It may just be the best kept secret in Laguna Niguel!
Laguna Niguel is known as one of the most beautiful master-planned communities in Southern Orange County. With mature trees, and plenty of parks, it is a fantastic place to call home. Nestled along the coastal San Joaquin Mountains, this community offers many options for those looking to purchase a condo, or a single-family home.

The community of Laguna Sur is one of the most desirable neighborhoods in all of Laguna Niguel. Located at the highest point of Laguna Niguel, Laguna Sur boasts some of the most spectacular views in all of Southern Orange County.

Laguna Sur is also in close proximity to Crown Valley Pkwy, making it easy to access other coastal areas like Laguna Beach, Dana Point, as well as the freeway.

If you’re looking to be “on top of the world”, Laguna Sur may be a great community to start at!

Please contact the Hakolas today to schedule a tour of the unique community of Laguna Sur.

Waiting to purchase a home could be costly for buyers and move-up sellers.

Waiting to Buy: With interest rates poised to increase, waiting is not a good idea. With minimal expected appreciation in 2014 compared to prior years, the sense of urgency to buy is not as prevalent. Instead, many potential buyers are taking their time or putting off purchasing to a later date. This is not necessarily a sound strategy with interest rates forecasted to increase about one-percent compared to where they are today by year’s end.

Interest rates are going up. It is not a matter of “if” interest rates will go up; it is “when” they will go up. They have been held at artificially low levels thanks to the Federal Reserve dumping money into the financial system and keeping the discount rate at an extremely low level for quite some time. The net effect of taking this action for years is increasing pressure for rates to rise. Economically, it is inevitable that interest rates will rise.

Considering that rates will climb, the impact on monthly payments cannot be ignored. For a buyer that is looking to purchase a $600,000 home with 20% down, the monthly payment would rise by an additional $291 per month with a 1% increase in interest rates. To drive home the point further, if a buyer qualifies for the $2,397 payment, that’s a purchase price of $600,000 today. When interest rates climb by just one-percent, that same payment allows a buyer to purchase a $535,000 home, $65,000 less than today. Rising rates erode purchasing power and affordability drops.

As the price range rises, the difference is even more profound. For a buyer that qualifies for a $3,994 monthly mortgage payment, that’s a purchase price of $1,000,000 today. When interest rates rise by one-percent, a buyer will be looking at an $891,625 home, a difference of nearly $110,000. That is a lot less home.

Home values in Orange County are not going down. Waiting to buy does not make economic sense. Instead, buyers that wait are throwing away hundreds of dollars every single month because rising rates are inevitable. In June of last year, Bernanke and the Federal Reserve announced that they were going to start to reduce the amount of money they dumped into the monetary system every month, also known as tapering. Immediately, interest rates shot up by one-percent. Buyers that did not lock were looking at an instant increase in their monthly payment. These increases are just the beginning. Interest rates prior to the downturn were at 6.4%. They dropped after the Federal Reserve intervened. The Fed is now strategically moving the other direction and interest rates will rise.

For the homeowner who is looking to move up in value, waiting to make the move really does not make any sense at all. Many would like to wait for their homes to appreciate in value before they pull the trigger on selling. Not only are they looking at eroding purchase power with a rise in rates, they are looking to pay more as well. 10% appreciation in a $750,000 home is an additional $75,000. For a $1 million home, it is an additional $100,000. The appreciation rate may be the same, but the net result is additional equity for higher priced homes.

Active Inventory: The inventory increased by 2% in the past two weeks.

The inventory added an additional 120 homes in the past two weeks and now totals 5,403. Despite the fact that demand is going up, the active inventory continues to climb. More homes are coming on the market than are coming off, thus the rise. Many homes are intially pricing their homes at ridiculously high levels and are sitting on the market. Buyers today want to pay the Fair Market Value for a home and are not willing to overpay for a home.

Last year at this time there were 3,237 homes, 2,166 fewer than today. 

Demand: Demand increased by 3% in the past two weeks.

Demand, the number of new pending sales over the past month, increased by 77 and now totals 2,458. Demand will continue to increase and will gain momentum through the Spring Market. Last year demand was at 2,898 pending sales, 440 more than today. Demand may not be at the same clip as last year, but it is growing as spring is right around the corner.

The expected market time for all homes in Orange County is currently at 66 days, dropping from 67 days just two weeks ago.

Distressed Breakdown: The distressed inventory decreased by 13 homes in the past two weeks.

The distressed inventory, foreclosures and short sales combined, decreased by 5%, 13 homes, in the past two weeks and now totals 255. Only 5% of the active listing inventory and 8% of demand is distressed. Compare that to last year when it represented 8% of the inventory and 23% of demand, and two years ago when it represented 30% of the inventory and 52% of demand. Distressed properties have an insignificant effect on the overall housing market because their numbers have dwindled considerably. 

In the past two weeks, the foreclosure inventory did not change and remains at only 67. 1% of the inventory is a foreclosure. The expected market time for foreclosures is 53 days. The short sale inventory decreased by 13 homes in the past two weeks and now totals 188. The expected market time is 34 days. Short sales represent just 3% of the total active inventory.

