Growing Demand and Higher Home Sales

SoCal-based financial information company CoreLogic recently offered its real estate market forecast for 2016 using their widely cited Home Price Index (HBI). Much like other forecasters, CoreLogic expects a rise in home sales and prices next year, as demand for housing continues to grow.

According to this report, “the improved macro-economy has brightened the financial outlook for many Californians and enhanced their sense of financial security.” As of this year, home buying activity has the potential to lift Californian home sales to a level not seen since 2007 (before the housing market collapsed). Prices are also expected to rise faster than inflation, albeit slower than last year, in 2016. Popular opinion among industry professionals is that strong demand will drive prices up in 2016, but at a more steady cadence than 2015. In essence, 2016 could see additional but smaller home-price gains in California.

Slowly & Cautiously: Rate Hikes

Next week The Federal Reserve may decide to raise rates. But just what does this mean for increases down the road given the state of our current economy?

Chairwoman of the Federal Reserve Janet Yellen, has reiterated in recent press releases that the economy won’t be able to sustain higher interest rates in the coming years. Officials from the Fed expect to proceed cautiously before raising rates again. Other countries that have tried raising rates in this past decade have since lowered them back. It is the Fed’s belief that the current state of the economy is such that it can sustain a modest raise, if only for the foreseeable future. The median forecast among 17 officials in September showed they expected the rate to reach 1.375% in December 2016 and 2.625% in late 2017. That would put them on track to raise rates four times next year and five times in 2017 (source: Jon Hilsenrath).

CBS News states, "It may seem counterintuitive, but when the Federal Reserve finally gets around to raising interest rates, the impact on mortgage rates should be negligible. After all, the last time the Fed was hiking, from mid-2004 to mid-2006, mortgage rates rose only a small amount, half a percentage point. Federal Reserve Chair Janet Yellen has signaled that the central bank plans to soon boost the federal funds rate -- which banks charge each other to lend funds -- likely at its next meeting in December. After that, she has indicated that the Fed will increase the fed funds rate only gradually, perhaps a quarter-point at a time. But few borrowers realize that the Fed's impact on longer-term rates, such as those for home mortgages, is muted to nil. In fact, "15- and 30-year mortgage rates could as easily go down as up," said Jason Lina, lead advisor at Resource Planning Group in Atlanta." 

Mortgage Apps Decline: Mortgage Rates Ease

Results of its Primary Mortgage Market Survey® by Freddie Mac, showed an average 30-year fixed mortgage rate declining slightly leading up into this Thanksgiving holiday. The average 30-year fixed rate mortgage hasn't budged above 4 percent since the week of July 23rd, which has helped affordability for prospective homebuyers in wake of increased home prices.

This behavior is the result of low levels of inventory in many markets. Mortgage applications however have been a bit of a mixed bag in the later part of November. The holidays have already put a split in market data as application activity was reported down by nearly 3.2 percent. This data includes adjustment for that week's Veterans' Day holiday. The Refinance share of all mortgage applications increased very slightly, nearly .01 percent. The seasonally adjusted Purchase Index dipped 1 percent from the previous week but rose 5 percent on an unadjusted basis. An interesting time to say the least, but leaves opportunity for seasonal gains before the new year.

(data according to the The Mortgage Bankers Association’s Market Composite Index.)

First-time Buyers Have Not RSVP’d to the Recovery Party

On Thursday the National Association of Realtors said the share of first-time buyers is at the second lowest level in over 30 years. The 2015 Profile of Home Buyers and Sellers reveals a home buying market driven by repeat buyers within two income households. Historically first time buyers constitute nearly 40 percent share of primary home purchases but according to NAR's survey this trend has declined for three consecutive years to 32 percent.

There are several reasons why there should be more of these buyers in the market. These reasons include low interest rates, healthy job prospects for college graduates, and the increasing costs to rent. However there are many obstacles slowing first-time buyers down. 

Increased rental amounts paired with current home prices are diminishing the ability to save for a down payment. This is coupled with low inventory for new and existing-homes in this buyer's price range. 

31 is the median age of a First-time buyer, which remains unchanged since 2013. This home buyers median income was $69,400, up $1,100 from 2014. The typical first-time buyer purchased a 1,620-square-foot home (1,570 in 2014) costing $170,000. With the median amount of student loan debt for all buyers at $25,000, it's likely some younger households with even higher levels of debt cannot afford to save for an adequate down payment or at the very least, have decided to put off buying until their debt is more manageable.

