WAIT UNTIL YOU HEAR THIS STATISTIC...IT'S A DOOZY.

This is a real estate newsletter.  It goes without saying that there is always an advantage to selling or buying in almost any market, depending on personal need and motivation.  But right now??  A staggering 96% of Americans currently looking in today's market, say home ownership is "very important."  It is particularly high for women and Gen X and Gen Y.  Another 74% of those polled said, "interest rates are at historic lows and now is a great time to buy."  But let's look beyond the hype of those who are enthusiastic, to see if there are other signs that So Cal is in an upward trend and that the recovery is more than momentary.  We don't have to look far.  The end of April and beginning of May have given us lots of ammunition.  First off, nationally, solid job gains have eased apprehension about the recovery.  The U.S. economy added a solid 165,000 jobs in April.  Unemployment scooted down to a four-year low of 7.5%.  Does anyone else remember when it was double digits?  Not only that, but the job gains were higher in February and March than originally thought, and the gains came despite a global slowdown.  The Orange County Register noted that if you track the three major moving companies, collectively the van lines fell 9% in moves out of California, comparing 2011 with 2012, the first drop since 2009.  Plus in 2012, the state added 296,000 jobs, the nation's biggest job boost, by the way, and unemployment in the state fell to 10.5% from 11.8%.  All in all, this means not only are people feeling better about their financial situation, they are better.  This paints a rosy picture that explains tight inventory and so many buyers out there.  Add three other factors: 1) low interest rates.  2) Pent up demand.  3) back to the survey, 46% of prospective sellers feel the need to find another house first, creating a big blockage of homes and 43% are waiting to make bigger profit.  There is definitely some buyer gridlock happening on the housing front.   Good ways to avoid this are be ready to buy and be prepared to offer your highest and best because you will most likely have stiff competition.  Sellers will be able to peruse through the offers.  Writing a letter to the seller, explaining why you want the house and what it means to you and your family is another great tool.  It isn't always just about the money, believe it or not.  Finally, some people still feel some skepticism over the recovery.  Is it too much, too fast?  Let's remember, prices may have risen sharply compared with the last 6 years, but this is real money this time, real loan qualifications, real down payments, real appraisals.  Prices could level off, if interest rates rise, or if more supply hits the streets.  But the people who already bought, could afford it, and will be sitting with a home whose price may have fallen, but are making a fixed payment at 3% interest.  They are not going to default and they are not going anywhere.

HOW WERE THE NUMBERS FOR THE FIRST QUARTER 2013?

The overall median price for the first quarter was $485,000, a 22% gain.  Resale homes came in higher at $540,000, an upward tick of 18.7%.  Condominiums median was $325,000, a 27.5% rise.  New homes, although much lower in volume were higher in price at $667,500, climbing 20.4%.  The total volume of all homes sold was 7,746.  There were 5,018 single-family resale, 2,203 condos and 525 new homes.  All numbers were higher than 2012.  Specifically for the month of March, there were only 108 homes that made it to a trustee sale auction/foreclosure, and only 574 Notices of Default recorded.  Indeed, CoreLogic reports that Orange County's foreclosure rate fell to less than1% in February.  Those that are 90 days or more delinquent dropped to 3.3%.

WHY DO PEOPLE BUY HOMES

The real estate blog Keeping Current Matters wondered about that and reported some recent reasons from a Gallup Poll.  Not all the reasons are financial.  In fact, below are the 5 most compelling reasons to buy, financial/non-financial.  First let's look at financial: 1) See owning as an investment  2) Chance to build equity and credit  3) Smarter than renting  4) More cost effective (3% interest and leveraging money)  5) Financial security/stability.  And now, non-financial:  1) Belief in home ownership  2) Don't want to rent  3) Better for family  4) Ability to do what you want with the property  5) Pride of ownership.  Gallup went on to give results that 8 of  10 of all people own or plan on owning property.  Here is their own quote regarding their results; "Our data on home ownership provide strong support for the idea that the American Dream of owning a home continues to be alive and well."  Finally, people were asked, regionally, where they thought prices were headed.  The results for the West?  62% said prices were going up.  25% said they would stay the same.  12% said they would go down.   What do you think?  Historically? Always up.  For more interest on Gallup polls, visit their website, www.gallup.com.  