Waiting to purchase a home could be costly for buyers and move-up sellers.

Waiting to Buy: With interest rates poised to increase, waiting is not a good idea.

With minimal expected appreciation in 2014 compared to prior years, the sense of urgency to buy is not as prevalent. Instead, many potential buyers are taking their time or putting off purchasing to a later date. This is not necessarily a sound strategy with interest rates forecasted to increase about one-percent compared to where they are today by year’s end.

Interest rates are going up. It is not a matter of “if” interest rates will go up; it is “when” they will go up. They have been held at artificially low levels thanks to the Federal Reserve dumping money into the financial system and keeping the discount rate at an extremely low level for quite some time. The net effect of taking this action for years is increasing pressure for rates to rise. Economically, it is inevitable that interest rates will rise.

Considering that rates will climb, the impact on monthly payments cannot be ignored. For a buyer that is looking to purchase a $600,000 home with 20% down, the monthly payment would rise by an additional $291 per month with a 1% increase in interest rates. To drive home the point further, if a buyer qualifies for the $2,397 payment, that’s a purchase price of $600,000 today. When interest rates climb by just one-percent, that same payment allows a buyer to purchase a $535,000 home, $65,000 less than today. Rising rates erode purchasing power and affordability drops. 

As the price range rises, the difference is even more profound. For a buyer that qualifies for a $3,994 monthly mortgage payment, that’s a purchase price of $1,000,000 today. When interest rates rise by one-percent, a buyer will be looking at an $891,625 home, a difference of nearly $110,000. That is a lot less home.

Home values in Orange County are not going down. Waiting to buy does not make economic sense. Instead, buyers that wait are throwing away hundreds of dollars every single month because rising rates are inevitable. In June of last year, Bernanke and the Federal Reserve announced that they were going to start to reduce the amount of money they dumped into the monetary system every month, also known as tapering. Immediately, interest rates shot up by one-percent. Buyers that did not lock were looking at an instant increase in their monthly payment. These increases are just the beginning. Interest rates prior to the downturn were at 6.4%. They dropped after the Federal Reserve intervened. The Fed is now strategically moving the other direction and interest rates will rise.

For the homeowner who is looking to move up in value, waiting to make the move really does not make any sense at all. Many would like to wait for their homes to appreciate in value before they pull the trigger on selling. Not only are they looking at eroding purchase power with a rise in rates, they are looking to pay more as well. 10% appreciation in a $750,000 home is an additional $75,000. For a $1 million home, it is an additional $100,000. The appreciation rate may be the same, but the net result is additional equity for higher priced homes.

Active Inventory: The inventory increased by 2% in the past two weeks.

The inventory added an additional 120 homes in the past two weeks and now totals 5,403. Despite the fact that demand is going up, the active inventory continues to climb. More homes are coming on the market than are coming off, thus the rise. Many homes are intially pricing their homes at ridiculously high levels and are sitting on the market. Buyers today want to pay the Fair Market Value for a home and are not willing to overpay for a home.

Last year at this time there were 3,237 homes, 2,166 fewer than today. 

Demand: Demand increased by 3% in the past two weeks.

Demand, the number of new pending sales over the past month, increased by 77 and now totals 2,458. Demand will continue to increase and will gain momentum through the Spring Market. Last year demand was at 2,898 pending sales, 440 more than today. Demand may not be at the same clip as last year, but it is growing as spring is right around the corner.

The expected market time for all homes in Orange County is currently at 66 days, dropping from 67 days just two weeks ago.

Distressed Breakdown: The distressed inventory decreased by 13 homes in the past two weeks.

The distressed inventory, foreclosures and short sales combined, decreased by 5%, 13 homes, in the past two weeks and now totals 255. Only 5% of the active listing inventory and 8% of demand is distressed. Compare that to last year when it represented 8% of the inventory and 23% of demand, and two years ago when it represented 30% of the inventory and 52% of demand. Distressed properties have an insignificant effect on the overall housing market because their numbers have dwindled considerably. 

In the past two weeks, the foreclosure inventory did not change and remains at only 67. 1% of the inventory is a foreclosure. The expected market time for foreclosures is 53 days. The short sale inventory decreased by 13 homes in the past two weeks and now totals 188. The expected market time is 34 days. Short sales represent just 3% of the total active inventory.

The influence of foreclosures and short sales on the housing market is minimal.

Distress: foreclosures and short sales make up only 5% of the overall inventory.

It is amazing how often people ask about foreclosures. Buyers want to buy a foreclosure. Investors want to buy foreclosures. Shadow inventory? Empty foreclosures intentionally held off the market? When’s the wave?

The reality is that as the interest in distressed homes has grown exponentially, the number of foreclosures and short sales placed on the market has dropped dramatically. Buyers and investors wishes for more distressed sales have become nothing more than wishful thinking. The more they ask, the less they find.

