Mortgage Rates

U.S. Homebuilder confidence in housing market conditions slipped by 5 points to October’s reading of 54 as compared to September’s reading; this was   also lower than the expected reading of 59. Builders are concerned over strict mortgage credit rules, but the NAHB’s chief economist noted that pent-up demand, lower mortgage rates and improved labor markets are expected to drive builder confidence in the near term. Readings of 50 and above indicate   that more builders are confident about market conditions than not.

Freddie Mac reported lower average mortgage rates across the board with the rate for a 30-year fixed rate mortgage at 3.97 percent, a drop of 15 basis points from the prior reading. 15-year fixed rate mortgages had an average rate of 3.18 percent from the prior week’s reading of 3.30 percent. The average rate for a 5/1 adjustable rate mortgage fell by 13 basis points to 2.92 percent. Average discount points remained at 0.50 for all mortgage types.

If 30-year fixed rate mortgages can stay below the four percent mark, this could mean additional incentive for fence-sitters to become active home buyers.

Surprise: New Jobless Claims Hit 14-Year Low

Concerns over job markets and employment stability have consistently been of concern to home buyers in the aftermath of the recession. Last week’s jobless claims report brought encouraging news as it came in at 264,000 new jobless claims filed against predictions of 289,000 new claims and the prior week’s reading of 287,000 new jobless claims filed. This was the lowest number of new jobless claims filed in more than 14 years. Analysts said that lower numbers of weekly jobless claims indicate fewer layoffs, which should help boost prospective home buyers’ confidence in job stability.

Fed: Economy Growing at “Modest to Moderate Pace”

The Federal Reserve released its Beige Book report on Wednesday. This report contains anecdotes from business sources within the 12 Federal Reserve districts. The report said that the economy continues to grow at a modest to moderate pace and noted that potential concerns over the stronger U.S. dollar causing increases in export costs did not concern the Fed’s business sources.

Housing Starts, Consumer Confidence Up

September’s housing starts were above both expectations and August’s reading. 1.02 million starts were reported with the majority being multi-family homes. The expected reading was 1.015 million housing starts; this was based on August’s reading of 956,000 starts. This news is consistent with the drop in builder confidence for sales of new single-family homes.

The University of Michigan/Thompson-Reuters Consumer Sentiment Index for October rose to 86.4 against an expected reading of 83.5 and September’s reading of 84.6. This was the highest consumer sentiment reading in seven years. Analysts rained on the consumer sentiment parade by noting that recent jitters over Wall Street and concerns about Ebola outbreaks could cause the Consumer Sentiment Index to lose ground.

What’s Ahead:

Next week’s scheduled economic reports include the National Association of REALTORS® Existing Home Sales report, FHFA’s Home Price Index and New Home Sales. Leading Economic Indicators will also be released.

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3 Reasons Why Setting Your Listing Price is the Most Important Aspect of the Home Sales Process

Three Reasons Why Setting Your Listing Price is the Most Important Aspect of the Home Sales ProcessHave you decided to sell your home, perhaps to make an upgrade to a newer, larger house? Whatever your reasons for selling, you’ll have a number of decisions to make as you craft your listing and begin receiving offers from buyers but few are as important as your initial selling price.

Let’s take a look at three reasons why setting your listing price is the most important factor in your home sale.

Reason #1: You Can Scare Off Potential Buyers With A High Price

You’ll receive the majority of your buyer interest in the first few days and weeks after you place your home up for sale, so it’s critical that your price isn’t set so high that it scares a number of buyers off.

While some sellers believe that it’s better to price high and let buyers submit lower offers, this can actually work against you. It’s better to have your home priced fairly from the beginning as you can always refuse offers that you deem are too low.

Reason #2: Your Price Directly Impacts How Long Your Sale Will Take

If you’re interested in seeing your home sell quickly it’s going to be in your best interest to have it priced competitively. Buyers will be shopping around for similar homes in your community and if there are other listings with lower prices on the market you may find it takes you a while to get your home sold.

Also, if you do find a buyer who is interested they’ll likely try to haggle with you, which can extend the length of the sale by a week or more as you go back and forth to reach an agreement.

Reason #3: A Low Price Means Leaving Money On The Table

While pricing too high can cause issues with your sale, pricing your home too low isn’t going to benefit you either. While you’ll likely find that you receive a high number of offers very quickly, you’ll end up leaving some of your home equity on the table – equity that you could easily have realized as buyers would have been willing to pay the difference. That’s a good reason for choosing a Realtor with an excellent track record of obtaining top dollar sales prices on his or her listings, in the shortest amount of time possible.

In these parts – South Orange County, in Southern California, such a Realtor is Bob Phillips, of Realty One Group. Call Bob today at (949) 887-5305, or email to BobPhillipsRE@gmail.com.

