Tuesday, May 12, 2009

Shevy Akason and Associates is proud to announce a beautiful new lease listing

1125 West Olive Avenue in Fullerton is listed at $2500/month. If you are looking for a beautifully remodeled home, with a huge yard, conveniently located near parks, schools, in a fantastic neighborhood, this is it! This completely remodeled home features a fantastic floor plan with dual pane low-E, energy efficient windows throughout, hardwood floors, and designer paint inside and out. The Kitchen features a breakfast bar, new appliances, Slate floors, a beautiful backsplash, and new cherry Cabinets. The bathrooms were remodeled with beautiful slate tile. The garage is fantastic and has been finished with drywall and Epoxy floor coating. The master bedroom and guest room feature new carpet. The large back yard includes a fantastic Avocado tree and fruit trees. Copper plumbing, 100 amp electrical panel. This home is a must see and will not last.

Monday, May 11, 2009

Shevy Akason and Associates is proud to announce two new listings

Listed at $159,9000 23298 Orange Ave. 11 is by far the best priced regular sale for a 2 bedroom 2 bathroom property in Lake Forest. It is NOT A SHORT SALE but is a bargain. This property can close quickly. The home has two bedrooms with two full bathrooms and includes a walk-in closet in the mater bedroom. It is a short distance to Lake Forest Golf Course and El Toro Park! Located on the first floor with greenbelt and pool views it is hard to find a better location than this and it includes a fenced patio. Bright home with neutral carpet and nice floor plan. Close to major shopping centers. Unique association, HOA fees include gas, water, and trash! This is a great opportunity, lower than the cost of rent! This is the best deal in south Orange County and will not last, hurry!

Listed at $129,900 23288 Orange Ave. 1, is by far the best priced regular sale for a 1 bedroom 1 bathroom in Lake Forest. This property is a fantastic end unit with a private fenced patio off of the kitchen and dining area. The home features new ceramic tile, carpet, and paint throughout and includes a walk in closet in the master bedroom. Nestled in a great area of the tract surrounded by green belts and a short walk to two community pools. The tract is adjacent to the Lake Forest Golf course as well as a park including numerous baseball fields. In addition, it's close to major shopping centers. Unique association, HOA fees include gas, water, and trash! This too is a great opportunity.

For more information and pictures of both properties visit Orange Ave Villas

Thursday, April 9, 2009

Shevy Akason and Associates is proud to announce our new lease listing

Property Highlights

Catalina View
Granite counter tops
City Lights view
Huge back yard
high ceilings
Wood floors
Crown molding
Remodeled kitchen
recessed lighting

For more infomation click on this link

You do not want to miss this fantastic view home high in the hills of Yorba Linda. This home has a huge back yard and is located in a cul-de-sack. With upgraded wood floors, a fully remodeled kitchen with granite countertops, and high ceilings, this is a fantastic place to live and will not last. Client recently installed brand new appliances and they will stay with the property. Do not miss this fantastic home!

Sunday, March 22, 2009

Solving the Housing Crisis - John Mauldin's Weekly E-Letter

A friend sent this to me, I'm going to reserve my thoughts on this for now. However, I would love to hear some opinions.

Thoughts from the Frontline Weekly Newsletter
Solving the Housing Crisis
by John Mauldin
March 21, 2009
In this issue:
Solving the Housing Crisis
Housing Could Drop Another 20% in Pricing
Buy A Home, Get a Green Card
A Real Stimulus Package
Las Vegas, La Jolla, and the OC

This last Tuesday the Wall Street Journal published an op-ed by my friend Gary Shilling and Richard LeFrak. They offer a simple solution for the housing crisis: give foreigners who will come to the US and buy a home resident status (green cards). This is a very important proposal and one that deserves national attention and action. Gary was kind enough to send me two lengthier white papers offering more facts. In this week's letter we are going to look at this proposal in more detail than the small space that an op-ed can offer. And while this letter will be somewhat controversial in some circles, I ask that you read it through, giving me the time to make the case. I will also add a few thoughts as to why this could not only help solve the housing crisis, but help put the nation back into growth mode.

Long-time readers know that I have been growing more and more bearish of late. I have been writing for a long time that we are in for a long period of slow Muddle Through growth as the twin crises of the housing bubble and credit bubbles require time to heal. Today we look at a serious proposal for cutting the time to healing for at least one of those bubbles (housing), and at least keep the other (credit) from getting worse. This is the most serious idea I have seen that could actually make a real positive contribution to the economy and help put us back on a growth path.

I will post Gary's papers and a link to the actual op-ed piece for those who want to do further research, but let me make one point at the beginning that he did not emphasize: the US is already allowing roughly 1 million immigrants a year into the country (which for a variety of reasons I and most serious economists of all stripes believe is a very good thing). We are suggesting that we simply change the nature of what constitutes the conditions for acceptance, so as to jump start the housing industry and the economy. We are not suggesting additional immigrants, although nothing would be wrong with that. I will also post a link for you to send this e-letter to your congressmen and senators.

Let me put up front a few benefits of a program that would allow legal status to immigrants buying a home. Housing values would stabilize and in many cases rise. The massive losses because of bad loans that are being subsidized by US taxpayers would be stemmed, saving many hundreds of billions, if not a trillion or more dollars. The excess inventory of homes would quickly disappear and the millions of jobs that were lost as home construction fell into a deep depression would come back. If housing values rise, many families would be able to refinance their homes at lower rates and have more income left over after paying their mortgages. $12 billion in commissions would end up in real estate agents' pockets, helping a very battered and bruised group. Hundreds of billions will flow into local businesses, as these new immigrants will need to furnish their homes. This could mean as much as a half trillion dollars in sorely needed stimulus in the next few years, without one penny of taxpayer money and actually adding taxes back to governments from local to national. And we are not bringing in 1 million foreigners, we are attracting 1 million mostly middle-class new Americans, which, if we are smart in how we do this, will result in more jobs for all Americans. So let's jump right in and look at the details.

Housing Could Drop Another 20% in Pricing
Let's review the situation as it will be if we do nothing. Shilling shows that we built 6.7 million more homes in this country between 1996-2005 than the normal trend would have projected, partially because we underbuilt the decade before that. New housing starts average about 1.5 million in normal times but have fallen to 500,000 recently, and could fall further as unemployment rises and demand declines. Even so, Shilling estimates that we still have about 2.4 million excess homes.

This compares rather well with estimates by independent analyst John Burns, which I cited in the e-letter early last year. What they both agree on is that it will take at least until 2012 to work through this excess inventory, and that assumes that foreclosures do not increase as housing prices drop.

Excess supply of anything means lower and continuously falling prices, and that has certainly been the case in housing. Here is what Shilling writes:
"We believe that if nothing is done to eliminate surplus housing, prices will fall another 20% between now and the end of 2010 for a total peak-to-trough decline of 37% (Chart 1 below). The resulting further negative effects on the economy will be devastating. At that point, almost 25 million homeowners, or almost half the 51 million total with mortgages, will be underwater… That's also a third of the 75 million total homeowners, with the remaining 24 million owning their houses free and clear. It would take a little over $1 trillion to reduce their mortgages to the value of their houses, compared to $449 billion for the almost 14 million currently underwater."