The number of homes placed on the market for the first six weeks of 2014 is up 4% compared to the first six weeks of 2013. That’s not a significant change. In digging deeper, the overall makeup of the inventory has changed radically. The number of foreclosures is down 70% and short sales are down 68%. Yet, the number of homeowners with equity placed on the market is up 19%. There are only 260 foreclosures and short sales that were placed onto the market thus far in 2014. Compare that to 828 in 2013 and 2,101 in 2012.

It is pretty safe to say that the change is not a fluke, but a commanding shift in the market. Here’s the earth shattering headline to take away from the data: the distressed market, both foreclosures and shorts sales, is down 69% from last year in Orange County.

The trend began a year ago. The year to year drop in comparing 2013 to 2012 was 61%. It was jaw dropping news a year ago, which illustrates just how impressive this year’s drop is in comparison. The distressed tank is running on empty and the fuel light just came on.

Does that mean that distressed homes will vanish? Not hardly. Instead, expect to deal with these low levels for some time. There are still a lot of homes at different stages of the foreclosure process, the infamous “shadow inventory.” Collectively, banks have been slow to foreclose and slow to approve short sales. That has been an intentional strategy that, on the surface, has seemed to work surprisingly well. On average, according to Foreclosure Radar, it takes about a year in Orange County for banks to foreclose. Banks are not going to change this strategy anytime soon because it has worked. Unleashing a steady, slow stream of distressed properties has helped reignite the housing market and the overall inventory has dropped substantially from earlier in the downturn.

Now that home values have recovered impressively over the course of the last couple of years, many homeowners who were upside down have been freed from the grip of owing more than their home was worth. As a result, there will be fewer short sales, fewer homeowners walking away from their homes, and, ultimately, fewer foreclosures.

Distressed Breakdown: The distressed inventory increased by 10 homes in the past two weeks.

The distressed inventory, foreclosures and short sales combined, increased by 4%, 10 homes, in the past two weeks and now totals 268. Only 5% of the active listing inventory and 10% of demand is distressed. Compare that to last year when it represented 10% of the inventory and 26% of demand, and two years ago when it represented 33% of the inventory and 56% of demand. As noted earlier, the impact of distressed homes on the overall Orange County real estate market is minimal.

In the past two weeks, the foreclosure inventory increased by 14 homes and now totals 67. 1% of the inventory is a foreclosure. The expected market time for foreclosures is 46 days. The short sale inventory decreased by 4 homes in the past two weeks and now totals 201. The expected market time is 31 days. Short sales represent just 4% of the total active inventory.

Active Inventory: The inventory increased by 4% in the past two weeks.

The inventory added an additional 196 homes in the past two weeks and now totals 5,283. This increase comes despite an increase in demand. Remember, the active inventory does not include pending sales; so, homes are being placed on the market while others are pulled off as they become pending sales. Currently more homes are coming on the market than are coming off. The net result is an increase in the active inventory.

With many homes coming on the market at far reaching, overpriced levels, they will not realize success until they reduce their asking price to the Fair Market Value, what buyers are willing to pay. This is based upon the most recent comparable sales. Buyers do not want to overpay, so they are approaching the market cautiously. Overpriced homes will come on the market and accumulate, causing the inventory to rise.

Last year at this time there were 3,272 homes, 2,011 fewer than today.

Demand: Demand increased by 17% in the past two weeks.

Demand, the number of new pending sales over the past month, increased by 338 and now totals 2,381. Demand will continue to increase and will gain momentum through the Spring Market. Last year demand was at 2,887 pending sales, 506 more than today. Demand may not at the same clip as last year, but it is gaining momentum just as it typically does after the Super Bowl.

For the sellers that price their homes at their Fair Market Values, they are finding success because demand is improving. There are buyers in the marketplace ready to buy at the right price. The expected market time for all homes in Orange County is currently at 67 days, dropping from 75 days just two weeks ago.

If you’re feeling overwhelmed at the thought of organizing your home, you are not alone! According to the National Association of Professional Organizers, 80 percent of the stuff that we keep in our homes goes unused. Some of us stack it, some of us stash it in boxes, and some of us squeeze all of the clutter into one room like the garage.

No matter how you choose to keep your clutter, the challenge of organizing your home can be overwhelming if you don’t know how to approach the process. Did you know that there are professional organizers that make a living teaching the rest of us how to keep our homes in working order? It’s true! There’s even a popular book called The Fifth Discipline that explains the science behind organization, written by an MIT professor. He founded MIT’s school of organizational science! Luckily there are a few tips that we all can follow that will help make our lives more organized.

Local Orange County Organizers

I-Deal-Lifestyle

OC Home Organizer

The Organizers Network of Orange County

Organizing Before Selling Your Home

The number one action you can take to help maximize the appeal of your home to potential buyers is to de-clutter. What you may see as a “cozy” family room full of children’s toys and packed with creative storage options, may be making your house look smaller to potential buyers.

The best way to make your home look as large and appealing as possible is to move the clutter to a separate storage unit before showings begin. This way half of the packing work is already done before the stress of moving sets in.

