Sweet Orange

Here is an example of a home that sold for more than the list price. This home, which is in Irvine’s El Camino neighborhood, was listed on August 12, 2009, for $415,000, delisted on August 19, then relisted on September 8 for $415,000. This El Camino condo sold on 10/19/2009 for $437,500, approximately $22,000 more than the asking price.

8 Pierre Irvine, CA 92604 (El Camino neighborhood)

• 3 beds/2 baths
• 1223 SF
• Condo built in 1977
• HOA: $175
• Asking price: $415,000 ($339/SF)
• Selling price: $437,500 ($358/SF)

Current estimates for this home:

• Cyberhomes: $406,828.
• Eappraisal: $362,930
• Zillow: $438,000.

You might be surprised to learn that the Big Orange is a green jobs hub. In addition, green jobs on the national level are growing faster than most other job categories. Here is a breakdown of how green jobs are an important feature of our economy:

Green jobs on the county level:

Orange County will likely add 3,130 new energy-related jobs over the next three years, most of them in the realm of project managers for construction or design work, according to a new report by a local college-affiliated group.–Pat Brennan, “Report: O.C. to add 3,000 jobs in energy sector”

Green jobs on the state level:

From January 2007 to January 2008, green jobs in California increased by 5 percent, while jobs decreased by 1 percent in the economy as a whole.–Pat Brennan, “Need a job? Think ‘green’ - jobs booming in O.C., statewide“

Green jobs on the national level:

The push for clean energy could lead to explosive job growth in the United States, according to a new report by a clean-energy research group.

The report, Clean Tech Job Trends 2009, says activity is high in the renewable energy market, with some predicting the biggest chance for wealth and job creation since the rise of computers and the Internet.–Pat Brennan, “Report: job potential high in renewable energy“

Green jobs and national security:

According to Mayor Michael Bloomberg, going green is important not only because of the personal job benefits it might bring us, but also for our national security.

We are transferring our wealth to countries around the world who don’t agree with us and, in many cases, are funding the very terrorists that we are sending our young men and women out to fight….We have got to get somehow or other to [energy] independence. It’s doesn’t matter if you are a greeny or not. The bottom line is we cannot keep funding our enemies.–Michael Bloomberg on Meet the Press

For more information on green jobs and the economy, see:

• Energy Efficient Occupations in Orange County, Center for Excellance, California Community Colleges
• Green Business by Media Planet
• EDF’s Clean Energy Jobs State Fact Sheets
  

Graph Courtesy Wikipedia

According to DQNews, the number of Notice of Defaults (NODs) in California was 12.4% higher in the 2009 fourth quarter than it was in the 2008 fourth quarter. The number of fourth quarter trustee sales was also up: 10.6% more foreclosure sales occurred in fourth quarter 2009 than occurred in fourth quarter 2010.

Now here is where the numbers get tricky: In spite of these year-over-year increases, foreclosure sales as a percentage of the housing market declined. In Q4-2009, 40.7% of the resales in California were foreclosure sales. However, in Q4-2008, 54/4% of resales in California were foreclosure sales.

The first set of numbers (the overall number of foreclosure sales) seem to be telling us that foreclosure sales are becoming more prevalent. But the second set of numbers (the number of foreclosure sales as a percentage of the total sales) seem to be telling us that foreclosures are becoming less prevalent.

In addition, more conflicting numbers exist:

DQNews states that the number of NODs declined between the third quarter and fourth quarter of 2009. And John Walsh, DataQuick president, had this to say about the foreclosure market:

Clearly, many lenders and servicers have concluded that the traditional foreclosure process isn’t necessarily the best way to process market distress, and that losses may be mitigated with so-called short sales or when loan terms are renegotiated with homeowners.

But many analysts are predicting a sizable increase in defaults when the terms for many outstanding loans adjust upward in the coming year. For example:

Amid falling home prices and a nasty labor market, roughly 1 in every 7 mortgages was either past due or in foreclosure by the end of the third quarter-the highest delinquency rate in the 37-year history of the Mortgage Bankers Association’s National Delinquency Survey. Two factors are expected to drive delinquencies even higher next year. First, nearly 1 in 4 homeowners currently owes more on their mortgage than the property is worth, which increases their odds of default. And secondly, the national unemployment rate-which already stands at 10 percent-will peak at about 10.5 percent in the first quarter of 2010, says Patrick Newport, an economist at IHS Global Insight. Additional job losses mean more borrowers won’t be able to pay their mortgage bills-”10 Things to Know About Real Estate in 2010,” Luke Mullins, U.S News & World Report

This quote from U.S. News & World Report is referencing the national housing market, but this would apply to Southern California as well.