The Result of a Positive Jobs Report

Friday’s favorable job report is a positive, albeit scary lead into potentially higher mortgage rates. The Federal Reserve could very well raise interest rates sooner than later. While we’ll have to wait until December 15th & 16th, it’s important to move now if you’re at all hesitant about locking in the best rate possible.

With the change incoming, there’s a list of fundamental questions consumers will begin to ask their Loan Officer, like: why do interest rates matter and does that mean for the typical family purchasing a home? While interest rates rise, responsible buyers will most likely still enjoy the same level of access to low rates as well as loan programs. Banks, as it often happens, will likely demand higher interest payments from lesser qualified borrowers, but still approach the market aggressively. 

"From a consumer standpoint, even after a potential rate hike, rates will remain at historically low levels. Borrowers need to realize that mortgage rates moving from the 3s to 4s is not the end of the world, and that the affordability index remains very high." said Louis Navellier, chairman of money management firm Navellier & Associates in Reno. 

The question we should all be asking is: should rates rise, who will the clear winners be? Home sellers for one. “Though it's a bit counterintuitive, higher interest rates could actually be good for home sales at the beginning of any period of rate increases. "It may cause a flurry of activity as buyers look to get in a new home before future rate hikes hit," said Whitney Fite, President of Angel Oak Home Loans in Atlanta.” Shoppers with good credit are second. “As long as you have a good credit history, you should still expect to see 0% APR promotional deals at your local car dealership or furniture store, said Greg McBride of Bankrate. The terms may vary slightly over time, for instance moving to 0.5% instead of 0% flat or with financing for 12 months instead of 18 months, he adds. But "those with good credit or who shop around, will always get attractive promotional offers," McBride said.”

5.1%, the Positive Growth of Home Prices in the Month of August

The pace steadily rose in August from the same time last year. It’s a sure sign that the housing marketing is improving in spite of an overall slowdown in our economy.

The Standard & Poor's/Case-Shiller 20-city home price index rose 5.1% in the 12 months ending in August, according to figures released Tuesday. That's up from a 4.9% pace in July. 

Home prices have risen at a 5% pace for the better part of this year, which economists define as more sustainable than last year's double-digit gains. This can be attributed to a few specific factors: three years of solid hiring and historically low mortgage rates have enabled more Americans to buy homes. That's helped by lifting sales of existing homes nearly 9% in just the past year. 

“Sales of existing homes jumped 4.7% in September to a seasonally adjusted annual rate of 5.5 million. That's a reassuring sign that the housing sector has so far been insulated from weaker growth overseas that is slowing growth in the U.S. manufacturing and energy sectors.”

Application Volume Up, Down, Up, Down...

The Mortgage Bankers Association said today that applications during the week of October 23rd decreased at roughly 3.5% -- adjusting seasonally from the previous week.

Granted the accounted for data increased 7% on an unadjusted basis, taking into account for Columbus Day. While this news is not shocking, the Refinance Index decreased 4% from the previous week, remaining the same in comparison to the week prior at 59.4%. Applications for government backed mortgages also tapered off slightly from higher levels last week. The share of FHA decreased from 14.3% to 13.7%. 

Is now a good time to refinance? Yes. For more homeowners, it’s still a good time to refinance. Interest rates have risen from the record lows we witnessed a couple of years back, but mortgages remain incredibly cheap in comparison. Reach out to your loan officer today to go over your situation to see if there is room to save money.

All-Cash Sales Down to 31.3%

CoreLogic reported a decrease in the share of all-cash home sales in June over the previous year. This accounted for 31.3% of the total sales during the month compared to 33.9% in June 2014 and was down 0.7% point from May.

It’s important to note also that CoreLogic says the share of cash sales has fallen each month since January 2013 -- signalling a much anticipated change in market trends. Up to this point cash purchases were most common for real estate owned (REO) properties at 57% of the total and were the only category in where cash sales increased year-over-year. The sales of existing homes had a 30.8% cash share followed by short sales at 28.7%. Only 15.6% of newly constructed homes were sold for cash. 

What does this mean for a buyer who needs a mortgage? It could mean a lot of things, not the least of which is less of a battle for inventory that does exist. It’s important to remember, especially in California, the influx of all-cash buyers has been steady, making it harder to purchase. There’s hope that this talking point will give more buyers who are looking to get a mortgage a fighting chance at achieving their dream of owning a home.

As Inventory Slides, Are Pending Home Sales to Blame?

The volume of pending home sales dropped a bit. Summer cooled off after strong numbers in May and June whereas July numbers, while slightly smaller, remained in relatively positive territory.

