Transforming a Kitchen Laundry Closet

In Mission Viejo, there are a few floor plans that have the laundry closet in the kitchen area. It is a convenient option, but can be a bit awkward, especially if you opt for a large washer and dryer pair. Removing the closet doors to accommodate the washer and dryer has some cons, though, like having the appliances always in view as well as the noise always within earshot.

But it can also be an opportunity for creative design! I recently helped a colleague list a home for sale, and the seller had transformed the outdated and clunky laundry closet into an attractive and functional focal point.

Transformed Laundry Closet in Kitchen

This owner removed a pair of louvered closet doors, removed the old upper storage cabinets and old lighting soffit. They gave the newly opened space a more cohesive look by adding subway tile, a small shelf and cool lighting. Looks like a natural extension of the kitchen. They still have storage, but now it is located between the appliances. I wouldn’t mind looking at this all day long!

This home is located in the Mallorca neighborhood overlooking Lake Mission Viejo.

Staged and Sold in Irvine

I love helping folks buy and sell their homes here in Orange County. One thing I truly enjoy is helping them stage their home as needed.

Earlier this year, a past client called me to help sell this home. This was the third property I would sell for them! It was a wonderful, newer home, three bedrooms and three baths and nicely updated! But they wanted to move out during the selling process, so the home would be empty. I knew it would sell for more if it were staged, so I went to work staging the entire home and the patio.

You can see that before there was no dining table, so I added a dining table. And there was plenty of room to spare for ample seating in the living area. Living plants add life and a wonderful feel to any home. Bright, happy colors like orange also make a statement. In almost all my staging, I add orange!

There were MANY showings, and we received over a dozen offers, all over the asking price of $835,000. It sold for $880,000, higher than any home like it in the neighborhood had sold before!

When I listed this home for sale in April of 2021, it was a strong seller’s market in Irvine. I could have just listed and sold it empty, but the extra effort ALWAYS pays off. My staging is offered as part of my agent services package to the seller.

See the virtual tour of this beautiful home below.

OC Housing Market – Still Strong

When housing is surging with seemingly no end in sight, society cannot help but flashback to 2001 through 2006. In 2004 and 2005, the Case-Shiller U.S. Home Price Index showed red-hot home price appreciation between 10% and 14.5%. Everybody knows what happened next, the housing bubble eventually popped and led to double digit home price depreciation in 2008 and 2009. In May of this year, U.S. home price appreciation reached 14.6%, its highest level since tracking began in 1988. Yet, today’s housing market is glaringly different than the run-up to the Great Recession. That housing stock was built on the backs of easy credit, pick-a-payment plan, subprime lending, zero-down loans, easy qualifying, and fraudulent lending. Prior to the bubble deflating, there were obvious signs of a pending housing collapse: way too much supply of available homes to purchase and diminished year over year demand. The simple Econ 101 principle of supply and demand painted the inevitable housing plunge.

Today, it is completely different. There is no credit bubble like before. It is not easy credit that is the catalyst to the highest appreciation on record. Buyers cannot merely fog a mirror to obtain financing. Instead, they must qualify for loans, prove that they can afford the monthly payment. The process is intentionally cumbersome to prevent a repeat of 2007 to 2011. The current housing boom is quite simply due to supply and demand. Everyone is acutely aware of the current plight of the housing market: there just are not enough available homes to purchase. Supply is low. Recently the supply has been rising, up 14% in the past 4 weeks, but still at historical lows. At 2,528 homes, it is 46% less than last year’s level of 4,645, which was muted due to COVID-19. In comparing it to the 5-year average from 2015 to 2019 of 6,820 homes, it is 63% less. There are just not enough homes to satisfy the immense buying demand. That is the real issue, the supply side of the equation. For comparison purposes, in 2008 there were 18,000 available homes in Orange County. In 2006, a year before the start of the Great Recession, there were 16,000.

How about the demand side of the equation? It is elevated due to the historically low mortgage rate environment. After COVID-19 hit, mortgage rates achieved 17 record lows, starting with 3.29% in March 2020. It dropped to 2.65% during the first week of January this year. The record prior to last year was achieved in November 2012 at 3.31%. Last Thursday, July 8th, according to Freddie Mac’s Primary Mortgage Market Survey®, rates dropped to 2.9%. Prior to COVID, rates were hovering around 3.75%. Combine today’s low rates with a strongest demographic patch of First-Time home buyers in decades, and it is easy to see where all the demand is coming from. Even as values rise, homes are still affordable when factoring in rates and incomes.

