Real Estate in Orange County, CA

Flip and Grow Poor

2008-05-06T06:12:00.000-07:00

Many of you have seen the fun house flipping TV shows where someone gets in way over their head and losses their ass or the master "house flipper" who has made a cool hundred thousand dollars in 3 months.
The majority of "house flippers" should be called market riders. Simply because they're riding the real estate market to victory or defeat, not generating their financial future on their own. Either they'll spend too much money in the wrong neighborhood with too low of an appreciation rate for a loss or make a few bucks and dump it into their next investment deal with their fingers crossed. Eventually, when the market turns South, like it has, they'll no longer be able to generate income and most likely be stuck in a financial headache of some sort.

THE RAPE OF REGRESSION:
I cringe and cheer for the homeowner that dumps hundreds of thousands of dollars into his home in the wrong neighborhood. It's a great thing for the neighbors and can help turn a neighborhood around if it's become less desirable. However, more often than not, it's a terrible financial move.
The market value of a residential home is based off the homes in the neighborhood. If you are the most lavish home on your street, chances are that the value of your home is being pulled down by your neighbors. This is called regression in the real estate world and it's not your friend.
Although not so bad for a long term investor who has selected the right beat up, old neighborhood that's beginning to come back around, building a castle in a village is financial suicide for a short term house flipper.

THE COST OF FLIPPING:
The cost of buying, fixing up and selling a home is tremendous. real estate agent commissions, financing costs, escrow, title, notaries, appraisal, home inspections, termite inspections, repair work, cosmetic work, etc, etc...
A professional "house flipper" will calculate the cost of buying, fixing up and selling to help him/her determine whether or not there's any money to be made. It's hard to believe that someone can make money by flipping residential in just a few months, but in the right neighborhood and the right real estate market, anything is possible.

RESIDENTIAL VS COMMERCIAL REAL ESTATE:
Residential real estate investments are a good tool for tax shelter and a good way to generate appreciation over the years. The value of a commercial property is determined by the cashflow it generates today. Therefore, it's a much more lucrative tool to flip short term. Lowering expenses with energy efficient investments, changing the tenant mix to better suit the current community can have a dramatic effect. Sometimes, all that's needed is to simply raise the rent to the current market price.

Written by, Evan T. Little

Realtor®, EcoBroker®
Volkl Investments Inc.
949.939.9687 phone
evan@volklinvestmentsinc.com

My other blogs:
Going "Green" in Orange County
Orange County, CA Community
Real Estate in Orange County, CA

Has the Real Estate Market Hit Bottom Yet?

2008-03-14T15:45:00.000-07:00

In Orange County, CA, I believe that we're nearly there, if not right on top of it.

New home sales and rental prices were one of my first indicators.

New home builders are the first home sellers to drastically slash prices. Their homes are rarely priced incorrectly because they're a cash flow company and must keep the income rolling in or else they're sunk. They're ahead of the price curve because of their competitiveness and need to continually be selling. Last Sunday, the Orange County Register showed new home sales up 1.9%. Meaning that they've already bottomed out. Re-sales will be soon to follow.

Lease prices have ceased in their steady climb upwards. I've seen no leases that have been leased for more then their asking price and the majority are being forced to reduce in price in order to attract potential tenants.

The inventory of well priced homes is starting to shrink and it's now common for listing agents (represent the seller) to have multiple offers from aggressive home buyers just weeks after listing the home.

Government tampering will also play a part in the economies recovery at a much greater cost to our future, but if you were to only live another 20 years or so, I suppose it'd be a good thing.

The ~~big banks~~ Corrupt Banks are already swallowing up other lenders and capitalizing greatly like they have done repetitively in the past.

There are of course terribly challenging obstacles that lay just around the corner. Under prepared baby boomers, run away inflation, endless and unaffordable wars, peak oil and the potential for a greater depression. So don't get too emotional about your next real estate deal! Live within your means, plan ahead and don't base your decision on the carpet color.

Don't believe in Federal Reserve conspiracies, sustaining unaffordable wars, inflation or peak oil? Visit my myspace blog HERE for links to watch online films for free now.

Written by, Evan T. Little

Realtor®, EcoBroker®
Volkl Investments Inc.
949.939.9687 phone
evan@volklinvestmentsinc.com

My other blogs:
Going "Green" in Orange County
Orange County, CA Community
Real Estate in Orange County, CA

Is Prince John finished pillaging Sherwood Forest yet?

2008-02-01T16:09:00.000-08:00

As if old Prince John hasn't had his way with the villagers for long enough. He's back at it, buying up real estate notes for pennies on a dollar. He's tricked U.S. residents and foreign investors into investing real value into an inflated market and he's cleaning up the mess with a fat, piggish smile across his face.

By real value, I'm referring to the hours you've spent working for paper money. Paper money that is backed by absolutely nothing other than how much of it is in circulation. The simple fact that it takes human time and power to dig something like silver out of the earth gives it real value.

The current mortgage crisis is about transferring your hard work to the large banks who own a controlling share in the Federal Reserve. It could be said that we're slaves to their greed for power.

In so many words, Baron Rothschild uttered the words, "Buy when there's blood in the street". The history is there for all of us to see and like Senator Mike Gravel said while in the 2007 Democratic Debates before being yanked for looking too angry about what's happening in his country, "Follow the money!"

So is Prince John finished yet? I believe the answer is overwhelmingly no.

October 15th of last year, Kathleen Casey-Kirschling applied for Social Security benefits. Kathleen is the 1st Baby Boomer in U.S. history to apply for such benefits. Big deal right? Well, more and more boomers, many unprepared, will begin to enter retirement and be forced to withdraw money from investment accounts much faster than expected. Panic will strike, markets will crash and good old Prince John will be right there waiting to pick up the pieces through each up and down for practically nothing.

I'm disgusted by working short-sales and foreclosures in our depressed real estate market because I understand I'm helping to clean up the mess and consolidate their wealth.

Read Robert Kiyosaki's, "The Prophecy". It's a basic outline as to what will most likely happen over the next 10-20 years and it doesn't even speak of run away inflation, never ending wars or peak oil!

Here are some links to free online videos that may interest you:

Rich Dad's 2008 Predictions

Part 1 - http://www.youtube.com/watch?v=8CQ5gJNxsdk
Part 2 - http://www.youtube.com/watch?v=EgSrFkbCw6U
Part 3 - http://www.youtube.com/watch?v=4wTmiAPfUEk
Part 4 - http://www.youtube.com/watch?v=FOKn7tiUMyc

Fiat Empire

CLICK HERE to view video online now for free

America: Freedom to Fascism

CLICK HERE to view video online now for free

Olson Homes: The Depot Walk

2008-02-01T15:12:00.000-08:00

It's Orange Counties first LEED Certified community and it's worth taking notice of. New home builder, Olson Homes seems to have grasped the idea of sustainable housing design and principles with The Depot Walk. The 32 unit project is indeed within walking distance of Old Town Orange's train depot. Instead of sprawling further into Orange Counties open spaces, Olson Homes decided to build in the heart of an older community and I'm thrilled to see such leadership.

Please feel free to contact me if you'd like to spend some time touring the models together.

CLICK HERE to view Olson Homes' web-site

"Energy Efficient Mortgage" Myth or do they actually exist?

2007-08-29T15:49:00.000-07:00

The green mortgage was born in 1979 when President Jimmy Carter signed an executive order directing federally-sponsored secondary market institutions to offer consumers incentives for energy-efficient homes.

Why must it take SOOO long to get something that makes this much sense into the public eye?

Energy efficient mortgages are one of the most beneficial and under-utilized programs the consumer can find and capitalize upon in today's real estate market.

EEM product features I've heard of:

EEMs are available for new home purchases, old homes purchases and refinances.
Allows borrowers to finance the cost of adding energy-efficient improvements to new or existing homes as part of their purchase or refinancing mortgage.
Up to $200 of the cost of a home energy rating may be included in the mortgage.
When purchasing an energy-efficient home, a lender can stretch the borrower’s debt-to-income ratio by 2 percent.
A lower interest rate.
A discount on closing costs and/or origination fees.
Paying for the cost of the home energy rating.
A home buyer can finance 100 percent of the energy efficiency improvements without increasing the down payment.

The feature that makes the most sense to me and I would think that every lender could offer is the stretching of a borrower’s debt-to-income ratio by 2+/- percent. The money saved in utility costs due to the homes energy efficiency allows the homeowner pay a larger monthly payment. This is just basic common sense and could help buyers get qualified.

Where are they?
So why aren't they being promoted? Why aren't mortgage brokers/lenders advertising with them to differentiate themselves from the competition? Especially in the current market when they should be providing extra services to buyers who can actually get qualified.

I met someone who has done them:
Yeah, that's right. I was at a United States Green Building Council meeting and a LEED (Leadership in Energy and Environmental Design) certified energy rater claimed to have lenders who he uses to put real estate deals together. They are private lenders who will offer similar features to what I've listed above. Private lenders getting involved in something progressive before big banking does? WOW! What a shock... (sarcasm)

To mortgage brokers and lenders:
Get involved! There is a large movement towards "Green" principles and products. The services that you could provide will help in working towards a more sustainable lifestyle.

CLICK HERE to Browse Orange County, CA Homes

CLICK HERE to view my "Green" Orange County, CA BLOG

Basic Selling Process

2007-05-08T02:14:00.000-07:00

Basic Selling Process
by Evan T. Little

Selecting Real Estate Agent
Can you trust the prospective agent to make decisions and influence the transaction with your best interests above all others?
Does the prospective agent have the experience necessary to handle the sale of your specific real estate?
Certain neighborhoods and types of real estate can require much different marketing campaigns.
Be sure your agent is aware of how to correctly market your real estate and attract the right buyers.
How comfortable are you with your agent? Selling and buying real estate can be a personal journey for many homeowners. Dealing with your home & often the most valuable investment you own can become a terribly stressful experience. Having an agent that you're comfortable with can alleviate much of the stress and you may even have fun!
Don't be afraid to discuss commissions with a prospective agent. It can be a great test to see how well the agent can negotiate. A weak or unsuccessful agent may be more inclined to accept a low commission. Bare in mind that this will be the person representing you. If the agent has difficulty negotiating with his own client, how will they fare with other agents. A superior agent may cost 1-2% more. However, you're more then likely to financially gain from their skills once the smoke clears.

