Purchasing a house in Irvine, (or pretty much anywhere), can be an incredibly daunting process, and it's easy to feel overwhelmed with all of the decisions that need to be made. Before purchasing a home, there are three essential tips that potential buyers should keep in mind. 

Firstly. It’s important to consider your budget and figure out what you can realistically afford. It's equally important to ask a lender for a pre-approval letter showing the maximum home price you can buy. If you’re not paying cash for a home, this pre-approval letter must accompany the offer you make on a listing.

Secondly, increasing your credit score is an important step to take if you want to reduce the amount of interest you pay on your mortgage loan. Having a high credit score can often mean the difference between paying hundreds or even thousands of dollars more in interest over the life of a loan. If your score is really low, no lender will approve you for a home mortgage loan.

Thirdly, when you’re ready to start the process of buying a house, it is important to find the right Realtor who can help guide you through the process. It's a good idea to read some Realtor reviews, not only on their website, but on Zillow too. If a Realtor does not have many 5-star reviews on Zillow, ask yourself why.

Here are some qualities to look for in a Realtor that will make your home buying experience as smooth and successful as possible:

1. Knowledgeable: Make sure your Realtor is well versed in the local area. They should be able to provide accurate information about the housing market, various areas, neighborhoods, school districts, and other relevant details to make sure you find the perfect home for your needs.

2. Experienced: It’s important to hire someone who has a good amount of experience in the industry. A seasoned Realtor will have knowledge of all the different steps involved throughout the course of purchasing a home so she can advise you on each step and handle any potential issues that may arise along the way.

3. Professionalism: Your Realtor should be courteous and professional when interacting with clients or other key figures involved in your purchase such as lenders, inspectors, listing agents and sellers. You want an individual who is capable of handling delicate negotiations without getting offended or being overly aggressive.

4. Good Communication Skills: A great Realtor should be able to keep everyone in the loop about what’s going on during each stage of your purchase including yourself, lenders, listing agents, appraisers etc., so no one misses out on crucial information or deadlines. She should also be available both online and over the phone so you can easily get in touch with them whenever needed.

5. Good Negotiator: Having a Realtor who has excellent negotiation skills is incredibly important when purchasing a home, in fact it is an essential part of the real estate process, as it allows buyers and sellers to come to an agreement that’s beneficial for both parties.

With the help of a Realtor who knows how to negotiate effectively, you can ensure that your interests are represented in all aspects of the transaction from start to finish.

A great negotiator will know exactly how to maximize your chances of getting the deal you desire, whether it’s securing a lower purchase price or obtaining more favorable terms and conditions such as closing costs or repairs. They will be able to assess any potential risks associated with the deal and help you determine if they are worth taking. Moreover, they will also be able to leverage their knowledge of the marketplace and local area to provide you with market data that can assist you in making more informed decisions about the purchase.

In addition, having someone with strong negotiating skills can save you time, money and stress by ensuring the entire process goes smoothly without any issues or delays. They will also be able to work around any obstacles that may arise during negotiations such as appraisals and inspections, so both parties can reach an agreeable outcome quickly and efficiently.

There’s no denying the long-term financial benefits of owning a home, but today’s Orange County housing market may have you wondering if now’s still the time to buy a home in Irvine. While the financial aspects of buying a home are important, the non-financial and emotional reasons are too.

Home means something different to all of us. Whether it’s sharing memories with loved ones at the kitchen table or settling in to read a book in a favorite chair, the emotional connections to our homes can be just as important as the financial ones. Here are some of the things that make a house a home.

1. You Can Be Proud of Your Accomplishment

Buying a home is a major life milestone. Whether you’re setting out to buy your first home or your fifth, congratulations will be in order when you’ve achieved your goal. The sense of accomplishment you’ll feel at the end of your journey will truly make your home feel like a special place.

2. You Have Your Own Designated Happy Place

Owning your own home offers not only safety and security, but also a comfortable place where you can relax and unwind after a long day. Sometimes that’s just what you need to feel recharged and content.

3. You Can Find the Space To Meet Your Needs

Whether you want more room for your changing lifestyle (like retirement, dedicated space for a hobby, or a personal gym) or you simply prefer to have a large backyard for entertaining, you can invest in a home that truly works for your evolving needs.

