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!

Predictions: Socal Real Estate Guru Predicts The Future

While there are loads of pundits and would-be crystal ball gazers looking to predict the future, there is one Californian who has spent 25 years studying our statistical tea leaves and has an excellent track record in predicting the rise and fall of California real estate. His name is Bruce Norris, and he recently made a local appearance with the following predictions.

1. The real estate market is almost at its bottom now in Southern California. After we hit bottom, the market will be flat for a few years, and then begin its next market rally. Norris predicts that the next peak in the real estate market will be in 2019.

So what does this mean for you...especially for those of us who look at real estate as a long-term investment and wealth strategy?

If you start to purchase one investment property a year (and that could be a single-family home, or 2-4 units) beginning in 2009, and continue to acquire properties for the next 8 years, your properties will rise to a new market peak in 2019.

The money you spend on your down payment will be returned in spades when you sell your properties in 2019; by choosing your properties wisely (with our help), you can select properties which either cash flow positively or break even. Your tenants will pay your mortgages for you, helping to pay down at least some of the principal over the next several years.

In 10 years, you can sell the properties and consolidate into a 1031 exchange into another real estate vehicle which may be less labor intensive and generate some nice passive income for you.

We're actively looking and selecting our potential purchases right now. If you want to do the same, let us know.

Down, But Not Out, In Beverly Hills

1Have you been crossing your fingers, hoping against hope that prices would drop in some of our ritzier L.A. neighborhoods so that you could maybe afford to buy there? Well, the wait is over for those of you who have been wanting to move on up...The L.A. Times reported today that "Westside Housing Goes South". You can hear the gasping for air as prices have started dropping in Beverly Hills (-27.5%), Culver City (-16.6%), Pacific Palisades (-15.3%), Santa Monica (-11.9%) and even Venice (-11.7%). Areas like Cheviot Hills, Beverlywood, Palms/Mar Vista, West Hollywood and Hollywood Hills are also facing declines.

While many sellers are sitting on the sidelines, saying "No thanks" to the lowering comparable sales numbers, people who must sell must still sell. And if you are selling to move up or buy elsewhere, the decreased price that you must swallow will likely translate into a decreased price that you pick up your next home for. After all, if your house is now worth $1,200,000 instead of $1,450,000 chances are good the next house you write offers on will have a similar (or even better) price cut...

Interested in comps for a particular neighborhood - send us an email with the area you want to know about, and we'll run the numbers for you. Our buyers in Los Feliz are rubbing their hands together gleefully as they watch prices plummet from $1.5M to $1.1M - that's $400,000 saved.
You know where to find us.

Stated Income Loans Going Bye-Bye

For those of us who enjoy the benefits (and carry the burdens) of being self-employed, the need for stated income loans is fairly obvious – its often difficult to fully demonstrate how much money we actually earn in a fiscal year. Stated income loans have been on everyone’s bullseye list as a culprit in the recent subprime mortgage meltdown, but for the good folks who pay their taxes and their bills in a timely manner, stated income loans have been very effective at helping us get into homes that we otherwise may not have qualified for.

So the news: Stated income loans are going away. January 15th is the last day to apply for a stated income loan and February 15th is the last day to open an escrow with a stated income loan. That means that if you have been sitting on the fence waiting to get a loan and buy a house, you have 7 days left. Otherwise, it’s full-document loans or nothing. Full documents means two years tax returns, asset and liability statements, FICO scores, etc.

While I am happy to not be a lender myself (way too much math and time spent at a calculator and a computer) I happen to have a couple of excellent direct lenders whom I work with constantly.

The advantages of using a direct lender:
1. They are not middle men so there are no extra fees padded for their bread and butter
2. They have in-house underwriting so they can tell you in a matter of minutes and hours whether you have the loan or not. Middle men have to send the loan package off to a lender for approval.

I also have a couple of excellent mortgage brokers:
The advantage of using a mortgage broker?
1. They handle a number of loan products and can find the best fit for your circumstances (while direct lenders are limited by the products that their company provides)

With a new President on the way (on January 20th), and some hope and optimism for better days ahead, here is some other important real estate news: Our median home price in California has dipped below $300K for the first time since 2003 – from a high of $505K just 18 months ago. Most neighborhoods have lots of inventory, and sellers are very, very motivated.

We are working with two types of buyers right now:
a. Those who had been priced out of the market but can now finally afford to get in and buy a home or condo (with interest rates at 5% or lower, and these reduced prices)
b. Those who have been wanting to trade up to a larger home or better neighborhood (they are willing to take a “haircut” on the sale of their home, in exchange for getting the new home at a “buzzcut” of a price.)

For example, you could sell your current home for $520,000 instead of the $650,000 it was worth two years ago – but then you can buy your new home for $780,000 instead of the $1.1M it was worth two years ago – you still end up saving significantly on the move-up house, plus have a killer interest rate.

We are committed to making 2009 a terrific year - please let us know how we can help you! We are never too busy for your referrals.