South Orange County Blog from Bob Phillips

National Association of REALTORS: Existing Home Sales Exceed Projections

sold-homeIn Tuesday’s post I focused on our local – Orange County, California – housing market. Today I have news about   the National housing market. It looks better than most pundits anticipated. It’s not great, but it’s not bad, either.

According to the National Association of REALTORS®, existing home sales surpassed both May sales and expectations for June. Sales of previously owned homes increased by 2.60 percent in June and reached a seasonally adjusted annual level of 5.04 million sales. June’s reading was the third consecutive monthly increase  in sales of existing homes and was the highest reading for existing home sales in eight months. Existing home   sales remain 2.30 percent below the June 2013 reading of 5.16 million sales of existing homes.

Analysts projected sales of 5 million existing homes for June against May’s initial reading of 4.89 million sales of previously owned homes; the May reading was later revised to 4.91 million sales. Lawrence Yun, chief economist for the National Association of REALTORS® said that market conditions are becoming “more balanced,” and    noted that inventories of existing homes are at their highest level in over a year and that price gains have slowed to much more welcoming levels in many parts of the country.

Housing Market Headwinds Declining

After a particularly harsh winter and lagging labor reports, analysts forecasted lower annual sales of existing homes for 2014 than for 2013. Labor markets are stronger according to recent labor market reports and a declining national unemployment rate. Steady work is an important factor for families considering a home purchase; as labor markets improve, more would-be homeowners are expected to become active buyers.

Housing markets are not without challenges. In recent unrelated reports, the Federal Reserve has noted higher than anticipated inflation may cause the Fed to raise its target Federal Funds rate in the next several months. Gas and food prices, important components of consumers’ household budgets continue to rise and could slow save toward a home for some families. Steve Brown, president of the National Association of REALTORS®, said that first-time and moderate income buyers continue to deal with affordability due to increased FHA costs and tight mortgage credit. Relief may be in sight as a slower pace of home price growth suggests that more buyers may be able to afford homes.

FHFA House Price Index Reports Gain in May Home Sales

FHFA released its May index of home sales connected with mortgages owned or backed by Fannie Mae and Freddie Mac. The index posted a month-to-month gain of 0.40 percent in May and a year-over-year gain of 5.90 percent year-over-year. FHFA said that increased sales were driven by a 9/60 percent increase in sales in the Pacific region and that average home prices remain 6.50 percent below April 2007.

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4 Tips To Lower Homeowners Insurance For Your Home

4 Tips To Lower Homeowners Insurance For Your HomeWith the prices for everything skyrocketing these days, every penny counts. This includes your homeowner’s insurance costs. If you’re thinking of buying a home and need homeowner’s insurance, here are a few tips on getting quality insurance for a fair price:

Tip #1: Shop Around

Ask family and friends about their homeowner’s insurance. Check the Yellow Pages, the National Association of Insurance Commissioners (NAIC) and the state insurance department.

Other places to shop for insurance include consumer guides, insurance agents and online insurance quote services. Don’t just look for lower prices, however. You need a fair price for the services you need.

Tip #2: Raise Your Deductible

The deductible is how much you have to pay before the insurance company starts to pay a claim on your home. The higher the deductible, the lower the premiums. If you live in a disaster-prone area, your policy may have a separate deductible for specific types of damages.

Make sure, when reading the policy, you carefully go over damage-specific information.

Tip #3: Use The Same Insurer

Some companies will take five to fifteen percent off your premium if you buy more than one policy from them. If the insurer offers homeowner’s, auto and liability coverage, you stand a chance of having a lower premium than if they only offer one or the other.

The key is to make sure that the combined price is lower than if you bought them separately.

Tip #4: Improve Home Security

By installing a sophisticated fire sprinkler system and a fire/burglar alarm that rings the monitoring stations, some companies will cut your premium as much as fifteen or twenty percent.

For a smoke detector, burglar alarm or deadbolt locks, you can usually get at least a five percent discount. Check with your insurer to make sure that the system you’re installing will lower your premiums, though; the systems aren’t cheap and not all of them qualify for a discount.