De-cluttering doesn’t mean you have to empty the house completely. Remember, homes sell more easily if a buyer can visualize how they might use the space. Instead of stripping your belongings down to the bare bones, try to keep items that add to the appeal of the space in place.

Organizing Before Moving

It may be tempting to dump your junk drawer into a box and vow to organize it after you’ve settled into your new home, but it is well worth the extra work to purge unwanted items before the move. Don’t move garbage! Unpacking in your new place will be far more enjoyable if you purge your unused items beforehand.

This rule of thumb doesn’t just go for the junk drawer either. Make sure you take the time to go room by room and eliminate items that no longer serve a purpose in your home. Set the proper time aside, and dig in!

Here are a few more tips to make sure you have an organized moving experience:

Bowl Full of Lemons: How to Organize Your Move

Organizing Daily Use Spaces

Life can be hectic, so who couldn’t use a little more organization in our daily lives to help make our jobs easier? High-traffic rooms like the kitchen and bathroom are often overlooked when de-cluttering, but these spaces generally harbor some of worst stashes of unused items. When was the last time you really went through the items in these rooms and got rid of what you don’t use? How long has that box full of medication been in your medicine cabinet?

Here are a few ideas to get your kitchen and bathrooms organized!

The Orange County housing market is finally shaking the effects of a slow Holiday Market and beginning its transition into a much busier Spring.

Demand: Demand increased by 31% in the past two weeks.

From Thanksgiving until mid-January, the real estate market was muted as buyers and sellers alike, for the most part, took the holidays off. The holidays are notoriously the slowest time of the year for real estate. Compared to the prior year, it was much slower. During that market, if a home popped on the market, it was greeted by a throng of buyers and would generate immediate offers despite the season. But, that is not normal for the time of year. This time around, the housing market was what you would expect; if a home was placed on the market, it would still generate a few showings in a week, but immediate offers were out of the question unless it was aggressively priced to generate instant action.

Within the last couple of weeks, the Orange County housing market engine has been revving. During the holidays, it was as if the market was in a 5 mile per hour zone. Now, it has reached the 25 mile per house zone, where it will quickly accelerate to 45 in the coming weeks. It will continue to accelerate through February, March and April. In April, housing will be humming along at its quickest pace of the year at freeway speeds.

Orange County and all of Southern California are unique, as our Spring Market really begins right after the Super Bowl. That is mainly due to our incredible weather. With the holidays over a month in the rearview mirror, there are not many excuses that could potentially prevent buyers and sellers from entering the fray. We are not experiencing a harsh, brutally cold winter like most of the country. We do not have snow; for that matter, our roads are barely wet. We have a Holiday Market, when housing pauses to celebrate the season. Most of the country has a Winter Market. It is hard to show homes in a blizzard or when there is a lot of snow on the ground. Black ice? Snow blowers? Frozen locks? Many Southern Californians have never experienced the consequences of a brutal winter, especially this year.

Until the official start of spring, over six weeks away, housing will continue to improve. Spring is the best time of the year for housing for a very good reason: if a family would like to move during the summer, when the kids are out of school, contracts need to be written during the spring. This is precisely why demand peaks around the end of April. Contracts written at that time are typically looking to close in June, when the kids get out of school. That will give the entire family time to adjust to a new neighborhood and meet new friends prior to resuming school in the fall.

Demand, the number of new pending sales over the past month, increased by 485 pending sales in the past two weeks and now totals 2,043. Last year demand was at 2,596 pending sales, 553 more than today. In 2013, the year over year statistics have not told the complete story. The chart that illustrates the difference was intentionally left off this report because it gave the wrong impression. Embedded in prior year demand curves were a ton of short sales. Unfortunately, even if you had a willing and able buyer and a seller who wanted and needed to sell, a successful closed sale was at the mercy of the dreaded “subject to lender approval.” Only about half of all short sales ever closed on time. Many were so complex that they would take months to get all of the appropriate approvals. By that time, many buyers had moved on, necessitating finding another interested buyer. Demand in prior years resulted in fewer sales because they included so many short sales.

In the past 30 days, only 175 of the 2,043 pending sales were short sales. Last year it was 594 of 2,596, and two years ago it was 1,367 of 3,553. Demand in prior years was so inflated that you really could not compare year over year statistics as we began to move to a predominantly equity seller market, regular every day folk with equity in their homes. With fewer short sales, looking at 2014 compared to 2013 is starting to make sense. From the numbers, we can finally tell that this year’s demand compared to last will result in fewer sales in the coming months compared to 2013.

Active Inventory: The inventory barely moved in the past two weeks. With the holidays behind us, more homes are coming on the market at a faster pace; and, more homes are coming off the market as demand increases. As a result, in the past two weeks, the active listing inventory increased by only 10 homes and now totals 5,087. Last year at this time there were 3,276 homes, 1,811 fewer than today.