Its on the Market
Your agent will begin to market your real estate in order to attract potential buyers. You may be required or desire to schedule appointments yourself, allow agents to access your home via lock box on their own during certain hours or even insist that your agent be present for all showings. Keeping your real estate looking as best it can, staging correctly and being flexible with buyer visits will greatly improve your chances of selling.

Negotiating Begins
After receiving an offer to purchase you may decline, accept or counter offer.
If the you decline, the deal is done. The Buyer may choose to make a more attractive offer or search for another home.
If the you accept, the buyer's deposit will be held by a neutral third party (escrow company) while inspections & financing are worked out.
Lastly, you may choose to counter offer by negotiating any number of things. Such as sales price, escrow time frame & inspection conditions. The prospective buyer may either decline, accept or counter offer.

Open Escrow
Congratulations, you & the buyer have reached an agreement. Now hopefully their financing will hold together, inspections and/or inspection negotiations will go in your favor & you don't suffer too much stress in the process.

Appraisal
A real estate appraiser will use information about the subject property and similar homes around the neighbor to determine what the home is worth. More so, its too be sure that the mortgage lender doesn't sell a $500,000 loan on a piece of real estate only worth $250,000.

Inspections
Home Inspection
Typically, a 3rd party inspector is hired by the buyer to conduct an inspection on the subject property & produce a detailed report for the buyer to review. More negotiating of the purchase price and terms may follow depending on what the home inspection report produces.
Termite Inspection
Buyers generally have the choice of who the 3rd party termite inspector will be. The cost of the service is negotiated before the offer is accepted. The termite specialist conducts an inspection & will produce a report, much like a home inspector. More negotiating of the purchase price and terms may follow depending on what the termite inspection report produces. Also, the inspector will flag problems that need to be address immediately & could ruin your buyer's financing. Termite clearance is a requirement for mortgage lenders.

Remove Contingencies
Any clauses and/or contingencies to purchase that were listed in your purchase agreement will be removed at some point during escrow. The Buyer's deposit will now be in jeopardy if they choose to back out of the transaction. Contingencies are used by buyers for many reasons. A common example is to protect a buyer from being obligated to purchase real estate without a home inspection.

Financing Finalized
The buyer's have obtained their financing & now have the ability to close escrow.

Close Escrow
Congratulations! You survived & hopefully financially gained from the transaction without too much stress.

Written by: Evan T. Little,

Orange County, CA

Article may be copied, but not changed in anyway. Including links.

Tips to Buying Real Estate

2007-05-08T02:12:00.000-07:00

Tips to Buying Real Estate
by Evan T. Little

Buying smart
While previewing property be sure not to be detracted from a potential investment because you don't like the wallpaper, carpet or paint colors. These are easy fixes that can help eliminate competition and provide a financial opportunity when negotiating the purchase price. Many house buyers become caught up with the emotional input they receive while walking through someone else's home. Do your best to block out these costly feelings and focus on the real estates potential. In general, home buyers prefer open floor plans, natural lighting & usable square footage. A 4 bedroom condo with only 1300 square feet has a limited buyer pool and could make things more difficult to financially capitalize in the future. Be sure that the bedroom count is on par with the amount of square footage your getting for the area. A 2000 Square foot 2 bedroom condo in an upscale area may do very well but regress in price significantly in more moderately priced regions. Many modern families prefer one large great room to entertain, opposed to the living space being divided up into seperate dinning, living & family rooms. Does the real estate currently satisfy that need or could it possibly be changed in the future and increase the homes value? Unless you plan to occupy your home for the next 20+ years, be sure to choose a house that will appeal to the masses.

Selecting a location
Be the little guy on the block
Don't be the victim of a nasty thing known as regression in the world of real estate. You know that neighbor who just spent another $300,000 remodeling their home in a $500,000 neighborhood? Well that neighbor of yours will have a tough time getting potential home buyers, banks & appraisers to see the improved value.
The advantage of being the little guy on the block is that your homes value will increase as a result of surrounding higher priced, larger homes.
This idea applies to surrounding neighborhoods as well. If the track you live in consists of homes less valuable then those in surrounding tracks, your real estate will most likely financially benefit from it.
Be aware of the zoning mix & structures surrounding the property in question. Obvious things such as busy streets & shopping centers can be death or a blessing to your next real estate investment.
What if the subject house has a home owners association. An HOA can help maintain curb appeal, value & regulate neighbors, but at what cost? Older neighborhoods without any home owners association can become distressed and run down more easily. Home owners association dues are not a legal real estate tax right off so do your best to research their value. The money going towards your HOA dues may have been better spent on more valuable real estate without an HOA. Study what amenities the HOA includes. Be sure the HOA has sufficient funds to maintain the neighborhoods value & isn't poised to hike rates soon.

Financing
Before getting to involved in the acquisition of new real estate, be sure to speak with an experienced mortgage professional. This can save you time, improve your chances of closing a deal & give you more leverage when submitting your offer.

Inspections
Have your own inspection(s) completed. Not being aware of outdated electrical systems, foundation problems & past flooding may yield tremendous financial obstacles that you could be responsible for. Inspections provide home buyers with an insight into the homes history, problems that need to be address immediately or in the near future. They can also serve as a bargaining chip in the form of buyer credits or free repairs while in escrow with the seller.

Written by: Evan T. Little,

Orange County, CA

Article may be copied, but not changed in anyway. Including links.

Basic Buying Process

2007-05-08T02:10:00.001-07:00

Basic Buying Process
by Evan T. Little

Get Pre Qualified
Sit down with an experienced mortgage professional to be pre qualified. Knowing exactly how much you can & cannot afford will save you time & money.

Selecting Real Estate
Begin house hunting.

Make an Offer
After finding real estate that meets your financial & emotional needs you make an offer to purchase.

Negotiating Begins
After making an offer to purchase the seller may decline, accept or counter offer.
If the seller declines, the deal is done. You may choose to make a more attractive offer to the seller or search for another seller.
If the seller accepts, your deposit will be held by a neutral third party (escrow company) while inspections & financing are worked out.
Lastly, the seller may choose to propose a counter offer by negotiating any number of terms. Such as sales price, escrow time frame & inspection conditions. You may either decline, accept or counter offer the sellers counter offer.

Open Escrow
Congratulations, the seller has accepted your offer. Now hopefully your financing will come together within the given escrow time frame, inspections and/or inspection negotiations will go in your favor & you don't suffer too much stress in the process.

Appraisal
A real estate appraiser will use information about the subject property and similar homes around the neighbor to determine what the home is worth. More so, its too be sure that the mortgage lender doesn't make a $500,000 loan on a piece of real estate only worth $250,000.

Inspections
Home Inspection
Typically, a 3rd party inspector is hired by the buyer to conduct an inspection on the subject property & produce a detailed report for the buyer to review. More negotiating of the purchase price and terms may follow depending on what the home inspection report produces.
Termite Inspection
Buyers generally have the choice of who the 3rd party termite inspector will be. The cost of the service is negotiated before the offer is accepted. The termite specialist conducts an inspection & will produce a report, much like a home inspector. More negotiating of the purchase price and terms may follow depending on what the termite inspection report produces. Also, the inspector will flag problems that need to be address immediately & could destroy your financing. Termite clearance is a requirement for mortgage lenders.

Remove Contingencies
Any clauses and/or contingencies to purchase that were listed in your purchase agreement will be removed at some point during escrow. Your deposit will now be in jeopardy if you choose to back out of the transaction. Contingencies are used by buyers for many reasons. A common example is to protect a buyer from being obligated to purchase real estate without a professional home inspection.

Close Escrow
Congratulations!
Now be sure to live within your means or the bank will show you who really owns your home.

Written by: Evan T. Little,

Orange County, CA

Article may be copied, but not changed in anyway. Including links.

O.C. home to biggest subprime lenders

2007-05-07T19:14:00.000-07:00

Sunday, May 6, 2007

O.C. home to biggest subprime lenders

Five of the 10 largest subprime home lenders in America in 2005 were based in Orange County. The top 10 lenders made nearly half of all subprime home purchase loans that year. Here are the top 10 lenders, the amount loaned in billions of dollars and their share of the subprime market.

Sort this table by clicking on the labels at the top of each column.

US Rank	CA Rank	Lender, headquarters	Volume (billions)	Market share
1	3	Argent Mortgage, Orange	$37.22	6.2%
2	1	New Century Mortgage, Irvine	$35.09	5.8%
3	5	Fremont Investment & Loan, Brea	$33.38	5.5%
4	8	Option One Mortgage, Irvine	$28.90	4.8%
5	6	National City Bank Of Indiana, Indianapolis	$27.17	4.5%
6	7	Countrywide Home Loans, Calabasas	$26.84	4.4%
7	4	Long Beach Mortgage Co., Seattle	$26.25	4.3%
8	2	WMC Mortgage Corp., Burbank	$25.25	4.2%
9	13	Ameriquest Mortgage, Orange	$18.72	3.1%
10	15	Accredited Home Lenders, San Diego	$14.25	2.4%

Source: Federal Financial Institutions Examination Council

Who's at risk from subprime implosion?

2007-05-07T19:12:00.000-07:00

Sunday, May 6, 2007

Who's at risk from subprime implosion?

Low-income, fast-growing neighborhoods more likely to sign subprime mortgages than buyers elsewhere.

By RONALD CAMPBELL

The Orange County Register

They're often described as tickets to homeownership for people with damaged credit.

But subprime mortgages also are reshaping entire neighborhoods. In subdivisions from Rialto to Sacramento, half or more of all home-purchase mortgages in 2005 were subprime.

