THE ECONOMY MAY BE SPUTTERING, BUT THAT'S GOOD FOR REAL ESTATE

Here is the real scoop on what's happening in the real estate market.  First of all, don't just stand there...BUY!!  The whole reason the median price of a single-family property increased so rapidly the past 60 days, (more on prices in the next paragraph), is because interest rates jumped more than a full percentage point.  Between that increase and sellers demanding greater increases than the market could bear, sales slacked off in the price ranges most susceptible to interest rate increases, namely $250,000 to $750,000.  Without the volume of those sales to temper the million plus purchases, the median price shot up.  Many families were forced to the sidelines with the interest bump.  Now, they can return, because in case you didn't hear... rates are back down, low...really low.  Also, during the past 60 days, more property has hit the market, inventory levels are much healthier, creating more competition for sellers.  This will naturally keep prices in check to a normal appreciating market.  Don't miss out on the great rates again.  Go out and find your dream home!  The Federal Reserve has made it clear in recent articles and blogs that the U.S. economy still needs support from its low interest-rate policies, because it is growing only moderately.  After its policy meeting, the Fed also announced that it will continue buying bonds to the tune of 85 billion a month to keep those rates low and encourage borrowing and spending.  The question is:  does that mean through first quarter next year?  Or possibly second quarter?  If buying a family home, to raise your family, spend your quality time, now may be your time.

WHAT WERE THE EXACT NUMBERS?

According to all sources, including,  the LA Times, the OC Register and DataQuick, the So Cal area's home price gains for August and September are the highest since '05.  Before we get too excited, let's remember what we discussed in the last section of this newsletter.  The sheer number of deals in the upper price range and cash transactions in the multi-million dollar range had a lot to do with the increase.  Lack of inventory also drove up prices.  Expect them to soften somewhat because of the increased inventory we wrote about.  The number of sales in Orange County for September (the last complete month available) is 2,916.  That number was up 8.9% from the previous month year over year.  The median price for all properties was $550,000 up 22.2%.  However, the median price for a single-family was $612,000 and that is a 20% increase from the same month of 2012.  The median price for a condo was $380,000 and that was up 24.6%.  The volume for the number of sales for single-family was flat with 1,807 sales, but condos rose 16% in volume to 836.  The median price was highest for new homes at $696,000 but the sales were a paltry 273.

WATCH OUT FOR REAL ESTATE SCAMS ON VACANT PROPERTIES

A recent article in the OC Register reported a 5 year prison sentence for a man forging deeds on vacant properties and then renting them and collecting those rents.  The unfortunate part of this scenario is for the homeowner who may have moved out of a distressed property or simply moved and had not yet disposed of the existing property and now have to deal with tenant's rights, as well as a forged deed.  Fortunately, the ALTA Residential title policy protects against after close of escrow forgery.  Not all title companies issue this policy or do so automatically without Western Region Exceptions, but Fidelity National Title does.  Always check to make sure you receive this superior title policy when you are purchasing a home.

A LITTLE TENDER, LOVING, CARE GOES ALONG WAYS TO INCREASE YOU SALES PRICE

There are many cheap, easy (ok maybe a little effort involved), ways to help buoy your asking price when you sell your home.  Here are a few.  (For even more info, go to www.kcmblog.com)  First off, we are mainly talking about curb appeal, and a few cosmetic things inside your home.  Curb appeal is huge, because buyers always look at homes initially based on their visual, emotional, reaction to the home.  Make sure your roof is repaired and will pass for a one year roof certificate.  Gutters should be cleaned and repaired.  Invest a small amount of cash in really cool numbers for your address on your home's facade.  Windows and trim should look newer, with no cracked paint.  Wash your home's face, get the dirt and grime off it and add $10,000 to your sales price!  Upgrade your front door to a snappy color or etched glass or trim.  Replace old light fixtures for a more modern, with it look.  Brush up your landscaping with a few new plants or flowers.  Inside, think about replacing carpet with tile (if time or money), otherwise get your carpets cleaned.  These types of changes require mainly, time, a little money, but could result in better and more offers for you.  This is the last report for the year.  

