Market Conditions for Aliso Viejo, California Reported by Liana Norman, GRI, CRS, REALTOR Since 1989 Updated November 16, 2011.

Current Market Rating: 4 1 2 3 4 5 Buyer's Seller's

Current Price Trend: 2 1 2 3 4 5 Falling Rising

Aliso Viejo average list price dropped to $415,000 with an average days on market remaining about the same, 2.6 months. 56.3% of all listings are distressed sales which is an increase in the last few months.

Orange County Housing Report: Lowest Payments in Over a Decade! As of November 12, 2011

Combine historically low interest rates with lower values and monthly payments have dropped to new lows.

Monthly Payments: We haven't seen monthly payments this low in Orange County since 2000.
Everybody knows that home values have dropped considerably since 2006. We are also very much aware that interest rates have dropped to unbelievable, historically low levels. Yet, nobody seems to drill it down further and take a look at what that means to our wallets. Obviously, when values drop and interest rates drop, so will the monthly payment. Let's look a little deeper. In looking at the median sales price and the historical average interest rate, you have to go back to the year 2000 to find a monthly payment that is lower than what we are experiencing today. The median sales price for a single family detached home in September was $480,000, based upon the average interest rate for the month of 4.1%, the monthly payment was $2,319. The payment in 2006 was 48% higher. The median sales price was $713,160 and interest rates were at 6.4%. In 2000, the payment was just $39 less. Even though the median was 35% less, the interest rate was almost double. Today's buyers are searching for a deal, but many fail to realize that the deal is right in front of their noses. The median sales price has dropped 33% since 2006 and interest rates have dropped 36% as well. That is precisely why it is so advantageous to be a buyer in today's market. Carpe diem! Because of the current economic climate, many have chosen to ignore reports of home affordability at levels not seen in years. The reports are authentic because they take into account the amazingly low interest rates. Eventually, rates will rise from these unheard of levels and will never return to these historical lows during our lifetimes. So, why haven't we heard more about the impact of interest rates on our wallets? Isn't a 48% savings newsworthy? There just isn't enough sizzle in interest rates to grab the attention of readers and viewers. Today, "spreadsheet buyers" pour over recent comparable pending and closed sales to arrive at a purchase price, but they often don't spend enough time considering the impact that interest rates have on the monthly payment that they are going to be paying for years. I find it ironic that most everyone will negotiate their monthly car payment just to save a few extra bucks, but they aren't nearly as concerned when it comes to purchasing a home. When automobile makers offered 0% interest rates, consumers didn't have to worry about whether or not they were getting a deal. At today's interest rates, they are not going to fall any further. They are equivalent to the 0% rates for brand new cars. It is time to seize the day. When interest rates increase, it will be a swift rise. The UCLA Anderson Forecast believes that interest rates will rise to an average of 7.3% almost overnight. At the current median sales price, the payment would climb by nearly $1,000 per month, from $2,319 to $3,291. Remember, these are 30-year fixed mortgages. Staying in the home for thirty years equates to a savings of $350,000 over the life of the loan by not waiting for rates to rise to purchase.

Demand: Demand increase a little in the past two weeks.
Demand, the number of new pending sales over the prior month, continues to bounce around the 2,900 level since mid-September. In the past two weeks it increased by 60 homes and now totals 2,914. From here, demand will drop as we officially enter the Holiday market. Christmas lights are beginning to go up and Thanksgiving is just a couple of weeks away. It is time to start planning all of the holiday diversions, averting the attention of many buyers and sellers until after we bring in a New Year. Demand will start dropping to its lowest levels of the year. There are 244 additional pending sales this year compared to last year at this time, 8% stronger. This will of course translate to an increase in year over year sales at the end of the year.

The Active Listing Inventory: The active inventory achieved another new low for the year.
In taking a snapshot of the active listing inventory ever two weeks for the remainder of the year, each snapshot will achieve a record low for 2011. More and more homeowners throw in the towel in the Autumn market, and the same holds true for the Holiday market. Sellers in the Autumn market come to the realization that they have officially missed the best time of the year in terms of demand. During the Holidays, sellers realize that it is the absolute slowest time of the year. That does not mean sellers cannot find success during the holidays, though. It takes patience and a very accurately sharp pencil in arriving at the asking price; otherwise, they are just wasting everybody's time. After shedding 258 homes in the past two weeks, the inventory now stands at 9,543, a 3% drop. We haven't seen this inventory level since April 2010.

The Distressed Market: The distressed inventory dropped to levels not seen since July 2010.
Even with a drop of 75 homes in the distressed inventory, both foreclosures and short sales, the distressed market has not really changed much the entire year and has been somewhat predictable, a surprising feature of the 2011 housing market. Foreclosures and short sales combined represent 37% of the active listing inventory and 56% of demand. For the remainder of the year, expect the distressed inventory to not change much. The active distressed inventory now totals 3,488. The foreclosure inventory decreased by 9 homes in the past two weeks and now totals 669. With an expected market time of 1.5 months, it's a very HOT seller's market for foreclosures. There's tremendous competition to purchase foreclosures and very little supply. They only represent 7% of the active inventory. The short sale inventory decreased by 66 home in the past two weeks and now totals 2,819, 30% of all active listings in Orange County. The expected market time for short sales is 2.4 months, also very hot.

For more information please contact Liana Norman (949) 690-6906

Above information has been revised a bit by Liana Norman from Steven Thomas' original report.
Data tabulated from SoCalMLS. All Rights Reserved. This report may not be reproduced in whole or part without express written permission by author.Copyright 2011 - Steven Thomas


ZIP Codes: 92656, 92653, 92677

Approximate Location Boundaries: Aliso Viejo, Laguna Niguel,Laguna Hills

Location Characteristics: Aliso Viejo is a newer community with wonderful shopping centers, restaurants, theatres & more! Just off the 73 Fwy (Toll Road) and only minutes from Laguna Beach.

To view homes in this area you can search the entire MLS at www.LianaNorman.com or go to "For Buyers" or "For Sellers" and click on "Community Information."


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