That means the implosion of the subprime market could hurt not only borrowers, who may lose their homes, but neighbors whose home values could be reduced by a wave of forced sales or foreclosures nearby.

Subprime mortgages usually cost two to three percentage points more than conventional loans. Monthly payments typically rise sharply after two years, forcing most borrowers to refinance.

But because of the collapse of the subprime industry, many borrowers may be unable to refinance when their payments go up.

The Orange County Register analyzed all 920,000 home purchase mortgages made in California in 2005, the last year for which complete data is available. The analysis showed a strong geographic pattern to subprime loans:

Buyers in fast-growing areas such as the Inland Empire and in lower-middle-class neighborhoods like Santa Ana were far more likely to sign subprime mortgages than buyers elsewhere.

"Subprime lending does not happen equally throughout the state," said Paul Leonard, California director of the Center for Responsible Lending, a nonprofit advocacy group. "There are concentrations, both at the county level and the neighborhood level."

He added that racial minorities are "likely to suffer more when housing prices drop and foreclosures begin."

The Register was unable to determine if minority borrowers were disproportionately prone to get subprime mortgages. The newspaper used a database compiled under the federal Home Mortgage Disclosure Act. One of every five borrowers in the database did not list his or her race, making it difficult to draw firm conclusions about race and subprime lending.

The analysis also found:

The subprime market share varied widely among counties, from 8 percent in San Francisco to 40 percent in San Bernardino. In Orange County, 21 percent of home-purchase loan volume was subprime.
Subprime commanded most of the market in relatively poor cities such as Compton, Lynwood and Rialto. In wealthy cities like Beverly Hills, Saratoga, Newport Beach and Laguna Beach, subprime accounted for less than 5 percent of the home-purchase market.
Subprime dominated the bottom of the market, accounting for 61 percent of all home-purchase loans under $100,000 and 51 percent of loans under $200,000. Subprime lenders grabbed just 11 percent of the business in the over-$500,000 loan market.

Contact the writer: 714-796-5030 or rcampbell@ocregister.com

Wachovia expanding in O.C.

2007-03-28T17:20:00.000-07:00

Wednesday, March 28, 2007

It expects to hire up to 500 people in next 3 years.

By MATHEW PADILLA

The Orange County Register

Forget the subprime meltdown. Wachovia is opening eight retail branches in Orange County this year and plans to hire up to 500 people over the next three years, said Frank Newman III, chief operating officer of Wachovia for the Western U.S.

He said Wachovia makes few subprime loans, especially at the retail level, and so doesn't have subprime exposure holding back its growth. Wachovia is bullish on Orange County and does well in such affluent markets, Newman said.

Newman said subprime lenders relied too heavily on automated underwriting and loans with little documentation of a borrower's income. They were too focused on just making deals, he said.

"It's just not a healthy way to do business for long-term relationship building," Newman said. "We are very connected with our customers over long periods of time and provide lending to match their needs."

Wachovia signed a 25,400-square-foot lease at an office tower under construction at 2211 Michelson Drive in Irvine, where it will have a regional headquarters and retail branch. It expects to employ 150 to 200 workers there and is hiring now, Newman said.

A year ago, Wachovia paid $4 billion for Irvine-based bank holding company Westcorp Inc. and its auto finance unit WFS Financial Inc. In the deal, it picked up seven branches in the county under the Western Financial Bank brand. Wachovia also is converting 19 branches to its name from World Savings, which it bought in a separate deal.

NEW HOME: Wachovia Bank just signed a new lease for its regional headquarters in a new office tower in Irvine at 2211 Michelson.

EUGENE GARCIA, THE ORANGE COUNTY REGISTER

Contact the writer: 714-796-6726 or mapadilla@ocregister.com

O.C. house prices down again

2007-03-28T17:16:00.000-07:00

Sunday, March 25, 2007

Single-family home prices fell in Orange County last month, marking the sixth time since August that prices showed year-over-year declines, the California Association of Realtors reported today.

By JEFF COLLINS

The Orange County Register

The median price of an existing single-family home in Orange County was down last month, making February the sixth of the past seven months to see year-over-year price declines, the California Association of Realtors reported today.

The median price – or the price at the midpoint of all home sales – was $692,820, the association reported, up slightly from January's median, but down 3.9 percent from February 2006.

Existing single-family home sales, which usually make up about two-thirds of all homes sold in the county, first fell below year-ago levels in August and have been down every month since then except for November. November's median price was up just 0.5 of a percent.

But Orange County house sales were up last month, both from a year ago and from January, the Realtors group reported. There were 10 percent more homes sold last month than in January. Sales of single-family homes were also up, 4.6 percent, from February 2006.

Statewide, and throughout most of Southern California, single-family home prices were up from year-ago levels.

California saw the median price go up 5.7 percent in February, to $564,700, the association reported. In Los Angeles County, the median price was $616,230, up 9 percent; and in the Inland Empire, it was $409,020, up 4.4 percent.

But San Diego County's median price of $593,680 was 2.5 percent below year-ago levels.

Because the Realtor group derives its median prices from a different source than DataQuick Information Systems, its figures differ slightly. DataQuick reported last week that the median price of an existing single-family home was $675,000 in February, which was down 2.2 percent from the median in February 2006.

Contact the writer: 714-796-7734 or jcollins@ocregister.com

Bear Stearns Eyeing Subprime Purchases

2007-03-16T10:51:00.000-07:00

March 15, 2007, 1:08PM

By JOE BEL BRUNO AP Business Writer
© 2007 The Associated Press

NEW YORK — Bear Stearns Cos., the nation's fifth-largest investment bank, is on the hunt for troubled mortgage lenders weakened by the meltdown in the market for risky subprime loans, a top executive said Thursday.

Samuel Molinaro, the New York-based company's chief financial officer, said the dislocation in the subprime market will cause many companies to file for bankruptcy or sell their portfolios. Bear Stearns, the nation's largest underwriter of mortgage-backed securities, could benefit from the turmoil by either buying whole companies or pieces of their portfolios.

Bear Stearns has built a reputation as a consolidator within the mortgage industry. In February the company acquired Encore Credit Corp., a subprime lender, for $26 million, and made it a separate division of the existing mortgage bank operation, Bear Stearns Residential Mortgage Corp.

"Obviously, these origination platforms are going to be absorbed by somebody," Molinaro said in an interview with the Associated Press. "There will be a lot of assets moving, and I expect we will participate in some of that."

As with Encore, any mortgage bank & or portfolio & it acquires would be adjusted to meet Bear Stearns' lending standards, he said. Even before the turmoil within the subprime industry, Molinaro said the company has been looking to build on its Encore and Bear Res business.

Investors have been nervous about the impact the disruption in the subprime mortgage industry would have on U.S. investment banks, which act as creditors to many players in the industry. In addition, a number of big U.S. investment houses buy loans, package them as mortgage-backed securities, and sell them to investors.

Mortgage lenders that issued risky loans during the housing boom are now reporting that borrowers are missing payments and have become delinquent. This has caused financial backers, like Bear Stearns, to pull the plug on the lenders' credit lines.

Concern about rising mortgage delinquencies has rippled through the entire banking industry. New Century Financial Corp., which had been a major provider of loans to high-risk borrowers, said it has lost support from its financial backers and its shares are being delisted from the New York Stock Exchange.

Shares of subprime lenders such as Accredited Home Lenders Holding Co. and Novastar Financial Inc. have rallied over the past two days as talk accelerates about large investment banks eyeing purchases in the subprime arena. Morgan Stanley, Lehman Brothers Inc. and Merrill Lynch & Co. acquired subprime lending companies before the market for those loans imploded.

Goldman Sachs Group Inc. is also seen having interest in boosting its subprime portfolio. Merrill Lynch analyst Guy Moszkowski wrote in a research report earlier this week he wouldn't be surprised to see Goldman Sachs buy a subprime mortgage bank. Noting their recent acquisitions, however, Punk Ziegel analyst Richard X. Bove wonders whether the investment banks aren't "just exercising their vocal chords in order to protect a business they have a significant interest in."

Molinaro said the worst of the subprime meltdown is over for Bear Stearns, and projects it might even be a benefit down the line. The company last year began to dramatically scale back exposure to subprime loans, cutting origination and securitization activities almost in half.

Right now, about 3 percent of its mortgage business extends into subprime loans.

"Cutting back was a conscious decision we made," he said earlier in a conference call with analysts. "The market has been very difficult, but at least to this point the dislocation has been relatively limited to the subprime sector. We haven't seen any real increase in delinquencies or defaults in the prime sector."

Shares of Bear Stearns rose $3.12, or 2.1 percent, to $148.41 on the New York Stock Exchange.

____

AP Business Writer Dan Seymour in New York contributed to this story.

Subprime fixes come too late, some say

2007-03-12T16:57:00.000-07:00

Sunday, March 11, 2007

Rules won't help existing owners, and lenders are leaving market.

By MATHEW PADILLA

The Orange County Register

Is it too late for the federal government to fix the subprime problem?

Homeowners with the higher-risk, higher-interest-rate loans are missing payments at the fastest pace in at least seven years. And companies – including several that call Orange County home – making the loans are going bankrupt, being sold or shutting down on an almost daily basis.

The crisis leads some experts to wonder why the government didn't act sooner.

"That horse has left the barn," said Jim Svinth, chief economist in the Irvine office of LendingTree. The Federal Reserve should have acted three years ago, he said.

Indeed, last year, lenders issued about $600 billion in subprime loans, and many of those are going sour amid flat or falling home prices.

At this point, Svinth said, it's doubtful new regulation is needed, although a discussion on the need for tighter loan underwriting is welcome.

"I think the market is relatively self-regulating," he said. "You can see it right now. The subprime market is punishing itself."

There is a sensitive issue at play here. Any new regulation would limit consumerloan choice and therefore the ability of some people to get a home. Few things are more sensitive or personal in the U.S. than access to homeownership.