In August however, the National Association of Realtors® (NAR) said its Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings for home purchases, was down 1.4 percent from the previous month. Analysts had expected that the index would hold at July's half percentage point gain. NAR stands to believe that August sales represent a healthy level of activity, continuing what is now a 12-month streak of consecutive year-over-year gains.

121 Emerald Bay - Laguna Beach, 92651

Luxury Property + Private Beach

 

  • Price: $5,999,800    

  • Bedrooms: 5    

  • Bathrooms: 5

  • Living Space: 4,403    

  • Lot Size: 0.14 acres

  • Year Built: 1992

This beautiful Laguna Beach home, located on the much desired ocean side of Emerald Bay, is just a minute walk from the sands of Emerald Bay's private beach. This custom built home, designed by renowned architect Ade Collie, is a must see, especially for the discerning buyer who understands and appreciates quality. Inside the 24 hr guard-gated community, the home boasts 5 bedrooms, 4.5 baths, soaring 10' and 12' foot ceilings, in addition to a formal living and dining room, as well as a fully equipped gourmet kitchen. The main living areas, located upstairs, are designed with an open floor plan to take advantage of the wonderful ocean views. Additional amenities include custom hand chased hardware throughout from P.E. Guerin, New York, hand painted wallpaper from de Gournay, London, authentic fireplaces from Paris and walnut hardwood floors from Richard Marshall. All this and much more in a home that is located in a unique enclave of upscale coastal properties. Emerald Bay has long been known as one of the premier, private and most exclusive guard-gated communities in Orange County and the Southern California Riviera. Experience Emerald Bay's lifestyle and all that it has to offer for your entire family - you won't be disappointed.

1060 Maertzweiler Drive - Placentia, 92870

Just minutes from the Alta Vista Country Club.

OPEN HOUSE
5/3/2015
12pm - 4pm

 

  • Price: $899,000    

  • Bedrooms: 5   

  • Bathrooms: 4

  • SF: 3,100   

  • Lot Size: 5,553

  • Year Built: 2002

  • HOA Fee: $40.00

Located in the private Alta Vista South neighborhood, this home is just minutes from the Alta Vista Country Club. The opportunities are endless when you combine an exceptional location in Placentia, an outstanding open floor plan, and an absolutely beautiful interior. Guests are greeted with a stacked stone entryway that leads into the living room and formal dining room. Both rooms feature sky-high ceilings, travertine floors, crown moldings, an abundance of natural light, and sleek wall cut-outs. The recently remodeled kitchen has custom maple cabinetry, granite countertops, tumbled travertine floors, high-end built-in stainless steel appliances and it opens up to the family room. The family room has a cozy stacked stone fireplace and recessed lighting throughout. Upstairs you will find the beautiful master bedroom with a huge master bathroom. The updated master bath has dual vanities, a jacuzzi tub, and a luxurious shower. Upstairs you will find ample storage space, an individual laundry room, and spacious bedrooms. This home also features a lovely entertainers backyard with a large BBQ island and a shaded patio. Some additional features include: dual zone ac/heating units, surround sound audio system, water softener, and epoxy garage floor.

3711 North Hermosa Place- Fullerton, 92835

Simply wow. This custom Sunny Hills Estate has over $300,000+ in upgrades.

 

  • Price: $2,299,000    

  • Bedrooms: 6    

  • Bathrooms: 6

  • Living Space: 5,644    

  • Lot Size: 0.53 acres

  • Year Built: 1991

This is a truly amazing, custom Sunny Hills Estate with over $300,000 + in upgrades. This gorgeous, single-story, cul-de-sac home has a plethora of amenities and stunning details throughout. Demonstrating excellent curb-appeal, the gated front of the home features an enormous drive-way that is perfect for hosting many guests, or parking your extra large RV! Walk through the grand entryway and you'll be greeted with soaring beamed and vaulted ceilings, travertine floors throughout, and pool views thanks to the large glass doors plus windows. The spacious gourmet kitchen is impressive w/custom cabinetry, granite countertops, and stainless steel appliances. Just off the kitchen there is a custom dry bar, and a large private office. There is also a chef's kitchen that leads into your very own theater room! Each bedroom has it's own spacious bathroom. Step outside to see the breathtaking backyard and it's sparkling pool and private spa behind the with waterfall. The abundant patio space is perfect for entertaining. Other features include a bose sound system, master suite with an uprgaded bathroom, tons of closet space, a custom built outdoor fireplace, and much more! Award winning schools nearby Laguna Road Elem, Parks Jr. High, and Sunny Hills High School.