4. You Can Customize Your Surroundings

Looking to try one of those decorative wall treatments you saw online? Tired of paying an additional pet deposit for your apartment building? Or maybe you want to create an in-home yoga studio. You can do all these things in your own home.

Bottom Line

Whether you’re planning to purchase your first home or you’re ready to buy a different home to meet your needs, consider the emotional benefits that can turn a house into a happy home. When you’re ready to make a move, let’s connect.

The Fall issue of Inside Irvine is available online now, and Irvine residents will see Inside Irvine in their mailboxes soon. 

Read the fall issue of Inside Irvine online here.

Learn how the Irvine Global Village Festival supports local businesses; read about the many ways Irvine is celebrating diversity, equity, and inclusion; and find out how you can prepare yourself for wildfires. Then, search the Fall Activity Guide for City classes, camps, and programs happening this season.

You can also preview all upcoming classes now at yourirvine.org.

Registration has been open for all Fall activities since Monday, August 15.

The 30-year fixed-rate mortgage increased an average of 1.2% since the beginning of the year, (from 3.22% to 4.42%), and just last week it leaped a quarter of a percent. Look at this chart to see how the movement of home-loan rates last year were not bad at all, compared to the rapid increase in rates this year:

I've read that many mortgage experts expect rates to continue to increase throughout the rest of this year. Let me know if you’d like me to send you some reading material.

What does this mean for you if you're looking to buy a home?

Well, because both home values and rates are going to increase for the rest of the year, if you’re able to buy, it would be better to do so sooner rather than later. That's because the longer you wait, the more it will cost you.

But there is some good news if you buy now. Yes, you will be paying more for a home now than you would have if you had bought last year, and you’ll be paying a higher mortgage rate than you would have last year, rising prices do have a long-term benefit once you buy.

If you purchase a home today valued at $800,000 and put 10% down, you would be taking out a $720,000 mortgage. That means at a 4.42% fixed mortgage rate, your mortgage payment would be $3,614 a month (this does not include insurance, taxes, and other fees because those vary by location). You can see a Mortgage Calculator on my website, HomesForSaleinIrvine.com

Now think about the huge growth in equity that you’ll see, due to rising home prices. Last week, Pulsenomics released their latest Home Price Expectation Survey.

The survey shows that the experts expect a 9% increase in home values in 2022.

So although paying a higher price for a home in Irvine, (or anywhere actually!), and paying a higher mortgage rate, can be difficult pills to swallow, waiting will just cost you more. If you're ready, willing, and able to buy a home, now will be a better time than a year, or even six months from now.

Let's connect to begin the process today. Call or text 949-537-2079 or send me a message!

If you were thinking about buying a home this year, but already pressed pause on your plans due to rising home prices in Irvine and the surrounding cities, and increasing mortgage rates, there's something you should consider. 

According to the latest report from ATTOM Data, owning a home is more affordable than renting in the majority of the country. The 2022 Rental Affordability Report says:

. . . Owning a median-priced home is more affordable than the average rent on a three-bedroom property in 666, or 58 percent, of the 1,154 U.S. counties analyzed for the report. That means major home ownership expenses consume a smaller portion of average local wages than renting.

Other experts in the industry offer additional perspectives on renting today. In the latest Single-Family Rent Index from CoreLogic, single-family rent saw the fastest year-over-year growth in over 16 years when comparing data for November each year (see graph below):

While it’s true home prices and mortgage rates are rising, so are monthly rents. As a prospective buyer, rising rates and prices shouldn’t be enough to keep you on the sideline, though. As the chart above shows, rents are skyrocketing. The big difference is, when you rent, that rising cost benefits your landlord’s investment strategy, but it doesn’t deliver any sort of return for you.

In contrast, when you buy a home, your monthly mortgage payment serves as a form of forced savings. Over time, as you pay down your loan and as home values rise, you’re building equity (and by extension, your own net worth). Not to mention, you’ll lock in your mortgage payment for the duration of your loan (typically 15 to 30 years) and give yourself a stable and reliable monthly payment. We all know that landlords will increase the rental amounts from time to time.