The Federal Reserve and consumer groups say the public needs to be protected from some lenders and mortgage brokers interested mainly in profit. Consumer advocates and federal officials say some of these companies are leading consumers into loans they can't afford – just to earn a commission. And that might justify limiting consumer choice.

On March 2, the Fed introduced new lending guidelines, a short list of rules that subprime lenders might have to follow. It's asking for feedback from the industry before adopting them.

It's not looking at all loans–just subprime loans. These loans are made to people with blemished credit and have rates fixed for short periods, say one to three years, that later adjust. People who get these loans can't afford them after the initial teaser rates, Fed officials say.

Lenders typically qualify borrowers based on their ability to pay before the teaser rate ends. However, the Fed says companies should qualify borrowers based on their ability to pay after the teaser period.It passed a similar guideline in September for exotic interest-only and payment-option loans made to consumers of all credit profiles.

If these rules are adopted, they won't do anything to help consumers who have already taken out loans.

Defaults spiked on all subprime mortgages issued last year, as home prices stalled and sales slowed. Cash-strapped borrowers had less home equity to tap for credit card bills or to pay the cost of a refinancing that would delay a jump in monthly payments. And it got harder to sell a home to avoid foreclosure.

A Feb. 22 report from Barclays Capital said about 2 percent of subprime mortgages made in 2006 were more than 60 days past due after five months, nearly twice the rate for ones made in 2005 and the highest this decade.

A different report by UBS last year found that Orange County-based subprime lenders, including Fremont Investment & Loan in Brea and Irvine-based New Century Financial, which is under criminal investigation for some stock trades and accounting practices regarding loan losses,experienced some of the highest default rates for loans made in 2006.

High defaults have taken a heavy toll on those companies. Fremont's parent company said on March 2 that it was shutting down the Brea unit. Option One, the Irvine lending unit of H&R Block, is for sale.

Paul Leonard and his organization, the Center for Responsible Lending, have long lobbied lawmakers on the need to regulate subprime loans fixed for just two years. He recently urged a California Senate committee looking into newer, exotic mortgages to look at such loans.

"Homeownership is too important to make mortgages into a gamble," Leonard wrote in an e-mail.

Leonard, who heads the group's Oakland office, said he is not asking regulators to adopt any complicated scheme on subprime loans.

"We're simply asking for a return to sound lending principles, like a fair consideration of the borrower's ability to repay the loan based on the fully indexed interest rate," he said.

Lenders are qualifying borrowers assuming they will pay up to 50 percent of their incomes just to make initial two-year teaser payments, he said.

Freddie Mac, the No. 2 buyer of mortgages and a government-chartered company, said it would stop buying subprime loans fixed for just two or three years.

Scott Simon, who heads the mortgage unit of Newport Beach's Pimco, said the move by Freddie has had little effect on the market for mortgage securities. He said the company tended to buy higher-grade securities tied to subprime loans, and there are plenty of buyers for those securities.

Simon's also a believer that regulation would be superfluous: "Most of the things people are talking about the market is already doing itself."

Contact the writer: 714-796-6726 or mapadilla@ocregister.com

O.C. strip mall yields a low 3.25%

2007-03-08T11:17:00.001-08:00

March 08, 2007

Hanley Brown Group says that a multitenant retail center in Garden Grove was recently sold for $2.96 million, representing a record low 3.25 percent cap rate – what the owner's rents equal compared with the price. You can get 5 percent at the bank ...

The 12,000-square-foot strip center, which was built in 1961, is just east of the intersection of Bolsa Avenue and Ward Street in Garden Grove. Adjacent to a Chevron (not a part of the sale), the property is on 1.2 acres and consists of nine national and local tenants catering to the surrounding community, including Sprint, Verizon, Newport Seafood, Phuong Hoang Restaurant, 4 Mau Restaurant, and a barber shop. The property was 86 percent occupied at the time of sale.

“This was an excellent opportunity for the buyer to acquire a multitenant strip center directly adjacent to the Little Saigon corridor in central Orange County,” says Jeremy McChesney, a senior associate at Hanley Brown Group. “The property offered tremendous upside potential to fill the remaining vacancy and raise rents in a well-established location.” McChesney also notes that the cap rate of 3.25 percent was a record low for a multitenant strip center in the area, and the sale was a direct deal that never officially hit the market. The buyer paid all cash and closed the property in 45 days.

To read more, CLICK HERE.

Posted by Jon Lansner at March 8, 2007 07:29 AM

Green House

2007-03-05T22:09:00.001-08:00

Monday, March 5, 2007

A Newport Beach architect known for creating energy-saving buildings designs his dream environmentally friendly home

By VALERIE TAKAHAMA

The Orange County Register

The breeze blows off the ocean and sweeps across Newport Back Bay. It rustles the leaves of a stately old eucalyptus tree, skims the aquamarine surface of a swimming pool and flows through open sliding glass doors of architect Dan Heinfeld's Newport Beach home, a cooling comfort on a hot summer day.

Harnessing the prevailing breezes for natural air conditioning puts into practice what Heinfeld means when he says: The first rule of "green," sustainable architectural design is to pay attention to what the site offers for free.

It's a philosophy he preaches as president of LPA Inc., an Irvine-based architectural firm. Regarded as a pioneer in the green architecture movement, LPA has designed such energy-efficient buildings as Ford Motor Co.'s Premiere Automotive Group headquarters at the Irvine Spectrum, Toyota's South Campus in Torrance, and experimental Wal-Mart stores in Colorado and Texas that have solar power and were built with recycled and renewable materials.

And he put the principles into practice when he built his dream home, a sunlit model of Southern California living that is green from the environmentally friendly carpet tiles on the floor to the "cool" roof with solar-energy photovoltaic (PV) panels on top.

"Our focus is to take time-honored principles, and marry them with the technologies available today," Heinfeld said. "If you do that, you'll create something that is timeless, unique and regional.

"That's much firmer ground to rest on than the latest fashion of the day."

The architect got the opportunity to build a house from the ground up in the East Bluff neighborhood of Newport Beach after one of the tract's original mid-1960s California ranch-style homes flooded, developed mold and was demolished. In its place, he designed a four-bedroom house that centers around a skylit, two-story great room. It is spacious enough for a grand piano and opens onto a pool and courtyard.

Energy-smart features extend throughout the house, with a heat-reflecting "cool" roof, highly efficient insulation panels in the walls and low-energy glass throughout.

But the home's primary green feature is a solar-panel system that is integrated into the roof. Heinfeld expects the system will supply fully half the home's electrical needs.

"The great thing about PV panels, especially in our state, is when we do have our absolute worst energy crisis in the middle of summer, that's when PV panels are the most efficient."

He also invested in energy-efficient lighting and installed mechanical shades on windows that open or shut depending on the weather.

To offset some of the cost of the green features, Heinfeld saved money in other places. For example, he passed up expensive finishes in favor of common materials such as Douglas fir, maple veneer and paint. (He used colors symbolically on two sliding doors – pale green for the landscape on the downstairs door and clear blue for the sky upstairs – and he made sure they matched hues from the palette developed by the Swiss modernist architectural master Le Corbusier.)

The design itself provides visual interest: A bridge walkway that connects the bedroom wings is perforated with tiny holes, and sunlight flows through windows punched into a northeast-facing wall.

The Heinfelds – the architect, his wife, Katherine, and their 16-year-old daughter – moved in in January. Today, visitors entering the front door are greeted by a wall displaying Heinfeld's collection of "souvenir buildings," metal models a few inches tall of such landmarks as the Eiffel Tower, the Griffith Observatory, the White House and dozens more.

"Look, here's Gehry's Disney Concert Hall," the architect said. "Everywhere we go, I look for these. Friends bring them back from their travels. It's a good hobby for an architect."

Opposite, built-in bookshelves that surround a fireplace are filled with novels and a nonfiction collection dominated by – what else? – books about Le Corbusier and other architects and artists.

Katherine Heinfeld says that one of the home's best features is the open kitchen at the heart of the house.

"I love being in the kitchen and looking out and seeing people in the pool," she said.

If the indoor-outdoor design has yielded unexpected pleasures, it's had an unforeseen drawback, as well. Katherine Heinfeld says her husband has found it impossible to ignore the natural world's messy ways.

"When our daughter's friends come to use the pool, they always laugh," she says, " 'Oh, there's Mr. Heinfeld, cleaning the leaves out of the pool.' "

RESOURCES

“Mainstream Green,'' by LPA Architects ($31.19) can be ordered from the Irvine firm's Web site, www.lpainc.com, which also provides additional information and links.

For a glossary of green terms go online to www.nbm.org/Exhibits/greenHouse2/goGreen/greenTerms.html

“The Green House, New Directions in Sustainable Architecture,'' by Alanna Stang & Christopher Hawthorne, ($45), available from Princeton Architectural Press, .

“Building Green, A complete how-to guide to alternative building methods,'' by Clarke Snell & Tim Callahan, ($29.95, Lark Books), available at bookstores or online.

GREEN SCENE: Overhangs on the southwest side of the Heinfeld home in Newport Beach shade windows, helping keep the two-story great room at the center of the home cool in summer. Breezes that enter through the open sliding glass doors also provide natural air conditioning, helping to harness the advantages of the site.

CRISTIAN D. COSTEA

MORE PHOTOS

Web extras

• Click hereto see a floorplan of the home, or download an Acrobat Reader (.pdf) version here.

• For a list of green building projects by LPA Architects, click here.

• To see details of the home's energy-saving features and materials, click here.

Tips on environmental building products, processes

In the book "Mainstream Green," which it published in 2005, LPA Architects of Irvine explains why it has become an award-winning designer of energy-saving, sustainable buildings.

"Every year in the U.S. buildings account for 30 percent of raw materials used and 36 percent of the country's total energy consumption, including 65 percent of its electricity use. Buildings produce 30 percent of the U.S. greenhouse-gas emissions that contribute to global warming."

Beyond saving energy and recycling resources, LPA also cites concerns over "sick building syndrome," stemming from the use of paint, carpeting, furniture and other products that can emit toxic fumes.