This is not inconsistent with similar projections by other acknowledged experts and independent analysts like John Burns and Professor Robert Shiller of Yale. If nothing happens to stimulate buying, there is a great deal more pain ahead for American homeowners.

For the great majority of Americans, their homes represent the largest portion of their assets. This is particularly true of Americans of more modest means, who have been hit the hardest. Watching their single biggest assert drop another 20% will be devastating and for many will mean they will not be able to retire as they had planned. More Americans own homes (68%) than own stocks (50%). This helps explain a recent poll which shows more Americans are worried about house prices than about the decline in stock prices.

Falling home prices means that consumers have to save more for retirement, which results in lower consumer spending, which translates into lost jobs and more homeowners coming under stress -- a vicious spiral that is increasing unemployment. Realistic estimates of unemployment rising to over 10% within the year abound.
Two years ago I and a few others foresaw the current housing crisis (and an accompanying credit crisis), predicting a protracted recession and a slow, multi-year Muddle Through recovery. Sadly, I was right about the housing crisis. Without some intervention, there is little to suggest that the prediction of a long, protracted recovery will not come true.

Lowering rates, as is being discussed in various circles, will help homeowners who can make their payments, but it does nothing to really bite into excessive inventory. Until we reduce the inventory, housing prices in many neighborhoods all across America are going to continue to come under pressure. And as Barry Habib points out, while the Fed may be lowering rates for securitized packages of loans, those low rates are not available to the average home buyer. The cost of packaging and securitization adds considerable cost.

Shilling discusses the "traditional" options for reducing home inventories, but in the end there is no real solution other than time, or massive amounts (read trillions) in taxpayer money being given to homeowners, which will be very unpopular, as homeowners who were responsible and are paying their mortgages would get no benefits. Waiting another two and a half years for the excessive inventory to sell will keep this country in a very slow or no-growth economy, and devastate the wealth of millions of homeowners.

But there is a solution. There are millions of foreigners throughout the world who would like to come to live in the US. In 2006, there were 1.1 million immigrants allowed into the US, some 63% of whom were allowed in simply because they already had relatives here. Only 13% of visas were granted to people because of their skills. While allowing relatives of current residents to come to the US may be a humane and reasonable policy, it does nothing to assure they bring more than that relationship to help them make their way in the US.

Buy A Home, Get a Green Card
What if we changed the rules for a few years? Starting as soon as possible, we should allow anyone to come into the country who would buy a home. They would be given a temporary visa which would become permanent if they had no problems after, say, five years.

While Gary proposes that they be allowed to borrow against the value of their homes, I lean toward suggesting that initially we take those who buy their homes outright (with a few exceptions). That means they have enough capital to purchase a home to begin with, which probably means they are educated and have skills. In fact, if they have enough cash to buy a home, that means they would have more actual savings than most US citizens. We would be attracting future citizens with the capital to invest in job-creating businesses and/or who have useful skills to assist in the recovery of the US economy.

Of course, there should be some rules that go along with this proposal. Background checks and references should be required. The home could not be rented for a period of time (at least two years), to help reduce the supply of available housing, and could not be resold for at least two years unless another home was purchased. There should be a minimal price, which could be somewhat different for various regions, but $100,000 would seem to be a good minimum for most areas, with higher minimums in certain areas.

The immigrant should demonstrate the ability to support himself and his family for a period of time (at least one year, preferably two), including the purchase of health insurance. Cash or letters of credit or other guaranteed commitments would be required. Only immediate family members (spouse and children) would be allowed to come with the immigrant. Cousins and siblings must buy their own homes. The permanent visa should be contingent on not having gone on welfare or public assistance at any time in the past five years. We are trying to solve a housing problem, not looking to create others.

I would make an exception in having 100% financing for immigrants with advanced degrees or special skills, especially those who did their schooling in the United States. If the US is to remain competitive in an increasingly technological world, we need more scientists and engineers. But getting permission to stay is becoming increasingly difficult. We are seeing a brain drain of those who would like to stay and create new jobs and technologies (and buy houses) here in the US. Shilling and Le Frak write:

"The authors of this report believe that a number of people have given up waiting for those visas or don't want to put up with the hassle and are leaving the country. This "brain drain" is unfortunate since many of these foreigners are highly productive. In 2006, foreign nationals residing in the U.S. were named as inventors or co-inventors on 25.6% of the 42,019 international patent applications filed from this country, up from 7.6% in 1998. Studies of the authorship of academic papers show the same trend.

"U.S. educational institutions are considered the best in the world by many and are magnets for foreign students, especially at the graduate level. Many of them are inclined to settle and work in this country after completing their studies, if they can obtain permanent resident status.

"The Council of Graduate Schools survey revealed that in the fall of 2007, 241,095 non-U.S. citizens were enrolled in graduate programs. Technological progress and the productivity it generates depends on people educated in biological sciences, engineering and physical sciences, but only 16% of U.S. citizen graduate enrollment was in these three disciplines. In contrast, 55% of total non-U.S. citizen enrollment was in those fields. Conversely, 53% of graduate enrollment by Americans was in education, business and health sciences while those three fields accounted for only 24% of foreign graduate students."
(There is a great deal more background detail in the second white paper. See link below.)

Much can be learned from similar programs already in place in immigrant-hungry countries such as Canada, Australia, and New Zealand. The United Kingdom has recently added new programs. Many countries realize that in the coming years there is going to be increasing competition for the best and brightest of the world. Again, there are more details in the white papers, but let's turn to the effects that would result from such a program.

A Real Stimulus Package
First, upon Congressional approval, it would almost immediately stop the seemingly inexorable slide in house prices, as initial demand would be significant. Let's assume one million new immigrants would buy homes. At an average price of almost $200,000, that would be $200 billion injected into the economy. And each of those homes has to be furnished, food has to be bought, clothing will be needed, local taxes will be paid. Airplane tickets to research potential areas, hotels needed during the interim period, and other related expenditures would add up. Over two years, this could easily be another $100 billion.

Couple 1 million new buyers with current US demand, and the excess inventory would be worked through within a year, and possibly faster. This puts a floor under the housing market, and home values could once again to begin to rise in line with a growing economy.

Such a program would have a salutary effect on the value of the dollar, as not only the initial purchases of homes and materials would need to be converted to dollars, but it is likely that immigrants would bring even more capital into the country.

By stemming the fall of home values, it would decrease the likelihood of foreclosures and help homeowners get refinancing at lower rates. Refinancing now is difficult because most lenders want a substantial slice of equity to go along with any new mortgage. If your home value has dropped 20% and is likely to fall another 20%, it is hard to have enough equity to qualify for a new mortgage. Stopping the fall in prices is critically important; and maybe if prices rise in some areas, homeowners will be able to refinance at better rates, giving them more cash each month to save or spend.

As I have written in previous letters, the psyche of the American consumer is permanently scarred. We are on our way back to a savings rates that will look more like 1987 than 2007, when it was almost zero. Just a few decades ago, we saved 7-10%. Consumer spending was only 64% of US GDP in 1987. It was 71% in 2007. It is on its way back to that lower level.

