March was a Record but April was Better

The sellers in San Clemente couldn’t be happier.  Wow! 79 sales in tax month!  No one would have predicted that.  Sales have pulled ahead of new listings for the entire year and now inventory is very limited.  This is just the reverse of last May when there were 73 new listings and 58 sales.  People are flocking to San Clemente because the ocean-close properties are so much cheaper than other coastal cities. And San Clemente is so charming, traffic is much lighter than Laguna or Newport Beach, and the beaches are beautiful.  The days on market dropped to 122, new listings are flying off the shelf. And our old, tired listings are moving. Four of the homes that sold were on the market for a year or more.  Some of these older listings are short sales which just exhausted the buyers and the buyers cancelled escrow after months of waiting for the bank to act. Then the approval process has to start all over again and a new request for a short sale approval has to be submitted.  These applications have to contain the complete financial data of the seller.  Tax returns, bank statements, paystubs, letters from former employers verifying the termination or lay-off, and much more.

Sales Nearly Double the Number of New Listings for Last Two Months

The green columns tell the story.  Everyone is out there buying who can possibly afford to buy. New properties are moving quickly and old listings are finally moving too.  One condominium was on the market for 738 days, another for 427 or 301 days, but then the numbers drastically shrink. One residence was only on the market for ten days from the listing date to the close of escrow. People have to move very quickly here for that to happen.  There are inspections to be done, title records to be checked, homeowner association documents to review and disclosures to be made and reviewed.  Even the records at the title plant are not updated for 10 -14 days and there is a risk to purchasing a property too quickly.

25 Homes Sold in April

Twenty-five sales is about average for the last 12 months.  Interestingly the days on market has come down and you can see wealthy people are out there buying property.  35 Emerald Bay sold for $4.3 million, 1710 Ocean Way sold for $6.1 million and 325 Weymouth sold for $3.8 million.

Average Sales Price $1,655,298

You really need a budget of $1.6 million to $2 million to buy here.  But if you have the money, now is the time to buy!  This market is recovering and the beach properties always lead the way.  Let’s face it, the Pacific Ocean is beautiful.  Laguna Beach is an eclectic place, everyone feels comfortable here. Once you live here awhile, you realize some of the most unassuming residents are among the wealthiest.  They are not living here to impress anyone, they live here because they can wear their flip-flops 24/7 or dress up for the Performing Arts Center.

Median Price $1,230,000 was not exceptional.  What is remarkable is the average discount from the median asking price was 11%.  This means the middle of the market was very flexible with price.  The least expensive median price during the last 12 months was $875,000.

CNN Reports Record Low Interest Rates

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One of the beautiful beaches in Laguna Beach

Look at all the beach front condos.  Now let’s get to the prices.  There were only two sales but these were amazing residences.  31423 Coast Hwy #11 sold for $1,669,688 in just three months.  If you click on the link at the bottom of this post, and click on April, the listing will appear as an address, click on the address to see a picture and get the MLS number.  You can see all the pictures on the MLS and I have an MLS link on this blog in the right column.

59 Sales in April! A Record High for the Year

Fifty-nine sales! Wow! We have had an active 12 months but the last 4 months have been building momentum way past the last 12.  Now we are running out of inventory.  There are only 59 condos still on the market.  With just 17 new listings, we now have a real shortage of condos for sale.  Let’s hope more sellers get motivated to move or sell.  Last month, there were some really old listings sold. One was on the market for 529 days (nearly two years) and 6 of the 59 were on the market for almost a year to a year and a half.  The 529 day listing gave a 9% discount to finally sell it, but the other old ones stuck close to their asking prices.  On the average 148 days passed from the initial listing date to the close of escrow.

But next month will really be affected by the dearth of inventory.  We need more listings.  Sellers can be expected to start raising their prices.  If a buyer is really interested, they may have to pay over the appraised price.

View of the mountains from beautiful Aliso Viejo

While the latest monthly housing data have shown signs of a slight softening, NAHB Chief Economist David Crowe said this is more reflective of typical month-to-month volatility in the numbers and unusual seasonal factors than they are an indication of any significant downward trend in the broader housing market.

Crowe noted that numerous other fundamentals remain positive for housing at this time, including demographic factors (with pent-up household demand expected to ramp up and echo-boomers heading into their prime household formation ages), historically favorable mortgage rates that are not expected to move higher than 5 percent by the end of next year, more than 100 local markets currently listed on the NAHB/First American Improving Markets Index, and the fact that house price-to-income ratio has now returned to its historical average of about three-to-one versus the nearly five-to-one to which it had previously risen during the height of the housing boom.

However, he cautioned that housing still continues to face formidable challenges of its own — such as rising foreclosures, persistently tight lending standards for home buyers and builders and difficulties in obtaining accurate appraisals. Moreover, disappointing job growth numbers in March and uncertainty in the European economy are undermining prospects for a vigorous recovery.

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Buyers are Depleting Inventory – Only 41 Homes left on the Market

Look at all those green columns dwarfing the blue ones. Those are the sales swallowing up the new inventory. Homes are getting multiple offers and over-the-listed-price offers.  This is wonderful news for our sellers. They can celebrate, pack quickly and move on with their lives.  Most homes are sold in less than three months.  The average days on market was 130 but that included one for 382 days, one for 296 days and one for 261 days.  Remember when the inventory was averaging 261 days?  Those days are gone. In the last 12 months, 213 properties came on the market and 229 were sold according to the MLS Market Report firm.  At this rate, we will run out of houses to sell.

The Average Price Jumped to $597,462

 Only two months in the last twelve had average prices over April’s number.  The interesting part is that none of the April sales were over $1 million.  Usually at least one home will sell for that price.  Of the remaining inventory there are ten homes with prices exceeding a million dollars.  We will see if those sell this month. 

It is tough to qualify for a loan if you are an independent businessman or self-employed.  Banks want to see plenty of net income after deductions which is usually not the case for these people.  They take all the deductions they can to reduce their income tax and then the banks look at what is left and will not loan the money the buyer needs.  If you want to buy a residence, check with your accountant.  You may need to pay a little extra in taxes just to show the disposable income necessary to qualify for a loan.  After you get your house, then go back to deducting all the possible deductions and you will have a nice mortgage deduction too.  It will be worth it!

Median Price was an Affordable $540,000 in April

Most sellers sold their homes close to or above the asking price but there were a few who gave the buyer 5%-7% off the sales price to get the home sold.  Overall half of the buyers paid less than $540,000 for a home in Aliso Viejo.  Compared to the last 12 months, the median price is on the low side.

 This is a very desirable, newer area with a younger and more professional population by comparison with many older areas.  And they have the advantage of getting close to paying off the Mello Roos bonds in some tracts.  That will reduce their checks to the Tax Assessor.  Always good news!!

 

For a detailed look at each of the past twelve months and lists of the sold homes – Click here to see the report

Look at that green column! 23 Condos Sold in April

Off the charts!  Condo sellers in Dana Point can finally get excited.  2011 was so dismal but 2012 is shaping up to be a banner year.  With the exception of January,  every month sales exceeded new inventory but not like April. Twice as many condos sold as entered the market.  One really old listing finally sold. It was 34300 Lantern Bay #71 and it was listed for 700 days. Any longer and it would have qualified for Kindergarden. It was not cheap, of course. The sales price was $650,000, originally it was marketed at $819,000.  Going way back the sellers bought it for $1,150.000 in 2006.  This was not a short sale.