The company says that green buildings, in contrast, "provide a healthier quality of life because they use nontoxic building materials, and they provide abundant fresh air and natural light."

Here is how, in part, LPA defines a "green" building:

• Its construction reduces the consumption of natural resources, such as wood from old-growth forests.

• Most of its construction waste is recycled or reused rather than sent to landfills.

• Its operation reduces the consumption (and costs) of energy and water.

• Building materials, from structural steel to carpeting and furniture, have recycled content.

GREEN BUILDINGS GROW PROFITS

2007-03-05T22:04:00.000-08:00

COVER STORY
FEBRUARY 1, 2007

GREEN BUILDINGS GROW PROFITS
Commercial building in Orange County is undergoing a startling change that could help save the planet, even as it increases developers’ profits.
By Steve Thomas

Commercial building is going green in Orange County in dramatic fashion. This is happening partly because businessmen and builders want to be good corporate citizens by doing something to save energy and combat global warming, but more so because they are finding that green buildings are good for their bottom line.

“It has turned on a dime,” says Doug Holte, senior vice president of Hines, one of the world’s largest commercial real estate developers. Hines, which controls assets worth more than $12 billion in 68 U.S. cities and 14 foreign countries, is the developer and majority owner of the first LEED pre-certified spec office building in California.

LEED stands for Leadership in Energy and Environmental Design. It is the rating and certification program of the U.S. Green Building Council, a 91,000-member nonprofit organization created and run by design and building professionals.

“I have seen a fundamental sea change in just the past six to nine months,” says Dan Heinfeld, FAIA, president of LPA Architects, the leading green design firm in Orange County. “The demand for energy-efficient, sustainable design is starting to come from the end user now. It seems like awareness of the value of green building is becoming more widespread every month. It’s amazing.”

Jorden Segrave, an architect who heads the OC chapter of the U.S. Green Building Council, seconds Heinfeld’s perception: “Owners and tenants are starting to request LEED certification. That is a big change.”

Hines’ 12-story, class-A midrise at Michelson and Von Karman in the Irvine Business Complex is scheduled for completion in May. It marks a critical turning point because until now green commercial buildings were exclusively institutional, belonging to corporations or other organizations with long timelines in which to enjoy the green benefits and recoup any extra construction costs. The fact that a speculative builder is putting up a green building means that the marketplace has shifted, making sustainable design profitable in the short term.

Going forward, Hines will build nothing but LEED-certified “green” buildings in California. It has formed a fund with the California Public Employees Retirement System (CalPERS), which has some of the deepest pockets on the planet, to finance an aggressive program of sustainable development in Orange County and throughout California. It is the first such fund in the country.

“Green building isn’t about kooky tree-huggers wearing earth shoes anymore,” says Holte. “It is about smart business, about lower energy costs and increased productivity. We think we will lease up 2211 Michelson faster and have better luck holding onto tenants because it is a LEED-certified building.”

Cities, states, federal agencies and major corporations such as Ford, Toyota and Wal-Mart are racing like homesteaders in a land rush to embrace LEED building standards. They crave green buildings for a long list of reasons and architects, engineers and developers are gearing up to answer the call.

“There has been phenomenal, exponential growth in the LEED program over the past several years,” says Eric Ring, a project manager with the mechanical engineering firm Glumac in Irvine. “More and more projects are going green. Mainstream, publicly-traded companies that you wouldn’t necessarily think of as having a green agenda are coming to LEED and green building because it makes financial sense for them.”

The products and services market for green building exceeded $7 billion last year, up 37% from the year before. Since 2000, membership in the U.S. Green Building Council has increased tenfold. According to E-The Environmental Magazine, 5% of new commercial construction underway in the U.S. meets LEED standards today, and nearly 1 billion square feet of green commercial building space has been registered or certified.

Another overnight success
Like the Hollywood actor who becomes famous “overnight” after 10 years of storefront theater and bit parts in lowbudget movies, the green building movement has paid its dues. In one sense its roots go back to traditional, pre-technological architecture around the world. Before air conditioning and electric lights, people knew how to build buildings that were heated, cooled and lit much more by nature than are most modern buildings. More recently, green building emerged during the energy crunch of the 1970s, with solar panels being a main feature. When oil and energy got cheap again, the movement faded somewhat. Ronald Reagan, the old Westinghouse spokesman, removed the solar panels that Jimmy Carter put on the White House, and, in the United States at least, ecologically minded builders were pushed to the fringe where they survived by building smart structures for environmental organizations, universities and progressive individuals.

The re-emergence of green building as a broader, more powerful, presumably permanent force is due to several social and economic factors. Education and advocacy is a big part of it. Visionary individuals, federal programs such as Energy Star, and organizations such as the Urban Land Institute (ULI) and the U.S. Green Building Council (USGBC) laid the groundwork by educating the general public and bringing building professionals together to develop and implement green building practices and standards.
Since 2000, especially, these efforts have taken place against a backdrop of skyrocketing energy prices and a steady, ominous drumbeat in the press about the looming dangers of global warming. Fear of planetary catastrophe has motivated average citizens and building professionals alike to take a hard look at anything likely to lower energy consumption. Likewise, the general public and the business community share a desire for lower personal energy costs, the Holy Grail that green building holds out to them.

Profit motive has come into play along with market forces in the past several years as green building expertise has spread and solidified, and green building systems have matured and proliferated. Both of these developments have made it easier and more economically feasible for the building industry to begin to meet the growing demand for green structures.

“A few years ago, when fewer designers and contractors were familiar with LEED concepts and technology, bids on green projects got padded with a margin of safety,” says Ring. “People weren’t sure what a job was going to cost, so they bid it high to protect themselves. That is happening less and less now. People at all levels of the building industry, from product manufacturers to designers, contractors and developers, understand the systems and procedures better and can price them more fairly. Any sort of delta between green and not green is shrinking or going away all together.”

There is also ever-increasing competition on both the manufacturing and installation ends. “That’s happening in spades,” Ring says. “A lot of product manufacturers who have been around for a while, selling carpet or lighting fixtures or HVAC equipment, are racing to develop new products lines that can appeal to the green sector of the commercial building industry because it is growing so fast. They want to be able to go to the architect and say, ‘Spec our product because it is greener than the competitions.’”

LPA designed FORD’s Premier Automotive Group headquarters in the Irvine Spectrum in 2000. It was the first LEED-certified building of any kind in Orange County, and is still notable. One of its most striking features is a garden roof. Instead of black tar on top, the PAG building has six inches of soil planted in beautiful, flowering native flora. This roof accomplishes a host of environmentally friendly things: It absorbs rain water which reduces urban runoff, OC’s main source of water pollution; insulates the building from both heat and cold; provides habitat for birds and bees; and cools and oxygenates the atmosphere around the building.“When we designed that building, there were two companies that had garden roof systems,” says Heinfeld. “Now, there are 20.”

Good government, bad government
Sad but true, the Bush administration has been terribly slow to react to the threat of global warming, providing more than $10 billion worth of subsidies for the oil and natural gas industry for every $1 billion invested in alternative energy technology. Nevertheless, lower down in the federal government, and in state and local governments, significant progress has been made.

Federal agencies such as the Department of Agriculture, the Environmental Protection Agency and the General Services Administration now require that all new departmental buildings meet LEED requirements and receive certification. The Department of State has committed to using LEED on all new embassies worldwide.

A number of states have mandated LEED certification for state facilities, with California in the forefront. Governor Schwarzenegger signed Executive Order S-20-04 on Dec. 14, 2004, requiring the design, construction and operation of all new and renovated state-owned facilities to be LEED Silver, a step up from basic LEED certification. Since the state builds, owns and operates many buildings, developers took note.

On the local level, scores of cities have put a fern in their cap, requiring new municipal buildings over a certain size to be LEED certified and offering incentives to private developers who build green. San Francisco, Los Angeles, Pasadena, Santa Monica and San Diego all have green mandates. Here in Orange County, Irvine has developed its own voluntary green building certification program for both commercial and residential structures. Builders can earn points for energy efficiency, water conservation, construction waste reduction, environmentally friendly building materials, indoor environmental quality, and sustainable development practices. If a project earns 50 out of 100 points, it is certified as a green building.

“We file the certification certificate so that the owner will have proof positive that it is a green building if they ever go to sell it,” says Tina Christiansen, AIA, director of redevelopment.

In another environmentally conscious move, Irvine recently created the post of Energy Administrator, now filled by Shawn Thompson, P.E. Her job is to plan and shape the city’s energy usage over the next 20 years.
“One of the best thing about our green building program is that we developed it collaboratively with the builders,” says Thompson. “It isn’t something that we made up and imposed on them. We talked it over and negotiated and came up with a set of standards that make sense for them and for us, using products and procedures they are familiar with.”

Irvine also provides a Green Building Resource Guide for citizens, defining green building materials and systems and listing sources for them, helping build a desire for green construction from the bottom up. “People are asking about green building more now,” says Thompson. “They are becoming more educated and more fluent in the terminology.”

Anaheim uses the LEED certification point system to identify green buildings and offers substantial cash incentives to developers who meet LEED requirements and city benchmarks. Incentives include expedited plan review; waiving up to $50,000 in plan check fees per project; providing up to $75,000 in rebates for energy efficiency, up to $50,000 for solar energy installation, up to $30,000 for LEED certification and up to $10,000 in design review assistance.

Altogether, these and other government programs give green building a powerful push forward, making it more attractive to both owner/operators and spec developers. When the federal government commits to LEED-certified structures, it legitimizes the concept. When the great state of California decides to build green, it creates a major market for green products and services. Anaheim’s rebates and subsidies help make sustainable buildings more viable. There is also a trickle-down, combination effect that plays in with rising energy costs and other factors to make green more appealing to profit-minded businessmen.