Note: Beware of foreclosure rescue scams - Help is Free. Beware of any person or organization that asks you to pay an upfront fee in exchange for a counseling service or modification of a delinquent loan. Do not pay - walk away! –MakingHomeAffordable.gov

Photo Courtesy Wikipedia

Recently, I wrote about some new laws that went into effect on January 1 and apply to the real estate industry. A new law that applies to the building and remodeling industries also went into effect.

Before January 1, all pipes, pipe fittings, plumbing fixtures and other fixtures that might become wet were allowed up to a total contain of 8% lead. On January 1, 2010, the allowed amount was reduced to 0.25%.

I am sure that there are differencing opinions on what amount of lead would be harmful. But, no matter what that level is, exceeding that amount can result in the following:

Lead can increase blood pressure and cause fertility problems, nerve disorders, muscle and joint pain, irritability, and memory or concentration problems. It takes a significantly greater level of exposure to lead for adults than it does for kids to sustain adverse health effects.–”Lead and Your Health,” National Institute of Environmental Health Science  (NIEHS)

As the NIEHS quote states, lead poisoning can be particularly harmful to children. The KidsHealth website provides more information on this:

Lead poisoning can lead to a variety of health problems in kids, including:

• decreased bone and muscle growth
• poor muscle coordination
• damage to the nervous system, kidneys, and/or hearing
• speech and language problems
• developmental delay
• seizures and unconsciousness (in cases of extremely high lead levels)
  –”Lead Poisoning,” KidsHealth

Following are some recent Altos Research and Redfin numbers for the South Orange County homes prices between $700,000 to $1,000,000. You can pick out the city of interest to you and see what is happening in that market. You can also do some compare and contrast with other cities.

Laguna Niguel: approximate % homes on market that are detached–60%

Altos Research Market Action Index:

• December 13 2009:18.09
• October 18, 2009: 18.26
• September 20, 2009: 16.69
• July 19, 2009: 15.23

Altos median list price for detached houses:

• December 13 2009: $778,046
• October 18, 2009: $791,188

Redfin median sold price

• November 2009: house–$320/SF; condo–$240/SF
• September 2009: house–$304/SF; condo–$239/SF

Ladera Ranch: approximate % homes on market that are detached–70%

Altos Research Market Action Index:

• December 13 2009: 18.26
• October 18, 2009: 19.40
• September 20, 2009: 17.38
• July 19, 2009: 6.20
• December 13 2009: $822,396
• October 18, 2009: $834,077

Altos median list price for detached houses:

• December 13 2009: $822,396
• October 18, 2009: $834,077

Redfin median sold price

• November 2009: house–$264/SF; condo–$236/SF
• September 2009: house–n/a

Laguna Hills: approximate % homes on market that are detached–50%

Altos Research Market Action Index:

• December 13 2009: 17.64
• October 18, 2009: 18.69
• September 20, 2009: 16.27
• July 19, 2009: 13.26

Altos median list price for detached houses:

• December 13 2009: $828,596
• October 18, 2009: $850,712

Redfin median sold price:

• November 2009: house–$312/SF; condo–$187/SF
• September 2009: house–$405/SF; condo–$142/SF

San Clemente: approximate % homes on market that are detached–75%

Altos Research Market Action Index:

• December 13 2009: 15.17
• October 18, 2009: 16.07
• September 20, 2009: 14.95
• July 19, 2009: 12.67

Altos median list price for detached houses:

• December 13 2009: $853,894
• October 18, 2009: $869,131

Redfin median sold price

• November 2009: house–$281/SF; condo–$282/SF
• September 2009: house–$222/SF; condo–$345/SF

Up next: South Orange County housing numbers for homes over  $1,000,000

Note: Usually, I would not publish another post until Monday; however, since this post is time-sensitive, I am posting Monday’s post today, Friday. Also, during the holidays, I might publish fewer posts per week than I have up to this point. We’ll see.

The Irvine Community Land Trust in partnership with Neighborhood Housing Services Orange County is putting its first three Irvine homes on the market. The deadline to apply online is soon (December 22nd by 11.59 pm PST), so if you are interested, hurry. Also, be aware that restrictions such as income limits and resale restrictions exist. For more information, see the land trust website.

Here is some more information on the three homes that are currently being offered to qualified buyers. In some cases, the square footage and value estimates involved some educated guessing on my part.