Lower consumer spending will be a drag on growth for years. But bringing in 1 million already middle-class new immigrant families will help make up for a lot of that reduced spending. If you can spend $200,000 on a home, you are likely skilled at something and well-educated. You will find a job, or create one, as many immigrants do, and then you will add to our total consumer spending.
If you are a real estate agent, you should love this proposal, as it would result in an additional $12 billion in commissions.

If you are a home builder, what a great way to reduce inventory and get back to the conditions where there is a demand for your product. This would help put back to work those who have lost their jobs in the home construction collapse. Home Depot and Lowe's and local stores? It would help them to increase sales, which leads to more jobs.

We are on the cusp of the Baby Boomers beginning a huge wave of retirement, both in the US and elsewhere in the developed world. There is going to be a need for skilled workers to replace those Boomers, as well to provide services to the retirees. Further, the promised Social Security and Medicare expenditures are going to start increasing at a significant rate. We are going to need immigrants to help pay for those benefits. Given the controversy over immigration, we will look back with some irony in ten years when we find we are in a serious competition with other nations to attract skilled immigrants. We should start now. I think the concept is, let's not waste a good crisis.

Let's look at some of the potential critics of this proposal. I was on Yahoo Tech Ticker yesterday talking about this, and got a few irate emails and phone calls.
"Why," I was asked, "do I hate American workers? Isn't there enough unemployment? Why do we need more immigrants taking American jobs?" And there was considerable angst about illegal immigrants.
First, I am suggesting we transform the already existing legal immigrant flow, which is going to happen anyway, into a form which helps us solve a major crisis. I am not talking about adding another 1 million immigrants on top of the current legal inflow. Just change the nature of that inflow until the excess housing inventory is settled, and then we can go back to the current program, if that is what is wanted (more on that below).

Second, I am not suggesting we bring in or condone illegal immigrants. That is another issue altogether, for another debate at another time.
If we do nothing, unemployment is going to rise to at least 10%. That is certainly not good for the American worker. Home values are going to continue to fall. That is certainly not good for the American worker. The economy is likely to be stagnant for an extended period of time, which means job growth in a Muddle Through recovery will be slow and stagnant. That is not good for the American worker.
Hundreds of billions more of taxpayer dollars will have to go to banks to keep them solvent as falling home prices and increasing unemployment increase foreclosures. That is not good for the American worker and taxpayer.
And further, I am not talking about bringing 1 million foreigners to this country. I am talking about bringing 1 million future Americans, who want to work hard and live the American dream.

Let me say a few words to those who are opposed to immigration -- and I have heard from you. With few exceptions, US citizens reading this have an immigrant in their genealogies. Some of mine go back to the 1600s. Some of mine were not exactly considered welcome. "No Irish and Dogs allowed" read the signs. But immigrants and their children have been the driver for growth in this country for generations. It is hard-working immigrants who leave their homes for the dream of being Americans that have been the backbone of the building of the nation -- the hewers and shapers, if you will.

It is precisely that melting pot of human diversity that is the strength of the American idea. Each new wave of immigrants has been viewed with trepidation or scorn, yet within one generation they have become American. And in turn, their children's children forget that their forebears had to deal with discrimination.
America -- the US -- is not so much a country as it is an idea, the idea that anyone, regardless of race or religion or gender, can come here and with hard work and determination make their own way. Some end up owning the local deli, and some end up founding Google. Some 25% of Silicon Valley start-ups, I am told, are by immigrants, creating jobs at the bleeding edge of technology. They see the US as a land of opportunity. That is why so many want to come and that is why we can attract a new generation of affluent, self-reliant immigrants who can help us solve a problem that we created.
I can see no downside to changing our immigration policy for a few years. We solve the housing crisis, stabilize home values, brings hundreds of billions in stimulus to the US, and with no taxpayer outlay. For a short time, we substitute one class of immigrant for another, to solve a serious crisis. It is not a matter of immigrants or no immigrants, just which immigrants
So which do you want? 10% unemployment and a decade of lower home values and increasing foreclosures, with a slow, Muddle Through, jobless recovery, or a stable housing market and home construction back to trend?
If you agree with me, I suggest you contact your Congressman. You can go to http://www.visi.com/juan/congress/ (selected at random from many such sites) and type in your address and get the name of your congressperson and senators. Just tell them you like this idea, and cut and paste the link where you read this into the letter. And tell them to get into gear! I would like to point out that this proposal is not Republican or Democrat, it is just common sense. I hope we can get broad bipartisan support.
The link to the Wall Street Journal editorial is: http://online.wsj.com/article/SB123725421857750565.html
The links to the white papers are:

Las Vegas, La Jolla and the OC
I expect I will get a few new readers from this letter. Normally, at the end of my regular weekly letter, I make a few personal comments. I write this free weekly letter to my 1 million closest friends, and you can add yourself to the list at www.frontlinethoughts.com. You can find out more about me at www.johnmauldin.com.
Parts of this letter have been written in New York and Dallas, and as I write this I am on a flight to Las Vegas to speak at a conference on natural resources. I am sure the recent Fed actions will be at the center of conversation. There is not enough space now to comment on that; but I did do a few segments on Yahoo Tech Ticker (one of which evidently made the Yahoo home page), which you can listen to at the following links.
Links to the Yahoo segments:
D.C. to America: You Can't Handle the Truth

Plan to Solve Crisis: Let Immigrants Buy Houses

Fed Strategy: Spread Economic Pain Over Multiple Years
I will be in La Jolla for my annual Strategic Investment Conference in two weeks, as well as hosting the Richard Russell Tribute Dinner. The dinner is shaping up to be a big event, with hundreds of attendees and many of the brightest lights in the investment writing world present to honor Richard for 50 years of brilliant commentary.

I really enjoyed my trip to NYC. I had a great steak dinner with Art Cashin, everybody's favorite commentator on CNBC. Breakfast with Tom Romero and then a meeting with Jim Cramer, who I found to be very personable and genuinely likeable. Meetings in the afternoon with business partner Steve Blumenthal, then breakfast the next day with Barry Ritholtz, Yahoo at the NASDAQ, and then a speech at noon, back on the last flight and up writing -- and then this plane, which I hope ends up in Las Vegas.

In addition to being with old friends Doug Casey and David Galland (and their posse), I intend to see the inside of the gym and spa. I need it. Tiffani has been gone for two weeks, working on our book, and will get back on Monday; and the new chapter I was supposed to have for her has disappeared in a reboot from this laptop. I am quite distressed, but evidently the book gods decided it needed a major rewrite.

Have a great week, and find a few friends and share some laughs and your adult beverage of choice.

