Irvine Real Estate Blogger

On February 18, 2009, President Obama announced his Homeowner Affordability and Stability Plan. The plan has two components to it–one offers homeowners who qualify a plan that would refinance mortgages that are greater than the current market value of their home or condo into a more affordable monthly payment thereby reducing the possibility of a future foreclosure.

The second component offers homeowners a way to modify their existing mortages into a housing payment that would enable the borrower to stay in their home/condo and avoid possible mortgage default and/or foreclosure.

Beware of Foreclosure Rescue Scams–Help is Free! Let me preface by saying there are many scams out there that prey on troubled homeowners. There are people who purport to be experts in loan modifications and ask homeowners to pay for their services when you can obtain all the information and help you need for free.

This is one reason why I prefer to pass along the real source of information, so that you, the consumer, can determine after reviewing the eligibility requirements of each of these government sponsored programs whether you are a candidate for either one or the another.

The following web site explains in detail each of the programs–the Home Affordable Refinancing and Home Affordable Modification–eligibility requirements and the information you will need to gather before you contact your mortgage/loan servicer.

Go to: http://www.makinghomeaffordable.gov/

If you would like to read the detailed report released by the U.S. Department of the Treasury on March 4, 2009:

See: http://www.ustreas.gov/press/releases/reports/housing_fact_sheet.pdf

Is there a place for Open Houses in a real estate agent’s marketing strategy these days? Elaine Carlson, of PalosVerdesSource.com, exploses this issue in her article entitled “Is the Jig Up on Open Houses? There is no short answer.

Open Houses can be a viable, valuable marketing tool under certain circumstances and in particular niche markets. Real estate is after all local, and buyers often like to check out neighborhoods and houses up close and in person without having to commit to using the services of a real estate agents in the beginning stages of their search.

Just as many buyers prefer to view homes first online, anonymously, and educate themselves before actually making contact with a real estate professional, buyers also utilize Open Houses as a way to familiarize themselves with those particular communities in which they may ultimately have an interest in purchasing a home or condo. (more…)

We lived in Tucson, Arizona when our children were infants, and, in the desert climate, we socialized around the pool. To ensure that our kids were pool safe, we enrolled them in a program that would help them survive in the event that they fell or found their way into the pool in an unguarded moment. The swim program taught babies 6 months to 6 years old to save themselves in an accidental water encounter. This was a first-step in trying to avert a tragedy.

In the Friday, May 30th edition of the Orange County Register, Michael Mello, in his article entitled “Take Steps for Safer Swimming,” sums it up in a few words: “Three seconds. One inch of water.” This is the time and the amount of water needed for an infant or toddler to drown. A kiddie pool holding water only an inch deep demonstrates all it takes to drown a small, unattended child.”

Were you aware that drowning is the leading cause of death in children under five? Fire officials urge homeowners to install multiple barriers, as well as other safety measures around pools and spas, such as fences with self-closing and locking gates, and net covers. Other approaches to pool safety include the following: adult supervision, barriers, and classes such as swim lessons and CPR.

The U.S. Consumer Product Safety Commission recommends multiple safety measures such as “pool and spa drain covers to help keep children from becoming entrapped and an alarm that will go off after seven seconds if a door to the back yard is opened by a child.”

Even if one doesn’t have children of their own, homeowners need to be mindful that their neighbor’s children can get into their yard, where the pool or spa may not have a cover or a fence.

Photo Courtesy of the Orange County Register On-Line, 05/29/08

For further information, please visit the following web sites:

http://www.abcpoolsafety.org

http://www.usla.org

http://www.swimforlife.org

http://www.choc.org/community/safetycenter.cfm

If you’ve watched Sabrina Soto on HGTV’s “Get It Sold”, you know that she takes a home that’s been languishing on the market, makes some changes, rearranges, spruces it up, stages it, and it sells… Even if you haven’t watched the program, a home that is well presented will sell faster.

