O.C. home sales, prices see double-digit gains

Momentum continued to build in Orange County's housing market last month, with home prices and sales reaching levels last seen five to six years ago.
The median price - the price at the midpoint of all sales - of an Orange County home hit $535,000 in April, DataQuick Information Systems reported Tuesday.

That's up by $30,000 from March and $115,000 - 27.4 percent - from April 2012's median. It was Orange County's highest median home price since December 2007.

Meanwhile, sales increased 14 percent year over year, climbing to 3,327 transactions last month. That's the highest sales tally for an April since 2006.

A lack of homes for sale was the biggest reason for recent price gains, fueling competition among buyers, industry observers said.

But experts warned not to take last month's 27.4 percent appreciation rate - the fourth highest on record - too seriously. Prices are climbing from still very depressed rates a year ago, when the market was plagued by the lingering foreclosure crisis, they said.

Also, a changing mix of the homes being sold artificially inflated the appreciation rate. Foreclosed homes and "short sales," or sales for less than what's owed on the mortgage, have almost disappeared from the market, giving way to sales of move-up homes and newly built dwellings.

Cheaper, distressed listings fell to 6 percent of the market last month, down from 25 percent in April 2012, according to Steve Thomas of ReportsOnHousing.com.

"Twenty-seven percent sounds crazy to me," said housing economist G.U. Krueger. "It's just too much." He said continued price gains at that pace are "not sustainable."

"If this goes on for a year with 30 percent or 35 percent appreciation, we'd have some concern that there's some irrational exuberance out there," Krueger said.

As of last month, the local housing price was up $165,000, or 45 percent, from the price reached at the bottom of the market crash in January 2009. April's median still was $110,000, or 17 percent, below the housing boom's June 2007 price peak of $645,000.

Home values are, nonetheless, rising by double digits, industry observers said.

DataQuick Analyst Andrew LePage estimated that half to three-fourths of median price rises are due to actual increases in home values, as opposed to the composition of home sales. Jock Patterson of Coldwell Banker in Laguna Beach said Orange County's true appreciation rate is in the 10 percent to 15 percent range.

Despite a recent uptick in homes coming on the market, April's inventory was down 41 percent from a year earlier, Thomas reported. As of May 9, Orange County had 3,776 homes in the multiple listing service, a database of properties on the market. The county has averaged 10,200 listings since 2004.

While some homeowners have been lured to the market by higher prices, others are holding off, waiting for prices to go even higher.
"The story line so far this year has been a real estate market with very little inventory meets insurmountable buyer demand," Thomas said.
Among the buyers are first-time home shoppers as well as investors, many from overseas, local agents said.

DataQuick reported that absentee buyers - most likely investors or second-home purchasers - accounted for 23.1 percent of last month's buyers. While that's down slightly from a peak of more than 27 percent in January, the average is 13.4 percent since 2000.

Cash was used to buy homes in 31.7 percent of last month's transactions, DataQuick reported, compared with an average of 12.1 percent going back to 1988.

Twenty or more offers are common for homes selling for $750,000 or under, said Brian Kamenca, an agent with Re/Max TerraSol in Huntington Beach.
"We're seeing a lot of cash offers with a lot of money coming from investors," Kamenca said. "The first-time buyers are having a rough time. They're just getting bumped because sellers have so many options. There's buyers galore."

Cash buyers can waive requirements that homes be appraised for at least as much as the sale price. Since prices have been going up so quickly, appraisals - based on past sales - often don't keep up, killing many sales to buyers who need a mortgage.

"Our biggest problem is we can't get the properties to appraise because appraisers always are looking through the rear-view mirror," said Orange broker Al Ricci, president of the Pacific West Association of Realtors.
The hot market is drawing some younger buyers who fear getting priced out if they wait too long, said Patterson, the Laguna Beach agent.

At the same time, fast sales and rising prices are luring sellers who are "fishing": overpricing homes to see what they can get, Thomas and Kamenca said.

"This is a market that is still rebalancing," said DataQuick President John Walsh. "It's catch-up time, with a healthier economy spurring more demand and rising prices tempting more people to put their homes up for sale."

