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OC Market Update - June 2014

Orange County Real Estate Market Update June 2014

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kendra stevens
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123 views1 page

OC Market Update - June 2014

Orange County Real Estate Market Update June 2014

Uploaded by

kendra stevens
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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As we launch into the summer home-buying

season, homebuyers are getting the wind


at their backs again. While theyve been
frustrated by strict lending standards since
2008, theres hope on the horizon that
paying for a loan will be less expensive
and loans will be slightly easier to obtain.
Long-term Treasury rates have fallen to 2.6
percent, which is causing mortgage interest
rates to drop. Alongside better rates, home
prices are reaching a plateau in many areas,
allowing rst-time and move-up buyers more
opportunity.
More important, regulators that oversee
the Federal Housing Administration and
government-sponsored entities Fannie
Mae and Freddie Mac agreed to
make mortgage credit more available
to homebuyers.
HUD Secretary Shaun Donovan just
announced a new four-year pilot program
called HAWK (Homeowners Armed With
Knowledge) that would reduce the fees
borrowers pay to obtain FHA-guaranteed
loans. In exchange for completing a credit
counseling course, these borrowers will
have their upfront mortgage insurance
premium cut by half a percentage point
and their annual premium will reduce by
10 basis points.
Mel Watt, the new director of the Federal
Housing Finance Agency (FHFA), said he
would not lower the maximum loan limits
for Fannie Mae and Freddie Mac, currently
$417,000 in most markets. This is good news
for high-cost areas such as California where
conforming loan limits can reach $625,500.
Easing mortgage restrictions could help many
rst-time and lower income homebuyers in
California where home prices and housing
sales are rising and affordability is declining.
In April 2014, home prices rose 3.2 percent
to $449,360 the highest level since
December 2007.
Year-over-year, the median home price in
California was 11.6 percent higher than the
$402,830 recorded in April 2013. Meanwhile,
sales volume is down seven percent, largely
due to still-low supplies of homes for sale.
In Southern California, housing sales rose
more than usual in April over March, observed
housing data aggregator Dataquick, but
remained seven percent lower than the year
before. Sales volume has fallen on a year-over-
year basis for seven months, but April marked
the smallest decrease since last October.
Dataquick analyst Andrew LePage said, If the
inventory grows more, which we consider
likely, its going to make it a lot easier for sales
to reach at least an average level, which we
havent seen in more than seven years.
Southern California housing sales volume
is 17 percent below the 24,133 average
number of homes sold in April, but 10
percent better than March sales volume.
Median home prices in Southern California
climbed to $404,000, which is 13.2 percent
higher than a year ago.
Looking forward, it is likely that we will
see a more moderate level of price increase
throughout the rest of the year, and further
improvements in sales in the spring home
buying season, said C.A.R. Vice President
and Chief Economist Leslie Appleton-Young.
A slower, less frenetic pace in sales volume
and home prices is a good thing and not
necessarily a sign of a declining market.
Rising inventories will give consumers more
choice and the ability to make decisions
without being as rushed, creating a more
balanced market for buyers and sellers.
YOUR MARKET UPDATE | AT-A-GLANCE
Southern California Sales Volume Improves As Sellers Test the Market
2014 BHH Aliates, LLC. An independently operated subsidiary of HomeServices of America, Inc., a Berkshire Hathaway aliate, and a franchisee of BHH Aliates, LLC. Berkshire HathawayHomeServices and the Berkshire Hathaway HomeServices symbol are registered service
marks of HomeServices of America, Inc. Equal Housing Opportunity. This report is published February 2014, based on data available ending 12/31/13 from Trendgraphix, Inc., unless otherwise noted. Data maintained by Trendgraphix, Inc., Sandicor MLS and/or CARETS MLS
may not reect all real estate activities in the market. Information deemed reliable but not guaranteed. Copyright Trendgraphix, Inc. 2014. CalBRE# 01317331
June 2014
ADVI CE FOR BUYERS
With credit easing and mortgage rates
dropping, now is a good time to buy a
home. Its clear that regulators want to
make it easier to buy a home, but that
could change with a booming economy.
Incentives will be taken off the table.
If youre an entry-level buyer, look into
the HAWK program and see how much
you can save in borrowing costs.
ADVI CE FOR SELLERS
Home prices are still rising by the double
digits, but the pace of gains is beginning
to slow down. Buyers are experiencing
sticker shock with over two years of year-
over-year double-digit price increases and
little inventory to choose from. In those
circumstances, buyers tend to be more
exacting and aloof. If you are pricing
your home to sell, make sure your
homes location and condition live
up to its asking price.

Looking forward, it is likely that we will see a more


moderate level of price increase throughout the rest of
the year, and further improvements in sales in the spring
home buying season.
- Leslie Appleton-Young, Vice President and Chief Economist, C.A.R.

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