Client Question –
How is the market looking to you?
I am getting sick of renting. Do you know if the West Irvine homes have Mello-Roos and high association dues? I’d like to get something new so I don’t have to rebuild the thing.
Are you seeing any repos that look reasonable?
I am assuming that you are curious of how the market is from a buyer’s point of view – am I correct?
What I am telling all of my clients right now is, if you have stable income/employment, and purchasing a home is a goal of yours, then right now is a great time to buy, or at least before the year is over so that you can take advantage of the $8000 tax credit when buying a home in 2009. Will prices continue to fall….most likely, due to the fact that short sales and REO’s (foreclosure homes) are continuing to pop up in our market place. The key focus however should be on the financing aspect. Clearly, interest rates are historically low at 4.5% +/- a little here or there, and there are still some great financing programs that one can take advantage of. Where it gets tricky is that lenders are tightening up their guidelines every day and slowly eliminating programs and making restrictions tighter. To give you an example, I am currently working with a buyer who has been pre-approved for a purchase price with a 15% down payment for several months now. The lender just came to us early last week and told her that the program she qualified for is now requiring a minimum 20% down payment due to her qualifying criteria. Luckily for her, she was able to come up with the additional 5% at the last minute. Not everyone is as lucky or as resourceful as herself. My biggest concern in this type of market place where lenders are getting pickier and pickier with who they lend money to, is that home prices will continue to fall, and once it becomes so affordable, only a small, limited number of buyers will actually qualify to obtain financing. Obviously, to my cash buyers, it doesn’t affect them because they do not have to worry about qualifying or interest rates.
Many buyers are also waiting for interest rates to fall even lower. The problem with this is that, the number of home sales in Irvine has almost doubled since January. In January the total number of homes that sold and closed was 77, whereas just in April, there were 131 closed home sales! The Fed’s see this and understand that the interest rates are where they should be, because obviously, just based on home sales, the existing low interest rate has already stimulated buying. Although, both my lender and I feel that the interest rates will continue to stay stable throughout the year at between 4.5-5.5%, there is really no telling what will happen if sales continue to increase on a monthly basis. One thing we feel confident about is that they will not get any better…..but like I said, we don’t have a crystal ball, it is just an educated conjecture that we have come up with.
As far as West Irvine is concerned, it is a great area! Still a newer community started in the late 90’s, with homes that require little to no rebuilding or remodeling. Similar to Northpark and Northpark Square, West Irvine has moderate HOA dues and very reasonable Mello-Roos assessments compared to other newer areas of Irvine or Tustin like Woodbury, Portola Springs, or Columbus Grove/Square. Of all the newer communities in Irvine, West Irvine is one of the most reasonable areas to live in. In addition, it is a great community with Tennis Courts, playgrounds, parks, and a saltwater swimming pool, which I am sure you know about. When you say high association dues….what price range would be reasonable to you and your family?
As a whole, Irvine does not have a large amount of Foreclosure listings in comparison to other cities in North Orange County. Of the 677 total homes currently listed in Irvine, only 25 of them are foreclosed homes which is just over 3.5%. In West Irvine, there are a total of 10 homes listed, none of which are foreclosed. As a matter of fact, only 1 foreclosed home has been listed and sold in West Irvine since January, and that was in March. Since then, they have been virtually non-existent. This doesn’t mean that others won’t pop up though!
I have seen some reasonable repos in other areas of Irvine, and keep in mind that the repo’s that are in good shape and priced aggressively are sold within a day or two (max) of being listed on the market. Normally at a price higher than the actual list price to the most able/willing and prepared buyers. Most banks will price these homes very aggressively to get them sold immediately and their intention is to create a multiple offer situation so that they can have their pick from many offers. This is not always the case, however it is very common.
If you are interested in the West Irvine area, you may also want to include the Northpark and Northpark Square communities. As I mentioned above, all 3 of these communities are quite similar in what they have to offer a resident and have quite similar Mello-Roos and HOA dues, including the amenities.
If you are truly getting sick of renting and want to begin looking for a home, I would recommend that your next step be to contact a direct lender and begin the process of getting pre-approved. Obviously there is no obligation to you, and all this process will do for you is create more certainty. You will not only get pre-approved for a purchase price that you can afford, it will also give you more insight on the different financing options you can take advantage of and give you a detailed break down of your monthly investment. Without completing this process, you will be walking blind into the whole process. If you have a lender you are comfortable with, that is great, otherwise, I would be happy to send you a referral of a great lender that I have been working with for years. Please let me know if you would like me to send you the referral and I gladly will!
Please let me know if you have any other questions or concerns.
All the best,
Century 21 Professionals
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