Written by Jeff Collins - Orange County Register

Five spring home improvement projects

Now that spring is here, it's finally time to get to those do-it-yourself projects. Give your home a mini makeover and increase your curb appeal with these DIY-friendly projects.

1. Clean your gutters. After a rough winter, remove any debris or obstructions from your rain gutters to prevent any water around your foundation. For the true do-it-yourselfer, consider replacing your gutters if you notice any rotting or cracking.
2. First impression. Your entryway is the focal point of your facade and leaves a lasting first impression on guests. Consider painting the front door and adding or updating light fixtures on either side of the entryway.
3. Snail mail. Replacing your mailbox is a quick and easy way to improve your front yard. House numbers can be purchased and added for a minimal expense.
4. Refresh and refinish. Stain outdoor wood decking and furniture. Remember to sweep and scrub surfaces before applying the stain. The fresh coat will make wood look like new.
5. Pave the way. Budget-friendly stones can be purchased at most garden supply stores. Line either side of your driveway to achieve a crisp look without the expense of pavers.

Millennials Get House, Then Hitched

Mortgage: Step toward marriage.

There's love and marriage and then there's love and a mortgage.
Millennial couples are more likely to buy a house together before they take their wedding vows than their parents and grandparents were, according to a new Real Estate survey.

Almost a quarter of married homeowners aged 18 to 34 bought a home together before they were married, compared with 14% of those aged 45 and older.

It's good news for the housing industry that has fretted about a steadily growing trend: Every year, men and women are waiting longer to get married. In 2012, the median age of men who married for the first time was 28.6, up from 26.1 in 1990. Women: 26.6, up from 23.9.

Since buying a home often follows nuptials, delaying marriage could delay homeownership.

"We didn't expect to find that couples committed to each other to buy homes before they were married," says Robi Ludwig, a psychotherapist who works for Coldwell on lifestyle surveys and buyer habits. "It's almost like buying a home is the new engagement ring."

Married homeowners said buying a house did more to strengthen their relationship than any other purchase they made together.

"Increasingly, Americans and especially Millennials see marriage as something that should be entered into only after you've taken several steps toward showing your maturity," says Stephanie Coontz, co-chair of the Council on Contemporary Families. "It's not something you jump into."

Two-thirds of couples getting married these days lived together before they walked the aisle. Buying a home together is a big proof of commitment.

"The purchase of a home is a monumental step in their relationship," Ludwig says.

The online survey of 2,116 adults March 8-12 found that couples who bought homes before marriage were all planning to tie the knot.

Their decision to buy a home first "was based on being financially savvy," Ludwig says. "Opportunities were coming up in the real estate market and with low mortgage rates, and they take advantage of these ideal conditions and didn't feel they had to wait till they got married."

That's why Lauren Farris, 28, and her boyfriend Mark Sieckman, 30, of Chicago are house hunting. They're not living together and not yet engaged. But they're committed to spending their lives together and determined to buy a condo they can move into when her lease runs out June 1.

"The timing is right," says Farris, a senior media buyer at A. Eicoff & Co. ad agency. "Things are moving so quickly that listings that come on today could be gone tomorrow."

Her parents are helping them make an all-cash offer and are no longer concerned that the two haven't set a date.

"We get along really well and want the same things out of life," Farris says. "We know we're going to be married one day. ... We really don't have any concerns. We need to take advantage of the situation and get a head start in life."

By delaying marriage, some couples can afford to buy big - as long as they have good jobs and clean credit, and interest rates are low.

Detroit-area engaged couple Bryan Carter, 28, and Lisa Valesano, 30, are building their starter home: a $300,000, four-bedroom house with granite countertops. Carter's parents "were definitely surprised that we were building a house at such a young age," he says.

Other findings in the survey:

Southerners are more likely to take the traditional route. Almost three-fourths of married Southerners got a marriage license first, a mortgage second, compared with 60% in the Northeast.

Only 16% of married Americans have not bought a house with their current spouse.

Written by Haya El Nasser, USA Today