A recent article in the OC Register points out that nearly 1 in 4 sales in the O.C. are short sales. Not only are home owners looking for bargains, but also buy and hold investors are swooping up homes in records numbers. The article points out that,
Almost one out every every four Orange County homes sold in May went for less than was owed on the mortgage, new figures from the Southern California Multiple Listing Service show.
Of the 2,778 homes sold through the MLS, 672 or 24.2% of them were so-called “short sales.”
By comparison, homes seized by lenders through foreclosure accounted for 13% of all May sales, or one out of every eight. Altogether, “distressed sales” accounted for almost 40% of all homes sold through the MLS in May.
How has this affected the home remodeling business? We have two large investors that we work with that have requested more work on homes they have bought at great prices. Orange County Home Remodeling is alive and well, even with investors. What we do is fix their homes, primarily in Huntington Beach and Newport Beach for them to prep them for a solid flip. We also have worked with other clients that have recently bought a new home and want to have them updated. It’s important to note that going forward real estate can not move down forever, in the same way that it was impossible for it to move higher forever as it did a few years ago.
While we see positive moves in the remodeling business, based on our interactions we are happily helping owners that have purchased great homes, in great neighborhoods with great schools. These houses tend to hold value and rise faster. As the market stabilizes owners with move in ready homes will be primed to reap the immediate benefits of increased equity and homes ready to sell.
What do you see happening in the local markets where you are? Once a short sale is made are you seeing more investors or owner occupiers? I would love to have your feedback.
Fred, “The OC Remodeler”, 714.289.2600.