Read everything carefully before you sign, to make sure the policy covers your insurance needs without adding on hidden fees. Even a little money saved can go a long way toward making it easier to live within your budget.

Ready to buy a home? Let me help you find the perfect home and get it at the best terms and price.

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It’s Spring Cleaning Time! Kick Clutter to the Curb With These Home Cleaning Tips

It's Almost Spring Cleaning Time! Kick Clutter to the Curb With These Home Cleaning TipsSpring is here, and it’s time to get your home in order!

Spring cleaning can be fun and easy if you follow some general guidelines, which are sure to get your home ready for the nice weather and looking as beautiful as the weather is about to. Kick the winter clutter to the curb with these spring cleaning tips.

Start With The Closets

Spring is here, and winter wear is no longer needed! It’s time to box up all of the winter boots, jackets, gloves, and scarfs until next season.

Starting your spring clean with your closets is a good tip, and will get you prepared for the rest of the process while creating more space and organization in the bedrooms of the house. This is also the perfect opportunity to create a “give away” box full of clothes that are no longer being worn.

Reorganize: Bookshelves, Countertops, And Desks

Reorganizing is the perfect way to prepare your home for the spring and summer. Good clutter is common in many homes, like useful books that are interesting for guests to read or decorations that offer a sense of warmth and character to the home.

So pick up the fallen and leaning books on the bookshelf, reorganize your kitchen countertops, and de-clutter your home office. For busy home offices, purchase organizational tools like additional shelving units, compile and file away old bills and receipts, and toss anything else that is no longer needed or of any use.

Get Scrubbing: Removing Stains And Odors

Getting ready for spring means removing the stains, dirt, and odors that accumulated in your home over the colder months. First, you should start with wiping your painted walls with a wet cloth to remove scuffmarks and dust.

If the water doesn’t do the trick, you can try mixing a little dishwashing soap in with the bucket of warm water. You may even want to repaint certain high-traffic areas, like entrance halls and the baseboards around the front door.

Next, you can go for the floors. Having a fresh carpet cleaning is sure to kick-start your spring cleaning; this may be something that you wish to have done by a professional. To make the most out of your carpet cleaning, have it scheduled for when the kids are out of the house for a while, and wait until the worst of the weather is over.

Make sure the kids take their shoes off inside, but get them to leave their socks on to avoid natural oils from getting into your freshly cleaned carpet. Vacuum area rugs in the same fashion, and mop the kitchen and bathroom floors at the same time you clean your hardwood floors.

Give the showers, bathtubs, and toilets in the house a good scrub. In the kitchen, empty the fridge and freezer of their contents, and give the inside a good scrub down as well.

Once the tidying, de-cluttering, and scrubbing are done, you will get to enjoy the fun part of spring cleaning: spring decorating! And while you’re at it, why not buy yourself and your home some spring flowers for a job well done.

If you’re doing a big spring clean this year because you’re looking to sell your home, these tips will get your home ready for any buyer’s eyes.  Give me a call or shoot me an email to discuss other ideas for making your house ready for the market.  This next 4 months is the best selling season of the year.

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What Does The Future Hold For The Security System In Your Home?

Posted in Around The Home, Home improvement, Home safety, Home Security, Real Estate Trends by southorangecounty on June 7, 2013

What Does The Future Hold For Home Security SystemsImagine walking into your home and turning off the alarm, locking your doors, opening the windows and starting your coffee maker, all with a few taps of your finger on your smart phone?

What if you had a home security camera that you could monitor from anywhere and a motion sensor that would send you an email when your kids come home from school? What if you could open your blinds or unlock your home for a visitor, even from halfway around the world?

The technology that powers our home security systems is getting more and more sophisticated and in the future, our homes will be more responsive than we could ever imagine.

Rather than a simple line of defense that keeps out burglars, it will be a completely integrated and custom designed automated system that responds intelligently to your needs.