There is quite a bit of buzz in the real estate trenches, though, with homeowners getting ready to place their homes on the market. The fate of a seller’s success today depends upon their willingness to carefully price their homes. Today’s buyers want to pay the Fair Market Value of a home. They are no longer willing to pay thousands of dollars over the most recent closed sale. So, sellers who price their homes right will sell. Many achieve success after reducing their asking prices, but the smart strategy is to price accurately as soon as they come on the market. Homes receive the most activity within the first few weeks after the for-sale sign goes up in the front yard. There is less fanfare after a price reduction.

The active inventory is most likely going to rise in the coming months on the backs of overpriced, overzealous sellers pricing their homes too high over the Fair Market Value. Success will not be achieved until those homes realize that a price reduction is the only answer.

Distressed Breakdown: The distressed decreased by 6% in the past two weeks.

The distressed inventory, foreclosures and short sales combined, decreased by 17 in the past two weeks homes and now totals 258, a 6% decrease. Only 5% of the active listing inventory and 11% of demand is distressed. Compare that to last year when it represented 11% of the inventory and 28% of demand, and two years ago when it represented 30% of the inventory and 52% of demand. Unlike prior years, the distressed market today is not a drag on the overall housing market.

In the past two weeks, the foreclosure inventory decreased by 5 homes and now totals 53. 1% of the inventory is a foreclosure. The expected market time for foreclosures is 30 days. The short sale inventory decreased by 12 homes in the past two weeks and now totals 205. The expected market time is 35 days. Short sales represent just 4% of the total active inventory.

Prices are currently not appreciating despite year over year and month

over month increases in the median sales price.

Median Sales Price: Don’t be fooled by reports of the median sales price.

Reports of the median sales price for last month are in and in Orange County they are up 21.3% year over year and 1.8% from November to December 2013. As a result, there’s an extra “giddy up” in sellers’ approach to the housing market. If you are a seller or are thinking about selling, please heed the following warning though: hold your horses, values are currently NOT rising like you might think.

The median sales price is up, but values are not rising? Where’s the disconnect? Property values did not recently appreciate, the median sales price did. It is confusing because the median sales price is widely used as an indicator of the direction of values, but it simply is not a precise indicator of exact home value changes.

To understand why the median is not that accurate, let’s dive into Econ 101 and take a look at what it means. When you list all of the sold prices of every home that changed hands in the month of December and sort them from highest to lowest, the exact “middle” value was $570,000, the median sale. That was up from $470,000 in December of 2012, and $560,000 in November 2013. Values had risen dramatically in the past year, but if you ask REALTORS® and sellers who had participated in the housing market during the fourth-quarter of 2013, they would all agree that home values had stalled. Most homes had to reduce their asking price to find success. Here’s a look at the median sales price in recent months:

• August 2013 $560,000
• September 2013 $550,000
• October 2013 $540,000
• November 2013 $560,000
• December 2013 $570,000

So, did values drop $20k from August to October and then rise $30k from October to December? Absolutely not. Instead, the median sales price was skewed by the mix of homes. In the latter months of the year, there were far fewer resale homes sold compared to the same month in 2012. For example, sales were down 19% in December 2013 compared to December 2012. Yet, there were 330 sales over $1 million last month, 14% of all sales, versus 305 a year earlier, 11% of all sales. In sorting the sales from highest to lowest, when there is an increase in the number of higher priced sales taking place, the median is skewed higher.

New home sales have been skewing the median sales price as well. The number of new home developments has skyrocketed and so have the number of new home closed sales. In December new home sales were up 121% year over year. The median sales price for new homes was $707,500. Since they have a higher sticker price, they also skewed the overall median sales price for all of Orange County, significantly.

For real estate professionals and sellers that have been engaged in the market for a while, the reports of increases in the median sales price are extremely frustrating to hear. Recent reports of the median hitting a “six-year high” in December compound the problem by motivating more homeowners to place their homes on the market. With rosy expectations of the Orange County real estate market, most are opting in an aggressive approach by grossly overpricing their homes. This year is going to be all about sellers learning the hard way that the market is not like it was for most of 2012 and for the first half of 2013, when homes flew off the market at seemingly whatever price. Multiple offers, offers over the asking prices, and open houses attended by a steady stream of interested buyers were the norm. That market was driven by lower values, lower interest rates, and fewer homes on the market.

My biggest concern is the number of overpriced homes coming on the market already during the first couple of weeks of the year. This will result in an increase in the active listing inventory as more homes come on the market and stay on the market until they come to the realization that a price reduction is necessary to achieve success. The inventory is anticipated to swell during the Spring and Summer Markets.

Today, home values are higher, interest rates are higher, and there are more homes on the market. Buyers are much more cautious due to these circumstances and are looking to pay the fair market value for a home, not a made up value $25,000 above the most recent comparable sale. Now, in order to be successful, sellers must rely on the expertise of a REALTOR® to help establish the actual market value of a home.

The bottom line, the next time you read or hear of a change in the median sales price, understand that it is a great gauge of the general housing health, but is not an exact measure of home price appreciation.

Active Inventory: The inventory rose 7% in the past two weeks.

