Category: Housing Blog


Is The ‘Trump Tantrum’ Mortgage Rate Spike Driving Buyer Urgency?

  • The average 30-year fixed-rate mortgage (FRM) spiked to 3.95 percent, from 3.77 percent, according to the Mortgage Bankers Association.
  • This is still lower the 30-year FRM of 3.97 percent recorded last year at this time.
  • Economists say the anticipation of Trump’s pledged spending plans and tax cuts have investors anticipating some inflation and a dose of adrenaline to the economy — and therefore there’s been some market volatility.
  • Some real estate agents are seeing consumers to reacting to the increases with a since of urgency by locking in rates and resuming negotiations.

Historically low mortgage rates have been the spoonful of sugar helping buyers swallow steep home prices, bidding wars and scant affordable housing this year.

Then, in a fever pitch, rates jumped 20 basis points immediately after last Tuesday’s news amid a wacky post-election bond market. (The 10-year Treasury note, which had for six months hovered around 1.80 percent, grew to 2.07 percent — the highest reading since last January.)

The latest from the Mortgage Bankers Association (MBA) tells us that 30-year fixed-rate mortgages (FRM) spiked to 3.95 percent from 3.77 percent.

Freddie Mac's Primary Mortgage Market Survey showed rates at 3.94%

Freddie Mac’s Primary Mortgage Market Survey showed rates at 3.94%

Moreover, Bankrate’s national survey released this week showed the 30-year FRM just breaking that 4.00 percent mark, up from 3.73 percent last week.

The ‘Trump Tantrum’

“This week’s increase in mortgage rates, being dubbed the ‘Trump Tantrum,’ is the biggest one week increase since the ‘Taper Tantrum’ in June 2013,” said Bankrate’s chief financial analyst Greg McBride in a statement, referring the surge in U.S. Treasury yields and subsequent panic a few years ago.

Some perspective: Rates remain at the bottom of the barrel, relatively speaking.

In fact, last year at this time, the 30-year FRM averaged 3.97 percent. (And as Realtor associate Rosemarie Villanova pointed out in a Facebook discussion on Inman Coast to Coast, “Remember in the boom a great rate was 6 percent.”)

But the anticipation of Trump’s pledged spending plans, particularly in the infrastructure realm, and tax cuts have investors anticipating some inflation and a dose of adrenaline to the economy — and therefore pulling money out of the bond market.

MBA also noted that mortgage application volume fell 9.2 percent last week compared to the previous week (indicating a pool of prospective borrowers has been spooked) while refinance loans dropped 11 percent.

On the other hand, some real estate agents are seeing consumers to reacting with a sense of urgency in the immediate aftermath of rate change — to lock in a good rate before it’s too late.

Reports from the trenches

Dispatches from industry pros across the country relayed similar sentiments.

Samantha DeBianchi, luxury agent and founder of DeBianchi Real Estate based in South Florida, said she’s “definitely seeing more people make moves and wanting to get in now before they go higher.”

Realtor Andrea Valenzuela of the Greater Denver area added in the Coast to Coast thread, “I’ve actually seen more people taking the plunge with the uncertainty of whether the rates will continue to rise.

“With the recent increase we’ve seen, I think those sitting on the fence have realized that the rates actually did rise (no longer a lofty threat that they may) and they fear that they’ll continue to rise so might as well jump in feet first and get in now before rates get even higher.”

Realtor Brandon Doyle replied: “We’re seeing the same thing with buyers here in [Minnesota], I locked in my rate this morning on my own purchase. It has risen 38 basis points since about 9:30 a.m.”

Earlier this week chatter about stimulated homebuyer interest created some buzz on Coast to Coast — Naples, Florida, agent Tiffany McQuaid chimed in that “My Realtors are running their tails off this week!” while others reported having stalled negotiations resume and wishy-washy buyers coming off the fence.

A fleeting moment or the first sign of long-lasting change?

While the housing market has been hanging out in the honeymoon stages of recovery, there’s been speculation of when that rate-rising moment would come, and whether it would be gentle or shell-shocking.

Steve Cook, editor of Real Estate Economy Watch, anticipates that all the pieces are in place for the rate increases to stick.

“I think that the long-awaited day when rates will change direction and begin a long-term rise has arrived,” he said. “The stars are finally aligned. The strengthening U.S. economy is driving up rates on 10-year Treasuries, Janet Yellen is raising expectation for an increase by the FOMC, and Donald Trump’s plans to heat up the economy with an infrastructure program next year all point to a major course correction in interest rates.