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What’s Ahead For Mortgage Rates This Week – October 6, 2014

Whats Ahead For Mortgage Rates This Week October 6 2014Last week’s economic news included multiple reports on housing and the labor sector. The good news is that job markets appear to be stronger, with new jobless claims and the national unemployment rate lower. Unfortunately, housing continues to struggle in its recovery.

Pending home sales slumped in August and the S&P Case-Shiller Housing Market Index reports for July showed slower growth in home prices with 19 of 20 cities posting lower gains than for June.

Mortgage rates were mixed, but remained relatively steady.

Housing Reports Show Slower Price Gains, Suggest Falling Demand

The National Association of REALTORS® released data for August that showed that pending home sales dropped by 1.10 percent to a reading of 104.7 as compared to July’s reading of 105.8. Pending home sales indicate upcoming closings and mortgage loan volume.

Pending home sales fell by 2.20 percent year-over-year. Analysts attributed the drop in pending sales to lower investor participation.

Analysts said that as distressed home sales diminish, mortgage rates and home prices rise, investors are not buying as many homes Regional results showed fewer pending sales in all regions except the West, where pending sales rose by 2.60 percent in August. A reading of 100 in the pending home sales index is consistent with 2001’s average contract level.

S&P Case-Shiller Housing Market Index reports indicated that July home prices gained 6.70 percent year-over-year as compared to June’s year-over-year reading of 8.10 percent. Prices even dropped in San Francisco to its lowest reading since 2012. On a seasonally adjusted basis, July home sales fell by 0.50 percent in July as compared to June’s decrease of 0.30 percent. 19 of 20 cities showed lower rates of price growth in July.

Slower growth of home prices was viewed by analysts as potentially increasing demand for homes provided that mortgage rates stay low.

Construction spending for August fell by 0.8 percent on a seasonally adjusted basis. The good news here is that spending on residential construction dropped only 0.10 percent.

Freddie Mac Mortgage Rates: No Major Changes

According to Freddie Mac’s PMMS report, average mortgage rates were a mixed bag. The average rate for a 30-year fixed rate mortgage dropped by one basis point to 4.19 percent with discount points lower at 0.40 percent. The average rate for a 15-year fixed rate mortgage held steady at 3.36 percent with discount points unchanged at 0.50 percent. The rate for a 5/1 adjustable rate mortgage fell by two basis points to 3.06 percent; discount points rose from 0.40 percent to 0.40 percent.

Lower mortgage rates are seen as a potential stimulus for housing markets as more buyers may be encouraged to enter the market.

Jobs Reports Readings Improve, Unemployment Rate Drops

Job markets are showing signs of improvement according to data on weekly jobless claims and reports released by the Department of Commerce. Weekly jobless claims grew by 287,000 as compared to expectations of 298,000 new claims filed. The prior week’s reading was also higher at 295,000 new claims filed.

The Department of Commerce released its Non-farm Payrolls report for August with more good news. 248,000 jobs were added against expectations of 220,000 new jobs and 180,000 new jobs reported in the prior week. The national unemployment fell below the six percent benchmark in August with a reading of 5.90 percent, which indicates proof that the jobs market is improving.

September’s Consumer Confidence Index suggests that economic conditions continue to concern consumers. The reading for September was 86.0 against an expected reading of 92.3 and Augusts reading of 93.4.

What’s Ahead

There is no scheduled housing news for next week other than Freddie Mac’s weekly report on mortgage rates. Other economic news includes Labor Market Conditions Index, Job Openings, and the release of minutes from the last FOMC meeting, which is expected to reaffirm the Fed’s position that it doesn’t expect to increase the target federal funds rate for a “considerable time” after the Fed concludes its asset purchases this year.

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Saving on Your Property Taxes

Tax-Saving-Tips-252This is a recent blog by one of my preferred lenders, Kevin Budde, of Prime Lending. Kevin has been doing loans in South Orange County for over 40 years, and I highly recommend him and his team, for any type of residential lending services.

Many Baby Boomers are selling their homes and downsizing these days. A question that is becoming more frequent is, “How do I transfer my current property taxes to a home I wish to purchase?” Most everyone in the real estate industry is aware of Proposition 60/90 but to articulate the guidelines and to not give wrong information is difficult. I find myself referring clients to the County Tax Assessors Office website for the technicalities of the Propositions. 

I decided to furnish the basics below to you and at the very bottom the URL address for the Assessor’s office. This is good information for any of your client’s that are thinking of making a move. If they are unaware of the ability to save on property taxes you might want to share this with them.

prop-60-90-a

prop-60-90

http://ocgov.com/gov/assessor/programs/55plus#470

 

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