Ok, the computer crashed again, and this letter is going out on Saturday rather Friday night. But I did get to see the Jersey Boys (The Story and Music of Frankie Valli and The Four Seasons) here in Vegas last night. One of the best shows I have seen in years. See it when it comes near you.
And if you are in Las Vegas, eat at Wolfgang Puck's new place, called Cut. One of the best pieces of steak I have inhaled in years. And now it really is time to hit the send button and go attend the conference.
Your wondering if we can actually get some action analyst,

John Mauldin
Copyright 2009 John Mauldin. All Rights Reserved

Note: The generic Accredited Investor E-letters are not an offering for any investment. It represents only the opinions of John Mauldin and Millennium Wave Investments. It is intended solely for accredited investors who have registered with Millennium Wave Investments and Altegris Investments at www.accreditedinvestor.ws or directly related websites and have been so registered for no less than 30 days. The Accredited Investor E-Letter is provided on a confidential basis, and subscribers to the Accredited Investor E-Letter are not to send this letter to anyone other than their professional investment counselors. Investors should discuss any investment with their personal investment counsel. John Mauldin is the President of Millennium Wave Advisors, LLC (MWA), which is an investment advisory firm registered with multiple states. John Mauldin is a registered representative of Millennium Wave Securities, LLC, (MWS), an FINRA registered broker-dealer. MWS is also a Commodity Pool Operator (CPO) and a Commodity Trading Advisor (CTA) registered with the CFTC, as well as an Introducing Broker (IB). Millennium Wave Investments is a dba of MWA LLC and MWS LLC. Millennium Wave Investments cooperates in the consulting on and marketing of private investment offerings with other independent firms such as Altegris Investments; Absolute Return Partners, LLP; Pro-Hedge Funds; EFG Capital International Corp; and Plexus Asset Management. Funds recommended by Mauldin may pay a portion of their fees to these independent firms, who will share 1/3 of those fees with MWS and thus with Mauldin. Any views expressed herein are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest with any CTA, fund, or program mentioned here or elsewhere. Before seeking any advisor's services or making an investment in a fund, investors must read and examine thoroughly the respective disclosure document or offering memorandum. Since these firms and Mauldin receive fees from the funds they recommend/market, they only recommend/market products with which they have been able to negotiate fee arrangements.

John Mauldin, Best-Selling author and recognized financial expert, is also editor of the free Thoughts From the Frontline that goes to over 1 million readers each week. For more information on John or his FREE weekly economic letter go to: http://www.frontlinethoughts.com/learnmore

Friday, March 20, 2009

Shevy Akason and Associates Proud To Announce 22 Sierra Blanco Closes for $633,500 after only 8 days on the market

22 Sierra Blanco, Foothill Ranch, sells for $633,500 after only 8 days on the market!

Shevy Akason and Associates uses broad marketing strategies, well researched pricing techniques, and superior buyer knowledge to sell homes faster and for more money. 22 Sierra Blanco in Foothill Ranch was originally listed on February 11, 2009 and closed escrow on March 20th, 2009. It spent only 8 days as active, recieved 5 offers, and sold for full appraised value.

For more information on listing your home with Shevy Akason and Associates click on this link. http://findmylandmark.com/contact.php

Find out how are strategies can help you sell your home quicker and for more money!

Saturday, March 14, 2009

Shevy Akason and Associates featured on the Irvine Housing Blog!

I would like to thank Lawrence Roberts aka Irvine Renter who featured a couple of pages from my web site that I have featured nice cash flow investments on. I am happy that I discovered blogging about 6 months ago and have been fortunate enough to become acquainted with Lawrence Roberts and his blog. His knowledge of the real estate market is something to be admired.

If every high school in America had a class on real estate, I cannot imagine a better book to use as the foundation of the course than his book "The Great Housing Bubble, Why did prices fall?" If everyone had the knowledge he shares in this book we would not be in the situation we are in today.

If you are not familiar with his blog or if you would like to see his recent posting today featuring Shevy Akason and Associates web section that features cash flow investment property visit;

Irvine Housing Blog

Thursday, February 26, 2009

My letter to NAR

I recently wrote a email to NAR, an organization that I am a part of. The email spoke out against bailouts that use tax payer dollars to subsidize and artificially support home prices. Although many colleagues have brought it to my attention that these types of blogs will not help me to get business, I also do not believe that not being honest is good business either. Howoever, I do know that keeping my opinions to myself may be! This is my real estate blog and this is my opinion. Plus very few actually read my blog anyways! Most of which are not my current clients anyways, plus if my current clients ask my opionion I will tell them regardless if it it costs me short term business. Nevertheless, I still believe that real estate is a great investment, in fact, to me it is still the best investment. However, it's only the best if done right. Moreover, bad policy is not good for anyone. My latest email to NAR is below.

I do not mean to bombard you with information, however, it is important that I clearly demonstrate my point.

Hence, I wanted to put together some facts to better demonstrate my position regarding home prices and affordability and why prices still need to come down in some areas. Moreover, why I believe that government subsidization in these areas will actually hurt affordability, the economy, and agents.

Moreover, that by giving people the ability to purchase past government policy made it irresponsible to purchase for a whole group of American’s that could not; and possibly still cannot responsibly afford a decent home in many areas of the country. Furthermore, by passing legislation and promoting policy that “stalls foreclosures” and artificially props up prices they are making another mistake.

For example, the zip code 92620 is a relatively average zip code in Irvine, CA.

· Between 2000 and 2006 the average home went up 260%

· During the same period the average income only went up 17%

· Although to date prices have fallen nearly 25% from the peak prices are still 93% higher than they were only 9 years ago while incomes have only increased 17%

· Is it really so bad if the people that bid up prices to begin with have to rent?

· Is it really so bad if the homes come back to market levels so that those that have been renting, paying their taxes, and savings can be rewarded and purchase a home for the right price?

Moreover, to demonstrate my contention regarding rental paridy I’m going to use real numbers. There is a home in my neighborhood currently for sale for $535,000

. The exact same floor plans rents on average for $2400. You can see using my preferred Rent versus Own calculator if a buyer is making a rational choice between renting this home and buying this home, he will choose to rent it. As the total cost over ownership is nearly $600 more per month than renting it. If the housing stimulus package is successful, home prices will stabilize at this level and instead of buying it at a price that would allow for a total cost of $2400 and allowing the buyer to have an extra $600 to spend to stimulate the economy it will get sunk into mortgage payments and go the bank.

The rent versus own calculator does not work on here, however you can access it your self and check for rental paridy at: http://www.irvinehousingblog.com/calculator/

Furthermore the home in this example is a relatively average 1700 square foot condo. Using the tempo (our MLS conduit) buyer’s qualification form for a conventional mortgage with 20% down, the average income family in Irvine earning $99,015 per year with 20% down only qualifies for a mortgage of $227,000. Do you know how many 3 bedroom homes sold in Irvine for less than $300,000 in 2008? Zero.

Buyer's Qualification Calculations for Conventional Mortgage:
The following data is for estimation purposes only and the accuracy of the figures is not guaranteed. The actual costs with respect to each transaction will vary depending on the circumstances.

Gross Monthly Income

Appropriate Percent for Mortgage


Max PITI $ 2310.00

Appropriate Amt for Total Debt ( 36%)

Total Monthly Long Term Debt

Max PITI $ 1970.00

Maximum Mortgage

Maximum PITI (lower of above)

Monthly Real Estate Taxes

Monthly Homeowner Ins

Monthly PMI

Monthly HOA

Estimated Max P&I

Estimated Maximum Mortgage Amount

Note: A Maximum Mortgage Amount that says "Unqualified" or a MaxPITI of 0.00 means that a calculation resulted in a negative number.

