Orange County Real Estate Insider

Orange County Real Estate Blog - News, Statistics, and Understanding Orange County Real Estate

We will cover a variety of topics including the current state of the Orange County Real Estate market, tips for buying and selling property, new developments and projects, investing in real estate, commercial property, and legal and financial considerations for real estate transactions.

Our goal is to be a useful resource and share Effective Real Estate Strategies.

If you have questions or concerns please reach out via email, text or phone, or leave a comment on a blog post.

July 16, 2024

The State of All-Cash Purchases in Orange County

By Eric Engelbert

Buying a home is one of the most significant decisions you'll ever make. In Southern California, where the real estate market is competitive, both all-cash and financed purchases play crucial roles. Let’s dive into the data on all-cash offers in Orange County and compare it to Los Angeles and San Diego counties.

The Market for All-Cash Purchases in Southern California

All Cash Purchases In Orange County, CA

Many buyers and sellers wonder if all-cash purchases have become more common in recent years. Despite concerns, the number of all-cash transactions has remained steady. For example, in 2021, there were 5,427 all-cash sales, the highest in recent years. On the other hand, 2020 had the lowest number with 4,480. Current trends indicate that 2024 will end with fewer than 5,000 all-cash sales but slightly higher than 2023.

All-Cash Home Purchases in Orange County

 

All Cash Purchases Orange County

2023 Totals

Through June 2024

Single Family Homes

3,846

2,147

Multi Family Homes

176

88

Condos & Townhomes

2,230

1,228

Based on our numbers halfway through the year, it's likely that we will surpass the 2023 totals but not by a large amount. Human nature often leads us to see trends even when there may not be one. Over the past decade, all-cash purchases have remained relatively unchanged. Rising home prices might lead us to predict a decline in all-cash purchases, but this has not been the case.

Comparing All Cash Purchases in Orange County to Los Angeles and San Diego

All-Cash Home Purchases in Los Angeles

 

All Cash Purchases Los Angeles County

2023 Totals

Through June 2024

Single Family Homes

7,874

4,241

Multi Family Homes

985

519

Condos & Townhomes

3,481

1,778

 

All-Cash Home Purchases in San Diego

 

All Cash Purchases San Diego County

2023 Totals

Through June 2024

Single Family Homes

3,350

1,836

Multi Family Homes

218

127

Condos & Townhomes

2,027

1,047

 

While Los Angeles consistently has more transactions and shows higher numbers for all-cash purchases, the trend is stable. Despite the competitive nature of these markets, the proportion of all-cash purchases remains steady, reflecting a balanced demand across different buyer types.

Financed Offers: Just as Strong

While all-cash offers have their advantages, financed offers are equally viable and often just as competitive. With the right preparation and support, a mortgage-backed offer can be just as attractive to sellers.

How We Ensure Financed Offers Succeed

At Orange County Real Estate, Inc., we excel in getting financed offers accepted. We instill confidence in the seller by ensuring our buyers are fully prepared to close. Here’s how:

  • Pre-Approval: Our buyers come with a strong pre-approval letter from reputable banks or mortgage companies.
  • Clear Communication: We maintain open lines of communication with the seller’s agent to address any concerns and demonstrate our buyer’s reliability.
  • Strong Offers: We help our buyers craft competitive offers that highlight their strengths, whether they are paying in cash or using a mortgage.

You can read in more detail how we get offers accepted in a competitive market at the blog we wrote in 2023 at this link.

Why Choose Orange County Real Estate, Inc.?

At Orange County Real Estate, Inc., we understand the nuances of both all-cash and financed purchases. Our experienced agents know how to navigate the complexities of the market to ensure our clients' offers stand out, regardless of the purchase method.

In Southern California's real estate market, both all-cash and financed purchases offer viable paths to homeownership. The key is to work with an experienced and knowledgeable brokerage like Orange County Real Estate, Inc. We have a proven track record of getting offers accepted, whether they are all-cash or backed by a mortgage.

Call or text us at: 949-430-7500

 

Posted in Real Estate News
July 8, 2024

Shopoff Realty Investments Plans For Transforming Huntington Beach's Magnolia Tank Farm And South Huntington Beach For Better Or Worse

By Eric Engelbert

South Huntington Beach is about to see a significant transformation with the redevelopment of the old Magnolia Tank Farm. Shopoff Realty Investments is bringing new life to this 29-acre site, located north of the Pacific Coast Highway. With plans for residential units, a boutique hotel, retail spaces, and parks, this project promises to add value and charm to the community.

A New Chapter for Magnolia Tank Farm

Magnolia Tank Farm Site

From Oil Tanks to Community Hub

The Magnolia Tank Farm, once home to oil storage tanks, is set to become a vibrant part of Huntington Beach. Acquired by Shopoff Realty Investments in August 2016, this land has seen a lot of changes already. The old oil tanks have been removed, making way for a new development that aims to blend seamlessly with the coastal lifestyle.

Key Features of the Development

Residential Units: The project includes around 250 homes, both single-family detached and attached units. These homes are designed to meet the needs of various families, offering a range of sizes and styles.