Take a good look at your home… Is it ready for its debut–it’s entrance–in our current Buyer’s market? Would you buy it if it was for sale? In today’s market, it needs to stand out among the inventory. If not…

Here are some low-cost ideas:

• The Brush-Off: Freshly painted interior and exterior walls in neutral colors are appealing, and tell the prospective buyer that your home has been well maintained. Call your Home Owner’s Association (if you have one) for exterior paint brands and colors. There are several “green” paints–low Volatile Organic Compounds or VOC’s available for interior paint.
• A Place for Everything: Remove clutter from exterior and interior stairways, bedrooms, kitchen and bathroom counters. Observe the one-appliance kitchen rule: just one on the counter, whether it’s your coffeepot, toaster, or food processor. This says there is plenty of cupboard and counter space.
• Counter Proposal: Your kitchen should sparkle and give the impression of plenty of working space. Be sure the faucets don’t drip, and the built-in appliances work.
• It Makes Scents: Borrow a friend’s bread maker if you don’t have one. The smell of fresh bread is almost irresistible, and gives a warm welcome. Do not use floral room sprays; they make the buyer wonder what you’re trying to cover up.
• Take a Powder: Put away shavers, makeup, curling irons, hair dryers, etc. Shine bathroom tubs, sinks, fixtures, and mirrors, and put out fresh towels. The caulking around the tub/shower and grout around tiles should be free of cracks and dirt. A good way to clean the caulk is with a toothbrush and liquid sink cleaner.
• Plenty of Hang-ups: Neat and orderly closets reveal plenty of storage space is available. Dispose of unwanted or unneeded clothing to a favorite charity. Store boxes of files, holiday decorations, etc. in the garage or at a storage facility.
• Beauty by the Yard: Make a great first impression by having the lawn neatly mowed and edged, flowers planted (especially fragrant ones), bushes trimmed, and the yard of free of garden tools and toys (swing sets excepted).
• Doing your Homework: You will rarely recoup the dollars invested in major home improvements just prior to selling your home. Exceptions: upgraded kitchens and baths.
• Take a Good Look at Yourself: Would you buy your home if it was for sale? If not, use these low cost investments that will return greater dividends.

The key to selling your home in a reasonable time frame and maximizing your sales price, especially in today’s market where there are many homes from which to choose, is to prepare your home for sale before its debut. Remove the clutter, the personal effects and paint the walls in neutral colors. Create an environment that can suit many buyer’s tastes. By depersonalizing your home, buyers will visualize your home as their home, and it will be as good as sold.

Photo is Courtesy of HGTV’s “Get It Sold,” by Sabrina Soto

“Sex and the City,” the movie, opened Friday to the tune of $26.9 Million based on the strength of sales by women and their friends (the buzz) resulting in sold out shows.

Your home for sale is the equivalent of an opening–it has to have the right “buzz” to be included on the buyer’s short list. Whether or not you have a successful opening can impact how many dollars you may gain or lose in terms of the sales price of your home. You usually do not get a second chance to make that all important first impression.

Your house for sale has to entice the buyer. If you were meeting a blind date, you would not don an ordinary “house dress,” but rather you might slip into that killer Little Black Dress, and accessorize it, perhaps, with a pair of strappy Manolo Blahnik heels, the latest “it” handbag, and an alluring “come hither” scent–in other words you would be “dressed to kill.” Your house needs to be “dressed to sell,” when a prospective buyer drives up to the front of your home for sale. Does your house have that all important “it” factor?

If not, you would be well advised to obtain a makeover (and it doesn’t necessarily require an extreme makeover) prior to putting your house on the market for sale.

In her article entitled Staging is House Marketing, Marion Duffy aptly points out that “You want your house displayed so as to give shoppers an idea of how your home may fit into their lifestyle. This is staging. Staging sets your house apart from the houses on the rack or the rows of houses.” Indeed, your house needs to appeal to the emotions of the buyer.

In a related article entitled Intuitive Home Finding, Lynne Pope paints a picture of how a buyer perceives their home: “When you think of a home, you look into your heart and you picture it, a picture so clear you feel it in your soul, the place you’ve dreamt about and longed for, ” namely, your Ideal Home. Indeed, your home may well be compared to one’s perception of an ideal soul mate. The image arises from our dreams…Your house is now the star of the Silver Screen: Ready, lights, camera, action!

