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.

🙂

Have you been thinking about becoming a property investor, and wondering why you should buy a rental? Here are some signs to look for if you are on the fence about investing in a rental.

“If you don’t own a home, buy one. If you own one home, buy another one, and if you own two homes buy a third and lend your relatives the money to buy a home.” John Paulson.

Low Interest Rates
When mortgage rates drop, it is much easier to find a property that will make you income. Mortgage rates just fell below 3% for the first time ever! The best place to figure out what kind of interest rate you will get for an investment property is with a mortgage lender. Check with your bank or ask me who a lot of my buyer clients use to get excellent service and great rates.

A heads-up for you that lenders charge more for “non-owner occupied” transactions than for one where the buyer will actually live in the home.

Let’s discuss how the process of buying an income-producing home is started, and I’ll send you properties to view virtually initially, (3D virtual tours, floor plans, viewing info and photos online and property walk-through videos), and then when you think you’ve seen one you may want to buy, I’ll arrange an actual tour of the property.

Home Equity
Check in with me to see how much your current home is worth! Some investment properties require a high down payment, but low-interest rates, refinancing and knowing your home value can make a difference. For example, if you need to borrow 10%, many homes in good markets can appreciate 10% of their value in just a year, depending on the condition and the location.

Chat with a lender to see if you can qualify, and check in with your current mortgage company to discuss your plan.

Scarcity of Units
You probably know that Irvine rental homes are in high demand. This is because Irvine is growing and the demand for a space to rent is higher than the available properties, unless renters want to live in one of the Irvine Apartment Communities. Therefore now is the best time to find an Irvine property to buy for rental purposes.

Return Rate
Do you know if the rate of return in Irvine is growing? Let’s talk. It’s important to know that if you’re thinking of investing in an Irvine property. There is potential to make significant gains over time.

Ultimately, talking to professionals can help you decide if now is the right time to invest in Irvine rental properties!

The key to selling your house is to price it just right.

Let's connect to make sure your house is priced to sell this season.

Whether it's an initial home wish-list analysis as a buyer or a listing appointment as a seller, we can get the process started remotely and we can create a plan together.

I’ve become even more innovative since March, (when the stay-at-home orders were issued), using newer technology that allows buyers to virtually look at homes, meet with mortgage lenders and consult with me throughout the buying or selling process.



I’ve always had 3D Virtual Tours in my marketing arsenal and now they’re used more often, by more agents, what with the ban on Open Houses and everyone’s concerns about Covid-19.

Experience the 3D Virtual Tour of this Irvine home and while you’re there, try out the “Dolls House View” and look at the “Floor Plan” by pressing the button on the bottom left.


“But what if I want to virtually look at a listing which isn’t one of yours Debbie?”, you might ask. Well hopefully the listing agent would have invested the money in providing a 3D Virtual Tour, but if not, I’ll do a Walkthrough Video Tour of the property for you. I can either do these live via Video Chat or I can upload it to YouTube for your exclusive viewing.

While of course buyers still prefer to physically see and walk through a home, virtual home tours and accurate listing information top the list of tech specs buyers find most helpful in today’s process.

According to Google Trends, which scores search-terms online, searches for real estate increased from 68 points the week of March 15^th to 92 points last week. So it seems to me that more potential homebuyers are looking for homes virtually.




Today's everyday reality is quite different compared with less than three months ago. I know that most people have been working remotely, and engaging with friends and business associates virtually.


I’m thankful that Video Conferencing is so simple and user-friendly these days. My initial consultations are held via Zoom or Facetime, and I’ve found that most people welcome not having to tidy-up and have me physically in their homes at this first “meeting”. I’m also thankful to still be in a position to help families make important moves.

Document Signing is usually being done digitally for all offer, counter-offer and disclosures paperwork, and more, right from a computer or smart phone. If my buyer or seller clients aren’t comfortable to sign electronically, they can physically sign the paperwork. In these cases, I courier the documents to them, or drop them off at their front door.

