ASK NIC!!!

Click on the ASK NIC!!! to the left…scroll down to Leave a Reply and type in your question.  Click on the “Submit Comment” button and I’ll do my best to give you a prompt answer.

 Sincerely,

 Nic W. Petrossi, Prudential

Missing the Trees for the Forest

You’re probably aware of the saying that one can “Miss the Forest for the Trees.” (One can miss the big picture when focusing on the less significant details). 

When reading the columns in O.C. Register’s Marketplace section, however, I have to say that Jonathan Lasner and his colleagues have “Missed the Trees for the Forest.”  That is, they have taken a conglomerate of statistics from all over California to explain the current situation of the local O.C. home market.  Or, they fail to distinguish between North Orange County and South Orange County.  Often, they have focused on all of Orange County’s home market stats and failed to see that it’s the “Trees,” the individual cities with their individual areas that are especially important.

For example, if home prices are dropping drastically in Buena Park, Anaheim, Garden Grove and certain other areas of Orange County, those cities can have a huge impact on the overall stats for Orange County home prices / sales.  If cities in South County are dropping at a faster rate than cities in North County, then the same stats are reported for both North and South counties.  What’s happening in these areas is not necessarily what is happening in Yorba Linda, Anaheim Hills and Brea.  And conversely, what is happening in North Orange County cities is not always the same as what is going on in South County cities.

Additionally, there are areas within cities that are suffering huge home price reductions while other areas within those same cities are enjoying stabilization.  For example, there are some areas in the downtown area of Anaheim that may be experiencing serious price reductions while homes in Anaheim Hills (same city, Anaheim) are stabilizing after experiencing reductions.  There are some areas in Fullerton (e.g. north of Tri-City Park in Parkhurst Place and corner of Bastanchury and State College) where the homes are stabilizing.  Then there are homes in Southwest Fullerton (e.g. near Harbor and Orangethorpe)that are experiencing huge price reductions.  The point is — some neighborhoods and communities hold their value much stronger than others, depending on a variety of factors. 

In conclusion, it is short-sighted to assume that since the overall index for median home prices in all of Orange County is dropping at a certain percent, that all areas of all cities are falling at that same rate.  This is absolutely untrue.  When someone asks my opinion on the “market,” that is a difficult question to answer in a sentence or two.  It really depends on what one means by the “market.”  North County?  Placentia?  Mission Viejo?  South County?  Northeast O.C.?  Don’t be misled by all the numbers you see in the news — what really matters is what is going on with the “Trees.”

Rebuttal to O.C. Register’s Article & Poll, 1/21/2008

I’m trying to remain objective after reading Jeff Collins’ Sunday’s Marketplace article entitled “HUMBLED HOMESELLERS” and Jon Lansner’s poll on page 2.  For those who did not read the article, it was a case study on the Freeman family in Tustin and a Laguna Hills resident named Paul Beyer.  Both the Freeman family and Paul Beyer experienced the bite from buying at the peak and trying to sell on the downward slope.  It was a good article in the sense that it showed the harsh reality of what can happen when things go wrong (divorce, job loss, etc.) after getting a risky loan when buying at the peak of the market.  It was a good article in that we can learn from the mistakes of others, how these sellers rejected offers that were pretty darn good in the beginning, only to be regretful when the offers are coming in $100,000 less 6 months later.  (Hindsight is always 20/20).  However, it was a bad article in that the Register’s columnists have a knack for attacking traditional Real Estate services by taking one example and skewing the information to achieve their desired results.  For example, at the very end of the documentary on Paul Beyer’s situation, Jeff Collins quotes Beyer saying, “I was frustrated. I thought a Realtor would work hard…There’s a market outside this one (international). Because you can’t sell in this market.”   Those are the last words of a huge front / back page Sunday Marketplace article.  The message may be indirect, but it is obvious:  (1) Realtors don’t work hard (because his one Realtor didn’t), and (2) You can’t sell a home in this market.

Wow.  I feel compelled to rebut those two remarks coming from a very discouraged & frustrated home seller.  #1  There are bad Realtors in every company, even in good real estate companies.  Some are lazy and incompetent.  Some, however, are not.  To say, “I thought a Realtor would work hard” is to imply that Paul Beyer was disillusioned and that all Realtors are lazy.  I love how (I’m being facetious now) Realtors pay tens of thousands of dollars to the Register on a weekly basis to showcase properties when the Register consistenly bashes us.  Ironic.  #2  To say you “can’t sell a home in this market” sends a “Why Try?” signal to readers.   Actually, the market has picked up since the beginning of the year with 10 properties going into escrow in Fullerton, Placentia, Yorba Linda, Brea a week ago whereas the norm for the last year and a half has been 1 to 3 homes.  I personally sold 2 homes in November that closed December and have 1 in escrow now.  All of these were my own listings.  Contrary to what the O.C. Register is telling the public, you CAN sell a home in this market.  You absolutely can.

The Poll

  Jon Lansner has become one of the most respected columnist for his catchy headlines and doom-and-gloom real estate articles that grab reader interest (catastrophes and bad news sells newspapers, good news is boring).  He reported the results of a recent poll in Sunday’s Marketplace (page 2) on the public’s perception of the “Bottom” (the bottom of the downward home price trend).  Respondents were able to check one of 5 categories — a) “It’s here!”  b) “Very near”  c) “Kinda close”  d) “Far off”  e) “Not even on radar screen”  If you look at the results, it is 24% for It’s here!, 5% for Very near, 10% for Kinda close, 37% for Far off, and 24% for Not even on radar screen.  The casual reader will quickly notice that the 37% for “Far off” is the largest percentage of voters.  What Lansner doesn’t tell us is this — Very near and Kinda close are good….the combination of a, b, and c is 39%, which is greater than the 37% for “Far off” voters.   It’s hard to take “Not even on radar screen” as a serious category (and I welcome any healthy disagreement with that).  So, in reality, you have a huge percentage of Orange Countians who believe the “Bottom” is either here or not far off, but the way the data is presented, you would just assume that most people are pessimistic about the timing of the “Bottom.”