Are home prices in Irvine going UP again?

by Robert Mack on June 9, 2009

in Irvine Real Estate Questions

Client Question –

Hi Robert,

Thanks for the follow up. We noticed the price of new listing properties in Irvine are getting higher; we probably will wait a little longer.
What is your opinion of current real estate market? Do you think it is the bottom or just because of the summer season?
I remember you mentioned about “not paying any loan closing costs on your mortgage” before. Could you explain what that is?

Thank you

Answer –

Hello A,

I have noticed that listing prices have gone up a bit as well.  The reason for this is because inventory has been consistently dropping since the beginning of the year and sales have increased consistently each month.  To give you an idea of inventory, there were a total of 692 homes available in Irvine in the month of April, which is considerably higher than the current month which is now 584 total available homes.  This is due to the fact that home sales have more than doubled since the month of January.

In January a total number of 77 homes closed and sold, and in the month of May a total of 188 homes sold.  This is due to the fact that home prices in Irvine have not only become very affordable to the first time home buyer; it is also due to the historically low interest rates.  I have noticed many buyers coming of the fence in the recent months because the future on inventory coupled with interest rates is simply unknown.  We do know that inflation will hit again, and this coupled with very high home sales may result in spikes in the interest rates.

As inventory falls, the demand will continue to rise which may cause the prices of homes to stabilize or possibly go up slightly.  I am not saying that we will see a big boom in prices, just that things may be leveling off as more and more buyers continue to feel that right now is the time to buy for them.  The summer season always shows the highest number of homes that are listed and there is no doubt that there will be more new homes listed on the market, so we will have to look out for that in the coming months.  In addition, we are expecting a new flood of foreclosed(bank owned) homes to hit the market in the coming months which will also have a direct effect on the prices of homes.

As I mentioned to you in earlier emails, it all comes down to whether or not it is the right time for you and your family to purchase a home, and whether it will be affordable to you.  In addition, if you have a stable job and good income, that is definitely a great sign.  If you haven’t already spoken to a lender regarding your qualifications, I would recommend that this be your next step.  It will help you determine a purchase price that you feel comfortable and it will also help you determine a detailed monthly payment.  In addition, your lender will be able to advise you on the interest rates and their thoughts on future interest rates.  If you do not have a lender that you are currently using, please let me know and I will send you a referral of a great lender that I have been working with for years.

As far as not paying any closing costs, it is quite straight forward.  When you write up an offer on a property, we simply ask the seller to pay a portion of or all of your closing costs, depending on the type of sale and type of loan you are planning on obtaining.  To give you a scenario, let’s say that you find a home and you estimate closing costs to be approximately $10,000.  You would simply write up the offer and request that the seller pay $10,000 towards your closing costs.  This will minimize/eliminate any out of the pocket costs for you.  Sometimes if the home is priced to sell, you may even have to offer a bit more than list price and request the credit.  The key is that the seller will net an amount that they will be happy with and you will be happy with as well.  Most sellers will agree to this if the net amount to them makes sense.  We are still in a buyers market and the sellers are willing to cooperate with creative offers to get the job done!

Please let me know if you have any other questions.

All the best,

Robert Mack
Century 21 Professionals
(949)209-7309 Cell
(949)262-2764 Fax <—- NEW EMAIL (please update your address book)

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