80 Clearbrook (Woodbridge)

• 1980 condo
• 3 bedrooms/2 baths with approximately 1,113 SF
• List price: $264,600
• Estimated value: $370,000

56  Clearbrook (Woodbridge)

• 1980 condo
• 2 bedrooms/2 baths with approximately 920 SF
• List price: $231,850
• Estimated value: $320,000

49  Torocco (Orangetree)

• 1983 condo
• 2 bedrooms/2 baths with approximately 995 SF
• List price: $240,400
• Estimated value: $270,000

What do homeowners think has happened to the value of their homes? According to Zillow’s Homeowners Confidence Survey, which came out at the beginning of this year and asked homeowners how much, if any, the value of their home decreased in 2008, the answers are as follows:

• In the South, 48% thought that their home lost value. The reality is that 70% lost value.
• In the Midwest, 59% thought that their home lost value. The reality is that 73% lost value.
• In the West, 70% thought that their home lost value. The reality is that 90% lost value.
• In the Northeast, 58% thought that their home lost value. The reality is that 71% lost value.

Zillow’s report also stated that 70% of U.S. homeowner thought that their home would increase or stay the same in the beginning of 2009.

Source: Marilyn Kalfus, “We’re beginning to admit our houses are worth less,” The Orange County Register, February 12, 2009

If you follow the housing news, you have probably read and heard numerous times that the median price for an Orange County home has gone up in recent months. For example, DQNews reports that the October median selling price for Orange County homes is up 3.9% from last October.

However, a report by The Real Estate Research Council of Southern California, which is located at Cal Poly Pomona, provides a different picture. Housing appraisers provide the input for the report by reviewing a sample of homes every October and April. The sample consists of the same homes being appraised and compared during each appraisal cycle.

Here are the October 2009 results:

• Orange County home prices are falling 15% annually. (The April report showed that O.C. home prices were down 14% from the previous April.)
• Orange County housing prices have been falling for three years.
• The amount of decline varies by region:
  –North Orange County: down 20.9%
  –Central Orange County: down 17.7%
  –South Orange County and beach areas: down 9%

A report by mortgage insurer PMI Group also shows a decline in Orange County housing prices. The PMI report states that the value of Orange County homes in the second quarter of this year was down 7.81%. In addition, PMI calculates that Orange County housing prices have a 99.9% chance of declining in the next two years.

A likely explanation for the conflicting pictures that the various numbers are painting is as follows: More homes at the mid- and high-end of the market are selling now than in the recent past. This brings up the median price for Orange County homes as a whole, but individual home prices might still be decreasing.

Sources:
Jonathan Lansner, “Appraisers see O.C. home prices off 15%,” The Orange County Register
Kristen Schott, “Orange County among 10 riskiest housing markets nationwide.” OC Metro

Yesterday, I wrote about the prefab green home in Newport Beach that developer LivingHomes put up in about four hours. The first home of this type that LivingHomes installed is in Santa Monica and is the home of  Steve Glenn, the CEO of LivingHomes, (To see additional prefab green homes that LivingHomes has built, see the LivingHomes website.)

In addition to being the first home of this type that Living Homes built, the Santa Monica prefab is the first residential building in the U.S. to receive the LEED Platinum rating.* The Newport Beach home mentioned previously as well as homes in Laguna Beach, Huntington Beach and Costa Mesa are competing for this title in Orange County.

You can view the Santa Monica home in two ways: You can take a tour of the Santa Monica house every Friday from 1-2 pm and the 4th Saturday of each month. Tickets are free and can be reserved through eventbrite.com. Or you can take a virtual tour.

About four hours–that’s all it took to install a prefabricated “green” home onto its foundation in Newport Beach.  After the four modules that make up this sustainably designed home were put into place on the existing foundation, the next step was to bolt everything together. The homeowner, Greg Brown, predicted that he would have the interior completed in four weeks.

Brown and the developer, Living Homes, hope to verify the greenness of the newly installed prefab by applying for the LEED Platinum rating. LEED is the predominate sustainable development rating system, and Platinum is the highest LEED rating.

Some of the characteristics of this home that will help to achieve the Platinum designation are the use of the following:

• 
• recycled material
• low-flow water fixtures
• solar panels
• ventilation system that improves indoor quality
• windows that seal in air
• low- or non-volatile organic compounds
• Energy Star appliances
• construction components that allow the building to be torn down in a way that allows for the easy reuse of  all the parts

The installed cost of this particular prefab green home (model LHKT 1.5), which is available nationwide, is $275 per square foot. This does not include the foundation or land costs.

Related post:

Going for the Green-and Platinum-in Orange County: The 319 Single-family Project in Huntington Beach

Going for the Green–and Platinum–in Orange County: The Environmental Nature Center in Newport Beach