When asking yourself if you should keep renting or if it’s time to buy, think about what Todd Teta, Chief Product Officer at ATTOM Data, says:

“. . . Home ownership still remains the more affordable option for average workers in a majority of the country because it still takes up a smaller portion of their pay.”  

If buying takes up a smaller portion of your pay and has benefits renting can’t provide, the question really becomes: is renting really worth it?

If you’re weighing your options between renting and buying, it’s important to look at the full picture. While buying a home can feel like a daunting process, having a trusted advisor on your side is key. Let’s connect to explore your options so you can learn more about the benefits of homeownership today.

The residential housing market has been at an unrelentingly insane pace since July 2020, and it seems like nothing will slow it down.

Interest Rates are Juicing the Market

Unless you've been living under a rock, by now you know that our local Irvine real estate market is going absolutely bananas. We know that we’re currently in an aggressive sellers market, and the numbers from the past couple months this year compared to those of last year prove it.

Historically low rates have led to the Expected Market Time dropping to 23 days, the lowest level for this time of year since tracking began in 2004. 

For buyers waiting for the market to slow and turn more favorably towards the home shopper, there seems to be no light at the end of tunnel. 

Housing has been lining up in favor of sellers since 2012. Many thought that the pandemic would slow housing, create a deep recession, and erode home values, giving buyers that much desired edge. Instead, rates plummeted to record lows, demand escalated, the inventory of homes available plummeted to unfathomable depths, and home values soared to unbelievable heights. 

The pandemic led economic recession lasted only two months, and it did not touch the Orange County housing industry, and certainly not Irvine's housing industry!

Values have climbed more than 20% year-over-year and the pace of Orange County housing has not slowed much at all this year. The Expected Market Time (the amount of time between hammering in the FOR-SALE sign and opening escrow) is not measured in months any more - it is measured in days, and often in hours!

A Hot Seller’s Market is defined as a market time below 60-days, the lower the level, the hotter the market. Today, Irvine sellers cannot keep their homes on the shelf - they go almost immediately.

Interest rates although still super-low, are rising. As rates rise further, many buyers will put their home-buying plans on hold because as monthly mortgage payments rise, affordability diminishes. As a result, the inventory will rise with fewer buyers in the marketplace, and the Expected Market Time will rise too. 

The market will transition first to a Slight Seller’s Market, between 60 and 90 days of inventory, then to a Balanced Market, between 90 and 120 days, next to a Slight Buyer’s Market, between 120 and 150 days, and finally, to a Deep Buyer’s Market, greater than 150 days.

Active, (for sale), inventory dropped 9% in the past two weeks and today there are only 85 homes listed for sale in the whole of Irvine. 

The prices of Irvine active listings range from $448,000 to $49,950,000!, (for a 7-bedroom, 12-bath Shady Canyon estate).

A lot of people who are considering selling their home but don’t want to deal with the pressure of buying in this market, what with prices going up, are holding off on selling - for the fear of being homeless or hoping to exit at the top of the market. Who knows when the to of the market will be here?!

Even in this crazy market you need a plan. Let's structure your plan together.

Whether it’s making an offer on a home, or figuring a list price for your present home, it’s important to understand what’s really going on and what the data is showing us.

My team and I are always here to answer any questions. If you or someone you know plans to buy or sell in the next 12 months or so, give me a call, shoot me an email or text, and let’s chat.

Last March, many involved in the residential housing industry feared the market would be crushed under the pressure of a once-in-a-lifetime pandemic. Instead, real estate had one of its best years ever. Home sales and prices were both up substantially over the year before. 2020 was so strong that many now fear the market’s exuberance mirrors that of the last housing boom and, as a result, we’re now headed for another crash.

However, there are many reasons this real estate market is nothing like 2008. Here are six visuals to show the dramatic differences.

1. Mortgage standards are nothing like they were back then.

During the housing bubble, it was difficult not to get a mortgage. Today, it’s tough to qualify. Recently, the Urban Institute released their latest Housing Credit Availability Index (HCAI) which “measures the percentage of owner-occupied home purchase loans that are likely to default—that is, go unpaid for more than 90 days past their due date. A lower HCAI indicates that lenders are unwilling to tolerate defaults and are imposing tighter lending standards, making it harder to get a loan. A higher HCAI indicates that lenders are willing to tolerate defaults and are taking more risks, making it easier to get a loan.”