Boutique Hotel: A 215-key boutique lodge will provide visitors with a luxurious stay, just a stone's throw from the beach. This hotel is expected to attract tourists and business travelers alike, boosting the local economy.

Retail Spaces: Approximately 19,000 square feet of retail space will cater to both residents and visitors. These shops will offer convenience and enhance the shopping experience in the area.

Parks and Open Spaces: Four acres of parks will provide much-needed green space for recreation and relaxation. These parks are designed to be family-friendly, encouraging outdoor activities and community gatherings.

Why Magnolia Tank Farm is Special

The location of the Magnolia Tank Farm is one of its biggest advantages. Situated north of Pacific Coast Highway, it offers easy access to Huntington State Beach and other coastal attractions. Residents and visitors will enjoy the convenience of nearby beach activities, dining, and shopping.

Community Benefits

The redevelopment of this site is expected to bring numerous benefits to the local community. The new homes will provide much-needed housing options, while the hotel and retail spaces will create jobs and boost the local economy. The parks and open spaces will enhance the quality of life for everyone in the area.

The Entitlement Process - What is Entitlement?

The entitlement process is a crucial step in any real estate development. It involves getting the necessary approvals and permits from the local government. For the Magnolia Tank Farm project, this process includes rezoning, environmental impact assessments, and obtaining the necessary permits for construction and infrastructure development. This ensures that all plans meet the required standards and regulations set by the city and other governing bodies.

Progress So Far

Since acquiring the property, Shopoff Realty Investments has made significant progress in the entitlement process. The removal of the oil storage tanks was a major milestone, clearing the way for the next phases of development. The project has also gone through extensive environmental reviews to assess potential impacts on the surrounding area and to ensure compliance with regulations.

Oil tanks have been removed from the Magnolia Tank Farm Site

Infrastructure and Utility Considerations

As part of the entitlement process, the development will need to connect to the city's sewer system and electrical grid. This includes installing new sewer lines, upgrading existing ones, and ensuring that the increased demand on the electrical grid can be met. Studies and assessments have been conducted to ensure that the infrastructure can support the new demand without causing outages or other issues for existing residents.

Energy Production Site and Environmental Concerns

The project site is near the Newland energy production area and has raised concerns due to its proximity to other environmentally sensitive areas, such as the ASCON toxic waste dump and potential flooding from sea level rise. Environmental groups have been vocal about the risks of developing in this area, arguing that it could lead to increased pollution and endanger natural resources like wetlands and wildlife.

Community Input and Regulatory Approvals

The entitlement process also involves significant community input and regulatory approvals. Public hearings and meetings have been held to gather feedback from local residents and address their concerns. This input is crucial for making any necessary adjustments to the development plans and for ensuring that the project benefits the community as a whole.

Shopoff Realty Investments is committed to sustainable development. The Magnolia Tank Farm project includes environmentally friendly features designed to minimize its impact on the local ecosystem. This includes energy-efficient homes, green building practices, and the preservation of open spaces.

The new development aims to enhance the coastal living experience in Huntington Beach. With its mix of residential, commercial, and recreational spaces, the Magnolia Tank Farm will become a hub of activity and a desirable place to live, work, and visit.

Community Opposition and Concerns

Despite the optimistic vision for the Magnolia Tank Farm, there are significant concerns from various environmental groups and local residents. Organizations like the Orange County Coastkeeper and the Sierra Club have been vocal about the potential environmental risks. They highlight the site's vulnerability to flooding, sea level rise, and its proximity to the ASCON toxic waste dump and a fault line.

Impact on Local Residents

Local residents are particularly concerned about the potential loss of ocean views and the increased traffic and noise that the development could bring. During city meetings, many residents have expressed their opposition, fearing that the development will alter the character of their community and negatively impact their quality of life.

Regulatory Challenges

The California Coastal Commission (CCC) has posed a significant barrier, citing concerns about compliance with their Sea Level Rise Policy. The CCC staff has recommended denying the rezoning application due to the site's climate change-driven hazards. Shopoff Realty Investments continues to push through these regulatory challenges, reapplying for necessary approvals and engaging in lobbying efforts to move the project forward.

Legal and Regulatory Challenges

Huntington Beach has been embroiled in legal disputes over state housing mandates. The city has repeatedly challenged these mandates, arguing that as a charter city, it should be exempt from state-imposed housing quotas. This stance has led to multiple court battles, with mixed outcomes. Recently, a federal judge dismissed Huntington Beach's lawsuit against the state housing mandates, but the city continues to appeal and fight the regulations in state court.

Possible Compromises

In response to community concerns, it is possible that Shopoff Realty Investments might consider reducing the height of the residential buildings to preserve ocean views. Such a compromise could address some community concerns and potentially ease tensions. However, the city's strong support for the development indicates that economic and housing benefits are prioritized, and the future direction will depend on ongoing discussions and regulatory decisions.