“The Fed plans to continue to move cautiously, so expectations are that we will see a gradual but steady rise in rates in 2017.”

What’s that mean for real estate clients?

“I would advise buyers to remain calm but to plan for rising rates,” Cook said. “The kind of increase we expect to see next year will have only a marginal increase on monthly payments on a 30-year fixed rate mortgage.

“However, I think that, barring bad news in the economy, this time we are in for lengthy rise in rates over the next few years that will make buying a home significantly more expensive.”

What’s it mean for sellers?

Pacific Union International CEO Mark McLaughlin in the Bay Area had some advice for sellers. In his company’s annual real estate forecast, he spoke of the likely narrowing of households that would qualify for a suitable home loan.

He told Inman: “If I am a seller in the next 24 months, I would be acutely aware that every 1 percent rise in mortgage rates effectively eliminates 30 percent of the portion of buyers … 25 percent in the Bay Area can afford a $1 million mortgage at 4 percent, 20 percent at 5 percent and 16 percent at 6 percent.” (A full recap of the forecast can be viewed here.)

In a Fox Business Network video newscast Wednesday, Rick Sharga, EVP of Ten-X, an online real estate buying and selling platform, noted that the increase as it stands isn’t anything worthy of ruffled feathers. And he gave buyers another silver lining: as interest rates go up, home prices will slow down and in some markets, go down.

Crunching some more numbers, he said, “For a $100,000 loan, the average borrower is going to pay an average $23 per month more than before the election, and that really shouldn’t have any effect on the housing market.

“The real question is how high is inflation expected to go and how much growth we’ll see in the economy, because that’s what’s actually driving the bond yields, which in turn drives the interest rates.

“Keep in mind … that a 45-year average, we’re looking at interest rates of 8.24 percent, and right now we’re still below 4.”


Source: Is The ‘Trump Tantrum’ Mortgage Rate Spike Driving Buyer Urgency?


Holiday Gift Guide 2016 – CNET

Looking for the perfect holiday gift? Check out CNET’s 2016 holiday gift guide for expert advice, reviews, and recommendations for you and your family.

Source: Holiday Gift Guide 2016 – CNET


The housing market is suddenly hot again

Core Logic April

Let’s get the bad news out of the way first. It doesn’t feel like the U.S. economy is firing on all cylinders.

Wage growth remains sluggish. The stock market continues to be volatile. Target, Macy’s and many other big retailers are struggling — and the recent spike in oil prices could further dent consumer spending.

But there is one part of the economy that is undeniably strong — the housing market.

New home sales hit their highest level since 2008 in April. Yes, 2008. The year the housing market, Wall Street and the entire U.S. economy went to you know what in a hand basket.

And home prices hit a record high.

Big homebuilder stocks Pulte (PHM) and KB Home (KBH) both rallied on the home sales news. And they are beating the broader market this year.

Shares of home price tracker Zillow (Z) — aka the web site you go to voyeuristically see what your neighbor’s home might be worth — are up more than 20% this year as well.

Another sign of housing strength? Home Depot (HD) and Lowe’s (LOW) both reported strong earnings last week. They are bright spots in an otherwise lousy quarter for big retailers.

But retail sales may soon take a turn for the better — thanks to the housing market rebound.

Thomas Wilson, senior investment manager at Brinker Capital, said that he expects consumers to start spending more — partly due to the wealth effect from a rebound in housing sales and home prices.

Wilson said that the recent upbeat guidance from luxury home builder Toll Brothers (TOL) is a good sign as well.

“There is a trickle-up effect. More first-time buyers are entering the market, which makes it easier for people to sell,” he said.

Wilson said that it’s premature to start worrying about whether the recent housing rebound could lead to another real estate bubble like the one we had in the mid-2000s that helped lead to the subprime mortgage crisis and Great Recession.

It’s worth remembering that the cause of the most recent downturn is rarely what creates the next one. The recession before the one in 2008 was largely a byproduct of a tech bubble in 2000 — not froth in the housing market.

“Normal recessions are caused by excess somewhere in the financial system,” said Eric Marshall, manager of the Hodges Small Cap fund.

That level of excess doesn’t seem to exist in the housing market. In fact, some areas of the country are still struggling to recover from the depths of the 2008 downturn.