The index shows that lenders were comfortable taking on high levels of risk during the housing boom of 2004-2006. It also reveals that today, the HCAI is under 5 percent, which is the lowest it’s been since the introduction of the index. The report explains:

“Significant space remains to safely expand the credit box. If the current default risk was doubled across all channels, risk would still be well within the pre-crisis standard of 12.5 percent from 2001 to 2003 for the whole mortgage market.”

This is nothing like the last time.

2. Prices aren’t soaring out of control.

Below is a graph showing annual home price appreciation over the past four years compared to the four years leading up to the height of the housing bubble. Though price appreciation was quite strong last year, it’s nowhere near the rise in prices that preceded the crash.There’s a stark difference between these two periods of time. Normal appreciation is 3.8%. So, while current appreciation is higher than the historic norm, it’s certainly not accelerating out of control as it did in the early 2000s.

This is nothing like the last time.

3. We don’t have a surplus of homes on the market. We have a shortage.

The months’ supply of inventory needed to sustain a normal real estate market is approximately six months. Anything more than that is an overabundance and will causes prices to depreciate. Anything less than that is a shortage and will lead to continued appreciation. As the next graph shows, there were too many homes for sale in 2007, and that caused prices to tumble. Today, there’s a shortage of inventory, which is causing an acceleration in home values.

This is nothing like the last time.

If you’re concerned that we’re making the same mistakes that led to the housing crash, take a look at the charts and graphs above to help alleviate your fears, then give me a call to discus.

For years I've talked about why it makes financial sense to buy a home, rather than rent one, but more often than not, we’re drawn to the emotional reasons for homeownership.

It doesn't matter if the living space is tiny or huge, whether the home is on the modest type, or one with a lot of wow factors, the feeling of a home means different things to different people. Sometimes it’s a certain pleasant aroma in the air, or the feeling one gets when relaxing in the patio, comfortable and pleasant connections to our own homes are typically more important to us than the financial ones. Here are some of the reasons why.

1. Owning your own home is something you've achieved and is worth celebrating
You’ve probably worked very hard to achieve your dream of homeownership, and it doesn't matter whether it’s your first home or your tenth, congrats to you! You’ve earned it.

2. There’s no place like home
Besides not having a landlord who might ask you to leave one day, you'll own your own place for as long as you like. Security and peace of mind is important to most of us. Owning your own home also offers safety and a comfortable place where you can simply relax and kick-back after a long day. Sometimes, that’s just what people need to feel recharge their batteries and feel truly content.

3. You can find more space to meet whatever needs you have
Whether you want more room in your home for your changing lifestyle, (maybe you're working from home, need space for the kids' virtual school, or you need a spot to work out), or you just would rather have a larger outdoor space for keeping your distance while entertaining in these pandemic times, you can invest in a location that truly works for your changing needs.

4. YOU decide what upgrades and other changes you want
So you want to copy one of those ideas you saw on Pinterest? Well, go for it - remember there's no landlord here, so no need to ask anyone for permission. Thinking of getting a four-legged member of the family? Well, again, there's no permission needed and you certainly won't be paying any pet deposit! of paying an additional pet deposit for your apartment building? You can do a lot more when you own a home, compared to when you're somebody's tenant.

Buying a home for the first time? There are programs for you! Maybe you'll be selling your home and moving up, or downsizing. Relocating to Irvine? Whatever the new chapter in your life is going to read like, now is a great time to think about all the things that turn a home into a HAPPY home.

If you’re like most people, you’ve probably heard that getting pre-approved for a mortgage loan is the first step in the homebuying process. But do you know why this is so important?

It’s so easy to fall in love with a home that is outside your budget when you start looking for a property to buy. That home then becomes the benchmark, and you compare other homes to that one.