Conclusion

The transformation of the Magnolia Tank Farm is an exciting development for Huntington Beach. Shopoff Realty Investments is bringing a new vision to this historic site, creating a vibrant community hub that will benefit residents and visitors alike. With its prime location, diverse amenities, and commitment to sustainability, this project is set to become a shining example of modern, coastal living.

However, the significant opposition and environmental concerns highlight the complexity of balancing development with community and environmental protection. The future of the Magnolia Tank Farm will depend on ongoing discussions and regulatory decisions, and the community will be watching closely as the project progresses.

Stay tuned for more updates as this project unfolds.

Monitoring the Market in South Huntington Beach

Keep an eye on the South Huntington Beach market report to see how property values will be affected by this development. The impact on property values will be a key indicator of the project's success and its integration into the community.

Posted in Real Estate News
June 28, 2024

The Best Places to Watch Fireworks in Orange County

By Eric Engelbert

Celebrate Fourth of July in Orange County

The Fourth of July is a special time in Orange County, where neighborhoods and communities come together to celebrate with vibrant fireworks displays. Whether you’re looking for a family-friendly spot, a romantic beachside view, or a lively community event, Orange County has it all. Here’s a guide to some of the best places to watch fireworks in the area.Where Can I watch fireworks in Orange County

Huntington Beach

Huntington Beach hosts one of the largest Independence Day celebrations on the West Coast. The festivities include a 5k run, a parade, and a pier festival that spans five days. The grand finale is a spectacular fireworks show over the ocean. You can enjoy the view from the beach, the pier, or downtown, with various seating options available for purchase.

Laguna Beach

Laguna Beach is known for its scenic beauty, and the Fourth of July fireworks at Heisler Park do not disappoint. Monument Point is a prime viewing spot, but you can also enjoy the display from Main Beach or any of the local restaurants and hotels. The backdrop of the ocean makes this a memorable experience.

Newport Beach

Newport Beach offers several great spots for fireworks. The Newport Dunes Waterfront Resort hosts a weekend full of activities, culminating in a grand fireworks show over the Back Bay. Families can enjoy watersports, an inflatable waterpark, and live entertainment throughout the day.

Dana Point

Dana Point Harbor is another fantastic location for Fourth of July fireworks. The show is launched from a barge off the coastline of Doheny State Beach, providing a stunning display over the water. Arrive early to enjoy the harbor and beach activities before the fireworks start at 9 p.m.

Anaheim

Anaheim Hills goes all out with a day-long celebration that includes a Firecracker 5k/10k run, a parade, and live entertainment. The evening culminates in a fireworks display at 9 p.m., making it a great spot for families and community members to gather and celebrate together.

San Juan Capistrano

For a more intimate community feel, head to San Juan Capistrano. The festivities at Marco Forster Middle School include live music, food trucks, and games, ending with a fireworks show that lights up the night sky. This event is perfect for families looking for a fun and engaging way to celebrate the holiday.

Ladera Ranch

Ladera Ranch offers a full day of activities starting with the Freedom Run, followed by a community parade and a fun-filled festival at Founders Park. The evening fireworks display is one of the best in South Orange County, drawing residents and visitors alike to enjoy the celebrations.

Costa Mesa

The OC Fair & Event Center in Costa Mesa hosts an Independence Day event on July 3rd, featuring live music, food, and a spectacular fireworks show. Bring your picnic blankets and lawn chairs for a comfortable and festive evening under the stars.

Laguna Niguel

Laguna Niguel’s Crown Valley Park Amphitheater offers a fun-filled day with a pancake breakfast, a live concert, and fireworks over the Laguna Niguel Regional Park lake. This community-centered event is great for families and friends to gather and enjoy the Fourth of July festivities together.

La Habra

La Bonita Park in La Habra hosts an annual Fourth of July Spectacular, complete with live music, kids' activities, and a fireworks display. This event is perfect for those looking for a relaxed and family-friendly environment to enjoy the holiday.

Tips for a Great Fourth of July Experience

• Arrive Early: Popular spots can get crowded, so arrive early to secure a good viewing spot.

• Bring Essentials: Don’t forget blankets, chairs, snacks, and water to keep comfortable throughout the evening.

• Check Parking: Some locations have limited parking or require permits, so plan ahead.

• Follow Local Guidelines: Each city may have specific rules and regulations for fireworks viewing, so be sure to follow them for a safe and enjoyable experience.

Celebrate the Fourth of July with these fantastic fireworks displays and make lasting memories with your friends and family. Orange County offers a diverse range of options to suit every preference, ensuring a spectacular celebration for all.

Posted in Real Estate News
June 15, 2024

The Perils of Tech in Real Estate: Why Local Agents In Orange County Still Matter

By Eric Engelbert

In the digital age, many industries have been transformed by technology. Real estate is no exception. Companies like Zillow and Redfin promised to change how we buy and sell homes. They aimed to make everything easier, faster, and more efficient. However, the results have not always been as expected. This post explores how tech companies sometimes fail in real estate and why local agents are still crucial.