AS MORE INVENTORY HITS THE MARKET, JULY SALES JUMP

Southern California home sales surged in July, rising to an eight-year high for that particular month, as there were more properties for sale.  Prices did not increase significantly from the previous month, but for July, year over year, there was a 26% increase in pricing.  This is the seventh month in a row, according to DataQuick, that prices have risen 20% in year over year comparisons.  That being said, housing is just at the 2004 levels, far below the high of 2007, just prior to the pricing crash and housing slump.  What is interesting is that people have already forgotten these encouraging numbers and were noticing the significant slowing of new sales for August.  Let this column be the first to encourage the consumer not to be discouraged.  August has always been notoriously slow compared to the spring season.  June is slow because of the advent of summer; graduations, weddings, early vacationers.  August is slow with heavy vacationing, the coming school year, and families getting ready for one or the other, or both.  Exacerbated this year, by many school districts staggering their start dates, August appeared to be one long back to school month.  Having said that, look for September to be stronger than usual, because so many schools did start earlier, allowing people to return to routine and start to think about the fall selling period.  There are many advantages to selling in the fall.  Less competition for buyers, so they have more selection, and because of the tight inventory this year, sellers should also find themselves in decent position.   There is frequently more flexibility on close of escrow time frames and an easier time getting to see those properties.  Buyers and move up sellers should not wait too long, read on for what may be in store for interest rates... This question is asked and followed immediately with the comment, "maybe I should wait for them to come back down."  The fact that interest rates have been at historic lows for so long, may cause some to forget that they have been held there artificially.  One mustn't be lulled into the common myth that after a quick hike, they will settle back down.  Although rates will remain fantastic, all agree for at least another year, 3 1/2% is likely not coming back unless you get a 10 year fixed rate loan, or buy it down through escrow.  In fact the following entities all agree rates will rise: 1)The Mortgage Bankers Association  2)Fannie Mae  3)Freddie Mac  4)National Association of Realtors.  How much?

FANNIE MAE PUTS TOGETHER SOME PROJECTIONS FOR SALES, PRICE, AND INTEREST RATES (NATIONAL OUTLOOK)...

The following projections are for 4th quarter 2013 versus 2nd quarter 2014.

Housing Sales -- 2013 - (in thousands) 5,592  -- 2014 - (in thousands) 5,794

Prices -- 2013 - $189,000  -- 2014 - $213,000

30 Year Mortgage -- 2013 - 4.6%  -- 2014 - 4.8%

WHAT WERE THE ACTUAL NUMBERS?

Orange County saw a total number of sales of 4,402; this includes resale single-family, condos, and new homes.  That was a change of 42.6% upward from the previous July (the most recent complete month available).  There were 2,851 single-family resale homes, 1,283 condos, and 268 new homes.  The median price for all of Orange County, for all housing types combined was $539,500 and that is an increase of 19.9% from July 2012.  Resale single-family median price was $611,000, with condos coming in at $380,000 and new home median price was $706,000. All of So Cal (Ventura, Los Angeles, OC, San Bernardino, Riverside, and San Diego counties) had sales totaling 25,419 which was up in volume 23.50% and the median price for So Cal was $385,000, up 25.80%, both comparing July 2013 with July 2012.

5 ESSENTIALS A REALTOR MUST HAVE FOR THEIR CLIENT

1) Tell the client the truth about price.  Whether buying or selling, it is wise to know what the market will bear, and what price reveals about motive on both sides of the transaction.  2) Understand the family's timeline.  When and how are very important in serving the client.  3) Remove Challenges - There are many during the course of a transaction, and all must be explained and overcome.  4) Help with Relocation.  Whether across town or across the country, every available resource will be made available to assist the client.  5) Get the home sold.  This is what a real estate agent does.  Never lose sight with all the hype of search engines, the Internet, social media, etc.  Get the home sold.  For the best price possible with the least amount of hassle.  Done.