You’ll agree that it makes sense know your price range, before you start house-hunting. Then you’ll be comfortable with your monthly payments and there is less chance of any surprises later. You can get a pre-approval letter from the mortgage department at your bank, or perhaps you already know and trust a mortgage loan consultant. If not, ask me to put you in contact with a really smart mortgage consultant who has helped many of my buyer clients.

According to a recent survey from realtor.com a lot of buyers are making the mistake of NOT getting pre-approved at the start of the homebuying process:
“Of over 2,000 active home shoppers who plan to purchase a home in the next 12 months, only 52% obtained a pre-approval letter before beginning their home search, which means nearly half of home buyers are missing this crucial piece of paperwork.”

The pre-approval letter shows sellers that you’re a qualified buyer, and the letter must accompany your offer to buy an Irvine home.

Right now, the Irvine housing market is hot, with inventory being arguably the biggest challenge for today’s buyers. There are a lot more active homebuyers than there are sellers, therefore things are in the sellers’ favor.

With limited inventory nationwide, homes are getting an average of 2.9 offers for sellers who negotiate, causing bidding wars.

Danielle Hale, Chief Economist for realtor.com notes:
“For ‘a buyer in a competitive market, it’s typically essential to have pre-approval done in order to submit an offer, so getting it done before you even look at homes is a smart move that will enable a buyer to move fast to put an offer in on the right home.’”

In addition, today’s housing market is also changing from moment to moment. Interest rates are the lowest ever seen.

Banks and other lenders are tightening-up their requirements so don’t delay beginning the pre-approval process – the lender may well be asking for documents you hadn’t thought of. They’ll be looking at your loan application and credit report, as well as info about your debt, work history, down payment and even your residential history.

In a competitive market with low inventory like the Irvine housing market, a pre-approval letter is a game-changing piece of the homebuying process. If you’re getting ready to buy, let’s connect before you start searching for a home.

The health crisis we face as a country has led businesses all over the nation to reduce or discontinue their services altogether. This pause in the economy has greatly impacted the workforce and as a result, many people have been laid off or furloughed. Naturally, that would lead many to believe we might see a rush of foreclosures like we saw in 2008. The market today, however, is very different from 2008.

The concern of more foreclosures based on those that are out of work is one that we need to understand fully. There are two reasons we won't see a rush of foreclosures this fall: forbearance extension options and strong homeowner equity.

1. Forbearance Extension

Forbearance, according to the Consumer Financial Protection Bureau (CFPB), is when your mortgage lender allows you to temporarily pay your mortgage at a lower payment or pause paying your mortgage. This is an option for those who need immediate relief. In today's economy, the CFPB has given homeowners a way to extend their forbearance, which will greatly assist those families who need it at this critical time.

Quite a few homeowners opted to pause their mortgage payments but of course they'll have to pay back that amount later. Many banks are saying that they want the paused payments to be repaid in one lump sum but are offering other repayment options. 

Under the CARES Act, the CFPB notes:

"If you experience financial hardship due to the coronavirus pandemic, you have a right to request and obtain a forbearance for up to 180 days. You also have the right to request and obtain an extension for up to another 180 days (for a total of up to 360 days)."

2. Strong Homeowner Equity

Equity is also working in favor of today's homeowners. This savings is another reason why we won't see substantial foreclosures in the near future. Today's homeowners who are in forbearance actually have more equity in their homes than what the market experienced in 2008.

The Mortgage Monitor report from Black Knight indicates that of all active forbearances which are past due on their mortgage payment, 77% have at least 20% equity in their homes (See graph below):

Knight notes:

"The high level of equity provides options for homeowners, policymakers, mortgage investors and servicers in helping to avoid downstream foreclosure activity and default-related losses."

So while many think that we may see a rush of foreclosures this fall, the facts just don't add up in this case. Today's real estate market is very different from 2008 when we saw many homeowners walk away from their homes when they owed more than their homes were worth. Not many of that happened in Irvine but there were certainly some cases, and many short sales. This time, equity is stronger and plans are in place to help those affected weather the storm. 

There is only one Irvine foreclosure on the market today. You can buy this Irvine REO for only $6,795,000

With a low supply and strong demand, the Irvine real estate market has not been this hot since 2013. This is the situation in Irvine now:

Thankfully my Irvine listings aren't taking long to sell.

🙂