Here are a few of the upcoming technology innovations:

Smart Home Technology

At the moment, prototypes are being developed for integrated home security systems that have individual Internet protocols that can address everything from a fridge to a window to a door.  Even your home appliances, like your refrigerator, air conditioning systems and lighting systems may be able to be managed remotely through a smart phone.

This connectivity essentially gives everything in your house an Internet address, so that you can control them and monitor them digitally. Once the system is linked up it can be controlled remotely by Blackberry, Apple or Android.

The 2013 Consumer Electronics Show in Las Vegas this year showcased a number of smart phone apps and devices designed to control everything within your home so that you can master the household with the click of a button.

The Future Is Still On Its Way

Although the technology is being developed, there is still a long way to go until we all live in automated houses like on The Jetsons. One underlying and yet unsolved issue is the security systems inability to function in a power outage or with bandwidth and connectivity challenges.

There are also many different conflicting operating systems, setups, standards and approaches that will need to be worked out before the dream of a fully automated South Orange County home can become a reality.

Even so, the technological advances being made in home security and management systems are impressive and exciting to learn more about.

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Existing Home Sales Rise As Home Inventory Shrinks

Posted in Housing Analysis by southorangecounty on February 28, 2013

Existing Home Sales Numbers ReleasedHome sales rose for the 11th consecutive month according to the National Association of REALTORS® Existing Home Sales Report for January.

This is the first time this has occurred since the period between July of 2005 and May of 2006.

National Average Home Price Up Over 12% Annually

The national average home price in January was $173,600, which is 12.3 percent higher than for January 2012. 

Calculated on a seasonally-adjusted annual basis, Existing Home Sales data is compiled using completed sales of single family homes, condominium units and co-ops.

January’s existing home sales rose by 0.4 percent to 4.92 million sales nationally as compared to December’s revised annual rate of 4.90 million sales nationally.

National sales of existing homes increased by 9.1 percent as compared to January 2012.

Regional Home Sales Support Housing Recovery

Regional home sales for January suggest more good news for housing markets. Seasonally- adjusted annual home sales rose in all regions of the U.S. except in the West, while median home prices rose for all regions.

Northeast: Home sales were up by 4.8 percent in January to 650,000 sales, which is 12.1 percent more homes sold than for January 2012. The median home price rose by 2.4 percent from January 2012 to $230,500.

Midwest: Annual home sales in January increased by 3.6 percent to 1.16 million; this is 17.2 percent higher than for January 2012. The median home price in the Midwest rose to $131,800, an increase of 8.6 percent as compared to January 2012.

South: Home sales were up by 1 percent to 1.96 million sales in January; this represents a 14.0 percent increase in annual sales as compared to one year ago. The average home price for the South was $152,100, an increase of 13.4 percent over January 2012.

West: Home sales fell by 5.7 percent to an annual rate of $1.15 million. This represents a 5.7 percent decrease in sales from one year ago. The median home price in January was $239,800 and was 26.6 percent above the region’s median sale price for January 2012.

A falling inventory of homes for sale may be holding back buyers; the inventory of homes for sale fell to a 4.2 month supply from December’s 4.5 month supply of homes. A 6-month supply of homes is considered average.

Home Prices May Rise Quickly

While the spring home buying season will likely see more homes come on the market in South Orange County and the surrounding area , economists caution that home prices could rise faster than expected due to increasing demand. A seller’s market could be in the making.

Mortgage rates also appear to be rising; now may be your best time for gaining the advantage of relatively low home prices and mortgage rates.

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Is Downsizing The Next Big Trend In Homes?

Posted in Real Estate Trends by southorangecounty on February 27, 2013

Z Glass Micro Dwelling by Tumbleweed Tiny House CompanyThe real estate market has started to recover from the downturn over the last few years in many areas of the country, and more people are thinking about buying a new place to live.

With this new energy in home buying, an interesting trend seems to be developing.  

Instead of going for larger homes, which was an overwhelming trend in years past, many people are choosing micro-dwellings.