The Trouble with Data and Lack of Oversight - The Kansas City Case

Imagine finding your million-dollar home listed for $10,000. This happened to Jamey and Lauren Bertram in Kansas City. Their house was hacked on Zillow, causing them a lot of stress. Friends alerted them to a “for sale by owner” listing with a fake price and description. Scammers had created the listing, and people started showing up at their house, eager to buy at the too-good-to-be-true price.

Zillow's Response

When the Bertrams contacted Zillow, the response was slow and unhelpful. The listing was eventually removed, but not before causing significant distress. This case shows how tech companies sometimes fail to check data before it goes online. Inaccurate listings can lead to confusion, scams, and even financial loss.

Why Local Knowledge Matters - Unique Market Dynamics

Real estate is inherently local. Each neighborhood has its unique market dynamics that only local agents truly understand. They are familiar with the schools, community culture, and even subtle variations in property values from block to block. This expertise is crucial for accurate pricing and successful transactions. At Orange County Real Estate, Inc., we analyze these statistics daily and publish our popular Orange County Housing Report every Monday. You can find our latest insights and reports on our website at this link.

Personal Connections

Local agents build trust within their communities. They act as advisors, offering personalized advice that algorithms cannot match. They understand the emotional aspects of buying or selling a home, providing empathy and support throughout the process. This personal touch is invaluable and cannot be replaced by technology.

The Limitations of Tech-Driven Approaches - The Human Element

Buying or selling a home is one of the most significant decisions in a person’s life. It demands empathy and understanding that technology alone cannot provide. Tech companies often overlook this crucial human element. While technology can streamline certain processes, it cannot replace the personalized service that local agents offer. We at Orange County Real Estate, Inc. understand the biggest fears of home buyers and work diligently to protect them from potential losses.

Financial Pitfalls of Big Tech

Tech companies have faced significant financial losses in their real estate ventures. For example, Zillow's algorithm-driven buying and selling program, Zillow Offers, did not perform as expected. The high costs and inability to predict market movements accurately, led to substantial losses. This highlights the challenges of relying solely on technology in real estate.

Zillow has long struggled with profitability despite its significant market presence. Here’s a look at Zillow’s annual net income over the years:

 

2023: -$158 million
2022: -$101 million
2021: -$528 million
2020: -$162 million
2019: -$305 million
2018: -$120 million
2017: -$94 million
2016: -$220 million
2015: -$149 million
2014: -$44 million
2013: -$12 million
2012:  $6 million (one of the only profitable years)
2011:  $0 million
2010: -$7 million
2009: -$13 million

 

Revenue Per User

Zillow’s revenue per user is also telling. While the company boasts high traffic, it struggles to convert this into profit:

Zillow: $0.81 gross revenue per visitor

Redfin: $1.48 gross revenue per visitor

Despite having more visitors, Zillow’s lower revenue per user highlights its challenge in monetizing traffic effectively.

The Value of Local Expertise Integrating Technology

The future of real estate lies in blending technology with local expertise. Technology can empower agents with advanced data analytics, marketing tools, and customer relationship management systems. Virtual tours and digital transaction management can simplify processes. However, the heart of the transaction should stay human-centric. Just as I like to squeeze apples before buying them, I want to experience the feel and smell of a house before making an offer.

The Role of Local Agents

Local agents, like those at Orange County Real Estate, Inc., bring irreplaceable value. They source properties, negotiate purchases, and navigate inspections with a level of detail and care that technology cannot match. Their deep-rooted knowledge and personal connections ensure successful transactions.

Big tech's attempts to revolutionize real estate have shown the importance of local expertise. While technology can enhance certain aspects of the process, it cannot replace the trust, knowledge, and personal touch that local agents provide. For consumers and investors, the lesson is clear: successful real estate transactions require a blend of technology and human expertise. By acknowledging and leveraging the strengths of both, the industry can move forward in a way that truly benefits everyone involved.

Contact Orange County Real Estate, Inc.

For expert guidance in the Orange County market, contact Orange County Real Estate, Inc. They have the local knowledge and experience to navigate the complexities of real estate transactions, ensuring a smooth and successful process. Call or Text 949-430-7500

Posted in Real Estate News
June 15, 2024

The Homebuyer's Biggest Fear: Making A Financial Mistake

By Eric Engelbert

Buying a house is a huge step in life. It's exciting, but it can also be scary. Many buyers worry about losing their money or paying too much. These fears are common, but with the right help, you can buy a house without the risk of losing your deposit and in many cases, your life savings.

The Fear of Losing Your Deposithow to protect your deposit when buying a house

One of the biggest fears buyers have is losing their deposit. Putting down a large deposit is a big commitment. If things go wrong, losing that money could be life-ruining. But we will never put your deposit at risk. We will make good use of your contingency periods, protecting your deposit and your future property investment.

How to Protect Your Deposit

We know how to protect your deposit. Our team of professionals will make sure all the paperwork is correct and all the deadlines are met. We will guide you through the process, so there are no surprises. When you work with Orange County Real Estate, Inc., you get peace of mind. We have the experience and the team to handle these details and keep your deposit safe.