Photo is Courtesy of StarPulse.com

Long before the sub-prime mortgage debacle became a part of our common vernacular, Freddie Mac instituted a campaign entitled, “Don’t Borrow Trouble,” in which specific steps were put forward in order to avoid “borrowing pitfalls.” Education, of course, is the best defense against predatory lending practices. An important initial step in protecting families and their homes is understanding your rights and educating yourself in the home buying process.

If you are considering an Adjustable Rate Loan Program be an informed consumer by asking the following questions:
1. Ask what the initial interest rate will be (your start rate).
2. Ask how often the interest rate will adjust and the dates upon which the interest rate changes will occur.
3. Ask the name of index used to adjust the interest rate (e.g. Libor, COFI, etc.)
4. Ask what the interest rate spread will be or what your interest rate will adjust to when your rate change does occur.
5. Ask how often your interest rate will adjust.
6. Ask what the lifetime cap of the interest rate will be above the initial start rate.
7, Ask how many points you will have to pay (each point translates into a percent of the loan amount for which you are paying) and what your total fees will be.
8. Ask what your APR or Annual Percentage Rate will be (your interest rate plus the total cost of your loan)
9. Ask if there is a pre-payment penalty associated with your loan and what the cost will be (No, you do not want one!)
10. Ask as many questions as you need in order to understand the loan program you are obtaining. You should have received a written Truth-in-Lending Statement outlining the interest rate you were promised, along with all of the charges associated with the loan, at the beginning of the loan process. Don’t sign the loan documents if they do not appear to be correct.

For more information on the subject, click here

I usually make it a point to scan the Real Estate sections of the L.A. Times, the Orange County Register, and the New York Times at some point over the weekend. However, I overlooked an article regarding 10 zip codes in Southern California that actually experienced price appreciation in the 1st quarter of 2008 as compared with the 1st quarter of 2007. Thankfully I came across Elaine Carlson’s article in PalosVerdesSource.com entitled Hottest SoCal Zip Codes.

The numbers were based on at least 20 sales in each of the zip codes as reported by DataQuick Information Systems. In Orange County, Irvine’s zip code 92603, which encompasses the villages of Quail Hill, Turtle Rock (including Shady Canyon), and Turtle Ridge, experienced an 18.0% increase in the median sales prices for existing single family detached homes as compared to the 1st quarter of 2007, Newport Coast’s 92657 zip code had an increase of 27.4% in the median sales price, and Newport Beach’s 92663 zip code encompassing Lido Isle and Balboa Peninsula had a 66.8% in the median sales price as compared to the 1st quarter of 2007.

Why do “some markets sizzle, while others fizzle?” Proximity to the beach where demand is high and inventory is relatively low has a great deal to do with price appreciation. These coastal areas have buyers who are able to qualify for good fixed rate loans, whereas the interior part of the state had borrowers who were stretching to afford homes, many of whom fell victim to the sub-prime mortgage debacle. (See my article entitled Which Cities are on Top for Home Sellers in California).

To view the cities with the biggest losses, Click here.

Not all city of Irvine addresses are served by the Irvine Unified School District.

The question arises time and time again: If I buy such and such property in Irvine, will my child be able to attend X elementary, middle, high school? The answer is: Don’t assume anything! If you want your child to attend a specific school within the Irvine Unified School District, the best course of action is to check, and then, double-check again!

All too often, buyers do not verify the school boundaries prior to purchasing a home. They assume that if a particular school is within a few blocks of the property they wish to purchase, then it follows that the school is within the property’s school attendance boundary. Wrong! In fact, a school can be within walking distance of the property, and still be outside the school’s designated attendance boundary.