What is a micro-dwelling?

There are a number of different styles of micro dwellings being built.  This is a relatively new concept for homes in the United States and individual creativity abounds in this space.

The most common factor in micro-dwellings are their size. They tend to be less than 500 square feet of living space.

Some densely populated metropolitan areas like San Francisco and New York City are planning apartments as small as approximately 300 square feet!

Think this shrinking of real estate space applies only to multi-family dwellings?

Think again. You can also find tiny single-family homes — some of which are even portable.

If you’re still not convinced, read on to discover a few of the factors drawing buyers to smaller living spaces.

A lower price tag – The cost of these homes can be significantly less than that of standard homes, which means you may not have a large mortgage over your head for the next 30 years.

More free time – A smaller house means less cleaning. Who isn’t on board with that idea?

Less clutter – If your home is less than 500 square feet, you have to get rid of everything you don’t absolutely need.

Mobility – Many of these tiny homes are equipped with wheels or built-on trailers, so moving is no longer the stressful and expensive undertaking it used to be. Simply close the door and go!

Smaller is greener – It makes sense that if your home is smaller, you will automatically reduce your energy consumption, which means more money in your pocket every month and a smaller carbon footprint.

Micro-living might not be for everyone.  It does offer an option for those who are just starting out, those who love to travel, or those nearing retirement.

And even if you don’t opt for the smallest living space, reducing energy usage and saving money are ideas most anyone can take to the bank.

Photo Credit: Tumbleweed Tiny Homes

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Why Buying Real Estate Can Be A Smart Financial Move

Posted in Personal Finance by southorangecounty on February 15, 2013

Owning Real Estate Can Be A Smart Financial MoveBuying South Orange County real estate doesn’t just give you a place to live; it can also be a very smart financial move.

This is because owning a home can be like having a forced savings account, which you are committed to for the long term.

Consistent Saving On Autopilot

Sometimes saving money on our own each month is difficult. It takes a lot of discipline to maintain a consistent savings plan.

However, paying your mortgage every month means that you are paying down the principal and working toward eventually owning the property outright.

In the early years of the mortgage, the payments will go primarily to the interest on the loan.

But over time, the portion of your payment dedicated to principle increases, which accelerates paying off the entire mortgage.

Make Yourself Wealthy Instead Of Your Landlord

In the long term, owning your own home may be a much better financial arrangement than renting a home. No matter how long you pay monthly rent, you will never own the real estate that you are living in.

When you are renting your home, it may also be possible for your landlord to increase your rent every year.

On the other hand, paying a mortgage on your real estate means that every month you get closer to owning the home.

In fact, most home mortgage lenders offer a fixed interest rate mortgage. This gives you a sense of control over how much you are paying every month, year to year. 

In a fixed rate mortgage, every mortgage payment pays down a portion of the principle on your mortgage loan.  In many cases this builds equity in your property and increases your net worth.

It’s a good idea to check with a professional mortgage lender to get an idea of the most up-to-date programs available.

Real Estate May Increase In Value Over Time

Over the years, your home might appreciate in value. Many experts say that the average home value increase each year over longer stretches of time, although this will vary according to the area you live in, the current economy and other factors.

Your home’s value may very well fluctuate throughout the years, but history has shown that over the long term, buying a home can be a very beneficial financial decision.

Understanding the benefits of home ownership, including the potential financial upside of purchasing your own home, can be an excellent way to further your overall personal financial plan. 


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A rising tide in luxury home sales in Orange County

A rising tide in luxury home sales in O.C.

High-end home sales have spiked. DataQuick projects a 48 percent year-over-year increase in 2012 for Orange County residences selling for $2 million and up. Luxe sales through November already have surpassed every year since 2007.

    • image1-A rising tide in luxe home sales


A recent buyer looking to snag a Newport Coast estate home had a vision: She wanted to install an elevator in an already spacious walk-in closet. While weighing an offer, she decided her wardrobe would span two separate floors.