2913 San Juan Drive - Fullerton, 92835

Welcome to the San Juan tract.

 

  • Price: $899,800    

  • Bedrooms: 5    

  • Bathrooms: 3

  • Living Space: 3,600    

  • Lot Size: 0.46 acres

  • Year Built: 1964

Located in the tranquil San Juan tract within Sunny Hills, this home features outstanding curb appeal and an expansive lot. In 2006 this property was completely renovated. This home has 3 lovely fireplaces including one in the master suite upstairs. The master bedroom is large with ample amounts of natural lighting from windows and skylights plus it's own private loft. In the master bathroom, you can enjoy multiple shower heads in the shower or soak in the bathtub. The separate family room is perfect for relaxing by the fireplace and seeing your large backyard views. The formal dining room has an exposed brick fireplace and a French sliding door to your private back patio with a view of the sparkling pool. The galley kitchen features a high-end 8 burner professional stove, and stainless steel appliances. The massive backyard has endless possibilities. It's perfect for a relaxing day, enjoying your privacy as you bask in the sun, or for hosting events. Close to Sunny Hills High School, Downtown Fullerton, and much more!

1724 Celeste Lane - Fullerton, 92833

Prime Fullerton location. Amazing Sunny Hills neighborhood. Oh, and it's loaded with upgrades too.

 

  • Price: $749,800    

  • Bedrooms: 3    

  • Bathrooms: 3

  • SF: 2,092    

  • Lot Size: 8,470

  • Year Built: 1964

This home on a corner lot in Sunny Hills features numerous upgrades and great curb appeal. This home is in a prime Fullerton location - it's just steps away from local hiking trails plus award winnings schools such as Sunset Lane Elementary, Parks Junior High, and Sunny Hills High School. The home features a formal entry that leads into the living room with large double pane windows with plantation shutters, stunning hardwood floors, custom shelving units, and crown moldings. The dining room get's plenty of natural sunlight while offering easy backyard and kitchen access. The fully upgraded kitchen features custom white cabinetry, pristine granite counters with a lovely tile backsplash to match, stainless steel appliances, recessed lighting and plenty of room for storage. Downstairs you will find the living room with tile floors, a custom brick fireplace, sliding glass doors leading to the backyard, and an updated powder room - this room can easily be converted to a 4th bedroom. The spacious master bedroom features a cozy stone fireplace, ample amounts of natural lighting, and dual closets. The master bathroom has a dual granite sink, travertine floors, and a luxurious glass enclosed shower. The backyard is enormous and perfect for hosting.

924 N. Highland Ave. - Fullerton, 92832

Warm and spacious, trust us, you will love this Golden Hills gem.

 

  • Price: $749,800    

  • Bedrooms: 5   

  • Bathrooms: 4

  • SF: 2,846    

  • Lot Size: 9,583

  • Year Built: 1971

Warm and spacious 5 bed 4 bath home located in the beautiful Golden Hills neighborhood. As you walk up the stunning driveway you can't help but take in how charming this home truly is with it's custom stone accents and sprawling front lawn. The front door swings open to a large and inviting living room with vaulted ceilings and a formal dining area. The remodeled kitchen has granite countertops, travertine floors, stainless steel appliances, and opens up the large family room with a cozy custom fireplace. There is also a downstairs guest room next to large indoor laundry room with plenty of storage. Upstairs the rooms are very spacious - especially the master bedroom with it's luxuriously upgraded master bath. The gorgeous backyard imparts a feeling of peaceful seclusion - thanks to it's large trees that stand tall above the sparkling pool. One thing is for sure; you are going to love this home.

2121 Skyline Drive - Fullerton, 92831

Privacy, luxury, and only the best features - this is Skyline Drive.

 

  • Price: $1.999,800    

  • Bedrooms: 7    

  • Bathrooms: 5

  • SF: 4,730    

  • Lot Size: 40,200

  • Year Built: 1966

Privacy and luxury located in Raymond Hills, this hill-top home has panoramic city views, a plethora of amenities and stunning details throughout. The front of the home features a private paver and stone drive-way leading to the 3-car garage with plenty of parking for guests. Walk through the formal entry and you'll be greeted with excellent craftsmanship, soaring ceilings, custom moldings, hardwood and natural stone floors throughout. No expense was spared in the finishing of this home. Custom Michael Ashford lighting fixtures, Thomas Moser furniture, and luxurious appointments are showcased throughout. The gourmet kitchen is impressive w/custom cabinetry with granite countertops, plenty of storage, stainless steel appliances and a coffered ceiling above your enormous center island. The living room is stunning with exposed wood accents and beams, vaulted ceilings, private bar area, conversation pit, and access to your first of 2 private patios. Step outside to see the breathtaking backyard and it's panoramic city views. The master suite is the perfect escape with wall-to-wall windows, an enormous master bathroom and tons of closet space. Award winning Acacia Elementary and Troy High are just down the street. You will not be disappointed.