I think that most people already know that Spending Money can be done from the comfort of their homes too. Buyers can pay for an inspection or appraisal digitally, and both buyers and sellers can wire money into escrow from home, if their bank offers it, and most do. In case you’re wondering “Why Sellers?”, they would sometimes need to wire money into escrow, for example to pay for Irvine Home Owner Association documents. 

So as you can see, if you need to move today, technology can help make it happen safely.

Let's touch base today to discuss your situation, so you don't have to put your real estate plans on hold. Yes, let’s do it via Zoom!

Currently, COVID-19 is not having a significant impact on the housing market, yet its effects will eventually be felt in the real estate trenches.

The Coronavirus and Housing: Despite all the news swirling about the Coronavirus, the Orange County real estate market is still rocketing forward with an Expected Market Time of 48 days. At first, news of the Coronavirus seemed like a distant crisis on the other side of the world. Then, at the end of January, the first case on U.S. soil was announced. It was not until the end of February when top federal health officials warned that the virus would spread in the United States.

Since then, everyone has been confronted with a deluge of information and misinformation. Many mistakenly ran to purchase N95 face masks and now they are nowhere to be found. Others are stockpiling water, toilet paper, canned goods and everyday essentials. The response has been similar to Y2k when the banking system and world economy was supposed to crash due to a computer glitch in ringing in the year 2000, which never materialized.

The Coronavirus is beginning to interrupt daily life. There are no more samples at Costco. After the kids’ soccer matches, the handshake has been replaced with a fist bump. Parishioners are no longer holding hands or offering a hand in peace. Starbucks no longer allows reusable cups. There are signs in the grocery store limiting the number of certain items.

As the virus began to spread out of control not only in China, but South Korea, Italy and Iran, Wall Street and financial markets around the world panicked and moved their money out of stocks and into long term bonds, United States treasuries. When that occurs, long term mortgage interest rates fall.

So, how will the Coronavirus outbreak affect housing? There is no absolute, 100% certain answer. Instead, it all boils down how long this crisis will last and how large of an impact it will have on United States soil and the rest of the world. In China, the number of new cases is dwindling, a glimpse of hope that this too will end. Currently, the data does not indicate any change in the local housing market. The supply of homes to purchase in Orange County is at its lowest level for a start to March since 2013, and demand (last 30-days of pending sales) is at its highest level since 2016. With not enough supply and strong demand, the Expected Market Time (the time between pounding in the FOR-SALE sign and opening escrow) is at 48 days, a HOT Seller’s Market and its lowest level since 2013.

As a direct result from the COVID-19 outbreak, mortgage rates have dropped to a record low and will most likely drop even further. There is a chance that they break below 3% and into the 2’s. This inevitably will provoke many more to purchase, juicing demand. For a $750,000 mortgage, today’s 3.25% rate amounts to a $492 per month savings compared to March 2019’s 4.4% rate. That’s a savings of $5,904 per year. If rates drop to 3%, it’s a $594 per months savings, or $7,128 per year. And, at 2.75%, it’s a savings of $694 per month, or $8,328 per year. In doing the math, it is easy to see how lower rates will stimulate demand. The impact on affordability is astounding.

Housing demand has skyrocketed due to historically low rates that are not going anywhere anytime soon.

The Impact of Low Rates: A buyer’s purchasing power has dramatically improved thanks to ultra-low mortgage rates.

Attending an air show for the first time is quite an experience, especially when fighter jets take off and rocket across the sky. The blast from the engines is deafening, the orange glow from the afterburners is visible from the ground, and the powerful vibrations can be felt coursing through a spectator’s body. It is the specially designed jet fuel that allows these aircraft to soar through the air. Housing has “specially designed jet fuel,” also known as ultra-low mortgage rates, that is allowing the market to soar in 2020. These historically low rates are not going to budge much from the mid-3’s. And, the recent news of the coronavirus has driven mortgage rates lower over the past month. The Orange County housing market is extremely hot, and as the year unfolds the heat continues to crank higher and higher.