“She just wants this massive closet,” said Realtor Lance Fogel of Keller Williams Realty in Newport Beach. “The closet would be 1,700 square feet. That’s bigger than most homes.”

Article Tab: auction-beach-oceanfront-
The historic Villa Rockledge, a sprawling, oceanfront, Mediterranean Revival compound in Laguna Beach, went on and off the market for years before being scheduled for an online and on-site auction in December. The home sold for $14 million — a few days ahead of the auction date.

Luring buyers with fancy ideas and big bank accounts is no problem, Fogel says. The real challenge these days is finding enough luxury homes to put them in.

High-end home sales have spiked. DataQuick projects a 48 percent year-over-year increase in 2012 for Orange County residences selling for $2 million and up. Luxe sales through November already have surpassed every year since 2007.

In November, 64 homes sold in Orange County for more than $2 million, compared with 29 homes in November 2011, said Mark Boud, owner of Real Estate Economics, a consulting firm based in Irvine.

“The whole market has picked up in terms of sales volume,” Boud said, “but the sales volume increase has been especially high for luxury housing sales.”

Nationwide, sales of homes $1 million or more jumped 51 percent in November compared with a year earlier, the National Association of Realtors reports.

Several factors are fueling the high-end trend:

The rush to avoid the increase in the capital gains tax. It goes up this year from 15 percent to 20 percent for individuals earning over $400,000 and couples making more than $450,000. Luxury home sales shot up at the end of 2012 as affluent buyers tried to take advantage of lower tax rates. The luxe homes inventory has since been dropping drastically, Philip White, Sotheby’s chief executive officer, told CNN last week.

The shortage of houses. The lack of inventory plaguing the $700,000-and-under market in Orange County also turns out to be an up-market phenomenon. The inventory of homes for sale at $1 million and up fell about 40 percent in November 2012 compared with November 2011, Boud said. “There is nothing for people to buy,” says Fogel, who specializes in homes selling for $4 million and up. “I have two dozen buyers right now. I just do not have (houses) for them.”

He and other Realtors say bidding wars are breaking out on multimillion-dollar properties.

•The influx of foreign buyers. “We’re getting a lot more international demand, from the Middle East, from China, from other Asian countries. That’s a big reason for the increase,” Boud said. “The U.S. dollar is so low, it’s almost like a fire sale.”

Fogel put it this way: “The international buyers are finally pulling the trigger. The last few years, they were window shopping.”

•The attention-getting auctions. In Laguna Beach, for example, the historic Villa Rockledge, a sprawling, oceanfront, Mediterranean Revival compound, went on and off the market for years. The property, stretching across a 30,000-square-foot oceanfront bluff with a main home and seven adjacent guest villas, once was listed as high as $34.5 million. An on-site and online auction was set for December. The goal: connect with both a local and global marketplace. The auction’s marketing campaign led about 250 real estate agents and more than 450 qualified buyers to tour the property, said Todd Wohl, vice president of Premiere Estates, the auction company. Several buyers submitted pre-auction offers, and Villa Rockledge sold at $14 million – a few days in advance of the scheduled auction date.

•The surge in “jumbo jumbo” loans. Lenders distributed $148 billion of private jumbos – which exceed amounts that banks loan to borrowers and then sell to government agencies – over the first nine months of 2012. That’s up more than 23 percent from the same period a year ago, according to Inside Mortgage Finance, a trade publication.

“We’re already estimating that private jumbo volume will hit $200 billion or more for the whole year. It’ll easily be the best year for private jumbo lending since 2007,” said Guy Cecala, publisher of Inside Mortgage Finance.

“Lenders have been more willing to make these mortgages,” he said. “These loans are very profitable for them. It’s a way for a small bank to compete with a Wells Fargo or a Bank of America. Most lenders are willing to make the jumbo mortgages now as opposed to five or six years ago. Even credit unions are making jumbo loans in California. That is something you never saw before.”