I’ve seen real estate agents make the mistake of inputing the wrong school in the multiple listing service. In so doing, they are unwittingly misleading prospective buyers. For instance, today I had a prospective buyer e-mail me regarding whether University High School is within the attendance boundary of the high-rise condos in the 92612 zip code. This would include the airport area’s mid and high-rise condos of Watermarke, Avenue One, the Plaza, and the Marquee–all of which happen to fall within the Santa Ana Unified School District, not the Irvine Unified School District. There are some buyers (and, indeed, even some real estate agents) who are under the assumption that just because these condos are located in the city of Irvine (92612), that they necessarily fall within the Irvine Unified School District’s attendance boundaries. Not so.

One other caveat: Be sure to check the attendance boundary changes for future years. Just because a school is located in an attendance boundary for 2008 doesn’t preclude the school from a future boundary change. Again, in the airport area, the Metropolitan neighborhood used to be within the Irvine Unified School District’s boundary. However, now the attendance boundary of the Metropolitan falls within the Santa Ana Unified School District. Similarly, the neighborhood of Las Palmas, within the village of Westpark, used to be within the University High School attendance boundary. A homeowner of a Las Palmas condo wound up selling her condo and moving to the University Town Center just so her daughter would be able to attend University High School. She sold her condo because University High was removed from the attendance boundary of Las Palmas a few years ago. To her chagrin, her former neighborhood was recently re-installed and is now again within the University High School attendance boundary.

Therefore, I always recommend that if parents are bent on having their child/children attend a specific school, then the best way to verify if a particular school falls within the desired attendance boundary is to go to the Irvine Unified School District’s web site and check. This is very easy do. Scroll down to Enrollment, and then over to Assigned Neighborhood Schools. Click on this and it will bring you to an area where you can type in the address of the property, and it will display the elementary, middle, and high school attendance area for that particular address. You may also wish to click on the Irvine Unified School District’s School Boundaries. The site also provides a future map indicating boundary changes.

Currently the attendance boundaries for University High School include the villages of Quail Hill, Rancho San Joaquin, Turtle Ridge, Turtle Rock, University Park, and University Town Center.
Better to be informed than sorry!

If you are a home owner looking to actually sell your home in this season of 2008 in the current Irvine real estate market, and not just hoping to sell, then pricing your home realistically makes the best sense–that is not at 2006 sales prices but at today’s comparable home sale prices. If the home is priced commensurate with the recent sales, then the home will sell.

The buyers out there, (and, yes, there are lots of buyers looking and comparing homes and prices) are savvy buyers. They are looking for the best deals. If there’s one thing of which Buyers are aware, it is the prices/values of homes and condos for which they have been looking–often for the better part of a year or more. Moreover, buyers are acutely aware of the foreclosure and short-sale market. These properties scream motivation–even if they are, in fact, a past buyer’s folly or mistake. That’s the buzz, and the buyers are sticking to it…at least that’s what we’re seeing.

Buyers are comparison shopping. Their antennae goes up when a new home comes on the market. Prospective buyers have frequented all of the comparable new homes around and have visited many Open Houses. Buyers are searching on the internet for those real estate web sites and blogs for active real estate listings and comparable home sales, or are seeking the advise of friends and family who may have purchased homes or read about properties for which the debt now exceeds the market value. Thus, buyers are very cautious about the real estate market in general.

Laurie Manny of LongBeachRealEstateHome.com correctly suggests in her article entitled, 8 Deadly Selling Mistakes, that overpricing a home may lead to the opposite result–ultimately a lower price–in other words, chasing the market down. Indeed, overpricing your home will send buyers off to look at and choose to purchase those homes that are reasonably priced in today’s market, leaving the overpriced home a bridesmaid, and never the bride. Moreover, chasing the market down not only can result in a greater loss in the home seller’s net equity, but may also could push a financially shaky seller into a short-sale or foreclosure situation.

On the other hand, homeowners who price their homes to sell can entice multiple offers and actually wind up selling the home for above the asking price–an anomaly in this market, but an increasing event. In her article of April 13th in the New York Times entitled, “Bidding Wars? In This Market?, Elsa Brenner, writes, of an owner in the Westchester area of New York who originally listed their house at $1.2 million, much less than they would have hoped for in better times, but, instead, the relatively low price drew three offers in five days. “In the end, the house sold for $1.35 million, which is what the asking price probably would have been in 2005, when the market was far stronger.”