CALIFORNIA IS FOR SALE...SORT OF

Let's put it this way, California hasn't looked this good to buyers in 8 years.  All of us who live in the Golden State, and who own or have owned property, have borne the brunt of a grueling recovery.  Actually, it was a market in free fall, that caused all kinds of pain, wrecked havoc not just in our fair state, but the shot heard round the world.  But a lot has changed in the last 8 years.  Part of the pain of a recession is that there seems no way out but to just grind it out.  Time, stamina, and determination have been local themes to Californians and in fact citizens of real estate everywhere.  Now we find builders are back in a big way, inventories are at historic lows (and by low, try less than half of the top of the 2006 market), money is cheap, and our state especially, is drawing buyers from all over, particularly cash buyers.  In fact, according to DataQuick, one in three Orange County buyers in 2012 paid cash.  Not surprisingly, the number of deals-- greater than 10,000, was the highest since California's last down market of 1992, twenty years ago exactly.  Why this insistence on history repeating itself?  Some would say it is because real estate is cyclical.  Others would say it is because people never learn that what goes up must come down.  Cycles do happen in real estate, and the cause for each generation's ups and downs do differ.  But germane to the process is a bubble, expanding for that economy's purpose, driven by that unique component of that expanding market.  But purely speaking, it is supply and demand driven.  The fuel to the fire this last time around was free loaded lending, irresponsible at best, and many would argue borderline illegal at worst.  Recovering from that has been painful and difficult for not only sellers and buyers, but the professionals left behind to deal with the cleanup of the heyday.  It is safe to say that we have today, a much healthier housing market, real lending standards, and the current pace of selling is based on legitimate pent up demand, from both move up buyers, first time buyers, and investors who still recognize the bottom of a market, although quickly rising.  They are coming in with cash from all over the world, some to stay in the market, holding properties as rentals, some still trying to "flip" properties to the many buyers out there, and some buying luxury second homes.  Read on and you'll learn some interesting information on current numbers, sales, foreclosures, and tips on buying and selling, and why the perfect time to do both is right now!

WHAT ARE THE ACTUAL NUMBERS?

The last full month of numbers available is December.  The total number of sales was 3,070.  That number is up 19.4% from December of 2011.  The median price of homes rose in Orange County 9.2%, which outpaced the country's uptick of 5.5%.  There were 2,010 total single-family resale transactions, 796 condominiums and 264 new homes that closed escrow in December.  The rise in new homes was 31% from the same period a year ago, and watch for that number to expand rapidly over the next 5 years.  The total number of Notices of Default for all of So Cal for the fourth quarter was 20,879.  Compare that to the same quarter of 2011 and that number jumps to 34,013.  Orange County's number plummeted 49.5% from 4,297(fourth quarter 2011) to 2,169 for 2012.  A point of interest: million dollar home buying reached a 5 year high in 2012.

FIVE REASONS TO LIST YOUR HOME NOW

The first reasons to list now jump out at you... 1)Demand is high--everyone has been waiting for this moment, so perfect a combination is low interest rates, and a bottomed out market.  2)Supply is low--just not enough to go around.  Your home has a multiple audience, and that's a good thing.  3)New construction is just under way.  Your home has a head start in the fact that it's ready to go now.  A resale home in competition with a shiny, bright, brand new home, will frequently lose out.  List now, while that competition is still low.  4)Interest rates--Does anything else have to be said about 3.5% ??? It won't last forever.  The higher interest rates go, the more buyers are priced out of your homes price range-- that means less competition and fewer multiple offers and that means less $$$ for your home.  5)Timelines are shorter--the pipeline is not as full this time of year.  Shorter escrows mean less time for things to go wrong.  And that's a good thing.

FIVE REASONS TO BUY NOW

1)Prices are on the rise.  The Home Price Expectation Survey polls 100 economists, investment strategists and housing market analysts.  All report to expect rising prices for the next 5 years.  2)Mortgage rates will increase.  They are being kept artificially low to keep our economy moving.  Inflation is a concern and is hovering nearby.  They can't stay low forever.  3)Rents are continuing to skyrocket.  And you can't deduct your rent.  Interest deduction on your primary home remains one of the very best write offs for the average tax payer.  4)New Mortgage Regulations to be announced--6 regulators, including the Dept. of Housing and Urban Development, the Office of Comptroller of the Currency, and the SEC are currently drafting the new Qualified Residential Mortgage (QRM) rule.  It will concern minimum down payments and minimum FICO scores.  Buying could get a lot tougher.  5)Timelines will be shorter.