This hot market can also be seen in Irvine where the Total Inventory of Properties available for sale as of February was 587, up 17.6% from 499 last month and down -18.5% from 720 in February of last year. February 2020 Inventory was at a mid range compared to February of 2019 and 2018.  The Selling Price vs Listing Price reveals the average amount that Sellers are agreeing to come down from their list price. The lower the ratio is below 100% the more of a Buyer's market exists, a ratio at or above 100% indicates more of a Seller's market. The February 2020 Selling Price vs List Price of 97.3% was up from 96.3% last month and up from 96.6% in February of last year.  Check out the latest homes to hit the Irvine market here.

The slower markets of 2018 and the first half of 2019 now seem like a distant mirage to most buyers. For a minute, buyers looked as if they were finally going to get a turn, but that all disappeared. In 2020 housing is sizzling hot again. To understand where this heightened demand and buyer’s exuberance is coming from it is necessary to consider where interest rates have historically been and their impact on affordability. The chart below highlights how higher interest rates limit the price of a home that a buyer can afford. In 1980, the average mortgage rate was 13.75%. For a desired monthly payment of $3,000 per month with 20% down, a buyer back then was looking at a $338,750 home. Rates continued to drop decade after decade. In 2000, the 8% mortgage allowed a buyer to look at purchasing a $511,250 home. It increased to a $602,500 home just prior to the Great Recession. Flash forward to today’s 3.5% mortgage rate and that buyer desiring a $3,000 per month payment is now looking at an $835,000 home. 

There are many clear financial benefits to owning a home: increasing equity, building net worth, growing appreciation, and more. If you’re a renter, it’s never too early to make a plan for how homeownership can propel you toward a stronger future. Here’s a dive into three often-overlooked financial benefits of homeownership and how preparing for them now can steer you in the direction of greater stability, savings, and predictability.

1. You Won’t Always Have a Monthly Housing Payment

According to a recent article by the National Association of Realtors (NAR):

“If you’ve been a lifelong renter, this may sound like a foreign concept, but believe it or not, one day you won’t have a monthly housing payment. Unlike renting, you will eventually pay off your mortgage and your monthly payments will be funding other (possibly more fun) things.”

As a homeowner, someday you can eliminate the monthly payment you make on your house. That’s a huge win and a big factor in how home ownership can drive stability and savings in your life. As soon as you buy a home, your monthly housing costs will begin to work for you as forced savings, coming in the form of equity. As you build equity and grow your net worth, you can continue to reinvest those savings into your future, maybe even by buying that next dream home. The possibilities are truly endless.

2. Home ownership Is a Tax Break

One thing people who have never owned a home don’t always think about are the tax advantages of home ownership. The same piece states:

“Both the interest and property tax portion of your mortgage is a tax deduction. As long as the balance of your mortgage is less than the total price of your home, the interest is 100% deductible on your tax return.”

Whether you’re living in your first home or your fifth, it’s a huge financial advantage to have some tax relief tied to the interest you pay each year. It’s one thing you definitely don’t get when you’re renting. Be sure to work with a tax professional to get the best possible benefits on your annual return.

3. Monthly Housing Costs Are Predictable

A third item noted in the article is how monthly costs become more predictable with home ownership:

“As a homeowner, your monthly costs are most likely based on a fixed-rate mortgage, which allows you to budget your finances over a long period of time, unlike the unpredictability of renting.”

With a mortgage, you can keep your monthly housing costs steady and predictable. Rental prices have been skyrocketing since 2012, and with today’s low mortgage rates, it’s a great time to get more for your money when purchasing a home. If you want to lock-in your monthly payment at a low rate and have a solid understanding of what you’re going to spend in your mortgage payment each month, buying a home may be your best bet.

Bottom Line

If you’re ready to start feeling the benefits of stability, savings, and predictability that come with owning a home, let’s get together to determine if buying an Irvine home sooner rather than later is right for you.

The Orange County housing market is officially a HOT Seller’s Market.

Getting Hot: The market is getting crazy hot below $1 million.

Mother Nature’s seasons do not matter. Sitting outside, watching one of the kid’s games from the sidelines can get really hot when there are no clouds in the sky. Wearing jeans is often a mistake that is made, a natural target for the sun’s incredible intensity while sitting in a folding chair. The darker the jean, the quicker the temperature rises. With interest rates at lows not seen since October 2016, there are no clouds in the sky and housing is already really hot. The Spring Market has officially arrived in Orange County. Some price ranges are really feeling the intense heat of blistering buyer demand. Housing has not been this hot since April 2018, nearly two years ago. Once again buyers are tripping over themselves to purchase.