It is also important to keep in mind most home sellers are, at the same time, home buyers –looking to either size up or down or, if relocating to a new city, purchase a home once they have settled in a new area. So, if the seller can get their home sold fairly quickly, then they can typically negotiate a better price on their new home purchase rather than having a contingency fettering their sale, or, perhaps, the lost opportunity to buy a great home value.

In an article in Monday, April 7th’s Forbes.com, written by Matt Woolsey, the author outlines the best cities in the country for home sellers. At first glance it was surprising to find that the top two cities named in the article are in California, considering all the doom and gloom the media has been reporting about in the housing sector: however, San Jose, CA, and San Francisco, CA were named #1 and #2, respectively, for home sellers.
The reasons outlined were as follows:

“San Jose’s tough regulatory measures make it difficult to overbuild. In addition, new home construction dropped 63% last year, while jobs grew by 1.2%. Home vacancies, which were already low at 1.6%, fell to a national bottom at 0.8%, helping make San Jose one of the country’s tightest markets.”

“Farther north, San Francisco’s conforming loan limit jumped from $417,000 to the maximum $729,750, which makes getting credit a simpler affair for many of the city’s home buyers. In 2006, the market felt a softening that pushed vacancy rates up to 2.4%, but a 56% cut in construction has cut vacancy rates in half. The increased access to credit, thanks to the new Fannie Mae and Freddie Mac limits, and the lack of available properties plays to sellers’ interests.”

The top 40 friendly seller cities on the list were analyzed and “ranked by its 2007 unsold vacancy rate, calculated by the U.S. Census American Housing Survey, and how much the market had tightened or loosened when compared with 2006 conditions.”

Next the construction starts were reviewed as tracked by the National Association of Home Builders in order to see if building starts would “compound or alleviate vacancy woes.” In addition, the Bureau of Labor Statistics was reviewed for job creation as a “way to measure the local economy’s ability to absorb or offset housing losses.”

Lastly, the degree to which new conforming loan limits from Freddie Mac and Fannie Mae will improve each market’s lending conditions was factored into the mix. “When Freddie and Fannie get more involved, lenders get the implicit backing of the Federal Government, something that softens the risks that have slowed lending elsewhere, as jumbo, or nonconforming loans, can be expensive losses.”

San Jose and San Francisco came out on top because they fit the profile of a sellers’ market–low inventory rates that were still shrinking, good job creation, a large scale cutback in new home construction and a boost in the credit market from new Fannie and Freddie loan limits.

On the other hand, in an article written on April 8th, in the Los Angeles Times, entitled Southern California Beach House Prices Remaining Afloat, Ronald White outlines the reasons why homes in the beach cities of the South Bay have faired far better than those located in the inland empire counties of Riverside and San Bernardino.

Moreover, Elaine Carlson, in her article entitled, Now You’re Talking…remarks that the areas of Malibu, Palos Verdes, and Newport Beach are doing even better than the 18 beach side zip codes that were included in the study by the Times for their relative affordability.

Fewer sub-prime loans were made in the coastal areas, where the buyers tended to have less trouble qualifying for good fixed-rate loans, said Stuart Gabriel, a finance professor and director of the Ziman Center for Real Estate at UCLA.

“The sub-prime problems are focused on lower-income and lower-credit borrowers who were stretching to afford homes. Those areas are very visibly and geographically concentrated in the interior parts of the state,” Gabriel said.

Again demand for homes in the beach cities are high, while availability of inventory remains low. Those areas of the inland empire that have seen the steepest declines in the price of houses (losses of almost half the value from the highs) are those areas in which there was unbridled building and development, and risky lending to those buyers who were lower-income and lower-credit borrowers who were stretching to afford homes.

On the other hand, “The individuals who had the income and wealth to own in the beach areas have not seen any significant decline in their situations.”