“Take solar photovoltaic panels, for instance,” says Ring. “Photovoltaics have been around since the 1970s, and haven’t changed all that much, but the economics have. Because of higher energy costs, which will continue to rise, state incentives and federal tax credits, we are at a tipping point where significant photovoltaic systems are starting to make sense for many owners. A combination of drivers like LEED, where they get recognition for doing green things, and tax breaks, and higher energy costs are starting to make the economics of it into more of a sweet spot.”

The verdict is in
As Hines and its brokers lease up 2211 Michelson, they will certainly hammer potential tenants with statistics showing them how much lower their electric bills will be in a green building than in a traditional one, but energy savings won’t be the main selling point.

“The biggest thing we are emphasizing is the workforce productivity element,” says Holte. “A building like this, that has 60% more daylight coming in, that has higher quality air delivery systems so that you have a fresher air environment, and that has usable open spaces at the bottom where people can actually work outside part of the time, leads to a more productive workforce. Since workforce costs tend to be 10 to 20 times the cost of rent, that increase in productivity dwarfs any potential rent premium you might pay.

Solid evidence backs up Holte’s claim. When ING Bank did a productivity study on the efficiency of its green headquarters building in Amsterdam, it found not only a 10% energy savings but a 15% reduction in absenteeism.
Located in Torrance, the south campus of Toyota’s North American Headquarters consists of five 3-story buildings totaling 625,000 square feet. Designed by LPA, it is the largest LEED Gold-certified project in the country. Despite extensive green features, including the biggest privately owned solar power system in the U.S., it came in under budget and saves Toyota money compared to what it was paying in rent before.

“LPA created a working environment that has generated only superlatives from our associates,” says Robert C. Daly, group vice president at Toyota. “I have not heard one person say that he or she ‘liked’ the new offices or that the space is ‘nice.’ What we hear are comments like ‘great,’ ‘terrific,’ or ‘I’m thrilled.’ Everything works here, from the architecture to the interiors to the landscaping and the graphics.”

The building LPA designed for Ford’s Premiere Automotive Group in Irvine has earned similar praise. According to building manager Victor Borghese, it consistently rates the highest in employee satisfaction of all 80 Ford’s office buildings.

A 2004 article by Catrine Johansson in the Orange County Register quoted Roger Ormisher, a vice president at Volvo, one the brands Ford houses in Irvine, as saying, “The building makes work easier and more enjoyable. It encourages you to go to
work.”

Beside the garden roof, green features include a hydrogen fuel cell, an under-floor HVAC system that eliminates toxins from the building and reduces energy costs by 25%, and a simple, ingenious internal structure that lets most employees to enjoy natural daylight and spectacular views of the San Joaquin Hills and Santa Ana Mountains. Instead of putting walled offices around the perimeter of each floor, LPA put them in the center of the building, allowing daylight to flood over workers in cubes that take up most of the floor space.

Green building is full of almost magical synchronicities like that. What costs less and is best for the environment turns out to be best for the people in the building, too. At PAG, Ford saves on its electricity bill by allowing natural light to illuminate the building; at the same time, workers feel better, more energized and optimistic, enjoying the sunlight and beautiful views. LEED standards call for the use of non-fume-producing coatings, called low-VOC paints and stains. Because they are water-based, the low VOC coatings are better for the environment. They also don’t cause workers to suffer from allergies and headaches.

“Leasing brokers have been a challenging audience because they are short-cycle thinkers; they need to get a transaction done in short period of time,” says Holte. “So we have been spending time with both the tenant and brokerage community in Orange County, saying, look, this makes good business sense, and you should pay a premium to lease here as opposed to leasing in a non-sustainable building.

“I think we will get to a point before too long where a young architect coming up wouldn’t even think about designing a building that isn’t sustainable.”
“When the general marketplace requires it, when tenants say they want to move into green space, developers will provide it,” says Heinfeld. OCM

Steve Thomas is an Orange-based freelance writer and author.

WHY GREEN BUILDINGS MATTER

Buildings suck up energy at a rate that makes SUVs look like eco-cruisers. They absorb vast quantities of steel, wood, stone, plastic and other materials, and generate mountains of waste. Improving their energy efficiency and overall environmental sustainability is critical to combating global warming and keeping civilization viable. Consider these stats:

• Commercial and residential construction comprise 12.7% of the $10 trillion U.S. GDP. Buildings.
• They account for 39% of total U.S. energy consumption.
• They consume 70% of electricity used in the U.S.
• They consume 12.2% of all potable water (15 trillion gallons
annually).
• They use 40% of all global raw materials (3 billion tons
annually).
• They generate 136 million tons of construction and demolition debris each year. OCM

SNAPSHOT OF 2211 MICHELSON

Developer/majority owner: Hines
Equity partner: Crescent Real Estate Equities Co.
Architect: Paul Danna, AIA, DMJM
Design Builder: Snyder Langston
Construction start: January 2006
Expected completion: May 2007
Height: 12 stories
Square feet: 266,000

Green features:
• Will use 10-20% less energy
• Extensive use of recycled materials
• Will use reclaimed water
• Sixty percent more interior daylight
• Garden workspace with WiFi
• 50 new trees will be planted

Notable:
• First LEED-CS pre-certified spec office building in California
• First project to participate in Irvine’s Green Building program

Maturing OC is an urban story

2007-03-05T12:39:00.000-08:00

PUBLISHER'S NOTE
MARCH 1, 2007

Maturing OC is an urban story
With high-rise condos, a red-hot office market and a rich cradle of culture, OC’s sleepy suburban days are long over.
By Steve Churm

“Suburban” is a mindset and a reality that has long since passed this county. Anyone who drives the 55 or the 405 or any major arterial at rush hour knows what I’m talking about. Orange County as a sleepy string of bedroom communities is so over. We are urban, baby. Standing recently in the 15th-floor penthouse of an Irvine condo tower was all the evidence I needed that the citification of this county is in high gear – physically, economically and culturally.

Visually, this transformation is in full bloom and nowhere is the view of “Urban OC” more striking than along Jamboree Road near the John Wayne Airport. Within weeks of each other, two high-rise developers celebrated milestones for their residential projects. A beaming Geoffrey Edmunds proclaimed “a new era in living” as the first residents began moving into the twin towers at Plaza-Irvine on the corner of Jamboree and Campus Drive. Up the road a few blocks, off Michelson Drive, Canadian builder Nat Bosa was more direct about the high-rise trend: “You can’t build them enough. Why? Because people want them.” Bosa, who pioneered West Coast condo towers in Vancouver, San Francisco and San Diego, spoke as well-wishers marked the official opening of Marquee Park Place, a pair of 18-story towers at Park Place. Marquee and Plaza-Irvine are the first of at least 30 high-rise condo and apartment projects planned or under development in OC.

Another sure sign of a maturing urban market is office space, which remains red hot in OC. For the first time in several years, The Irvine Co. is building several new Class-A office towers in the airport area and in the Irvine Spectrum. Moreover, L.A.-based Maguire Properties announced this month it would pay nearly $3 billion for 23 properties, most in OC, in one of the largest commercial real estate deals in Southern California history. Maguire will more than double its office holdings to 10.3 million square feet and become the second-largest office landlord in the county behind The Irvine Co. Among the trophies in Maguire’s mega-purchase: the Stadium Plaza Towers in Anaheim and Tower 17 in Irvine.

Any great urban center also has its cultural triumphs. Last year, the opening of the Segerstrom Concert Hall elevated our performing arts opportunities. Now comes more cultural cache – the $15 million, 30,000-square-foot expansion of Bowers Museum in Santa Ana. The Dorothy and Donald Kennedy Wing has two new galleries, a sculpture garden and expansive event space that will lift this sometimes overlooked arts destination to a new level. Opening with an exhibit of 5,000-year-old Chinese artifacts and a rare collection of 75 images from photographer Ansel Adams, the new wing at Bowers further positions OC as a premier urban center.

Anyone still putting “sub” in front of urban when talking about this county needs to get out more. OCM

What Do Agents Really Bring to the Table?

2007-03-04T17:11:00.000-08:00

by M. Anthony Carr

I hate going to the dentist. I've always had good teeth, only one cavity in my head, so why spend all that money (not to mention the dental insurance) on a service I've never really needed. As long as I brush and floss, why do I need someone with a doctor's degree to look over my teeth, clean them, whiten them, etc.?

Besides, I've pulled teeth myself -- when I was just a grade school kid, in fact. So if I can pull teeth at that age, with just a string and a doorknob, why on earth do I have to pay a professionally trained tooth puller now? As I reminisce on those days of my early tooth-pulling, I even recall getting paid for pulling my own teeth! That's right. Every morning after pulling my teeth, I had money under my pillow.

Obviously, anyone who has received quality dental care in the past sees right through the absurdity of this argument. However, when it comes to real estate agents, everyone wants them to provide their services for discounted prices – even free.

Licensed real estate professionals bring state-mandated training and knowledge to the table for buyers and sellers. In fact, agents have to get as much, or more, training than what it would take for some college degrees before being given permission by the state to represent buyers and sellers in the transaction.

By the time a transaction is over, it is chock full of legally-binding documents controlling the transaction, pulling two parties together to exchange hundreds of thousands of dollars to complete a transaction that they may be involved in only a couple of times in their life.

Both the buyer and seller must perform to the contract, and most times, they don't even know how or what they're supposed to do to perform the paragraphs they just agreed to perform.

Nearly half of the buyers are purchasing for the first time, according to the National Association of Realtors. They only think agents are there to usher them into houses and that's it. And that's because hundreds of thousands of agents make that tooth extraction look so easy.

Why should you have a real estate agent on your investing/buying/selling team when it comes to building wealth?

There's talk on Capitol Hill of how the real estate industry has a "strangle hold" on the business. It makes me want to, not so much defend, as much as bring to the forefront what licensed professionals actually bring to the table for consumers.

You've heard the term, "You get what you pay for," and that doesn't go wasted on agents as well. Many sellers would love to get through the transaction themselves, without any help from a "middle man," to save the commission dollars. It sounds like it makes sense, "Hey, why pay thousands of dollars of your money to sell a house when you can do it yourself?"