The Fear of Overpaying for a House

Another big worry is overpaying for a house. In a hot market, bidding wars can push prices above current market value. It's easy to get caught up in the moment and agree to a high price. But what if the market changes? Overpaying can feel like a big mistake if the market crashes.

Understanding the Market

The good news is that the data points to a stable market. There is no sign of a crash. Paying a bit above market value can be okay, especially if you plan to live in the house for many years. Homes tend to increase in value over time, so a slight premium now could pay off later.

Using Local Data

To make sure you understand the pricing, we use local data. Orange County Real Estate, Inc. offers detailed market reports. These reports show current trends and prices. They use historical data to predict future market directions. By looking at this information, you can make an informed decision.

Weekly Housing Reports

Weekly housing reports are another valuable tool. They provide up-to-date information on the market, including the number of houses for sale, their time on the market, and their selling prices. This insight helps you understand the market dynamics and avoid overpaying. Our reports are published on our website every Monday, featuring data directly from the MLS. Click here to view the latest report and access historic reports.

Long-Term Benefits

Even if you pay a little more now, buying a home has long-term benefits. Owning a home gives you stability. You build equity over time, and the value of your home is likely to increase. Plus, having a place to call your own is priceless. You can make it your own and create lasting memories.

Choosing the Right Realtor

Choosing the right realtor is essential. A good realtor understands the market and can guide you through the home-buying process. They help you find the right home at the right price. Orange County Real Estate, Inc. is an exceptional brokerage with the expertise to source properties, negotiate purchases, and navigate inspections. Their goal is to make your home-buying experience smooth and stress-free. If you are thinking about hiring an agent, here is a link to a list of questions to ask.

Buying a house without risk and without overpaying is possible. With the right help, you can protect your deposit and make a smart investment. Use local data and market reports to understand the market. Work with trusted realtors from Orange County Real Estate, Inc. With these steps, you can buy a home with confidence and enjoy all the benefits of homeownership.

Posted in Real Estate News
June 5, 2024

The Impact of Los Angeles' New Mansion Tax on Luxury Real Estate in Los Angeles and Orange County

By Eric Engelbert

Jim Carrey recently made headlines by significantly reducing the price of his Los Angeles home. Originally listed at $28.9 million in February 2023, the property has now seen its price cut multiple times, currently listed at $21.9 million. This sharp decline is attributed to the newly implemented "mansion tax" in Los Angeles, officially known as Measure ULA.

Understanding Measure ULA

Measure ULA, which took effect on April 1, 2023, introduces a transfer tax on the sale of high-value properties in Los Angeles. Specifically, the tax imposes a 4% levy on properties sold for more than $5 million and a 5.5% levy on those sold for over $10 million. The revenue generated from this tax is earmarked for addressing homelessness and providing public housing in the city. The measure was passed in November 2022, with 57% voter approval, thanks to the efforts of housing advocates and labor unions.

The Market Response

The introduction of Measure ULA has led to a noticeable uptick in the number of luxury homes hitting the market. Celebrities and affluent homeowners, including Jim Carrey, Britney Spears, Kylie Jenner, and Mark Wahlberg, have all listed their properties, aiming to avoid the financial impact of the new tax. For instance, Spears listed her Calabasas home for $12 million just six months after purchasing it, while Jenner put her Beverly Hills property on the market for over $33 million.

Real estate agents have reported a "frenzy" of activity as sellers rushed to close deals before the tax took effect. This rush has created opportunities for buyers looking to acquire high-value properties at reduced prices. As a result, several high-profile sales have been completed at lower-than-expected prices, offering a unique snapshot of the current luxury market dynamics in Los Angeles.

The Political Paradox

An interesting dynamic has emerged as many of the wealthy individuals affected by Measure ULA are known for their support of progressive policies, including higher taxes. However, the financial implications of the mansion tax have led some to actively seek ways to mitigate its impact, highlighting a paradox between their political stances and personal financial actions.

Impact on Orange County Luxury Market

The mansion tax in Los Angeles has also had ripple effects on nearby Orange County. With the new tax in place, some Los Angeles residents are reconsidering their zip code and looking towards Orange County as a more attractive option. This shift could boost demand in Orange County's luxury real estate market, which has already seen an influx of buyers during the pandemic. Our data has highlighted more buyers considering Orange County for luxury home purchases.

In Orange County, there are currently 359 luxury homes priced over $5,000,000 that are listed for sale, compared to Los Angeles' larger luxury market with 966 homes listed for sale over $5,000,000. The shift in buyer interest could potentially balance out some of the market fluctuations caused by Measure ULA in Los Angeles.

The introduction of Measure ULA has significantly impacted the luxury real estate market in Los Angeles. As high-profile properties see price reductions and increased sales activity, the market is adjusting to the new tax landscape. For potential buyers, this period offers unique opportunities to acquire luxury homes at more competitive prices. However, the situation also underscores the complex relationship between political beliefs and personal financial decisions among the city’s affluent residents.