Mortgage for Desired Loan Amount

Desired Loan Amount

Annual Interest Rate

5.25 %

Term of Loan

30 years

Monthly Payment for Desired Loan (P&I)

Monthly Real Estate Taxes

Monthly Homeowner Ins

Monthly PMI

Monthly HOA

Estimated Monthly Payment for Desired Loan (PITI)

Quite simply prices will quit falling when they are back in line with income and rents. Moreover, the housing market will stabilize and our country will begin to move forward. Policies that stall and prevent this simply delay the necessary but somewhat painful process in exchange for a desired quick fix and instant gratification. The best case scenario based upon current policy is hyperinflation which will erode the dollar and cause incomes and rents and to catch up to home prices. Moreover, it angers me that our policy makers have not learned from their mistakes. The current economic situation is due in large part to policy makers that thought it would be a good idea if everyone in America owned a home. As a result they put into motion a chain of events that led the sub-prime melt down, the great housing bubble, and possibly the next great depression.

On the surface the idea that everyone should own their home is a great idea, however, one does not have to look too far ahead to see that it is not a good idea to borrow money to people that cannot manage it, to allow someone to take a negative amortization loan, to borrow $500,000 to someone that cannot save $5000 to pay for closing costs. Now, our policy makers irrational thought that the only way out of the mess is to artificially keep prices high and reward those that made horrible decisions.

Do not get me wrong, as an agent there is no better feeling than helping someone to purchase their dream home. Beyond the fact that if this works it will simply drag this mess on indefinitely, if he is successful, many responsible, hardworking people, that by any standard should be able to purchase, will not be able to and will be left holding the bag. Worse yet, this group will end up subsidizing the people that the irrational policies support and NAR has stood up in favor of this.

NAR’s policy is to make the dream of homeownership possible; however, by supporting this type of legislation it is actually stripping the dream from the most deserving people. Moreover, it is unforgivable that NAR has failed to take note of past failures and is asking those that these policies have hurt the worst to pay for these mistakes through their tax dollars. NAR has essentially caused the dream of responsible homeownership to disappear for this group and NAR continues to beat them over the head as they fights for the preservation of the failed experiment of homeownership for all, well most, ummm well, at least those that have not earned it.

Tuesday, February 24, 2009

Is Irvine a Buyers or a Sellers market?

If you say buyer's market, you are not alone, however, currently you are wrong. Moreover, until you have tried to buy a home in Irvine you will not understand how much of a seller's market it truly is! Don't take my word for it, the numbers speak for themselves. Let's take detached homes in Irvine between 2000 and 2800 square feet, with at least 4 bedrooms and 3 bathrooms, built since 1990, and listed since June 1, 2008.
•The average home in this range sold for $802,979
The average sales price was $344/square foot
•The average home sold for 96.83% of original asking price
•The average home sold for 98.43% of list price (price the property was listed price at the time the deal was reached)
•The average home sold in only 34 days, this includes any short sale listings that were listed since June 1st and closed escrow on or before February 22, 2009.
*a buyers market occurs when there is 6 months worth of inventory. Current inventory is misleading because there are a number of short sales on the market listed as active that have multiple offers but are waiting for bank or investor responses.

•The average home that was listed and sold in this time frame was on the market for only 34 days.

If those stats were not telling enough;
•16 out of the 52 homes, nearly 31% sold for at or above asking price.
•3 for exactly 100%
•7 for 100.01%-103.9%
•5 for 104%-109%
•The highest sold for 110% above original asking, in 12 days, at $408/square foot

Where are the screaming deals that should be out there in this housing meltdown? Of course, homes that back to major roads, need copious amounts of work, and have strange floor plans will sit on the market longer and sell for lower prices. If 2009 is anything like the end of 2008 in Irvine those looking for a smoking deal need to consider the following options.

•Cash on the court house steps, that is if Obama's housing plan is unable to prevent these foreclosures (Shevy Akason and Associates can assist you with this for a buyers premium)
•Study the best deals of the past and develop a strategy.

To buyers reading this article I have just showed you the worst deals in Irvine
In the last half of 2008 for the property types described above. Now where are the best deals? Ironically but not surprisingly 3/5 best deals were included in the numbers above and sold for over asking price.

•A total of 5 or 10% of the homes on this list sold for under $300/square foot.
•3 out of the 5 sold for over asking price
•105.36% of original asking
•103.95% of original asking
•102.5% of original asking

I am not implying that there are not going to be great opportunities for those that want to buy in 2009 because there are. Moreover, I am not implying that there is not strong downward pressure on home prices because there is. Nevertheless, the buyers that are ready and have a plan of attack will benefit.

What can the best deals of the past teach us to help us find the best deals in the future? Do find out read the rest of the report on my web site

The current housing debacle was predicted in 1999!

"From the perspective of many people, including me, this is another thrift industry growing up around us. If they fail, the government will have to step up and bail them out in the way it stepped up and bailed out the thrift industry." - Peter Wallison a resident fellow at the American Enterprise Institute, New York Times article by Steven A Holmes September 30, 1999

This quote comes from an article entitled "Fannie Mae Eases Credit to Aid Mortgage Lending" by Mr. Steven A. Homes that was published in the New York Times September 30, 1999. Mr. Holmes is currently a professor at NYU School of Law. Needless to say Mr. Holmes demonstrates tremendous foresight and leaves me wondering why our country does not elect more people like him to office. In the article he cites pressure from "the Clinton Administration to expand mortgage loans among low and moderate income people and (Fannie Mae) felt pressure from stock holders to maintain its phenomenal growth and profits."

Moreover, he quotes Peter Wallison from the American Enterprise Institute who correctly predicted the current bailouts, "From the perspective of many people, including me, this is another thrift industry growing up around us. If they fail, the government will have to step up and bail them out in the way it stepped up and bailed out the thrift industry."

I'm sure that many are impressed by the articles foresite and frustrated that his warnings fell on deaf ears. Mr. Holmes' predicts the center of today’s economic crisis 10 years, tens of thousands of sub prime loans, and millions or billions of tax dollars prior to the great housing bubble. I have emailed Mr. Holmes for permission to post the article in its entirety.

What does Mr. Holmes think about today’s current bailouts, the idea that tax payers should subsidize and create an artificial floor for home prices? In my opinion, any government subsidization beyond allowing those that can afford a 30 year fixed fully amortized loan at market rate to refinance is too much. First, most of the modifications will be back in foreclosure in less than twelve months. Second, subsidizing home prices with the thought that keeping prices high and stopping foreclosures will help the overall economy is short sighted. If the government successfully keeps home prices 10% higher through subsidization than the market otherwise would all future buyers will pay 10% more than they should and have that much less disposable income to spend on things besides housing.

Moreover, there is a whole generation of people that have overpaid for homes and if current housing stimulus policy is successful there may be a whole new group of people that will overpay for housing. When people over pay for housing they do not save enough for retirement, they do not have disposable income to spend and stimulate the economy, they may not have time to spend with their family, or the money to send their kids to college. Is using people’s tax dollars to subsidize and artificially inflate the price of housing a good idea?