Thinking about selling?  Get an instant computer-generated rough value, check out our home valuation page here.  

The Irvine market is showing similar signs with New Listings in January 2020 at 282, up 118.6% from 129 last month and down -12.4% from 322 in January of last year.  While an interesting difference can be seen in our days on market, January was 61, down -3.2% from 63 days last month and up 8.9% from 56 days in January of last year. The January 2020 DOM was at its highest level compared with January of 2019 and 2018. Stay informed by creating your own Irvine market report here.

Homes that are priced well according to their condition, location, and upgrades, are fetching multiple offers within the first couple of days. The bidding war days are back. When a home generates 15 offers to purchase, there is only one winner, meaning 14 buyers need to go back to the drawing board. After a couple of failed attempts, many buyers sharpen their pencils and write extremely aggressive offers, willing to stretch the price a little bit, even if it means paying more than the most recent comparable sale.

This market can be extremely frustrating for a buyer. It is all due to hot buyer demand fueled by low mortgage rates. Patience and a comprehensive strategy are a buyer’s bet in finding success. The expected market time (the time between hammering in the FOR-SALE sign and opening escrow) for all of Orange County is now at 55 days. When the expected market time drops below 60 days, the market is considered a rock-solid seller’s market with steady price appreciation. Last year, Orange County never dipped below the 60-day threshold. It appears as if 2020 is going to be much hotter than the last couple of years.

The demand for housing is coming at the market like a freight train, with the law of supply and demand on full display. The ongoing shortage of available homes for sale combined with a surge of homebuyers is forcing home prices up, according to Redfin. And where it stops, nobody knows.

This shortage can also be seen in Irvine where the Total Inventory of Properties available for sale as of January was 566,  down -17.1% from 683 in January of last year. Also, the number of New Listings in January 2020 was 278, down -13.7% from 322 in January of last year. Check out the latest Irvine homes to hit the market at https://ir-vine.house/AllIrvine 

HousingWire’s Julia Falcon reports that homebuyers are not waiting for spring, as usual, to buy, heating up home buying competition early in 2020. “In fact, there were only 1.4 million units available for sale in December, the lowest level in at least 20 years, according to the National Association of Realtors,” she says. She goes on to say that beyond that, December saw the largest year-over-year decline of housing inventory in almost three years, with inventory declining 12%.

Mortgage rates remaining historically low is a factor in all this. They are now at their second-lowest in three years. The double-edged sword in all this is that while low rates are driving some buyers into the market, they also contribute to many others holding onto their homes, happy to have their newly refinanced mortgage. Those with paid-off homes are enjoying the freedom of cash-out refinances at historically low rates, updating their homes and staying put.

“With every new release of data this year, I’m becoming more and more confident that demand will be strong in 2020—just as strong as, if not stronger than, in 2018 and 2017,” said Redfin chief economist Daryl Fairweather. “The big question for the housing market this year is supply. Will homeowners sit on the sidelines, content with their refinanced loans, or will they want to get in on the action too and move up, move down, or cash out entirely?”

There was a time when we thought bidding wars were behind us, but that was short-lived. “A rise in bidding wars and a continuous spike in home prices may soon be the result of a 10-year peak in home buying demand and 20-year low in the number of homes for sale,” says Falcon.  If you are thinking about selling, and wanting an instant computer-generated rough value, check out our home valuation page here.  

The silver lining in all this is that in some markets there will be some relief for home buyers hoping for more selection in the form of newly-built homes. Add this all together, and with 11 months left in the year, 2020 may turn out to be the most robust housing market in nearly a decade.

Source: HousingWire | Redfin, | NARTBWS

Rates Currently Trending: Neutral

Mortgage rates are trending sideways to slightly higher this morning.  Last week the MBS market improved by +25bps.  This was enough to move rates very slightly lower last week. We saw a bit of rate volatility last week.