The huge pullback in oil prices exacerbated housing weakness in some markets as well. But if the recovery in the energy markets last, then home sales and prices in places like Texas, Louisiana and North Dakota could bounce back too.

Along those lines, Marshall owns Plano-based LegacyTexas Financial Group (LTXB), which he thinks has been unfairly punished due to the turmoil in the oil market.

So the rebound in housing should be a good thing for other beaten down banks.

And If the Federal Reserve raises interest rates sooner rather than later as it is now indicating it might do, that could also push some prospective homebuyers to act more quickly before mortgage rates climb too much.

In the other words, the good times for housing-related companies may not be over just yet.

Source: The housing market is suddenly hot again – May. 25, 2016


‘Flip or Flop’ featuring Laguna Beach house for sale at $1.3 million

A modern, two-bedroom home in Laguna Beach has been through a metamorphosis and is ready for its close-up.

Tarek and Christina El Moussa of HGTV’s “Flip or Flop” purchased and rehabbed the house, originally built in 1950. The 1,104-square-foot residence will appear on the show at some point.

But it likely won’t be soon; the house just hit the market this week.

The El Moussas bought the home for $900,000 in January, property records show. They’ve priced it at $1.299 million.

The house, with balconies and peek-a-boo ocean views, sits at the bottom of hilly Nyes Place and across Pacific Coast Highway from Victoria Beach. Hitting the sand doesn’t mean having to cross a busy highway; Pedestrians can walk under it.

Travertine and composite wood floors, beamed ceilings, a reclaimed fireplace and recessed lighting are among the interior features of the home at 211 Nyes Place.

In the kitchen are modern white flat panel cabinets, quartz countertops, a glass tile backsplash, stainless steel appliances and a breakfast bar. Both bathrooms include floating vanities and chrome fixtures.

“Flip or Flop,” airing since April 2013, follows the Orange County couple as they buy properties that need rehabbing, fix them up, and resell them at a profit. Season 5 starts Thursday at 9 p.m.

Source: ‘Flip or Flop’ to feature Laguna Beach house for sale at $1.3 million – The Orange County Register


O.C. home affordability seen as best since 2013


It may be hard to believe, but when roughly 1-in-4 households can comfortably buy an Orange County house – that’s the best level of local home affordability in nearly three years.

The California Association of Realtors reports that 23 percent of Orange County households could qualify to buy the median priced single-family homes in the first quarter. That’s up from 21 percent in 2015’s fourth quarter and 22 percent a year ago. The last time local affordability was higher was the second quarter of 2013.

Even with the recent uptick in affordability, Orange County is a challenging place to buy as rising home values outstrip local salary growth. This affordability measure averaged 23 percent the last three years, down from 33 percent during the four years preceding that included the Great Recession and early says of the recovery.

The main Realtor affordability index is based on local median selling prices and assumes a buyer (1) puts down 20 percent; (2) pays prevailing fixed mortgage rates; and (3) has house payments – principal, interest, taxes and insurance – equal to no more than 30 percent of their income.

Statewide affordability for a single-family home was 34 percent in the first quarter, best in a year, as 22 of 29 California counties tracked had improved housing affordability vs. the previous quarter. But the association noted that in a year “rising home price offset income gains.”

In the first quarter, Los Angeles affordability was 31 percent and Riverside was 42 percent. Both were the highest reading in a year. San Bernardino’s 57 percent affordability was the highest since 2014’s fourth quarter.

Another Realtor affordability index, estimated conditions for first-time buyers, showed 43 percent of Orange County households could comfortably purchase a starter home. That’s up from 43 percent reports in the previous quarter but down from 45 percent a year ago.

Statewide, first-time buyer affordability was 54 percent; 66 percent in San Bernardino; 62 percent in Riverside County and 50 percent in Los Angeles.

First-time buyer affordability is based on a buyer paying 85 percent of the median selling price for a single-family home and assumes the new owner (1) put down 10 percent; (2) paid prevailing adjustable mortgage rates; and (3) got house payments equal to no more than 38 percent of their income.

Source: O.C. home affordability seen as best since 2013 – The Orange County Register


Fed likely to raise interest rates in June if economy keeps improving

Catching many investors off guard, the Federal Reserve made clear Wednesday that an interest rate increase in June is likely if the economy keeps improving.