I find this article particularly interesting because I wonder how many other people out there recognized that stated sub prime, interest only, and negative amortization loans were a bad idea and how did our best and brightest not? Moreover, I wonder if there are political science professors, economic experts, or others that share my opinion regarding government, subsidization to artificially inflate home prices? Foremost, I wonder if these voices will be hear and win out so that a larger crisis is not created.

I remember asking my wife many Sundays while reading the real estate section of the Orange County Register when the crazy over inflated prices will end. It was apparent that prices could not continue to rise at such unsustainable levels while people were barely able to afford payments using interest only and negative amortization loans. I often wondered how and why it was not apparent to others, particularly the banks giving the loans. One question I posed to people in the height of the crisis was what can banks do to go beyond the negative amortization loan? The bank pays you loan? Today I ask, when will they see that using people’s tax dollars to artificially inflate the price of the very homes those people have been saving to buy (at a reasonable price) is not a good idea.

While I was cautioning against over exuberance my warnings fell on deaf ears and in the back of my mind I wondered if maybe I was wrong. Fortunately, I trusted my beliefs and was able to avoid direct damage from the housing bubble, however, the collateral damage has been felt by all. Let’s hope that wiser voices prevail in regards to the current debates regarding housing bailouts. To this point, it seems that they are not.

I hope to hear from Mr. Steven A. Holmes soon.
previous article published on my blog November, 2008

America is quickly becoming desensitized to its moral obligation and duty to repay debts. In fact, many American’s now feel that they are owed something regardless of their behavior and actions. This moral path could lead to an economic crisis far worse than anything we have seen.

In the movie Cinderella Man Russell Crowe plays James Braddock, a.k.a Cinderella man. This movie is a story about a poor ex-prizefighter during the great depression. Unable to pay his bills struggling to feed and clothe his family he is forced to go on public relief. Driven by love and honor James Braddock returns to the ring to become a legend and a symbol to many American’s during the time, proving that hard work and sacrifice, pay off when he defeats the heavyweight champion. In a memorable scene, James Braddock returns to the public assistance office to return the money he was lent when he was down and out.

This brings me to today's economic crisis, a majority of Americans did not lose their homes trying to feed, clothe, and keep their children warm. In fact, of the entire country 6% of homeowners are behind on their mortgage, most of them are losing their homes as a result of irresponsible behavior that has caused many others that did not participate in the irresponsible behavior to lose their jobs, 401k's, and retirements. As Larry Roberts author of The Great Housing Bubble puts it, a majority of American’s are losing their homes because they “were lured by the free money accumulating as appreciation and took out an additional $400,000 in home equity lines of credit and refinancing and lived the good life. This neighbor was driving around in new cars, taking vacations, buying expensive toys and pretending to be rich,” while others sacrificed, even spent less time with family and friends in order to pay down their mortgage and in hopes of a better future. Now, current legislation endorsed by John McCain, Arnold Schwarzenegger, and others seeks to use the tax dollars of the prudent to pay for the imprudent and worst of all the imprudent are beginning to feel entitled and even proud of the plunders. Furthermore, this legislation leads to others saying why not me and the potential for the number of bad loans to increase exponentially as the banks tell people that they need to quit paying their mortgage to qualify for the modification.

“When the thirteen colonies were still a part of England, Professor Alexander Tyler wrote about the fall of the Athenian republic over two thousand years previous to that time:A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves money from the public treasure. From that moment on the majority always votes for the candidates promising the most money from the public treasury, with the result that a democracy always collapses over loose fiscal policy followed by a dictatorship.The average age of the world's great civilizations has been two hundred years. These nations have progressed through the following sequence: from bondage to spiritual faith, from spiritual faith to great courage, from courage to liberty, from liberty to abundance, from abundance to selfishness, from selfishness to complacency from complacency to apathy, from apathy to dependency, from dependency back to bondage.”1

1Alexander Tyler http://www.mcsm.org/democracy1.html In accordance with Title 17 U.S.C. Section 107, any copyrighted work in this message is distributed under fair use without profit or payment for non-profit research and educational purposes only. http://www.law.cornell.edu/uscode/17/107.shtml

Thursday, February 19, 2009

Shevy Akason and Associates is proud to announce 22 Sierra Blanco is in Escrow! Under 1 week! Multiple bids

Shevy Akason and Associates takes pride in understanding the market, getting homes sold, and getting our clients top dollar in any market. We are proud to announce that we opened escrow on 2-19-09 in only 8 days on the market, with multiple offers! A one week marketing blitz, proper pricing, and great cooperation from the sellers keeping the home clean, clutter free, and allowing us to hold open houses and show it freely made this a quick sale!

The housing plan--- I still don't think we get it

Is the government's plan only looking one step ahead? Hoping for Hyper inflation? How do you feel about paying other people's mortgage?

Monday, February 16, 2009

Opportunity- HUDS 203K program offers many buyers a fantastic opportunity

Tired of looking at homes that need a bunch of repairs that you do not want to pay for? Tired of looking at newer construction with high HOA and high mello roos or homes that have been done nicely but not to your taste? This program allows home buyers to obtain permanent financing when purchasing a home that will cover certain rehab costs. This could be a huge benefit to many buyers out there that have been looking at beat up bank owned homes or homes with $10,000s of thousands of upgrades done to someone else's taste. Or buyers that are not buying because of lack of funding for necessary improvements and repairs without dipping into important reserves. This could be a great option for buyers considering puting 10% down but hate the thought of PMI!

This loan can be used to fund up to $35,000 in improvements and can be done as part of an FHA loan. Therefor, it limits out of pocket expenses to a 3.5% down payment as an FHA loan. This could be an important tool to allow buyers to purchase a fixer (hopefully priced under market), and gain sweat equity. Here is my recommendation on how to best utilize this program.


Buy a fixer worth $500,000+ after repairs for $400,000 or less preferably ($396,000) so that with 3.5% down + $35,000 for rehab, your loan balance stays under $417,000 and request the seller pay 5% towards closing costs.

Take a loan for $415,915

Put $15,085 down

Put another $5000 towards repair out of your pocket

You are now in the property for $440,000

New appriased value= $500,000

Cash on cash return= 290%+ that's tough to beat!

Moreover you now have $74,085 equity nearly 15% (nearly $60,000 in sweat equity)

If you were previously planning on puting 10% down, if you put the other 5% down you will have put a total of 8.5% down and about 9.5% invested (including extra $5000 pitched in for rehab) and have 20% equity and no mortgage insurance (speak with your lender)!

for more information visit:

HUD information on 203K

Thursday, February 12, 2009

Shevy Akason and Associates proudly present 22 Sierra Blanco, Foothill Ranch

Do not miss this, relocation forces sale. Unbelievable views

22 Sierra Blanco
Foothill Ranch, CA 92610
Offered at US$599,000 to US$640,000
MLS Number S563452

Type: Residential
Year Built: 1993
Bedrooms: 4
Baths: 3
Living Area: 2043 Sq. ft.
Lot Size: 4695 Square Ft.