Recently, demand has been dropping, shedding 10% in the past 4-weeks, but it remains elevated compared to prior years. Demand, the last 30-days of new pending sale activity, is at 2,761. It is 9% less than last year’s 3,050 pending sales, but last year’s numbers were skewed because of COVID. In comparing it to the 5-year average from 2015 to 2019 of 2,699 homes, it is 2% more. And, today’s level is being achieved with a muted supply and a lot fewer homeowners placing their homes on the market. There are 1,910 fewer FOR-SALE signs this year compared to the 5-year average between 2015 to 2019, 8% less. More homes would have translated to higher demand readings.

It is important to also mention that there is not going to be a wave of foreclosures that will hit the market as soon as Forbearance comes to an end for a variety of sound economic reasons. Many doomsayers point to Forbearance and simply state that there will be a flood of foreclosures, and values will plunge like the Great Recession. The facts do not support this claim. There have been 7.2 million homeowners who have taken advantage of Forbearance. Of the 5.2 million homeowners who have exited Forbearance, 90% either are currently paying on time or paid off their loan. Of the 2 million homeowners with an active Forbearance, 90% have at least 10% equity, enough to sell their homes if they remain in a financial pickle.

Orange County Real Estate Market June 2020

Here are a few FACTS about the Real Estate Market in Orange County for first week of June, 2020

Demand, the number of new pending sales over the prior month, increased from 1,622 to 2,035, an additional 413 pending sales, up an incredible 23% in just two weeks. In the past 4-weeks, demand has added 863 pending sales, a 74% rise. With mortgage rates dropping to 3.15%, an all-time record low, more buyers are entering the market, eager to take advantage of extremely favorable home affordability. Expect demand to continue to increase as more inventory comes on the market.

Last year, there were 611 more pending sales than today, 23% extra. In mid-April, at the low point of the COVID-19 pandemic, demand was off by 60% year over year. The year over year gap is narrowing as the market continues to heat up.

In the past two-weeks the Expected Market Time dropped from 90 to 74 days, a slight Seller’s Market (between 60 and 90 days), where sellers get to call more of the shots during the negotiating process, yet home values are not changing much. Last year the Expected Market Time was at 85 days, slower than today.

  • The active listing inventory increased by 177 homes in the past two-weeks, up 4%, and now totals 5,044. In the past four-weeks, 33% fewer homes were placed on the market compared to the prior 5-year average; thus, COVID-19 is suppressing the inventory. It was 54% fewer four-weeks ago. Last year, there were 7,479 homes on the market, 2,435 more than today, a 48% difference.
  • Demand, the number of pending sales over the prior month, increased by 413 pending sales in the past two-weeks, up 25%, and now totals 2,035. It has grown by 74% in only 4 weeks. COVID-19’s effect on housing is rapidly diminishing. Last year, there were 2,646 pending sales, 23% more than today.
  • The Expected Market Time for all of Orange County decreased from 90 days to 74, a slight Seller’s Market (between 60 and 90 days). The drop was due to the surge in demand outpacing the rise in the supply. It was at 85 days last year, slower than today.
  • For homes priced below $750,000, the market is a hot Seller’s Market (less than 60 days) with an expected market time of 53 days. This range represents 35% of the active inventory and 50% of demand.
  • For homes priced between $750,000 and $1 million, the expected market time is 56 days, a hot Seller’s Market. This range represents 19% of the active inventory and 25% of demand.
  • For homes priced between $1 million to $1.25 million, the expected market time is 83 days, a slight Seller’s Market (between 60 and 90 days).
  • For luxury homes priced between $1.25 million and $1.5 million, in the past two weeks, the Expected Market Time decreased from 129 to 98 days. For homes priced between $1.5 million and $2 million, the Expected Market Time decreased from 158 to 116 days. For luxury homes priced between $2 million and $4 million, the Expected Market Time decreased from 368 to 258 days. For luxury homes priced above $4 million, the Expected Market Time decreased from 540 to 455 days.
  • The luxury end, all homes above $1.25 million, accounts for 35% of the inventory and only 15% of demand.
  • Distressed homes, both short sales and foreclosures combined, made up only 0.8% of all listings and 0.9% of demand. There are only 16 foreclosure s and 22 short sales available to purchase today in all of Orange County, 38 total distressed homes on the active market, down 4 from two-weeks ago. Last year there were 65 total distressed homes on the market, slightly more than today.
  • There were 1,712 closed residential resales in April, 34% fewer than April 2019’s 2,599 closed sales. This is entirely due to COVID-19 suppressing both supply and demand. April marked a 28% drop compared to March 2020. The sales to list price ratio was 98.3% for all of Orange County. Foreclosures accounted for just 0.3% of all closed sales, and short sales accounted for 0.4%. That means that 99.3% of all sales were good ol’ fashioned sellers with equity.