The minutes of Fed officials’ meeting in late April show they widely felt it would be time to raise rates at their June 14-15 meeting as long as hiring and economic growth further strengthened and inflation showed signs of accelerating.

The Fed had voted, 9-1, in April to keep rates unchanged while noting that threats from the global slowdown had eased.

Given the suddenly increased likelihood that the Fed will raise rates at its next meeting, stocks turned lower and bond yields jumped after the minutes were released at 2 p.m. Eastern time.

The minutes said that some Fed officials did express concerns at the April meeting that the economic data might not be clear enough by mid-June to determine whether a rate hike was warranted. But this view was balanced against other officials’ belief that the data would prove consistent with a June hike.

Even at the April meeting, Fed officials were encouraged by developments in the U.S. economy and financial markets, the minutes showed. Several participants suggested that the risks to the economic outlook were now “roughly balanced.”

The Fed had last signaled its belief that risks were balanced in December, when it hiked rates for the first time in nearly a decade, from record lows near zero. But after turbulence struck financial markets and the global economy weakened, the Fed removed that assessment from its descriptions of the economy and held rates steady.

Until now, many economists have assumed that the Fed would leave rates alone at its June meeting. Some had noted that the Fed would meet just a week before Britain votes on whether to leave the European Union — a possibility dubbed Brexit — and that the central bank might want to avoid destabilizing markets with a rate increase.

“June is very much alive, but Brexit remains a big hurdle,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

Yet the Fed might want to go ahead with another rate hike, given signs that the economy has been recovering in the second quarter after nearly stalling in the first three months of the year. Analysts say they think annualized growth in the current quarter will accelerate to about 2% or better.

In addition, inflation, which has been running below the Fed’s 2% target for four years, has shown signs of accelerating as energy prices rebound from a steep drop at the beginning of the year. The government reported Tuesday that the consumer price index jumped 0.4% in April, reflecting higher energy costs.

In remarks this week, three Fed officials raised the prospects of a June rate hike.

John Williams, president of the Fed’s San Francisco regional bank, called June a “live” meeting. Atlanta Fed President Dennis Lockhart said of the possibility of a June rate increase, “I wouldn’t take it off the table.”

Robert Kaplan, president of the Fed’s Dallas regional bank, said Tuesday that “in the not-too-distant future,” the Fed should be raising rates. Speaking in Midland, Texas, Kaplan said he may advocate for a move in June or July.

Source: Fed likely to raise interest rates in June if economy keeps improving – LA Times


Palm Springs home seen in James Bond’s ‘Diamonds are Forever’ is now bank-owned and for sale at $8 million

The Elrod House, an over-the-top Palm Springs home featured in a famous fight scene in a 1971 James Bond movie, was turned over to a bank this month and now is for sale at $8 million, records show.

The home was re-entered on the Multiple Listing Service Friday, down from its $10.5 million pricetag earlier this year. That asking price was chopped from $13.89 million in 2009, according to

Built in 1969, the residence had its cinematic close-up in 1971, appearing in the Bond film, “Diamonds are Forever.” The house was where actor Sean Connery’s agent 007 got badly kicked around by a bikini-clad bodyguard.

Architectural Digest in April described the home this way:

“The single-story structure is defined by its circular living room with rosewood walls and black slate herringbone flooring. A concrete dome overhead with clerestories (windows) radiating from the center floods the room with light, and a massive curved curtain wall retracts to reveal panoramic vistas of the Coachella Valley.”

Some of the natural rock is part of the home’s interior, and the glass walls open to a swimming pool and terrace that appear to float above the scenery.

The property, at 8,901 square feet on 1.22 acres about a mile from downtown Palm Springs, includes a 2-bedroom guesthouse with a gym.

Michael J. Kilroy, a real estate investor from Palos Verdes Estates, bought the house for $5.5 million in 2003, according to a story in The Desert Sun in 2014.

Property Radar shows the deed to the residence was conveyed to Lloyds Bank on May 17.

Legendary architect John Lautner had designed the home for Arthur Elrod, an interior designer. Some of Lautner’s other homes also have appeared in movies, including Pulp Fiction, The Big Lebowski, Lethal Weapon 2 and Charlie’s Angels.

In Orange County, a landmark, dome-shaped Balboa Island home designed by Lautner sold for more than $3.77 million in March.