Property Highlights

Catalina Views
3 car garage

Master bedroom view deck

community Pool
Community spa

1st floor bedroom
Nice yard

Cul-de-sac street
Dual paned windows

Property Description
Relocation forced sale of this beautiful view home on a cul-de-sac! This is dream home and an equity seller. First floor bedroom and full bath, 3 car garage. This home offers unbelievable views perched high in the hills of Foothill Ranch overlooking the city lights below. Views include Catalina Island, all the way to Dana Point and the Irvine Spectrum along with beautiful mountains! Plus a spacious back yard, gorgeous view balcony off of the master. The back of the home faces west allowing for fantastic sunsets. In addition, the master bedroom, dining room, kitchen, and living room have fantastic westerly views. The huge windows make this home bright and highlight the large back yard and views. Dual paned windows throughout, double sinks in master bath and 2nd upstairs bathroom, plus association pool and spa! Walking distance to Whiting Ranch hiking and biking trails. If all this is not enough, low tax rate and low HOA.

Shevy Akason 949.769.1599 shevy.akason@evergreenrealty.net

Saturday, February 7, 2009

The Wall or the Wave

The Wall or the Wave

Will the wall that the government is building to keep our country from drowning in the wave of foreclosures be too big? I set out this morning to write an article about the 4% plan that I’ve been hearing about. However, I was conflicted, as a realtor I saw huge potential for what this could do to help my clients to purchase homes, nevertheless, I also knew that in Orange County this might go too far and cause government subsidized increases in Orange County home prices, similar to the ones that got us into this mess in the first place, if not property regulated.

First, I’ve seen the inventory drop steadily in Irvine since the extra 90 day waiting period/ foreclosure moratorium passed, I’ve also been waiting for the wave of product that’s been left off of the market (read more about the moratorium). Of course, for those looking to buy in the past three months less inventory means higher prices. Even though the moratorium simply delayed the inevitable, if you want to buy a place today, more inventory coming in three months does not help you. Nevertheless, more inventory is coming and lawmakers are scared. With today’s realistic financing terms and the ARM and Alt-A loans adjusting there may be more price declines. Although price declines should mean more affordable housing which is exactly what we need, the government is against price declines because declines mean more to our economy than simply better affordability.

As crazy as it sounds, the government will do everything that they can to prevent more affordable housing as a result of more reasonable prices. Hence, we will surely see some huge measures in the stimulus bill to subsidize housing. The question is which will be bigger; the wall that the government is building or the wave of foreclosures that is bearing down on California. If the 4% mortgage idea passes and it is not heavily restricted I argue that the wall may be much bigger in Orange County and we may even see price increases for the two years this program is in place. Those that will benefit this most will be those that buy with today’s financing terms and prices and refinance using the new government subsidized loans. In fact, if 4% rates or subsidies similar may pass I will encourage my clients to buy as soon as possible and never sell. Especially as I see properties coming up at rental parity pricing using 5.5% and 6% loans, it’s tough to beat 4% thirty year fixed, even if we’re not at the bottom. However, with this type of subsidization in place it will be hard to imagine price declines. Moreover, as we know housing is a great hedge against the potential inflation that this “stimulus” plan has the potential to create down the road.

I am against government subsidization of housing that artificially increase prices. However, I am also against a complete economic collapse of our country. As a result, I’m going to play devils advocate and here is the argument. If properly regulated a 2 year period of 4% 30 year fixed interest rates will stabilize the housing market. Forget about inflation, the government doesn’t seem to care right now. If properly regulated this plan could be effective. In order to be effective the following provisions would need to be added.

1) debt to income must be below 50%
2) No stated income
3) Minimum 10% down for purchase
4) Loan amounts to be capped at 4x average income for the zip code the home is in -20% (for purchases)
5) Looking for other ideas that will keep this from sending prices artificially high

In conclusion, it’s tough to say which will be bigger, the wall or the wave.
What do you think?

To read more about the foreclosure moratorium and a great article about the 4% plan click on these links: foreclosure moratirium 4% loan proposal

Friday, February 6, 2009

Income opportunity in Lake Forest

Visit my website to see the latest income opportunity in Lake Forest. It's in a fantastic community that includes a pool, spa, and tennis courts. It's bank owned and well priced at $339,000 but not well priced enough. Visit Lake Forest,3/3, bank owned to see what I would recommend. This could be a great income opportunity and a fun project!

Thursday, February 5, 2009

$80,000 below rental parity!

This home is a fantastic value. Click on link for full report.


Investor opportunities in Costa Mesa

I recently featured a property that just sold in Costa Mesa below rental parity. To see this information please visit the page dedicated to this property on my website at http://findmylandmark.com/Costa-Mesa-n25918.html .

Saturday, January 31, 2009

Irvine Inventory

If you are a buyer and you are getting frustrated because you feel like there are not many options in Irvine you are right. The following link charts the inventory in Irvine over the last 24 months, you can see it is way down.


Tuesday, January 27, 2009

Barney Frank hear this- the housing market will stop collapsing when you quit artificially inflating prices! (Well, maybe not now that your poor poli

Barney Frank hear this- the housing market will stop collapsing when you quit artificially inflating prices! (Well, maybe not now that your poor policies have lead us into a complete economic crisis) Regardless---

If I had unlimited amounts of disposable income, I would do everything in my power to get the following point across. “B Frank- The housing market will stop collapsing when you quit artificially inflating prices!” In fact, there would not even be a collapse if you didn’t push policies that artificially inflated prices to begin with! I would pay for planes to fly over Franks house with banners expressing my point, take out full page spreads in the NY Times, the Washington Post, and the Wall Street Journal. In short I would make it my mission for the jokers in Washington to understand this very simple point. Moreover, that by giving people the ability to purchase they made it irresponsible to purchase for a whole group of American’s that could not; and possibly still cannot responsibly afford a decent home in many areas of the country. Moreover, by passing legislation and promoting policy that “stalls foreclosures” and artificially props up prices they are making another mistake.

First, Mr. Barney Frank along with some of his colleagues thought it would be a good idea if everyone in America owned a home. As a result they put into motion a chain of events that led to the sub-prime melt down, the great housing bubble, and possibly the great depression II. On the surface the idea that everyone should own their home is a great idea, however, one does not have to look too far ahead to see that it is not a good idea to borrow money to people that cannot manage it, to allow someone to take a negative amortization loan, to borrow $500,000 to someone that cannot save $5000 to pay for closing costs. Now, Franks incredible genius thinks that the only way out of the mess is to artificially keep prices high and reward those that made horrible decisions.

Do not get me wrong, as an agent there is no better feeling than helping someone to purchase their dream home. However, the feeling is much better if you know that they can afford it. The best case scenario from these policies that artificially inflate prices is that a new round of buyers will jump in and pay inflated prices , prices that can only be supported artificially. Beyond the fact that if this works it will simply drag this mess on indefinitely, if he is successful, many responsible, hardworking people, that by any standard should be able to purchase, will not be able to and will be left holding the bag. Worse yet, this group will end up subsidizing the people that Mr. Barney Frank’s irrational ideas support.