In Orange County there really is not much of a Winter Market, especially this year. With temperatures in the 70’s and 80’s, there is no good excuse to avoid the real estate market. With the holidays in the rearview mirror, it already feels like spring. Our Spring Market actually begins a bit earlier than most of the country due to our incredible weather. There is a noticeable shift in the market right after the Super Bowl, just a couple of weeks away. Cyclically, the inventory rises throughout Orange County, and this year is no exception.

In the past two weeks, the active listing increased by 344 homes and now totals 5,077, the largest increase since August. At this time last year, the inventory only grew by 88 homes and totaled 3,249 homes, 1,828 fewer than today.

Demand: Demand increased by 4% in the past two weeks. Demand, the number of new pending sales over the past month, increased by 63 and now totals 1,558. Demand will continue to increase and will continue to gain momentum through spring.

Last year demand was at 2,172 pending sales, 614 more than today. Even with fewer homes on the market, demand was much higher and buyers would do whatever it took to isolate a home. The market was soaring at a feverish pace. Flash forward to today and buyers approach the market much more methodically, seeking value, the fair market value.

Distressed Breakdown: The distressed inventory increased by only four homes in the past two weeks.

The distressed inventory, foreclosures and short sales combined, increased by four homes and now totals 275, a 1% increase. Only 5% of the active listing inventory and 12% of demand is distressed. Compare that to last year when it represented 11% of the inventory and 33% of demand, and two years ago when it represented 37% of the inventory and 59% of demand. Today, there are some distressed properties, but they play an overall insignificant role compared to recent years.

In the past two weeks, the foreclosure inventory decreased by 9 homes and now totals 58. 1% of the inventory is a foreclosure. The expected market time for foreclosures is 38 days. The short sale inventory increased by 13 homes in the past two weeks and now totals 217. The expected market time is 49 days. Short sales represent just 4% of the total active inventory.

Orange County has some of the most romantic, and picturesque coastlines in the world! Check out this list of great romantic spots for you and your Valentine.

First, let’s take a look back at what happened in 2013 in terms of the inventory, demand, expected market time, and distressed properties.

Active Inventory: The inventory increased despite unbelievable demand.

The year started with an active inventory of 3,161 homes, the lowest point of the year. That level is exceptionally anemic, making the housing market exceedingly difficult to navigate as a buyer. With strong demand, buyers were lining up to purchase anything and everything that came on the market. Homes procured multiple offers and cash was king. Just about every home in a neighborhood sold for more than the last sale. First time home buyers with small down payments simply could not compete and were squeezed out of the market. Values surge in this type of an environment.

The active inventory bounced along the low 3,000’s through mid-March. From there, they increased unabated through October, nearly doubling. The inventory reached a height for the year in mid-October at 6,350 homes. Despite incredible demand, the inventory increased in every price range and every city in Orange County. There was change in the air and, at first, nobody saw it coming. But, sure enough, more and more homes were coming on the market and some were not selling.

The big change in the market was the fact that values had risen to a point where it no longer made sense for investors to continue to participate, so they vacated the market. What had seemed like a HOT deal six months or a year ago, no longer looked as attractive. Sellers had been getting away with listing homes above the last sale. They were able to obtain a higher price because buyers and investors still perceived that they were getting a “deal.” But, as values were skyrocketing, that could only last for so long. Year over year it is estimate that values increased between 17% and 20%, and in some areas and communities, even more. In mid-March, as many values had approached levels where investors were not interested, buyers did not feel compelled to jump at any price. The pendulum began to swing the other direction at that point, and by the end of the summer, there was a palpable change in the market.

The rare open house at the beginning of the year was attended by throngs of people. Some REALTORS® reported over 100 potential buyers in just one day touring an open house. That was not the case in the Fall or Holiday Markets. Instead, only a handful of buyers made their way through an open house. One directional arrow at a busy intersection at the beginning of

he year was replaced with a sea of directional arrows. The market had definitely changed.

Since the market had changed, so did the strategy in approaching the market as a seller. Unfortunately, the media had not caught up with the market, as they were busy reporting year over year statistics that were staggering, but month over month statistics were slowly telling a different story. Many homeowners ignored the facts that were presented to them by professionals that were working in the trenches every day. As a result, the inventory blossomed on the backs of overzealous, irrational homeowners with overpriced asking prices.

Buyers were no longer willing to pay thousands of dollars above the last comparable or pending sale. Instead, they wanted to pay the fair market value of a home. So the inventory rose until hitting a peak in October. Typically, the inventory peaks at the end of August, but this year’s delay was due to too many overzealous sellers coming onto the market despite the fact that the Spring and Summer markets had passed. As the market moved deeper into the holidays, the inventory dropped more rapidly with fewer homes entering the fray and many sellers opting to throw in the towel and enjoy the season.

Within the past two weeks, the inventory shed an additional 416 homes, an 8% drop, and now totals 4,733. Last year at this time there were 1,573 fewer homes. There are 50% more homes on the market today.

Demand: Buying an Orange County home evolved from “must have” to “I am not overpaying.”