3744 North Hermosa Place - Fullerton, 92831

Sunny Hills dream estate.

•  IN ESCROW  •

  • Price: $1.999,800    

  • Bedrooms: 7    

  • Bathrooms: 5

  • SF: 4,730    

  • Lot Size: 40,200

  • Year Built: 1966

 

Sunny Hills dream estate. This gorgeous view home has a plethora of amenities and stunning details throughout. Perched atop a lush hill and surrounded by soaring trees, the gated front of the home features an enormous roundabout drive-way that is perfect for hosting many guests. You will also notice the separate guest house that 1,200 sqft with it's own kitchen, living room, and bedroom. The resort-like backyard has panoramic views, a private sports court, luxurious pool and separate spa with waterfall, an island with a built-in bbq, and much more. Inside you'll find the grand entryway and you'll be greeted with tall vaulted ceilings, hardwood floors, lots of natural light, and a gorgeous stone fireplace. The full master retreat has it's own private patio, and an elegant master bathroom with dual shower heads plus marble floors. The great room features a wide-open space, breath-taking views, recessed lighting, and a gourmet kitchen. The upstairs loft features it's own bathroom, exposed wood ceiling and beams, the best views in the neighborhood, a custom fireplace - you can't help but fall in love with this room. Award winning schools nearby Laguna Road Elem, Parks Jr. High, and Sunny Hills High School.

Open House - A Raymond Hills Gem!

907 N Mountain View Pl - Fullerton, CA

Open this Saturday, February 28th from 12:00 - 4:00. 

Price: $549,800    Bedrooms: 3    Bathrooms: 2   SF: 1,374    Lot Sz: 7,405

 


This beautiful Raymond Hills home is walking distance to Acacia Elementary and Troy High School and has been meticulously upgraded and cared for. The first thing you notice is the outstanding curb appeal, an inviting front patio, wide-open floor plan with custom paint and trim, stunning hardwood floors, plantation shutters, and an abundance of natural light throughout the home. The living room is spacious and open, featuring a stack stoned fireplace and vaulted ceilings. The galley kitchen features a cool hue that blends perfectly with the Caesarstone countertops and custom cabinetry; there is plenty of room for the Chef of the family. Just down the hall is the first bathroom with navy and white tiling, a clawfoot bathtub with shower, and trust us, you will love the vintage touches. The master suite has been enlarged by combining 2 bedrooms (the home is currently configured with a total of 2 bedrooms) but can be returned to the original 3 bedroom floor plan at buyer's request. The enormous backyard has a large covered paver patio, custom built bar, easy access to the atrium just off the kitchen, and low upkeep landscaping. Just minutes from Downtown Fullerton, Troy High School, CSUF and more!

Open House at our immacualte Villa Park listing...

10672 Dorothy Circle - Villa Park, CA

Open this Saturday from 12:00 - 4:00. 

Price: $999,800    Bedrooms: 5    Bathrooms: 3   SF: 3,200    Lot Sz: 9,500

This custom Villa Park home is truly one-of-a-kind. This home features outstanding curb appeal with a gorgeous stone exterior, interlocking pavers, and a beautiful entryway. The interior features loads of amenities such as; "magic" double pane windows, scraped ceilings, crown moulding, recessed lighting, custom wrought iron railings, lots of storage, new high-efficiency HVAC (4 zones), closet space galore, undercabinet lighting, built-in bookshelves, a stone fireplace, custom cabinets, and so much more. The great room features sky high vaulted ceilings, and large windows that provide lovely neighborhood views plus natural lighting. The upgraded kitchen has an extra large island, granite countertops, an Austrian glass tile backspalsh, professional stainless steel applainces, dual sinks, and pull-out cabinets. The family room features a breathtaking fireplace that matches the granite in the kitchen, and extra large windows that provide pool views. Upstairs you will find roomy bedrooms that have an abundance of storage. The master bedroom has a walk-in closet, an extra linen closet, and custom window treatments. The enormous backyard is amazing with it's large Pebble-Tec pool and spa, built-in BBQ, automatic awning, and more stone accents. Make this home yours today!