Published Friday, April 18, 2008

BUSINESS WATCH:

Hope is alive in housing market

UCI director and mortgage planner expect lower prices to foster flow in business, despite poor postings in the real estate market recently.

By Michael Miller

Kerry Vandell expects to see plenty of new home buyers in Newport Beach in the coming years — as well as new accents, new surnames and new passports.

The director of UCI’s Center for Real Estate agrees with many who believe home sales will improve soon as prices continue to drop.

He doesn’t believe, though, that all the purchasers will relocate from elsewhere in Orange County. With the combination of the falling prices and the weakening value of the dollar, Vandell said, coastal areas such as Newport may become increasingly attractive to the foreign market.

“You’re going to see Asian investors with money, European investors with money, Middle Eastern, too,” he said. “I believe that’s going to result in an increasing presence of wealthy foreign purchasers with money.”

Some, like Vandell, see a bright future for the Newport-Mesa housing market, which they expect to rebound after months of slow going.

Throughout the region, many Realtors and lenders said they had seen a leap in customers as housing costs fell and buyers who had been priced out of the market were finally able to close.

The numbers for March, though, show another bleak month for the home industry in Southern California.

The research firm DataQuick, which has compiled home statistics since 1988, declared Tuesday that Southland home sales were slower last month than in any March in the last two decades.

The number of homes sold dropped 41.4% across the region and 46.9% in Orange County from the same month a year ago.

Newport-Mesa, for the most part, was no exception. In four of the eight ZIP codes in Newport Beach and Costa Mesa, sales fell even more steeply from a year ago than the Orange County average.

“You’ve got everyone that’s reading the news and everyone’s freaked out,” said Steve Jones, a Westside developer who has tried for months to sell the last two condominiums in his 1.7 Ocean complex. “What I keep telling people is that this is when you can get a deal. This is when people are willing to negotiate.”

However, Galel Fajardo, a certified mortgage planner for the Coast Mortgage Group in Costa Mesa, thinks that time has come for many home buyers.

His office, he said, has gotten a flurry of activity in recent weeks, and he expects sales to surge in the area by the time summer rolls around.

“What those numbers don’t show, and it’s impossible to see, is how many buyers there are out there,” he said. “They are out there in droves looking right now. People who were on the fence are no longer on the fence.”

Costa Mesa Realtor Larry Weichman said a number of homes in his area had gotten multiple offers in the last few weeks.

One, a Mesa Verde home that had gone into foreclosure, netted 30 offers before a buyer finally closed on it.

“The market under $500,000 in Costa Mesa is on fire,” Weichman said. “People are lined up to go into these houses.”

Published Wednesday, August 19, 2007

BUSINESS WATCH:
Home loans finding lenders

Although the real estate market has slowed, some brokers are gaining from mistakes of now-defunct mortgage agents.

By Michael Miller

The mortgage industry is in trouble right now, and Tim Sibley is reaping the benefits.

Sibley, an in-house loan officer for First Capital, has done steady business in his Newport Beach and Irvine offices while other mortgage brokers have closed shop or suffered layoffs. Home loans may have fallen off around Southern California as real estate goes through its slowest patch in 12 years, but thanks in part to that drop-off, the Newport Beach resident has had his hands full.

"As other brokers are going out of business, these deals in escrow that have to close are ending up on our desks," he said. "We're picking up the pieces a bit and being able to fund some loans that other mortgage companies were having trouble with. Realtors are calling us and saying, 'Our broker is out of business.'"

Newport Beach and Costa Mesa , like many cities around the Southland, have been hit hard in recent months by the slowdown in home sales. According to the state Employment Development Department, firms in the two cities reported 694 layoffs since March — with 210 at CB Richard Ellis, 181 at Ditech.com, 150 at Quick Loan Funding, 109 at WMC Mortgage and 44 at Express Capital Lending.

What is the solution to staying afloat? Sibley, whose firm is housed within Coldwell Banker, said brokers are more likely to stay in business if they have an established name, have made prudent loans in the past, and have a direct connection with a real estate agency. Many of the brokers withdrawing from the field, he said, had jumped in to make easy money and granted too many subprime loans — the industry term for loans to people with shaky credit histories.

Jessica Brown, director of business development for Costa Mesa-based Assurance Capital, said her company tightened its standards and stopped making subprime loans a year and a half ago. Now, the company is thriving so much it is hiring new employees.

"It's like, 'We told you so,'" Brown said. "We were saying this a year and a half ago. Our business went down a year ago because other people were doing loans that we wouldn't do."

To broker Galel Fajardo, an affiliate member of the Newport Beach Assn. of Realtors, the tightening of the mortgage field has had at least one positive effect.

"I think it's been a great cleansing of the real estate business," he said. "There are a lot of people who have gotten into the business who are inexperienced on the lending side and as agents, and that has caused so many of the problems we've seen across the country. Now, people like that are going to leave the business, and the true professionals are going to remain."