Posted in Real Estate News
May 30, 2024

Skyrocketing Delistings and Pricing Imbalance in the News: Orange County Blazes Its Own Trail

By Eric Engelbert

In today's real estate market, many homes are being delisted due to overpricing. This trend is noticeable nationally but does not always apply locally, especially in Orange County, CA. Remember that news outlets often pick attention-grabbing stories and potential homebuyers are drawn to this narrative. Statistically, Orange County is very different from the rest of the country, although that is subject to change. Understanding the local market dynamics can help sellers price their homes correctly and avoid unnecessary delistings, which come in the form of withdrawn, expired, and canceled listings.

The Rising Trend of Delistings

Across the country, the number of homes listed for sale and then delisted without selling is reaching new highs. This rise in delistings points to a significant pricing imbalance. Sellers are setting asking prices higher than what buyers are willing to pay, causing many homes to remain unsold and eventually be taken off the market.

In our recent blog post about the pricing dilemma, we looked at local data and found that homes priced at or slightly above market value sell for more than homes priced slightly below. Timing is an important factor. Read the full blog at this link.

National Perspective

Nationally, delistings as a percentage of total listings are roughly double the normal rate. This trend is accelerating quickly and does not follow the usual seasonal patterns. Many new listings come to the market with record-high prices, particularly when considering the median price per square foot.

Local Impact: Orange County

However, Orange County often defies national trends. While the rest of the country sees rising delistings, Orange County maintains a relatively low rate. Only 80 properties were delisted last week, representing just 2.8% of the total 2,837 listings. This stark contrast highlights the unique dynamics of the Orange County market.

Price Drops and Market Adjustments

Another sign of a pricing imbalance is the rising number of price drops. More active listings are seeing price reductions, reflecting sellers' attempts to align with buyer expectations.

National Price Reductions

Nationally, the percentage of active listings with price reductions is higher than it has been for years. This trend is growing, indicating that many sellers initially overprice their homes and later adjust to attract buyers.

Orange County Price Adjustments

In Orange County, price drops are not as prevalent. The high demand to live in this desirable area keeps prices more stable. Although some homes do see price reductions, the overall market remains robust and less prone to the significant adjustments seen nationwide.

Time on Market

For homes that do sell, the time they spend on the market is increasing. This trend shows that buyers are taking longer to find properties that meet their price expectations.

National Trends

Nationally, the median days on market for homes is slowly increasing. This rise indicates that overpriced homes are not selling quickly, forcing sellers to wait longer or adjust their prices.

Orange County Insights

In Orange County, the median days on market remains relatively steady. Homes here tend to sell faster due to high demand and the appeal of the local lifestyle. This trend emphasizes the unique strength of the Orange County market. This is our days on market graph from our weekly market report which you can read at this link.

OC Days On Market

Today

Last Week

Average Days On Market

51

48

Median Days On Market

26

24

Under $1,000,000

19

18

$1,000,000 - $2,000,000

19

17

Over $2,000,000

45

40

The Role of Orange County Real Estate, Inc.

Navigating the complexities of pricing a home correctly is crucial. Orange County Real Estate, Inc. excels in helping sellers price their homes accurately. Their expertise in extrapolating sales data, sourcing properties, negotiating purchases, and managing inspections ensures a smooth selling process.

While the national real estate market experiences rising delistings and price drops due to overpricing, Orange County often does not follow these trends. The local market's high demand and unique dynamics keep delistings low and prices relatively stable. Sellers should be aware of these differences and avoid assuming that national trends apply locally.

Key Takeaways

  • National vs. Local Trends: Delistings and price drops are rising nationally but remain low in Orange County.
  • Importance of Realistic Pricing: Setting the right price from the start can prevent prolonged listing periods and delistings.
  • Expert Assistance: Working with experienced real estate professionals, like those at Orange County Real Estate, Inc., can help sellers navigate pricing challenges.

By understanding these trends and working with knowledgeable professionals, sellers can successfully price and sell their homes in today's market.

Orange County vs. National Data Summary

  • Delistings: National rates are high, but Orange County remains low at 2.8%.
  • Price Drops: Increasing nationally, but less common locally due to high demand.
  • Days on Market: Rising nationwide, but steady in Orange County.

For personalized advice on selling your home in Orange County, contact Orange County Real Estate, Inc. Their expertise will help you navigate the market and achieve your selling goals. Call or Text 949-430-7500

Posted in Real Estate News
May 29, 2024

Why Landlords Should Require Renters Insurance in Orange County

By Eric Engelbert

As a landlord or real estate investor, protecting your property and investment is a top priority. One effective way to do this is by requiring your tenants to have renters insurance. While it might seem like an extra step, the benefits far outweigh the nominal cost, which is usually less than $200 annually. Here's why renters insurance is a must-have for your tenants.+

Take a look at all the investment properties for sale in Orange County at this link.

Understanding Renters Insurance

Renters insurance is a policy that covers a tenant's personal property and liabilities. It ensures that both you and your tenant are protected in case of unforeseen events. Let's break down what renters insurance covers and why it's so beneficial.

