Real Estate Reads: What's Going On?

A couple weekends ago, I held an open house with my good friend and colleague at a property in a lovely, highly desirable North Orange County neighborhood. The home had loads of original character, roughly 1800 square feet, and was quite clean (fresh paint, neutral carpet) – but not at all updated. Its list price was just under $1.1M.

Over 80 groups of people came through and five offers ultimately came in. While some might feel that’s a low percentage given the foot traffic, let’s consider the overall picture:

1)????? Interest rates which saw some meaningful dips beginning in November have stabilized a bit and buyers are ready to go; Freddie Mac today noted the 30-year fixed-rate has settled in at 6.69% this week, nudging homebuyers off the fence and back into the market

2)????? Even though the home “only” received five offers, there’s just one offer that will ever win – which means the other four will likely go back into the buyer pool

3)????? Along with those four are the other 75 (!!!) or so groups of buyers who came to the open house and who are still hunting

4)????? Then along with all of those folks are the people from last year who sat things out, waiting to purchase for various reasons (see Freddie Mac note above)

5)????? And along with all of those buyers are folks who are entering the market for the first time this year

The home we held open is currently in escrow for almost $30K over asking price (after less than one week on the market).

If you haven’t heard, we’ve had an inventory shortage for a few years – and we’re still in the thick of it. With so many folks vying for a piece of the pie, I’ll let you ponder what that will do to home prices. Hint: see the good ol' Law of Supply and Demand for the answer.

Another interesting observation from that incredibly active weekend: many home hunters were foreign buyers – and not the kind that are all-cash. One of these couples spoke of their ability to put down a significant amount of money, needing only a modest loan. How’d they grow their wealth? They told me they bought years ago in places that would ultimately enjoy significant growth – Moreno Valley and Chino – and deliberately grew their personal empire. Their story was of interest to me because it’s in contrast to what I’ve heard a few times from friends and clients alike: they wonder about the strength of real estate, “how long the market can go on like this,” and they think it’s not a good time to buy – or that the places that have properties in a “better” price point aren't in areas where they'd want to live (note: "better" is relative to anyone’s given situation, and it also requires one to really think about what's important: buying real estate to get into the game even if it means a hefty commute for a while, or letting an opportunity pass you buy?).

The latter point may be fair enough, but the bottom line is two-fold: real estate is a powerful way to grow your personal wealth and leverage it for future purchases, and if buyers from other countries are ready to make a run at property in such a tight market, those who have been on the fence need to get serious about their goals and realize the benefit of homeownership. Engaging with a strong, strategic Realtor to realize their hopes and dreams is a great first step to take, and I'm here to help you with that.

Buying real estate – which will rarely be the dream home you’ll live in for the next 40+ years – is something that can not only be a stepping stone to another property, but can also be held for later generations’ benefit or be a resource to you in times of need. And given our unique, always-in-demand market, my bet will nearly always be on real estate over most other investments.

About the author: SoCal native Lauren Dunn is a full-time professional Realtor with CENTURY 21 Discovery in Orange County, CA. She is proud to bring her goal-oriented approach and client service skills from a nearly 20-year career in advertising, sports marketing, and media to the world of real estate. You may reach her at LaurenDunn@C21Discovery or by calling (714) 519-4669.