Source: Palm Springs home seen in James Bond’s ‘Diamonds are Forever’ is now bank-owned and for sale at $8 million


Housing’s Hot Streak Continues as Pending Sales Crush Expectations


This morning’s strong pending home sales report was the third upbeat April housing indicator. The National Association of Realtors® (NAR) said its Pending Home Sales Index (PHSI) a forward looking indicator based on home purchase contract signings, was up 5.1 percent in April to 116.3 while the March PHSI was revised up from 110.5 to 110.7.  It was the third consecutive month that the Index had gained ground and it brought pending sales to their highest level in a decade.  The index gained 4.6 percent from April 2015 and was the 20th consecutive year-over-year increase.

The month over month change blew analysts’ expectations out of the water.  Econoday’s poll put the high end of expectations at 1.2 percent with a consensus of 0.8%.

The strong report follows a solid existing home sales report of a 1.7 percent monthly increase and a stunning report in which new home sales posted a 16.6 percent gain.

Lawrence Yun, NAR chief economist, says vast gains in the South and West propelled pending sales in April to their highest level since February 2006 (117.4). “The ability to sign a contract on a home is slightly exceeding expectations this spring even with the affordability stresses and inventory squeezes affecting buyers in a number of markets,” he said. “The building momentum from the over 14 million jobs created since 2010 and the prospect of facing higher rents and mortgage rates down the road appear to be bringing more interested buyers into the market.”

Yun says it remains to be seen how long mortgage rates will stay as low as they have fallen in recent months.  They, along with rent growth, rising gas prices – and the fading effects of last year’s cheap oil on consumer prices – could edge up inflation and push rates higher. For now, he foresees mortgage rates continuing to hover around 4 percent in coming months, but surprises, he said, are always possible.

Adds Yun, “Even if rates rise soon, sales have legs for further expansion this summer if housing supply increases enough to give buyers an adequate number of affordable choices during their search.”

Yun now expects sales this year to climb above earlier estimates and be around 5.41 million, a 3.0 percent boost from 2015. After accelerating to 6.8 percent a year ago, national median existing-home price growth is forecast to slightly moderate to between 4 and 5 percent.

Pending sales increased in all four regions on an annual basis.  In the Northeast the index climbed 1.2 percent to 98.2 and is now 10.1 percent above a year ago. In the Midwest the index declined slightly (0.6 percent) to 112.9 in April, but is still 2.0 percent above April 2015.

April pending sales jumped 6.8 percent in the South to an index of 133.9 and are 5.1 percent higher than last April. The index in the West soared 11.4 percent to 106.2, and is now 2.8 percent above a year ago.

The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined. By coincidence, the volume of existing-home sales in 2001 fell within the range of 5.0 to 5.5 million, which is considered normal for the current U.S. population.


Source: Housing’s Hot Streak Continues as Pending Sales Crush Expectations


4 Simple Steps to Getting Twice as Much Done in Half the Time

Do you ever get to the end of a day, look back and ask yourself, “What did I really get done today?” You feel like you spent the whole day working but have nothing to show for it: Your business hasn’t improved. You haven’t reduced your stress level. You haven’t increased your net worth. Nothing has really changed — except that you sat at a desk all day.

Related: 4 Productivity Tips That Changed My Life This Year

Don’t feel bad — it happens to almost everyone! We overestimate how much we think we can do, and then when we look back, we are often shocked by how few tasks of real substance we actually got accomplished. There are a lot of reasons why this happens, but here I want to focus on a four-step process for accomplishing twice as much work in half the time. And, no, it’s not magic.

1. Work on the right stuff.

Most of what you work on doesn’t really need to be done. You might think it does in the moment, but let’s be honest: We have far too many “TPS reports” to fill out, too many meetings to attend, too many hours in between tasks (which I have defined before as “dead space”) and too much effort spent on tasks that don’t move the needle.

Therefore, the first and most important step in getting more accomplished is to focus on the few tasks that move the needle. You might achieve “inbox zero,” but does that matter if you didn’t get the only task accomplished that actually would help you move your business to the next level?

So, ask yourself right now: What are the one or two most important tasks that need to get accomplished today? For more on this, read The One Thing by Gary Keller and Jay Papasan or Essentialism by Greg McKeown.

