Brea, California, a suburban community

A city of around 35,000 in Southern California’s famed Orange County, Brea, California, is a suburban community just minutes from the shores of the Pacific Ocean. Like most areas in Orange County, the community felt a heavy impact from the economic downturn across the U.S., causing Brea real estate prices to fall and worry to set in among many homeowners who suddenly found themselves underwater on their mortgages.

According to the most recent statistics available on the Orange County Register‘s real estate blog, for the three-week period ended March 25, Brea saw drops in one of its Zip codes but small improvements in the other. In the city’s lower-priced Zip code, the median sales price was $457,500, a 13.7% drop year-over-year. In that area, there were 27 sales in the three-week period, a 15.6% fall from last year. The community’s second Zip code saw more promising signs. Its median sales price was $775,000, a 14.8% increase year-over-year. Meanwhile, sales activity was unchanged from last year in this area.

The most recent full monthly statistics, available on DQNews, showed similar trajectories. The first Zip code had a median price of $501,750, down 4.4% for the year, and sale volume of 17, a 5.6% drop. The city’s second Zip code saw a median price of $764,000 in February, 24.5% more than February 2009′s prices. It saw four homes sold in the month, double last year’s two sales during that time.

At the end of 2009, the city maintained a low level of Brea homes for sale that had been foreclosed upon. In the fourth quarter of 2009, there were just two foreclosures. There was just one single foreclosure in the third quarter of the year, though in the fourth quarter of 2008, there were no foreclosures at all in the city.

Balboa Island Real Estate

A neighborhood in Newport Beach, Balboa Island, California, is actually made up of three artificial islands in Newport Harbor. As such, the community has only a limited amount of space for homes and thus demand is quite high. Therefore the area has built up some very high real estate values over the years as home seekers crave to find a spot of their very own on this beautiful island. But, like so many other community in Orange County, the market has seen its share of calamity over the past couple of years brought on by the effects of the collapse of the U.S. real estate market and the ensuing recession.

Balboa Island ranks third in all of Orange County for price cuts, with a full one-third of homes for sale having seen a cut, according to the Orange County Register. These homes have seen average cut of 10% in the original price for a monetary value of nearly $300,000, offering what could be some great deals on Balboa island homes for sale for potential buyers, but what might also leave many homeowners underwater on their higher-priced mortgages.

Near the end of March, Balboa Island had an inventory of 43 homes on the market, enough to comprise an 11-month supply, according to the HOM real estate group. Four of the homes were in the lowest-priced market of $1 to $1.5 million, while two were in the highest bracket of more than $8 million. Most of the Balboa island real estate currently on the market, however, lies in the $1.5 million to $4 million range. Of those homes, none were short sales and none were bank-owned properties. But 22% of homes currently in escrow were short sales or bank-owned homes.

At the peak of the real estate bubble, the average sales price for a home on Balboa island was nearly $3.1 million, in 2006. In 2009, the community saw its median price for homes slip by more than 16% compared with a year previous, down to $1.8 million. Unlike many Orange County communities, most of which saw an increase in sales volume despite lower prices, Balboa Island saw a double negative, with a dip in sales activity as well over the year: 2009 accounted for just 14 sales in the area, a fall in volume by 30%.

Protection Tips for Homeowners and Buyers

It was in 2005 that the initial sign of the real estate crash was noticed. 2007 saw the fall of the market and after which, thousands of bankers and brokers who play a part in the mortgage industry were no longer in business. As if matters were not bad enough, the national market shows that 2008 is even worse than that. What is going to happen in 2009? We have yet to see it and can only hope the economy will rebound as it always does after hitting the bottom. However, experts say that the number of home foreclosures is expected to rise tremendously and the commercial real estate will be more badly hit than in the months before. This is indeed disturbing news but it does not mean that homeowners cannot undertake steps to protect themselves when they do get hit by the real estate crash.

You must first find out what kind of mortgage loan has been taken up by you and what the mortgage type implications are. Although many years, having an adjustable rate mortgage will be of great benefit to you because the homeowners are given the benefit of a lower interest rate, this is not so anymore. It will be more dangerous as the interest can go sky high.

It is definitely not advisable to be selling your house now. However, if you absolutely have to, think about whether you can come up with some incentives to add to your sale. You might want to add some bonus to the terms of the sale of your house or give some discounts to the selling price or whatever. This is because many sellers are in a hurry to get rid of their property so it is actually a buyers’ market now. Buyers have the choice of buying in their own terms and in order to be competitive, you might have to lower your price which might not be a very advisable choice. Try considering something else, such as renting out the premise instead of selling it. If you can hold onto the property for possibly another two to three years by renting it out instead of selling, you will stand to gain more profit in the long run.

As mentioned, this is indeed a buyers’ market. So, if as a buyer, you are able to delay a little, you might actually be able to grab a very good deal. This is the period where some properties’ prices can go rock bottom, as it has not done in many years. Thus, waiting a little longer might be a good idea for buyers as well, so as to catch the lower prices of properties when the time comes.

Before signing any contract, buyers must ensure that you carefully consider the most suitable kind of mortgage loan for you. You definitely do not want to get caught in the real estate crash, so making the right choice is very important. This is especially so if you are a first-time buyer. Do your homework and find out what are the mortgages available and which is most suitable for you. Don’t forget to consider the possibility of lower income in a bad year as well. You do not want to be caught unprepared.

If you search hard enough, you will discover that there are many mortgages that advertise as having no additional costs. However, you have to do your research thoroughly before you decide on the most attractive offer. Some of these are gimmicks whereby the actual cost is simply added to the capital sum of mortgage you have taken up so do be very careful before deciding.