At the beginning of the year there simply were not enough homes on the market to feed the seemingly insatiable buyer appetite. Every buyer and every REALTOR® wanted more inventory. Through mid-March, there were 14% fewer homes on the market compared to the same time period in 2012. The inventory tap was left at a trickle. The market shifted away from the buyer’s attitude of “I will do whatever it takes to purchase,” as values reached a level where they were no longer recognized as a spectacular deal.

Demand, the number of new pending sales over the prior 30 days, peaked in June at 3,154 pending sales. That was much less than the 3,992 peak of 2012. But comparing 2013 demand to recent years was actually pointless because embedded in prior year numbers were a tremendous number of short sales, and about half of all short sales never closed. So, demand in those years was artificially inflated.

There was a noticeable downshift in the Fall Market, as demand dropped by more than 25%. The market slowed further during the Holiday Market, another 25% drop. Compared to 2012 when the market slowed only slightly, 2013 felt completely different. The rush to purchase had been replaced with a more relaxed pace where buyers were willing to take their time to isolate a home that was priced right, at fair market value. Interestingly, the inventory tap increased during the second half of the year, with 13% more homes placed on the market in the third and fourth quarters of 2013 compared to 2012. There were even more homes to choose from and buyers took their time.

Within the past two weeks, demand dropped by 269 pending sales, or 15%, and now sits at 1,495. In comparing year over year demand, it is currently 26% lower than last year at this time even though there is 50% more homes on the market.

Distressed Properties: Foreclosures and short sales played a much smaller role in the overall market.

2013 was the year that homeowners with equity dominated the market and distressed sales dissipated to the point where there impact was almost unnoticed. There were 71% fewer foreclosures and 61% fewer short sales. In December, 91% of all closed sales were homeowners with equity versus 7% that were short sales and only 2% that were foreclosures.

The distressed inventory started the year at 400 total foreclosures and short sales, and ended the year at 271. It actually hit a low in May, totaling 169. The active distressed inventory grew a bit too during the second half of the year as demand dropped for anything that was overpriced, which surprisingly included foreclosures and short sales as well.

Distressed homes remain one of the hottest segments of the Orange County housing market with an expected market time of 38 days. Within the past two weeks, the distressed inventory decreased by 27 homes and now sits at 271, a 6% drop.

Expected Market Time: the evolution of the housing market in 2013 can be seen in the increasing expected market time.

After starting the year with an expected market time of 47 days, the market sizzled and it dropped to just 33 days in mid-March. By July, the expected market time had grown to 60 days and it hit a high at the end of December of 2.9 months, or 88 days. As the inventory increased and demand dropped, the expected market time rose.

The expected market time for all of Orange County grew to 3.17 months in the past two weeks. It is the first time it has been over 90 days since January 2012. For homes priced below $1 million, the expected market time is 2.6 months versus 1.4 last year. For homes over $1 million, the expected market time is 8 months versus 5.2 last year.

The 2014 Forecast: the tug of war between overzealous sellers and buyers only willing to pay the perceived fair market value for a home will prevail for most of the year.

Now that the housing market has been in recovery mode for some time, expect less government intervention, more “tapering,” and increased pressure on interest rates. This will ultimately cut into home affordability here in Orange County. Here’s the forecast:

•As more overzealous, overly optimistic homeowners enter the fray and overprice their homes, expect the inventory to rise to about 8,500, peaking by the end of August.

•Demand will ultimately depend upon the number of homeowners who price their homes right according to the current fair market value. Year over year, the first half will be a bit slower and the second half a bit stronger as sellers adjust their expectations.

•With an increase in the inventory and a push by buyers not to overpay, expect muted year over year appreciation close to zero.

•The housing market will follow a normal housing cycle. The strongest demand coupled with a lot of fresh inventory will occur during the Spring Market, followed by slightly less demand and a continued fresh supply of homes in the Summer Market, then another drop in supply and fewer new listings in the Autumn Market, and, finally, all the distractions of the Holiday market will be punctuated with the lowest demand of the year and few homeowners opting to sell.

•The number of successful, closed sales will decrease slightly with fewer sales in the first six months and a marginally stronger second half of the year. There will be an increase in the number of “move-up” sellers. It is a smart tactic to move-up before interest rates jump higher. In time it will prove to be a very wise decision.

•The distressed inventory will remain low with a very similar level of successful short sales and foreclosures, representing less than 10% of the overall market. Equity sellers will continue to dominate the scene.

•Even with the last year’s increase in interest rates, expect interest rates to continue to climb as the Federal Reserve maintains its strategy to taper their involvement in purchasing bonds and mortgage-backed-securities. Their taper will be gradual and so will the increase in interest rates. Interest rates at about 5.25% should not come as a surprise.