2. Set a deadline.

Next, to accomplish twice as much stuff in half the time, set a deadline and schedule those actions to be completed. Without a deadline, Parkinson’s Law takes over, and the work will expand to the time allotted for it. A task that really needs only two hours of deep, focused work ends up taking six months, as it rots away on a “to-do” list.

To save yourself from “to-do list hell,” set a pressing deadline by which that important task must be finished. Then, stick to it, no matter what.

For example, I’m in the middle of a large house-flipping project right now. This project could easily take six months, but because I have a June 1 deadline, my mind is working overtime (and subconsciously) to make sure it is finished by that date. I’ll hire more workers if that’s needed — but the job will get done. The deadline makes sure of that.

If you have trouble sticking to self-imposed deadlines, call in help from friends who will hold you accountable. For example, my buddy Joshua Long from has been working on a book for the past year, but recently set a huge “stretch goal” of finishing by April 26 — now, just a week away. Knowing that his deadline might not be enough, he enlisted the help of a couple of us friends to hold him to that date — and you can bet we’ll do just that. Maybe just this mention is enough!

Related: Become a Productivity Monster by Eliminating These 5 Time-Wasting Habits

3. Eliminate distractions — and focus.

Third, to get more done, eliminate the things in your life that are distracting you. Identifying the right stuff to work is important. But the hard part is actually taking the time to work without being distracted by meetings, mail, text messages, crying babies or your spouse asking about dinner plans — plus every other distraction that begs your attention. Distraction is the enemy of success.

So, go on the offensive. Schedule time to complete your most important work. This means actually going to your calendar and scheduling time to accomplish those “must-do” items. Find a quiet place that is 100 percent free of distractions. Turn off your internet, leave your phone in another room and do whatever you must to focus intently on the work at hand.

4. Track your results.

How many calories did you eat yesterday? I’m guessing you have no idea — unless you happen to place an incredible importance on your food intake at the moment. You see, we measure what matters in our lives! I ate 2,611 calories, and I know this because I’m tracking it, so I can improve my health. I measure it because it matters.

So, does your productivity matter? Does getting finished with your work by noon matter? Does doubling your income matter? How about growing your business? If these things matter, measure them! And do that on a regular basis. Because, increasing your productivity is difficult if you don’t track the progress you are making (or not making).

For example, I wake up, and the first thing I do is track my progress from the previous day:

  • Did I wake up by 6 a.m.?
  • Did I eat under 2,500 calories?
  • How much time did I spend in “deep work” mode?
  • Did I write 1,000 words?

Then, I track my progress day after day, week after week to compare with my past results. Perhaps last week I accomplished only six hours of deep work. That’s okay, because now I have a benchmark to improve upon next week. Simply put: I’ve gamified my productivity! And you can (and should) do the same.

Remember, what gets measured matters, and what matters gets measured. If you truly want to work less and produce more, you must track your progress.

Finally, once you’ve mastered these four steps, the tough question is: What are you going to do with all the extra time you have?

  • Spend more time with your family?
  • Increase your net worth?
  • Grow your business to incredible new levels?
  • Travel more?

Related: How Getting up at 5 a.m. Has Improved My Health and Productivity

All these options are in the realm of possibility if you only make a daily, conscientous effort to increase your productivity by working on the right things at the right time. Then — and only then — can you truly get twice as much done in half the time.

Source: 4 Simple Steps to Getting Twice as Much Done in Half the Time


$645,000: How O.C. home prices got back to pre-recession peak, experts aren’t worried…

Low mortgage rates, high demand and a shortage of entry-level homes have pushed Orange County house and condo prices back to the June 2007 peak of the housing boom.

The median price of a home – or price at the midpoint of all sales – hit $645,000 in April, making Orange County the first Southern California county to get back to pre-recession prices, according to CoreLogic data.

The market milestone followed a four-year, 54 percent run-up in home prices since the housing market bottomed out for a second time in 2012.

But nine years later, today’s market has little in common with the housing scene of ’07 apart from that $645,000 price tag.

For example, monthly house payments are lower today, averaging $406 less in April than in June 2007 because of historically low interest rates, CoreLogic reported.

“It’s hard to break out too much party gear when you realize it took nine years,” CoreLogic research analyst Andrew LePage said. “It’s meaningful, but it doesn’t mean everybody’s house is worth what it was back then.”

And getting back to the record price “doesn’t mean we’re re-creating the bubble,” added broker Bob Hunt of Keller Williams Realty in San Clemente.

