California's Tax-Free Ride

For everyone in our great state who filed a foreclosure or short sale last year, Gov. Schwarzenegger signed a bill into existence a mere 24 hours prior to Tax Day...giving people who could no longer afford their homes the opportunity to avoid a big tax bill from California. This puts California in alignment with the current Federal approach to those who foreclose or short-sale their property.

There are people on both sides of the fence regarding this decision. For the fiscally responsible - our state is already in a serious debt situation and this bill removes another possible flow of revenue to our very dry state coffers. For the socially conscious - the people who suffered through job loss and other hardships resulting in losing their homes, don't need to have another painful burden placed on them: a tax bill for "income" that they didn't really earn.

What are your thoughts about this?

Housing Real Estate Recovery On The Way

According to the Wall Street Journal, the U.S. housing market is poised to recover and begin a rebound during 2010. Economists are expecting 6% increase in home sales this year. “I would bet even odds that we’re at a bottom and that we’re going to see improvement in the coming months,” said Karl Case, co-creator of the S&P/Case-Shiller Home Price Index and a professor of economics at Wellesley College in Wellesley, Massachusetts. The famous Case-Shiller Home Price Index is used to help measure the progress in home prices.

As a result, interest rates may start to creep back up sometime in the middle of 2010. “They’re going to be tightening credit sooner than people expect,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. He forecasts that the Fed’s first increase since 2006 may come as soon as June.

California is the fourth ranked state in the Union in terms of foreclosures, and there are still many Americans who are delinquent in their house payments who may end up losing their homes. The Obama administration efforts to encourage banks to work out financing arrangements with homeowners has yet to make a significant dent in the number of people who are delinquent.

Southland Real Estate Prices Rebound

Well it's official - the housing market bottomed out in April 2009. If you've been waiting for the bottom of the market so that you can be confident that your investment will not drop in value - you needn't worry any longer. As of April 31st of this year. the median home price in the Southland was $247,000 (at levels not seen since 2002); by July 31st prices had risen by 2.6% to $275,000. Click on the link for the LA Times story published today: http://www.latimes.com/business/la-fi-home-sales16-2009sep16,0,6534055.story

In my personal experience working with buyers, there has been a mad rush of first-time home buyers and investors in areas throughout L.A. snapping up low-end real estate deals. If you are 1st-time home buyer and have been sitting on the fence, waiting longer will cost you $$$. Between the deadline for the $8000 which is looming (November 30th is not very far away), and the pressure on the Federal Reserve to begin to raise interest rates - which will likely begin to creep upwards next year, plus home prices ticking upwards; you could be looking at an increased cost for the same property 3-6 months from now.

For those of you who HAVE BOUGHT within the past 6 months and worried about losing value - you have already begun to enjoy some appreciation in your equity.

And for those of you considering selling but sitting on the fence, as prices rise you will be able to benefit too.

If you would like a market snapshot of what your home is currently worth and what your neighbor's homes have sold for in the past few months, send us an email and we will set you up immediately.

Home Sales Up By 11%; Home Prices Up by .5%

After 3 years of dismal price slides in L.A. County and around the United States, there is a glimmer of hope that the national market and local LA market are slowly starting to recover. Just out today is the Case-Shiller Index report indicating that property values are up by one half percent nationally. Doesn't sound like much but after steady declines in home values (much to the despair of homesellers) even a small uptick in prices is a little ray of sunshine on an otherwise gloomy horizon.

The most activity is definitely happening at the bottom of the food chain, where homes in the under $400K range are moving rapidly. Houses above $650K are definitely moving slower, and if you are thinking of trading your home up to a pricier one in a nicer area - you can still cut fantastic deals.

One of our sellers who had initially priced his home at $1.1M has now slashed his home price to $859K and we are finally getting more than just a few looky-loos. If you need help negotiating a killer price on a beautiful home, we are happy to help.

First-Time Home Buyers Despair Not

For all of you who are first-time home-buyers, (or investors looking to snap up some more great bargain properties), do not despair. While inexpensive homes are being snapped up as quickly as bacon-flavored treats at a dog park, there are more foreclosures coming our way.

While it is more bad news for those homeowners in default who were hoping to save their homes, banks are moving rapidly to accelerate resolution of these "toxic assets" by cleaning them up and getting them off their books. Today's LA Times reports that the drop in home losses is only fleeting and a precursor to what looks to be a busy fall season.
http://www.latimes.com/business/la-fi-foreclosure23-2009jul23,0,5325752.story

For some of our buyers, that will be hugely helpful as anything with four walls and a roof that doesn't leak has been selling faster than we can sign and deliver offers to realtors' doors. This is especially true for properties in the under $400K price range. Homes in the upper echelons are still sitting for long periods of time UNLESS they are priced well. Sellers who resist pricing to meet the market, find themselves chasing it painfully all the way down, down, down.

Lenders have sent out an estimated 124,562 default notices in this second quarter of 2009, so expect a flurry of foreclosures on the horizon this fall. We will be ready to rock n roll when they do.

Buyers On The Move: A Frenzy To Snap Up Homes in L.A.

Think that the real estate market is the same all over? Think again. L.A.'s market is comprised of dozens of niche areas, each with its own desirability. That's why it can be misleading for would-be L.A. home buyers to expect bargain-basement prices in neighborhoods like Venice, Santa Monica, Los Feliz or Culver City.

While prices have softened in some neighborhoods, in other neighborhoods they have barely shifted. Home loan interest rates are currently at historic lows for conventional loans (at 4.78% cash for lending is very inexpensive), while rates on "jumbo" loans (homes valued at over $730,000 - which is a lot of L.A. real estate) are finally starting to downtrend.

http://www.latimes.com/classified/realestate/news/la-fi-cover3-2009may03,0,1360420,full.story

This article in the recent Sunday L.A. Times captures the flavor and frustration that many buyers are experiencing. We know first-hand for our buyers, some of whom have been submitting 30-40 offers to try to land a home in the $300,000 range.

On the other hand, for one of our higher pricetag listings, up in the Hollywood Hills and priced at $959,000 now, the buyers have been slow to come and slower to write offers. Problem? Tighter lending and credit guidelines for jumbo loans, requiring would-be buyers to put down 20-30% of the total price in cash and pay higher interest rates. Until things improve in the jumbo market, home sales there will continue to be sluggish.

If you have been waiting for prices to get lower, wait no more. Everyone else is already in the huddle, scrambling to find the right deal. Multiple offers are flourishing everywhere in the under $417k price range.

Call us today for help with your real estate transactions. We are never too busy to help you or your friends and family to fulfill on your dreams of home ownership, investment and financial freedom.

This week, one of my favorite blogs "The Doughroller" (addresses all financial topics pertinent to the average American), has written an excellent explanation of the new Homeowner Stability & Affordability Plan which has been passed by Congress. If you are looking to understand more of what this plan can do for you: to help you save money if you want to buy a home this year, or to help you refinance the home you are currently living in, read on:

http://www.doughroller.net/mortgages/homeowner-affordability-stability-plan/

If you have any questions, or are considering buying a home or condo, give us a call!