The bottom line, 2014 will feel a bit different compared to the past couple of years. The first half of the year will be a learning experience for sellers as they deal with buyers who no longer want to pay a premium over the most recent sale. As the headlines change and sellers begin to shift their expectations, sellers will have a much better strategy during the second half of the year. Until then there will be a tug of war between buyers and sellers. The quicker sellers adjust, the quicker they will achieve success. At the end of the year, when we look back, values will remain somewhat the same, fewer homes will have been sold, and distressed sales will continue to take a backseat to homeowners with equity.

You don’t have to fly to New York or drive to Las Vegas for a fantastic New Year’s Eve celebration! Orange County offers a wide range of festive events to choose from right here in our backyard. Whether you’re looking for an over the top party with all the bells and whistles, or a more low key event that involves the whole family, Orange County is sure to have something for you.

Take a look at a few of our favorite celebrations below, and make sure to check out the map for options closest to your home.

Children-Friendly New Year’s Eve Celebrations

City of Rancho Santa Margarita: Family fun event that ends at 9pm! Located at 22232 El Paseo, Rancho Santa Margarita - The New Year’s Eve “Celebrating Family and Friends” event is designed to bring the community together in a safe, fun, alcohol-free setting. Featuring Magician Mark Gibson Local master magician and mentalist Mark Gibson will create a dynamic blend of mystery, comedy and fun. EVENT DETAILS HERE

Disneyland: One of the busiest days of the year for Disneyland! Who doesn't like to celebrate the new year with Mickey? Expect a fantastic firework show, and lots of special presentations! California Adventure park has their own celebration right next door too!

Knott’s Berry Farm, Buena Park: Knott’s Berry Farm puts on a fabulous family-focused New Year event every year! Check out a full listing and description of what to expect at the Popsicle Blog !

Traditional New Year’s Eve Celebration (Adult-focused)

Back Bay Bistro, Newport Beach: The Back Bay Bistro is the perfect setting to ring in the New Year! Located in Newport Dunes, the Bistro offers a special event menu and picturesque views of Newport’s Back Bay. MORE DETAILS

Pelican Hill Resort, Newport Beach: The Pelican Hill Resort offers a few different New Year’s Eve options, including private cabana specials at their world-renowned pool! Mix and mingle, dance the night away! MORE DETAILS

The Deck on Laguna Restaurant: Tuesday, December 31st, 2013 Starting at 7 P.M., celebrate in style in your finest Gatsby attire at The Bungalows with a highly fashionable progressive cocktail party and tasting menu. Enjoy live acoustical music as you graze your way from sophisticated sips to succulent tastes before the Soirée begins under the tent at The Deck. At 10 P.M., join the glitz and glamour at The Deck with appetizers, live DJ, hats and noisemakers, indoor dancing, a broadcast countdown from New York, and a midnight champagne toast as we ring in 2014 in style! MORE DETAILS

Montage Resort, Laguna Beach: The Montage Resort offers both adult celebrations as well as family-friendly options. The Loft 5:00-9:00 p.m. A la carte available Studio 8:00 p.m. Reception on the Patio 9:00 p.m. Dinner seating begins Five-Course Prix Fixe Menu. Ballroom 8:00-9:00 p.m. Reception 9:00 p.m.-1:00 a.m. Four-Course Dinner Menu. Dancing, party favors and champagne toast at Midnight Music by James Gang Encore Band Paintbox 6:00 p.m.-12:30 a.m.

Dinner and Children's Entertainment, $100/child Lobby Lounge 8:00 p.m.-1:00 a.m. Music by David Allen Baker

Still Water Spirits & Sounds, Dana Point: Looking for a traditional New Year's Eve party? Stillwater might be your place! Still Water Spirits & Sounds will offer a “Boardwalk Empire” themed celebration starting at 8pm. There is NO COVER charge for this event! MORE DETAILS

Savannah Chop House, Laguna Niguel: New Year's Eve Celebration, Savannah Chop House Laguna Niguel at 7 p.m. Enjoy complimentary glass of champagne, party favors, and after-dinner festivities in the bar and lounge. There will be a four-course dinner menu all night ($64 per person) or limited a la Carte menu from 5 to 8:30 p.m. Plus, complimentary glass of champagne. Come just for dancing and drinks or join in after dinner at the bar; DJs playing music from 8 p.m. to close. Small plates until 11 p.m. MORE DETAILS

The Ritz-Carlton, Laguna Niguel: Stunning ocean views, amazing cuisine, and a hoppin' ballroom! Sounds like a great place to be right before the clock strikes midnight! RAYA New Year's Eve at The Ritz-Carlton Laguna Niguel, 6 p.m. Celebrate New Year's Eve with a five-course a la carte menu presented by Chef de Cuisine Marissa Gerlach. Call, 949-240-2000. Price: $150 per person.

The St. Regis Resort, Dana Point: Celebrate "Decades of Bond New Year's Eve" at St. Regis Monarch Beach, 7 p.m. Bring in the New Year James Bond style. Dine at culinary stations and order something shaken ... not stirred at one of several full bars. There will also be a champagne toast as the clock strikes midnight. Make reservations at 1-800-722-1543. Price Adult 8 p.m. entry: $95; Adult 10 p.m. entry: $60, 18 and up.