In an April 1st Day article entitled “Market Bottom Officially Reached at 2:34 pm This Afternoon; Impasse Between Buyers And Sellers Finally Resolved,” Kevin Boar, of 3OceansRealEstate.com, blogged about a property in Stockton, CA that had finally sold after going through five real estate agents, several thousand dollars in price reductions and 30 long months on the market, signaling that the absolute bottom in the housing market had indeed been reached at this particular hour on this appointed day, at which time we could all breathe a collective sigh of relief.
While written tongue and cheek, there is a great deal of truthiness to this, if I can quote Steven Colbert’s newspeak word. If the housing market is in the tank, then why are all these buyers pouring through Open Houses recently? Is it just curiosity? Or do that many people simply have nothing better to do with their free time on the weekends than to frequent Open Houses? (A cheap form of entertainment, maybe?) My take on this up tick in Buyer foot traffic is that:

1. Buyers intuitively feel down deep in their gut that the housing market has “bottomed,” or “corrected.” (Truth be told, Buyers all seemingly appear out of nowhere and disappear into nowhere as a group.)
2. Buyers are experiencing housing market withdrawal in what is coined in real estate speak as “pent up buying demand.” (There has been a house buying strike since the mortgage debacle of the summer of 2007, and the fence sitters appear to be getting antsy.)
3. Re-sale housing inventory has shrunk dramatically since last year at this same time. (Sellers who don’t have to sell have taken their homes off the market, and we are not seeing the re-sale inventory increase dramatically for this “springtime” of the year.)
4. New home builders have either opted out of the current market by postponing new building, while, at the same time, cutting existing new home prices to reduce their current inventories quickly.
5. Buyers are becoming increasingly aware of the new favorable lending guidelines, i.e., the temporary increase of the conforming rate loan limit (previously capped at $417,000) up to $729,750 through the end of 2008, while interest rates continue to remain attractively low (30 year fixed rates continue to hover around the 6% mark with good FICO scores (above 720).

So what does it all mean? Well my “gut feeling” tells me that Buyers have their ear to the ground. Buyers intuitively know when a new listing comes on the market, and are in tune with what they consider to be a “good buy/value.” Buyers know when a home is “over priced” or “priced-to-sell.” Buyers know when other Buyers are interested in the same property that they are interested in. Buyers know when a home looks and shows well, and is priced right, because Buyers today are well educated…have done their homework, and then some.

Real estate is, after all, local, and what we’re seeing in the Irvine, CA housing market is an increase in demand as evidenced by the number of houses and condos going into escrow (that is, selling), and a diminished housing supply for this time of year. Both of which should translate into higher homes sales and stabilizing prices.

Sounds like the impasse between Buyers and Sellers may be passe…yesterday’s news. And that’s the truthiness of the housing stalemate…it’s over. And that’s no April Fools’ joke!

Everyone has his/her own reason for moving from one place to another. Over the past century we have become an increasingly mobile people. We uproot ourselves and our families seeking a better life, reinventing ourselves.

We move for a job relocation. We move to improve the quality of our lives and of those of our children or grandchildren. We are looking for a vacation or second home. We are looking for a retirement community. We are looking to move near excellent schools for our children or future families. We are seeking to move close to a university environment. We are looking to move from a colder to a milder climate. We are looking to move from a large single family home into a condo, town home or high-rise. We are seeking to move from a condo or town home into a larger single family home. We are looking to move to a golf course community. We are seeking to move to a coastal or a beach community. We are looking to move to a safer environment. We are looking for cultural enrichment.

In short, welcome to Irvine, CA whose everyday motto is “another day in paradise.” Irvine, CA has a dynamic and healthy business environment. Irvine, CA has real estate catering to the taste of one and all: homes, properties, condos, high rise and low rise town homes, second homes, vacation properties, golf course communities, beach communities, and retirement communities.

Welcome, home to Irvine, CA where lifestyle and real estate meet and fulfill the wants and needs of people of all ages in which one and all find their very own piece of paradise.