What Renters Insurance Coversshould i get renters insurance

  • Personal Items

Imagine a fire breaks out, or a theft occurs, damaging or stealing your tenant's belongings like TVs, computers, and clothing. Renters insurance can help reimburse them for these losses. This protection makes tenants more likely to take care of the property, knowing their possessions are secure.

  • Liability

Accidents happen. If someone gets hurt on your property and decides to sue, the tenant's renters insurance can cover their liability. This is crucial because, while your landlord's policy covers claims when someone gets hurt on the property, the tenant's policy will handle personal injury and possible property damage they might cause. Standard coverage is usually around $100,000.

  • Loss of Use

In case of a covered disaster that makes the property uninhabitable, renters insurance can cover the cost of temporary relocation. This means that if your tenant needs to move out while repairs are being made, their policy will help with hotel bills and meals. This benefit ensures your tenants have a safety net, reducing their stress and yours.

What Renters Insurance Does Not Cover

  • Earthquake and Flood Damage

Standard renters insurance policies typically do not cover earthquake and flood damage. However, these can usually be added to the policy if necessary. It's important to communicate this to your tenants so they can consider additional coverage if they live in an area prone to these natural disasters.

  • Roommates

Renters insurance generally covers only the policyholder, not their roommates. Each tenant needs their own policy to ensure they are fully protected. This helps avoid any confusion or disputes if a claim needs to be filed.

  • Personal Property Value

While renters insurance covers personal property, it may limit coverage for high-value items like expensive jewelry, art, and other valuables. Tenants can purchase additional coverage for these items if needed. This is another point to discuss with your tenants to ensure they have adequate protection.

The Benefits for Landlords

Reduced Liability

By requiring renters insurance, you significantly reduce your liability. If a tenant causes damage or an accident occurs, their policy can cover the costs. This protection can save you from expensive legal fees and potential payouts.

Attracting Responsible Tenants

Tenants willing to invest in renters insurance are often more responsible. They understand the importance of protecting their belongings and are more likely to take care of the property. This responsibility translates to fewer issues and a more positive rental experience.

Faster Recovery After Disasters

If a disaster strikes, renters insurance helps tenants recover faster. This means less downtime for your property and quicker turnaround for repairs. Happy tenants are likely to stay longer, reducing turnover and vacancy rates.

Implementing Renters Insurance Requirements

Requiring renters insurance is straightforward. Include it as a clause in your lease agreement and ensure tenants provide proof of insurance before moving in. Here’s how you can implement this policy effectively:

  1. Update Your Lease Agreement: Clearly state the requirement for renters insurance in the lease. Specify the minimum coverage amount and any additional coverage you might recommend.
  2. Educate Your Tenants: Explain the benefits of renters insurance to your tenants. Provide them with resources or suggest reputable insurance companies.
  3. Verify Coverage: Ask tenants to provide proof of insurance before they move in. Keep a record of their policy details and remind them to renew it annually.

Orange County Real Estate, Inc.: Your Partner in Property Management

When it comes to managing your real estate investments, partnering with a knowledgeable and experienced brokerage is key. Orange County Real Estate, Inc. is exceptional in sourcing properties, negotiating purchases, and navigating inspections. They can also help you implement policies like renters insurance requirements, ensuring your investments are well-protected. Visit our property management page at this link.

Requiring renters insurance is a small step that can make a big difference. It protects your property, reduces your liability, and ensures your tenants are well-covered. By implementing this policy, you're not only safeguarding your investment but also fostering a responsible and secure living environment for your tenants. Trust Orange County Real Estate, Inc. to guide you through this process and help you maximize the benefits of your real estate investments.

Posted in Real Estate News
May 13, 2024

Navigating the High Cost of Single-Family Home Ownership in Orange County

By Eric Engelbert

The path to owning a single-family home in Orange County is becoming increasingly steep, with financial requirements that significantly outpace those of the average American homebuyer. According to the latest data from the California Association of Realtors, a household income of $349,200 is now required to afford the county’s median-priced single-family home, priced at $1.37 million. This figure is 3.5 times greater than the national requirement. Let’s dive deeper into what these figures mean for prospective homeowners in Orange County.

Orange County's Residential Real Estate Landscape

The financial barrier to enter the single-family home market in Orange County starkly contrasts with national figures. While the median U.S. home price stands at $389,400, the specific challenges for Orange County residents are far more daunting. The income needed to buy a median-priced home here has surged by $99,200 or 40% since early 2022, coinciding with the Federal Reserve's interest rate hikes initiated to curb inflation.

National Comparison

On a national level, the income required to buy a median-priced home is $99,600, with an affordability rate of 37%. In stark contrast, only 11% of Orange County households can afford a median-priced single-family home, a figure reminiscent of the 2007 housing bubble. This gap highlights the unique challenges faced by our local market.

Impact of Economic Factors

The fluctuation in mortgage rates has had a profound impact on affordability. From the lows of 3% in early 2022 to a substantial 7% in early 2024, the cost of financing a home has dramatically increased. This, combined with a 12% increase in home prices over the same period, has significantly decreased purchasing power. Today, a typical OC homebuyer faces monthly payments of $8,730, including taxes and insurance, marking a 39% increase from two years ago.