But every agent has a real estate license regulated by the state. This means they are knowledgeable about various aspects of real estate law, rules and regulations, such as:

1. What rights exist for land and how they can be traded

2. How title can be held and how to ensure clear title to the land

3. Financing: traditional, non-traditional, owner-held, etc.

4. Fair housing laws: federal, state and local

5. Local limits on the sale and trade of real estate

6. State disclosure laws and regulations on the trade of real estate

7. Contracts and forms

Most sellers and buyers I've talked with, while having access to plenty of "information" on the internet about the sales transaction, do not have a handle on the nuances, pitfalls, and inherent dangers of legal problems they can face in the midst of this huge investment.

Published: August 25, 2006

Use of this article without permission is a violation of federal copyright laws -- http://www.loc.gov/copyright.

Mr. Carr has covered real estate since 1989. He is the author of Real Estate Investing Made Simple. Got a personal real estate issue? Post your questions and comments at Anthony’s blog: http://commonsenserealestate.blogspot.com.

Copyright © 2006 Realty Times®. All Rights Reserved.

TIPS TO SELLING

2007-03-04T16:53:00.000-08:00

by Evan T. Little

EMOTIONS
Emotions are your enemy! Ones home is often their most personal possession. Its easy to become stubborn or offended when negotiating the sale of real estate. Being open minded & staying calm will yield the best results. Don't make emotional chooses with financial decisions.

STAGING
Understand who your selling to. Ask neighbors to view your home & give feedback. How could the home show better. Your Realtor should be able to provide many tips in staging your home. Hiring a professional staging consultant should be considered in todays market, especially high end listings.

Personal items need to be removed and stored. This includes; family or personal pictures of any kind, awards, collections of sports memorabilia, etc Buyers should visualize themselves living in the home you're selling, not you. Also, try visiting some model homes to see the latest trends & interior decor.

Fix it before they find it. If there is obvious problems that need repairing, fix them. The last thing you want is an inspector bringing back a 50 page list of repairs to the buyer who hired them. This can cost big bucks in credits to the buyer or even losing your buyer. Have the repairs done ahead of time. You'll be able to find a less expensive and/or more qualified contractor to complete the needed repairs. More importantly, there will be less chance your buyer will back out or demand more money from you. Let your buyer get caught up in the emotions of finding their perfect home that doesn't need any work.

SHOWINGS
If you can show it, SHOW IT! Don't worry about the fact that your house isn't spotless or even if your family is just sitting down to dinner. Having a clean, vacant home is important but not at the expense of losing a potential buyer who may not have time to come back when its convenient for you. Often the buyer who request to view your real estate at odd hours is more serious & should be treated that way.

Making your home difficult to show or simply not being friendly can scare away buyers and even timid agents representing a buyer. Remember that your impression on the buyer or buyers agent could significantly affect future negotiations or even just getting an offer.

NEGOTIATING
There is more to negotiate then the purchase price. Terms & conditions can often weed out buyers who are already unsure of purchasing your home. Bettering the chances of the offer that you accept closing escrow. Also, being of the market for several weeks can cost you more time & money. Be sure you & your agent review offers & negotiate from all angles.

Written by: Evan T. Little,

Orange County, CA

Article may be copied, but not changed in anyway. Including links.

Top 3 Reasons to Delay Purchasing a Home

2007-03-04T16:49:00.000-08:00

By Nef Cortez

So you have set aside enough funds for a down payment on a house and closing costs? And you are curious to know if there is ever a time when you shouldn’t buy? Regardless of all the benefits of buying a home, it is still a major and life changing purchase and a buyer should go forward with an cautiously optimistic but informed attitude.

An important thing to honestly evaluate before you purchase is the average appreciation rates of your local market and your own personal circumstances. Historically, the average appreciation rate for real property has been roughly 6%; however, as the nation is huge your local market appreciation rates can obviously vary. Your main objective should be to stay in your house long enough so that you are not placed in a position where you will have to sell your home at a loss. If you have to sell a home before it has appreciated enough to cover the costs and commissions of selling, you could find yourself in a serious, financial bind. This especially applies to those who buy a home with a down payment of ten percent or less. In the market of the past five years, many who purchased homes with zero down payments are finding themselves in exactly that position, basically “under” their loan.

Real estate commissions traditionally run around six percent of a home’s sales price. The seller’s closing costs generally amounts to about one and a half percent. Adding all the costs you would incur if you were forced to sell, you can see how this can easily exceed the first year’s appreciation of your home. If you made a minimal down payment (from 3% - 5%), you could actually have to come up with cash out of pocket to sell your home. In addition, if the value of the houses in your neighborhood has dropped considerably, you may also find yourself owing a deficiency judgment. A deficiency judgment is a judgment for an amount not covered by the value of the security( in this case your house) put up for a loan or installment payments. In general, with the final sale of the house, the owner is still left with a balance owing on the original amount of the loan and is liable by law to pay it. While this is the worst case scenario, it still is prudent to know that such situations can occur and realistically evaluate how you can avoid them.

The three occasions when it is much better to hold off on buying a home are the following:

New to the Area

A very good to reason to delay buying a home is if you have just moved to an unfamiliar area or region of the country. It makes sense to rent for a number of months before deciding on exactly which neighborhood you desire and can afford to live in. Often when people are too hasty to buy a home immediately, they find that they might have made a better decision if they had waited awhile and had become more familiar with the surrounding neighborhood and local community. They would have additional leisure time to evaluate home values and find the best bargain in the neighborhood they desired to live in.

Uncertain or Unstable Job Future

You could have just graduated from college or you are expecting a promotion and a transfer. Or perhaps, your company has announced an impending "restructuring” or “downsizing”. If any of these apply to your situation, it might be best to fore go buying a home until your job and financial situation stabilizes. It is much easier to dissolve a lease on an apartment or condo, than to try to sell a home in a financially difficult or pressing situation.

Marital Problems

While not advertised on national real estate ads, real estate agents are often participants in the real unfolding life drama of clients who have to sell their houses due to foreclosure, divorce, and deaths in the family. One of the saddest scenarios occurs when recent former clients undergo a divorce and are forced to sell a recently purchased house. For whatever reason, many couples in marital turmoil, are steeped in denial and often decide that buying a new home may help resolve their difficulties. Perhaps it is inevitable that such problems should then occur, but selling a home before it appreciates can create an additional emotionally draining financial burden in an already difficult situation.

While this certainly isn’t meant to discourage the prospective buyer, it certainly is intended to inform the buyer of the serious decision they are about to undertake and to evaluate his or her circumstances honestly. Taking the time to be forthright at the outset will assure a purchase they will be happy with in the long run.

Nef Cortez has been a licensed real estate broker and has held various positions in the real estate and mortgage industry for over 25 years. If you would like to read more of Nef's pithy and timely advice (with the latest info on local foreclosures), visit his website at http://www.nefcortez.com or read his blog at http://www.nefcortez.com/newhomes.

Article Source: http://EzineArticles.com/?expert=Nef_Cortez

Stop Foreclosure Eleven Different Ways

2007-03-04T16:46:00.000-08:00

By Nick Adama

The list of various methods to stop foreclosure that is presented in this article is a nearly comprehensive accounting of the most common ways homeowners can use to save their homes, either by staying in them and avoiding foreclosure, or by getting out of a bad situation with as much of their financial lives intact as possible. There are really no magical ways to end the foreclosure process -- but there are enough tools that homeowners have available, that they can choose from a number of options to help them out of their hardship situations.

1. Save up and get current on the mortgage by paying back the payments that have missed, plus the interest, late fees, attorney fees, etc. Foreclosure victims should be aware that there are often thousands of dollars of extra charges that are added once a homeowner start missing payments and especially if the lender hires a law firm to pursue the foreclosure.

2. Work with the lender to put together a repayment plan, which would require the homeowners to put down part of the amount that they are behind now and pay back the rest over a period of months, along with the current monthly payment. Usually, repayment plans can be worked out through the lender's loss mitigation department, and will result in the foreclosure victims paying almost twice as much per month as the regular mortgage payment. This is to help get caught up on the payments that have been missed while the homeowners are paying their original monthly obligation.

3. Work with the lender to modify the terms of the loan to state that the missed payments are spread out over the life of the loan or put on the back end of the loan. This is called a mortgage modification or loan modification. Some lenders will not do this because they do not hold the paper to be able to modify it. This is especially true for mortgage servicing companies, who only service their loans and collect payments, but who do not own the loans.

4. Refinance -- find a hard money lender or traditional lender that will consider foreclosure refinance loans. Qualifications include lots of equity and lots of income, since interest rates for foreclosure loans are typically over 10%. Foreclosure refinance loans can be difficult to qualify for and may result in higher monthly payments, but they are a good way for homeowners to get a fresh start with a new note and new lender.

5. If the homeowners have an FHA loan, they may be able to qualify for a one-time loan from the FHA that will bring the loan current and is placed as a lien on the property that would have to paid back if the property is sold or refinanced. This is called a partial claim. The foreclosure victims would have to contact the FHA directly for this one time payout to get caught back up on the mortgage.

6. Sell to a private investor or friend/family member and lease/rent the property back from them. This option clears off the foreclosed loan on the property and uses someone elses good credit to get a new loan and may allow the foreclosure victims to stay in the property. Investors can also work out short sales on properties, although they usually do this in the hope of flipping the property by reselling it quickly at a profit.

7. Bankruptcy will stop the foreclosure process, but is usually an expensive alternative to setting up a repayment plan (described above as Option #2). Attorney fees, trustee fees, court costs, and high monthly payments cause numerous homeowners to fail their bankruptcies. Bankruptcy should usually only be considered if the homeowners desperately want to prevent foreclosure and if they have a significant amount of disposable income they can dedicate towards the bankruptcy payments.

8. Short sales are a good option for homeowners who owe more on the property than it is currently worth. A short sale means the bank accepts less than what they are actually owed, and would allow you to get out of the loan, at least. The bank would not be able to come after the homeowners for the rest of the loan amount, since, by accepting a lower amount, they forgive the rest of the debt owed on the mortgage.