Extravagance is in vogue again in some quarters. In the fall, The Wall Street Journal debuted “Mansions,” a weekly section devoted to high-end real estate. A recent cover included a spread on castles (coinciding with the Season 3 debut of TV’s popular “Downton Abbey”), an article on finding vacation homes in remote “final frontiers” and a feature on high-end, high-powered houseboats.

What’s ahead?

This year, the luxe market faces some challenges.

U.S. tax rates are going up for higher-income households, and financial advisers say it could mean some buyers will take a pass on vacation home purchases.

Another wild card in the new year would be the possibility of lawmakers trimming or eliminating the mortgage interest deduction on second homes, said Jed Kolko, chief economist for

“Scaling back the mortgage interest deduction isn’t likely to have a big impact on homeownership or on home prices in general,” he said, “but (it) could reduce home values at the high end because the benefits of the deduction are greatest for owners of more expensive homes and in upper tax brackets.”

Some Realtors say very affluent homebuyers are immune to the types of financial problems besetting other shoppers, and that the high-end market weathered the economic downturn relatively well. But Realtor John Evans recalls 2008 as the year that the ultra-luxury market in Coto de Caza “came to a screeching halt.” However, he noted, many luxe sellers can afford to keep on waiting for better times, however long it takes.

Among his listings is a house he’s had on the market for five years. The sellers own it outright, he said, and “they could hold it from now until doomsday.

“At the high end,” he said, “they can afford to carry.”

Staff writer Jeff Collins contributed to this article.

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Don’t Leave Tax Credits On The Table (And How To Get Them Back If You Already Filed)

Posted in Real estate, taxes by southorangecounty on April 8, 2010

Taxes are due April 15 and if you’re among the millions of Americans who wait until the last week to file, below is a linked video interview that could help you reduce your federal tax liability. 

Originally broadcast by NBC’s The Today Show, the 4-minute piece reviews various tax credits and deductions, plus some recent tax law changes.  A few of the topics covered include:

  • Tax filers receiving larger “personal exemptions” in 2009 versus 2008
  • Unemployment income recipients being required pay taxes beyond the first $2,400 received
  • The “first time” home buyer credit being extended to non-first time home buyers for up to $6,500

The interview also talks about how taking a parent, child or other family member into your home may change your tax filing status and reduce your tax liability.

Even if you’ve filed your taxes already, watch the video above. You may find that you missed a potential deduction. If that’s the case, consider filing an amended return with the IRS to recapture the credits you left on the table.  Most times, the benefits of re-filing will outweigh the costs of doing it.

Be sure to talk with your tax professional for personal tax advice.

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Pending Home Sales Soar In February, As Expected. Buyers Are Everywhere.

Posted in home affordability, Real estate by southorangecounty on April 7, 2010


Pending Home Sales (August 2008-Fed 2010)As expected, the Pending Home Sales shot higher in February, boosted by the federal home buyer tax credit’s April 30 deadline.

Versus the month prior, February’s index rose 8 percent but remains well off the highs set last October.

For today’s home buyers and seller, the Pending Home Sales Index is an important measurement. This is because a “pending home” is a property that is under contract to sell, but not yet closed.

According to the National Association of Realtors®, 80% of homes under contract close within 60 days, historically. Therefore, a higher Pending Sales figure in February projects that April’s Existing Home Sales will be higher, too.

If you’re a home buyer today, no doubt you’ve noticed the extra market activity.

On right-priced homes, multiple offer situations are more common; sales prices are settling closer to listing price; Days on market is falling. These are the signs of a buyer-heavy market.  It drives home supplies down and home prices up.

It’s a good time to be a seller, in other words.  Especially as buyer activity looks poised to peak.

When the home buyer credit faced its last expiration in November 2009, we saw a pattern of buyers rushing to beat the deadline.  There’s no reason to expect that won’t happen again. And as it does, Pending Home Sales should continue to climb. Average home sale prices should rise.

Home buyers may find it smart to go under contract sooner rather than later. Pending Home Sales is a warning shot.  Higher home sales figures are ahead.

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