Mr. Frank a proponent of apparent reckless loan modification proposes principle reduction and other methods meant to artificially keep prices high. Ironic, the purpose of Mr. Barney Frank and his cohorts was to make the dream of homeownership possible; however, it is actually stripping the dream from the most deserving people. Moreover, it is unforgivable that he has failed to take note of his past failures and is asking those that his policies have hurt the worst to pay for his mistakes through their tax dollars. He has essentially caused the dream of responsible homeownership to disappear for this group and he continues to beat them over the head as he fights for the preservation of his failed experiment of homeownership for all, well most, ummm well, at least those that have not earned it.

Friday, January 23, 2009

52 offers in less than 5 days, a unique opportunity for buyers and sellers

Buyers and sellers can both take lessons from a home in Huntington Beach that came on the market on January 13th, 2009. Less than 1/2 mile to the beach, over 3000 square feet, on 6500 square foot lot, and priced at $712,500. Based upon comps there is over $100,000 in equity in the property at that price. Recently I found that the property was on hold. I called the agent to get the details; he informed me that they had accepted an offer and that they were just waiting for the signed contract. I asked if they would be accepting back up offers and he said that he did not think that would be necessary and that he had 52 offers in less than 5 days. This property demonstrates the unique opportunity that buyers are faced with that is causing many buyers to get back into the market, properties down 20%+ from their peak and historically low rates. In addition, sellers that purchased their homes 10+ years ago are also presented with a unique opportunity, they still have lots of equity, rates are still low (bringing many buyers back into the market), and if they price their home correctly there are plenty of buyers!

52 offers in 5 days demonstrates one of the biggest challenges in today’s market, contrary to what most believe, it is not unusual for a properly priced property to get double figure offers in less than a week. When homes are priced appropriately for today’s market and they do not have any major issues such as foundation, structural, or other they sell quick and with multiple offers. It should not be a surprise, people still want to live in California, particularly in Orange County. Both buyers and sellers need to take note of this and use it to dictate there strategy.

First, buyers need to be able to recognize and take advantage of opportunities when they arise. In order to do this they need the following.

1) Write an offer quick when the right property comes to the market.
2) Hire a full time real estate professional that they trust (unless they have unlimited free time and access to all of the tools that the professionals do and have experience acquiring property in today’s market)
3) The willingness to take their agents advice. This occurs by listening to one’s agent, asking them questions, and trusting in their advice. Of course, a good agent will back their advice up with CMA reports and other market data that will support their advice. This is invaluable if one listens. Moreover, agents will tell you what today’s market value is and what the trends are for the community. Most agents will not speculate on what the prices will be in 6 months or one year from now. However, if you feel like they will be a lot lower and only want to buy based upon prices in 6 months to one year from now wait. It is very rare that a property will sell for more than 10% below market unless you are purchasing it all cash at the court house steps or there is something wrong with it. (I can help purchase properties at the court house.)
4) The ability and willingness to drop everything within hours to go and see an opportunity and write an offer
5) Ready to write an offer- The single biggest mistake that buyers make is waiting to write an offer when the right opportunity presents itself. If the property is right for you and a great deal, be rest assured others buyers will be ready to take advantage of the opportunity.
a. Pre-approval letter ready
b. Proof of funds ie. Bank statements that prove the buyers down payment is ready and in their account
6) Understand that banks have methods and procedures that they follow when selling property. One rule for most banks is that the home must sell within 10% of market value. As a result if buyers are not satisfied with getting a home 10% under current market value because they feel like prices are going to drop more than 10% they need to wait. In addition, buyers looking for elegant turn key homes must understand that most people prefer these types of properties, therefore, there is competition and with competition they will not get a steal.
7) Understanding that the best opportunity is not always an REO or short sale.

Where most buyers go wrong

Most buyers deal with a lot of unnecessary stress and frustration as a result of the following.

1) False sense of the market as a result of the media
a. Just as the media falsely led people into purchasing when they shouldn’t by creating TV shows about the vast amounts of wealth created buy purchasing real estate regardless of experience or fundamentals, made it appear that real estate would appreciate at 20% indefinitely, the media has made people believe that they can get homes for 30% below market value, in prime areas, and at the drop of a hat. Although this may be true in some areas, buyers looking in Newport Beach, Irvine, or other choice areas of Orange County need to recognize that in most of these areas the supply is less than 6 months, most homes are selling with 10% of the original asking price, and there is a lot of competition out there in the form of other buyers that want to purchase. A great deal in today’s market is 5-10% below current market value. Deals over 10% below today’s market value happen at auctions with all cash, when a buyer buys in bulk, or the rare opportunity when one can work with an equity seller that is extremely motivated and the buyer listens to the advice of their professional agent.

2) Think that a bank owned or short sale is the best way to acquire a property.

3) Waiting to think about it. Buying a home is the biggest decision of one’s life, it is important that when one decides it’s time to purchase that they have thought long and hard, created a budget, consulted with a lender, determined a comfortable payment and amount they want to spend on a home. In addition, it is important that they have decided where they want the home to be, size of the home, and the features of the home. Once a buyer has decided to purchase and made determinations about all of the other important aspects of the home and purchase that they are ready to react when the right opportunity comes along.

During the peak of the boom common sense dictated that a home selling for $650,000 and renting for $2100 was way over priced, that purchasing a home with a negative amortization loan was a recipe for disaster, that serial refinancing would eventually catch up to people. Moreover, common sense dictates that if prices are currently falling, even with interest rates historically low that when rates are forced up with inflation that prices will come down. That being said there is a big difference in the cost of a home if one has a 5% rate versus a 6% rate and even if history dictates that purchasing a home is historically best when rates are at the peak, most look at a home as more than just in investment and do not want to wait 5+ years for the possibility that rates will go to 9% and prices will come down.

Moreover, common sense also dictates that if there are 52 offers on a home that properly priced that there are currently 50 people competing for a home priced at $712,500, that needs work and will rent for somewhere in the high $3000 to low $4000 range. If we are going to achieve rental parity in California, it will happen as a result of a combination of factors and may not happen anytime soon.

Sellers can see this and know that there is a huge market of buyers out there ready to purchase their home if it is priced right for today’s market. As a result of the large number of ARM loans set to adjust over the next two years any buyer planning on selling in the next 3-5 years should not wait with the thought that they might get 2006-2007 pricing any time soon. Historically low interest rates will not last forever and although many are buying with plans to keep the house for a long time to come and take advantage of todays rates, it does not make sense to hold hoping for higher prices anytime soon unless you plan on holding the home for over 5 years. When the market starts to recover and inflation starts to catch up with us, the rates will rise and prevent major appreciation anytime soon. If you are planning on selling and definitely want to sell in the next 5 years it is advisable to list your home now, for a few percent below market, make sure it shows better than any of your competition, and use a professional agent that understands this market and is internet savvy.

In conclusion, there are a number of factors that go into purchasing and selling a home. One must be prepared for a challenging process when purchasing in today’s market. There are plenty of buyers out there and this market offers a unique opportunity for both buyers and sellers.