The Benefits of Trading Up

There are many great Orange County area homes for sale. Click here to perform a full home search, or if you're thinking of selling your home, click here for a FREE Home Price Evaluation so you know what buyers will pay for your home in today's market. You may also call me at (714) 335-0844 for a FREE home buying or selling consultation to answer any of your real estate questions.

The Benefits of Trading Up
I want to talk to you about a subject that  I am very passionate about. I want to discuss trade up purchases. We specialize in these types of property sales at Frank Del Rio and Associates, and there are many benefits of trading up that you need to know about.

"Trading Up" refers to selling your existing property in order to purchase a more expensive property. This has become a common trend with our clients for a couple of different reasons:

• Our clients want to lock in the mortgage rates on a more expensive home. Mortgage rates are at an all-time low and locking in these rates now is a wise investment. 
• Trading up also locks in any future appreciation that a home may have. The more expensive a home is, the more it will appreciate in value over time.

 There are a couple different ways that you can trade up: 

•  You could sell your existing home first and then purchase a new one.
•  You could purchase the new home first and sell your old home at a later date

Whichever method you prefer, I am more than willing to aid you with expert guidance and advice throughout the entire process, ensuring that you make a sound decision with the best results possible.

If you have any questions about how to price your property, then please don't hesitate to contact me. You can reach me via phone or email and I would be more than happy to share some advice with you.

Price Reductions Trending? You Need to be Prepared

There are many great Orange County area homes for sale. Click here to perform a full home search, or if you're thinking of selling your home, click here for a FREE Home Price Evaluation so you know what buyers will pay for your home in today's market. You may also call me at (714) 335-0844 for a FREE home buying or selling consultation to answer any of your real estate questions.

Selling your home without reducing the price?

Today I would like to speak with you about a pricing trend that I am seeing right now. This trend is price reductions. We have not experienced price reductions in almost a year and a half in our local real estate market. The market has been so hot that sellers believe that buyers will purchase for any price, but that is not the case anymore.

What we know is that inventory is up in Orange County, Eastern San Gabriel Valley, and the West Inland Empire. Inventory is actually up by 25% from January and sales have slowed down tremendously. If a Realtor or anyone else tells you that prices are still rising and the market is booming, well, nothing could be further from the truth.

Sellers are making price reductions for three different reasons:

1. The seller isn't listening to the agent's advice about competitively pricing the property.
2. The seller chose the price based on inaccurate information, or they just got a little greedy. 
3. The seller hired an inexperienced agent to sell the home, and they overpriced it. This is happening more and more often, so it is important to hire an experienced agent. 

If you price your home too high the market will immediately shun you. Buyers will not think twice about your home and you will spend weeks on the market until you are forced to sell your home at a highly reduced price. You definitely don't want to put yourself in a situation like this.

To stay competitive and get the most money while pricing your property, follow these guidelines:

• Listen to a great Realtor who has a proven track record of selling homes. Look at their individual record, not their company's record.
• Ask the agent what their list-to-sale price ratio is. A true professional will know these numbers and can provide you with proof of these numbers. 
• I'm currently getting my clients 99.8% of the asking price, and the average Realtor will only get you 92.2% of the asking price.

Make sure to do your research when pricing your home. You should know the home prices in your local area and how they compare to your own property. If you price your property just a hair below the real value, you will be creating momentum in the market and buyers will see a great value in your property. This will subsequently rise the price of your home through multiple offers and a bidding war may eventually ensue, causing you to get more money than you ever could have hoped for.

I also want you to know that the market will never let your home sell for too little. The market will naturally raise the price and buyers will offer more and more for your home. However, the market will allow an overpriced home to sit for months. This is why it is so crucial to price your home properly.

With this being said, if you have any questions about how to price your property, then please don't hesitate to contact me. You can reach me via phone or email and I would be more than happy to share some advice with you.

Another Housing Bubble?

There are many great Orange County area homes for sale. Click here to perform a full home search, or if you're thinking of selling your home, click here for a FREE Home Price Evaluation so you know what buyers will pay for your home in today's market. You may also call me at (626) 780-2705 for a FREE home buying or selling consultation to answer any of your real estate questions.
 

Are We Facing Another Housing Bubble?

Today we're going to be talking about housing bubbles. In a real estate bubble, home prices inflate because of overly-optimistic expectations that prices will keep rising. When people can't afford to keep up with the prices, the bubble bursts and demand for houses decreases. While supply goes up, the prices will then drastically drop. 

Today there are some markets around the nation that are seeing prices go up so quickly that consumers are worried that we are facing another housing bubble. My clients in Orange County are always asking me about where we stand in the market, and I have some data to shed some light on this.

From 2000-2006 home prices were skyrocketing because of over-optimism on real estate, careless lending standards, and really low mortgage rates. At the time that the bubble occurred, we over-valued our real estate by 39%. Built on this shaky foundation, when prices cooled and millions of people defaulted on their home mortgages, the bubble didn't just burst - it exploded. This caused the biggest real estate and credit crisis in modern history. 

Fast forward to today, and we're still in recovery mode. With tighter lending standards it is harder to buy a home now than it was back then. But in certain markets we've seen prices rise rapidly again, leading some to wonder if history will be repeating itself again. In our own Orange County market, prices have risen by 17%. 

The increase in California is generally due to the investors taking up all of the tight supply and some of the tech millionaires willing to pay exorbitant prices for property. The other over-valued cities in the nation are Honolulu, Austin, and Miami. These areas are all dealing with high demand and tight supply. 

Should this be a cause for concern about a possible bubble? Not yet. On a national level, our home prices are still 5% under their true value. Of the 100 or so markets that are monitored by real estate websites, only 19 are overvalued right now. In 2006 when the bubble burst, all 100 of them we overvalued. So if prices continue to increase at this rate, then we might be concerned about a bubble, but it's just not happening.

Price gains are starting to slow down, and consumer protection is stronger than it has ever been. We also have strict lending standards that have been put into place to ensure people will not be over-borrowing like they were last time. 

So, we're nowhere near the bubble levels that we saw a few years ago, but it's a good idea to keep a pulse on what your local market is doing and where prices are going. Bubbles do pop up from time to time, so pay attention to what your real estate market is doing.

If you have not been keeping an eye on the market here in LA County or Orange County, then please give me a call and I would be glad to discuss these things with you. I want to put you in the best possible position for you to succeed.