“We all know how that was fed by the crazy financing that was available” during the housing boom, Hunt said in an email Tuesday. “It’s nothing like that now.”

In addition, nine years of inflation means that 2007 median of $645,000 is equivalent to $744,000 in today’s dollars, or $99,000 more.

Happy sellers, frustrated buyers

At open houses around the county on Saturday, there was little talk about market milestones and more concern about the lack of affordable houses for sale.

“A lot of people are trying to get a house right now because interest rates are low,” said Taqialdeen Zamil, 27, of Anaheim.

Zamil was part of a steady stream of house hunters traipsing through a three-bedroom 1950s Garden Grove house listed at $599,000.

Broker Matthew Shinn of A-Plus Realty said he got eight offers for the house in six days.

“The market is very hot,” Shinn said. But, he added, “it’s very competitive for the buyers.”

After getting outbid on eight homes over the past month, Robert Nguyen had a different view.

“These guys are taking over the asking price, full-cash offers,” said Nguyen, 35, a Garden Grove resident looking to buy with his wife, Julie Vo. “I wonder how many people are going to come in and pay $40,000 to $50,000 over the asking price.”

“It can be disheartening,” added John Tyler, 34, an Orange renter who’s ready to own a house with his wife, Shiloh, their 5-year-old daugther, Camila, and their puppy, Harley. “But you have to go back in there and keep looking.”

Last month’s median was up 7.5 percent, or $45,000, from the previous April.

Buyers noted that the longer it takes to buy a home, the more they pay. Especially this time of year, the peak months for housing transactions and price hikes.

Zamil and his wife, Sara Tabbaa, stopped looking last year when their daughter, Shaam, was born.

When they started looking again two months ago, it seemed that prices were up as much as $100,000.

“I think people are listing at high prices – more than it’s worth,” Zamil said.

Rising prices, coupled with few homes for sale, may be discouraging buyers.

Orange County home sales fell 6.5 percent to 3,285 transactions in April, CoreLogic reported. Sales have dropped year over year just one other time in the past 14 months.

While April’s transaction tally is robust compared with June 2007’s total of 2,641, it’s 34 percent below the April average.

LePage attributed sluggish sales to a lack of affordability, inventory and mortgage credit.

Less home, more cost

Meanwhile, job growth, household growth and low mortgage rates are fueling demand, LePage said.

Mark Boud, president of San Clemente-based Real Estate Economics, said Orange County’s housing demand is growing faster than the number of new homes because of rising employment here.

That, he said, is “keeping prices at the currently high levels.”

Hence, the price of entry-level homes now is $500,000 to $750,000, said Steve Thomas of

The result is buyers settling for smaller homes. The median price for a condo was up 8.7 percent in April, compared with a gain of 3.7 percent for houses, CoreLogic figures show.

“Townhomes are appreciating like crazy, which is typical when things aren’t affordable,” Thomas said. “When people can’t squeeze into a house, they go the condo route.”

Region still below peak

Several Bay Area counties have been back to price peaks for months, while San Francisco home prices surpassed pre-recession peaks more than a year ago, LePage said.

But Southern California’s market has been slightly less robust, remaining 9.3 percent below the peak.

By comparison, home prices in Los Angeles and San Diego counties remain 5.5 percent below their respective peaks, LePage said. Prices in Riverside County are 23.6 percent below that county’s peak, while homes in San Bernardino County are selling, on average, for 28.9 percent below peak levels.

Perhaps lost in this latest round of price gains are a tiny group of homeowners who bought at the top of the market, yet somehow hung on while their homes steadily dropped in value after the crash.

CoreLogic reported that 12,930 households, or 2.4 percent of all mortgage borrowers, still owned homes worth less than they owed to lenders at the end of 2015.

By comparison, 82,586 households, or 15 percent of borrowers, were in similar circumstances at the end of 2012 when the current price run-up began. Rising home values rescued many of these “underwater” homeowners.

So what happens next?

Most observers see continued price gains, but at a less frenzied pace. And little chance of a new bubble any time soon.

“Despite the currently high level of home prices in Orange County, we don’t see a lot of upside in terms of price appreciation,” said Boud, the real estate economist. “Going forward, the result will be modest but continued positive price appreciation rates for the next few years in Orange County.”

Source: $645,000: How O.C. home prices got back to pre-recession peak, and why experts aren’t worried – The Orange County Register