How Should Huntington Beach Home Buyers Approach the Market?

By Scot Campbell, Realtor – August 18, 2013 – Source: Reports on Housing

The housing market can be frustrating for a buyer, so patience is essential.

The overall Orange County market is getting a little bit better for buyers in terms of inventory and the Huntington Beach market is expected to mirror the greater Orange County market trends.  Since mid-March the active inventory has increased and so has the expected market time. For homes price below $1 million, the inventory has doubled and the expected market time increased from a little over three weeks to six weeks.

In overall Orange County, buyers still feel the sense of urgency when a home is placed on the market at or near its “fair market value”. These reasonably priced homes generate multiple offers and a sea of buyers parade through the homes immediately.

But, there has been a shift in the market and it lies in how most new listings are being initially overpriced. The inventory is increasing substantially and it is entirely on the backs of overzealous, irrational sellers reaching for the stars. Many are being encouraged by unknowledgeable or “less than straight forward” Realtors desperate for listing inventory.  Other home sellers are erroneously pricing their homes based upon other area listings that are “overpriced and just sitting”.

Since homes have appreciated substantially in the past year, homes no longer look like a “great deal” they were 18 months ago.  Now that interest rates have increased a full percentage point, buyers are not willing to pay tens of thousands of dollars over the last comparable sale. In most areas of Orange County and Huntington Beach, home values are still far from their peak 2007 market value.

In this overpricing environment, price reductions are the new norm. In some areas, 50% of the listing inventory has reduced their asking prices at least once. When “initially overpriced “ homes are reduced to a list price close to their fair market value, they sell but the price is very possibly less than it could have been if the home had been priced “enticingly” initially causing a competitive bidding environment.

Given the current environment, is it a good time to buy?

Should a buyer who has written several offers with no success throw in the towel?

It is absolutely an excellent time to buy and buyers should not throw in the toweDont wait to buy a homel out of frustration. The key to tackling this market it to be patient. The frustration is completely understandable; however, it is a very smart decision to pursue purchasing if a buyer plans on staying in their homes for several years to come.

Interest rates remain at historically low levels even after rising from 3.5% to nearly 4.5%. For perspective, in 1980 they were at 14%, in 1990 they were 10%, in 2000 they were 8%, and in 2007 they were 6.5%. Today’s interest rates are a gift from the Federal Reserve and are part of a long term strategy to reverse the course of housing and, ultimately, the overall economy.

The “artificially low” rates have been working, but they will not last forever at their current level. Ben Bernanke and the Federal Reserve have already started talking about the end of this strategy; thus, rates have bumped up nearly 1%. It is not IF rates will be higher; it is WHEN rates will be higher. Nobody knows for sure when that will be, but the rise is inevitable after the stimulus is gone.

Very few buyers and sellers really know the impact of rising rates and how much they influence affordability.

Mortgage Table

When the rates jump from 4.5% to 5.5%, the payment for 20% down on a $540,000 home (July’s median sales price in Orange County) increases by $264 per month, or $3,168 per year, or $15,840 in five years. At 6.5%, the payment is an extra $542 every single month, or $6,504 per year, or $32,520 in five years. 6.5% is still low.

The trouble is that everybody is now accustomed to ridiculously low rates that are part of a stimulus package. Buyers should absolutely take advantage of today’s interest rates. They will be saving significantly every single month. One year after purchasing, a buyer will not care how much was paid for a home; instead, they will care about the check they have to write on a monthly basis. A savings of several hundred dollars each and every month is great for a family’s budget.

Yes, writing offer after offer can be very frustrating. But, with a long term objective and goal in mind of cashing in on today’s great home values along with today’s phenomenal interest rates, eventually success will be achieved.

For questions about buying and selling real estate in Huntington Beach and Coastal Orange County, contact Scot Campbell.

Scot Campbell is an expert in the Huntington Beach market areaHe is the President of The Scot Campbell TEAM at Coldwell Banker-Campbell Realtors in Huntington Beach, CA.

He has been a licensed broker for over 22 years and has brokered over 1000 homes and just about every type of transaction imaginable.

Read his profile and client reviews at

He can be reached at 714-960-0700 at the office, 714-336-0394 on his mobile number or via email at


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