Real-Life Market Activity Amid Affordability Challengescalculating the costs of home ownership in Orange County, CA

Despite the apparent affordability issues, the reality on the ground tells a different story. Every day, buyers are actively participating in the market, and homes in Orange County continue to sell quickly, as evidenced by the short days on market statistics. This dynamic is largely driven by the principles of supply and demand, with our low inventory exerting the most significant pressure. While the high cost of homeownership has reduced buyer participation in total, the limited inventory has created a highly competitive environment for those who are in the market. This presents an interesting situation; if inventory levels begin to rise, we might see home values level off or even decrease. However, a more likely scenario is a slight reduction in rates, which could draw more buyers into the market, increasing competition and continuing to drive up home prices.

Stay Updated with Our Housing Reports

For real-time updates and historical data on single-family home prices in Orange County, be sure to check out our comprehensive housing report, directly sourced from the MLS. Access the latest data here. This resource will help you track weekly fluctuations and understand long-term trends in our local market.

Looking Ahead in Orange County's Single-Family Home Market

Despite the high barriers, the value of single-family homes in Orange County continues to appreciate. This appreciation underscores the desirability of the area but also raises questions about long-term sustainability and community impact.

For those considering entering or navigating the Orange County single-family home market, it is crucial to stay informed and strategically plan. The allure of Orange County—with its desirable neighborhoods and quality of life—continues to draw interest, despite the high cost of entry. As your local real estate expert, I am here to provide insights and guidance to help you make the best decisions in this competitive market. Federal Reserve's interest rate hikes initiated to curb inflation.

As a seasoned real estate professional in Orange County, I specialize in helping my clients understand and navigate the complexities of buying and selling real estate. My commitment is to ensure that you are well-equipped to make informed decisions, whether you are purchasing, selling or seeking investment opportunities.

Posted in Real Estate News
April 19, 2024

Santa Ana's New Ban on Short-Term Rentals and Its Impact on Homeowners and Buyers

By Eric Engelbert

The City of Santa Ana, California, has recently enacted a ban on short-term residential rentals lasting less than 30 days. This decision comes in response to the growing concerns over the negative impacts these rentals have had on neighborhood quality and the overall housing market. The ban, already in effect, aims to preserve community character, address unpermitted business operations, and expand the availability of long-term housing.

Understanding the Ban

The Santa Ana City Council has voted to eliminate short-term rentals offered through platforms like Airbnb and Vrbo. This move is driven by issues including noise disturbances, parking shortages, and general neighborhood degradation that have arisen with the rise of these rental options. Moreover, city staff have identified over 1,100 active short-term rental units, which represent about 35% of the city’s new housing needs as determined by state requirements.

Benefits for Homeowners and Buyers

Improved Neighborhood Integrity

The ban is expected to help maintain the character and tranquility of residential areas, making them safer and more enjoyable for permanent residents. Reducing transient traffic can also decrease common nuisances such as litter and excessive noise.

Stabilized Real Estate Market

By redirecting properties (1,100+) from short-term rentals to long-term availability, the housing market in Santa Ana will likely see more stability in prices and availability. This is crucial for prospective homeowners looking for a predictable and steady market environment.

Legal and Community Security

The enforcement of this ban reduces legal ambiguities and ensures that all properties comply with zoning and usage laws, fostering a secure and well-regulated community environment.

How the Ban Works

The new ordinance prohibits the offering, rental, or maintenance of any property for short-term rental purposes. Violations of this ordinance will be met with serious penalties, including misdemeanor charges or civil action, ensuring strict compliance.

Reporting and Compliance

Residents and visitors can report suspected short-term rentals or seek more information about the ordinance through the Code Enforcement Division. The city has made resources available online and through the mySantaAna app to facilitate community engagement and compliance.

Santa Ana’s bold move to ban short-term rentals is a significant step towards stabilizing the housing market and restoring the essence of its neighborhoods. For homeowners, this could mean a return to community-centric living, while prospective buyers might find more opportunities and fewer fluctuations in housing availability.

For residents and prospective homeowners, understanding the implications of this new ordinance is crucial for navigating the local real estate landscape effectively. If you have any questions or need guidance on your next home purchase in Santa Ana, feel free to contact me.

Orange County Cities and Short-Term Rentals

In Orange County, several cities have taken measures to regulate short-term rentals, reflecting a trend similar to Santa Ana's recent ban. For example, Anaheim, home to Disneyland, has imposed strict regulations, effectively banning new short-term rentals and putting stringent operational requirements on existing ones to mitigate impacts on residential areas. The city of Laguna Beach has also implemented strict controls, requiring specific permits and limiting the density of short-term rentals to preserve the character of its neighborhoods. Huntington Beach and Newport Beach have debated tighter controls and regulations to balance the benefits of tourism with the needs of local residents. These moves across Orange County demonstrate a growing concern about the balance between maintaining residential community integrity and accommodating tourists, a discussion that might lead more cities in the region to consider similar bans or regulations in the future.

 

Posted in Real Estate News