9. Sell outright if the property is worth enough and if there is a willing and able buyer. List the house as a For Sale By Owner (FSBO) of through a local real estate broker. In some cases, it is the right decision just to unload the house to stop foreclosure and focus on repairing the credit situation until there is a more opportune time to purchase a new, more affordable home, possibly in a few years.

10. If 1-9 do not work, the homeowners can offer the bank a deed in lieu of foreclosure, which means they would be voluntarily giving the property back to the bank, with the bank agreeing that the property is payment in full of the loan. This is not much better than a foreclosure, and the homeowners have to leave the property anyway, but it will prevent the sheriff sale and eviction process. The bank will not be able to ask for any extra money or sue the former owners for a deficiency judgment, because they accept the property itself as satisfaction of the loan.

11. If 1-10 do not work, as a last resort, the homeowners can just move out and walk away and forget about the property. This is definitely not recommended if they care about their credit in any way and plan to borrow money for several years, but foreclosure should teach them not to rely on banks and lenders to bail them out with borrowed money when they face a hardship. or are short on cash. Many homeowners simply walk away because the foreclosure situation is so intimidating, but, as listed above, there are numerous options that are better than just giving up on the property.

Those are the most common options that can be used to stop foreclosure. There are a few others (suing the bank, bringing various complaints to regulatory agencies, etc.), but they involve much more cost and legal involvement and may not end up stopping the foreclosure process in the end. To learn more about any of these options, though, please consider searching through various resources online that offer foreclosure information. Every homeowners specific situation is very different and deserves a high level of review and analysis before any one solution or combination of alternatives to foreclosure are decided upon.

The ForeclosureFish.com website has been designed to help homeowners receive relevant foreclosure information and mortgage help. Various online resources are given to foreclosure victims in the hopes of educating them enough to be able to stop foreclosure on their own and avoid being taken advantage of. These resources include a free foreclosure e-book, daily updated foreclosure blog, and numerous reference materials. Homeowners who are interested in further help can receive a complimentary review of their situation by the company, as well as a detailed proposal analyzing the homeowners' chances of success for various options, such as loans to stop foreclosure, loss mitigation, or private real estate investment. The site also puts foreclosure victims in touch with mortgage and real estate professionals who can help them examine various options they may have available to save their homes. Their site is available online at the URL below: http://www.foreclosurefish.com/

Article Source: http://EzineArticles.com/?expert=Nick_Adama

Be Sure To Get Pre-Approved For A Mortgage

2007-03-04T16:33:00.000-08:00

By Carl DiNello

Is this scenario familiar? You and your finance have been looking for your first house for a few months without any luck. You've looked at numerous houses, but none seem to be "just right." You're patience is running out, and you are beginning to feel as though you never will find the right house.

Then one day, out of the blue, when out with your Realtor, you discover one of the most charming little houses you have ever seen. A modern well-equipped kitchen, a large grassy backyard, a beautiful wraparound porch, and at price you believe you can afford. Everything you've been searching for, and then some.

Your real estate agent immediately contacts the sellers and makes an offer they can't refuse. All that's left is for you to obtain financing from your bank.

Your emotions are at an all time high! You contact your landlord and give notice that you will be moving out. You start shopping for your new home by picking out just the right curtains for your beautiful new living room... and then it happens. Your banks loan officer calls with the devastating news that your loan application has been rejected.

Your current income level is not enough to cover the combined, anticipated expenses of the mortgage, homeowners insurance, and property taxes.

Your first home is out of your financial reach. To make matters even worse is the fact that you have already spent hundreds of dollars on the home inspection, as well as non-refundable loan application fees.

Could this have been prevented? Yes! You could have saved yourself a lot of stress, and heartache had you first been pre-approved for a mortgage. With pre-approval you would have know exactly just how much house you could afford.

Pre-qualified vs Pre-approved

Getting pre-qualified for a mortgage is quick and easy. Just by speaking over the phone to a loan officer and answering some very general questions regarding your income, expenses, and employment is enough to get you pre-qualified.

This general information is used by the loan officer to provide you with an approximate estimate of how much you could afford to borrow at current interest rates. The loan officer may even offer to provide you with a letter stating the amount on it.

However, since the loan officer has not actually verified the information given to him, there is no obligation to actually loan you that amount of money. It's quite common, and possible that when the loan officer checks your credit report, and verifies the employment and financial information you provided that a determination may be made to loan you a lesser amount.

It is for this reason, that I consider pre-qualification for a mortgage to be a complete waste of time. It is much better, and more beneficial to you, to get pre-approved for a mortgage. The lender will now pull your credit report, and ask you to provide additional paperwork such as tax returns, and pay stubs to verify your salary as well as your place of employment.

The lender can now provide an accurate calculation of exactly how much you can afford to borrow. You will now know exactly what is affordable and what is out of your price range.

Mortgage pre-approval also comes with an added bonus. With your financing in place, you become more desirable to a seller. Quite often a seller will receive multiple offers. A seller will be more inclined to go with the buyer who has already been pre-approved for mortgage financing. With your creditworthiness not an issue you are a lesser risk than someone who is just pre-qualified.

Copyright 2007 Carl DiNello

Carl DiNello is an Article Author whose articles are featured on websites covering the Internet's most popular topics.

You may republish this article on your website, or e-zine so long as none of the content, or author information has been edited or changed in any way, and all links are left active and unchanged.

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House-price growth steadies

2007-03-04T16:15:00.000-08:00

House-price growth steadies

Prices up 1.1% in fourth quarter

Thursday, March 01, 2007

Inman News

The rate of home-price appreciation in the U.S. remained steady in the fourth quarter of 2006, extending a general trend of deceleration begun earlier in the year.

Home prices, based on repeat sales and re financings, were 1.1 percent higher in the fourth quarter than they were in the third quarter of 2006, according to the Office of Federal Housing Enterprise Oversight's latest survey. This is slightly above the revised growth estimate of 1 percent from the second to the third quarter.

Prices in the fourth quarter of 2006 were 5.9 percent higher than they were in the same quarter in 2005.

Price appreciation in 2006 was substantially smaller than the tremendous price gains of recent years, which ranged from 7.4 percent in 2002 to 13.2 percent in 2005.

"These data show that, on the whole, prices are still rising, albeit at a much slower pace," said OFHEO Director James B. Lockhart Lockhart. "This suggests that house-price appreciation is, for now, more in line with historical norms."

House prices grew faster over the past year than did prices of non-housing goods and services reflected in the Consumer Price Index. House prices rose 5.9 percent, while prices of other goods and services, excluding shelter, rose 0.9 percent.

"The continuing strength in the economy and decreasing interest rates for borrowers prevented a harder landing in housing markets during the second half of last year," said OFHEO Chief Economist Patrick Lawler. "Last quarter, though sharper drops occurred locally, no state had average price declines of as much as 1 percent."

The states with the greatest rates of appreciation between the fourth quarter of 2005 and the fourth quarter of 2006 were: Utah (17.6 percent), Wyoming (14.3 percent), Idaho (14 percent), Washington (13.7 percent) and Oregon (13.5 percent). The states with the lowest rates of appreciation for the same period were: Michigan (-0.4 percent), Massachusetts (0.5 percent), Ohio (1 percent), Indiana (2.3 percent) and Minnesota (2.5 percent).

The Metropolitan Statistical Areas with the greatest rates of appreciation between the fourth quarter of 2005 and the fourth quarter of 2006 were: Bend, Ore. (21.4 percent), Wenatchee, Wash. (20.9 percent) and Provo-Orem, Utah (19.9 percent). The MSAs with the lowest rates of appreciation for the same period were: Kokomo, Ind. (-5.3 percent), Santa Barbara-Santa Maria-Goleta, Calif. (-4.2 percent), and Jackson, Mich. (-3.9 percent).

Housing affordability up slightly in late 2006

2007-03-04T15:58:00.000-08:00

Friday, March 2, 2007

About 24 percent of Orange County households were able to afford a typical starter home here in the fourth quarter.

By JEFF COLLINS

The Orange County Register

Starter homes in Orange County got slightly more affordable at the end of 2006, one survey out today shows, but an earlier report shows that the county is still one of the least affordable places to buy a home in the nation.

The California Association of Realtors reported that a buyer needed a minimum household income of $118,990 to afford an O.C. starter home in the fourth quarter of the year if they made a 10 percent down payment and used an adjustable rate mortgage.

About 24 percent of Orange County households have incomes that high, the highest percentage since the last half of 2005.

The minimum income level decreased slightly from the $123,800 needed to buy the typical starter home in the third quarter, the association reported. An estimated 22 percent of local households earned that much.

CAR assumes that a starter home costs 15 percent less than the median-priced house. It estimates that a starter home costs $587,100 in Orange County, compared to $477,400 statewide.

The association created the index as a rough guess of how many first-time buyers can afford homes at current prices. The index began in the winter of 2003, when 43 percent of households could afford a starter home.

Meanwhile, a separate survey by the National Association of Home Builders showed that Orange County had the nation's third least affordable housing market in the fourth quarter of 2006, just after Los Angeles County and Salinas.

The home builders "Housing Opportunity Index" reported that just 4 percent of homes in Orange County are affordable to buyers with median household incomes of $78,300, ranking 62nd out of 64 metro areas. The report said that just 2 percent of the homes are affordable in Los Angeles and 3.7 percent are affordable in Salinas.

Contact the writer: 714-796-7734 or jcollins@ocregister.com

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Low-income, fast-growing neighborhoods more likely to sign subprime mortgages than buyers elsewhere.

Wachovia expanding in O.C.

It expects to hire up to 500 people in next 3 years.

O.C. house prices down again

Single-family home prices fell in Orange County last month, marking the sixth time since August that prices showed year-over-year declines, the California Association of Realtors reported today.

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House-price growth steadies

Housing affordability up slightly in late 2006