The Pulse of Los Angeles Real Estate

California's Tax-Free Ride

2010-04-15T12:17:00.000-07:00

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

2010-03-15T21:55:00.000-07:00

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

2009-09-16T10:27:00.000-07:00

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%

2009-07-28T12:46:00.000-07:00

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

2009-07-23T12:37:00.000-07:00

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.

2009-05-07T07:52:00.000-07:00

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.

2009-03-03T11:13:00.000-08:00

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

2009-02-07T12:00:00.000-08:00

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

2009-02-02T12:57:00.000-08:00

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

2009-01-12T12:39:00.000-08:00

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.

Bleak, Bleaker, Bleakest or Opportunity Knocks?

2008-12-01T16:21:00.000-08:00

Well, for this first Monday in December, those of us in the real estate industry (and frankly those of us living and breathing in the United States!) were greeted by further negative economic news:

1. The Dow Jones skidded significantly lower today, closing more than 7% down…(check out the Wall Street Journal at http://online.wsj.com/article/SB122813164021168699.html)

2. Received official acknowledgement by the nonpartisan National Bureau of Economic Research that yes we are indeed in a recession (which started one year ago today)

3. The Commerce Department reported construction spending dropped even more significantly (1.2 percent in October) than the 0.9 percent analysts had predicted.

4. Rethinking Fannie Mae and Freddie Mac’s structure and roles – the hybrid existence of these two agencies providing government-backed lending security while driven to provide profits to private shareholders is being reevaluated on Capitol Hill. Until the future of these two agencies is hammered out in Congress, it will be difficult for many potential homebuyers to obtain financing. (WSJ at http://online.wsj.com/article/SB122809132669667781.html)

Until the credit crisis settles down and housing prices flatten out, it is unlikely that we will see a bottom to the current real estate market. Once liquidity is more readily available to the average American, the threat of continued economic downturn starts to abate, there will be an influx of buyers once again into the market. Current analyst predictions are that the housing market in L.A. County won’t really start to turn around until middle or late 2009. That means that for the next 8-12 months, it’s the optimal time to be buying local real estate.

For those buyers who do have good credit, it’s a great time to go shopping for a home. And for investors with cash and great credit, there are bargains to be had. Last week I was in a conversation with a local broker/developer who bragged about the beautiful brand-new 3/3 bath townhome style condo in a great part of the San Fernando Valley that he picked up for a song at $263,000 (about 40cents on the dollar for what it would have been worth).

We have been working with buyers who are ready to move – and we are finding that if the property is priced well, it’s selling rapidly, with multiple offers. One couple that we have been working with have written offers on well over a dozen homes and had been outbid each time – until last week, when we finally got them into escrow on a great 3/2 home in a nice bedroom community in the Valley with good schools for $300,000.

For my mother-in-law who is considering purchasing a condo in a retirement community in Laguna Woods, prices on condos have dropped by 50%. Units that were running in the mid-300,000s are now being priced in the mid to high $100s.

You know where to find us…

Is It Safe To Buy Now? Later? Never?

2008-11-18T13:44:00.000-08:00

Thanks to our national media spreading the fear of financial calamity into all of our lives, many of us who were shut out of buying homes in the L.A. area due to astronomical prices, are still waiting on the sidelines to buy...even though prices in some parts of L.A. County have dropped like a rock. No one wants to be the first to put their toes in the water - and the question that we are asked every time we enter a cocktail party is "When do you think we will hit the bottom?"

If only we had a crystal ball...we would be floating in a pool somewhere in the sunny South Pacific; but here are the facts that we can currently report to you:

1. Sales of single family homes have increased by almost 100% (97% to be precise) from a low of 255,340 homes in September 2007 to 502,190 homes sold in September 2008.

2. 50+% of all the homes being sold in California are bank-owned properties and prices have declined to a median of $316,480 from a peak high of $535,760.

3. According to the California Association of Realtors the unsold inventory index as of September 2008 was now at 6.7 months, versus a peak of 16 months a year ago. At 6 months the market is considered "balanced" - so we are technically shifting back towards a more balanced market.

In other words, houses are selling and there is decreasing inventory in the marketplace and greater affordability thanks to price declines - which will contribute to price stabilizing. At the same time, we anticipate that job losses and foreclosures are still increasing which will put a downward pressure on prices. The likelihood is that things won't really even out until some time in 2009.

Oh and let's not forget about interest rates - which have lately been slowly creeping up. A house priced at $500,00 with a 6% rate costs the same monthly as a $450,000 house with a 7% rate. So buying low isn't the only important variable.

For those of us who like to buy property at the very very very very bottom of the market - if you blink you may miss it. Market timing whether it be the stock exchange or real estate market is most effective in hindsight. The only way you know that you have reached the very bottom is when the market has already rebounded...and then you're too late.

For our clients who are planning on buying a home to live in for the next several years, good properties have been getting snapped up. Houses are selling rapidly with multiple offers for many bank-owned properties in neighborhoods where there are lots of them. The junkers that are overpriced are sitting - but most banks have now capitulated to the reality of the times and are unloading their inventory, pricing property to move. Be aware though - not every neighborhood is flooded with REOs. The higher-end neighborhoods where people did not use subprime loans or get 100% financing will never be in this predicament (with the exception of Ed McMahon!)

Also, buying a home takes some foresight and planning: working with your agent to find the right home in the right neighborhood, making sure that you are qualified by your lender, and then opening and closing escrow - all of it takes time and planning.

While the market is not going to dramatically rebound in the near future, its a great time to do your homework, get your financial ducks in a row, and start writing offers - especially on REOs if that's what you are interested in, which are moving very rapidly.

We are working with clients on both sides of the hill: Sherman Oaks, North Hollywood, Studio City, Lake Balboa, Los Feliz, West Los Angeles and Culver City...every neighborhood has its own micro-market and we are tracking prices and inventory for clients wherever they are interested in purchasing.

And for those of you interested in investing - there are lots of opportunities for great bread-and-butter homes and apartment buildings.

We look forward to hearing from you sooner rather than later.

California Real Estate - Dying or Recovering?

2008-09-16T10:52:00.000-07:00

So with the financial market turmoil still ongoing, and no end in sight - Lehman Brothers self-destructed yesterday, and AIG is scrambling to borrow over $70B in cash today or will likely follow suit - what's happening to the real estate market in Los Angeles? Or another way to put it is: Have We Hit Bottom Yet??? (If you don't want to read all the stats you can skip to the conclusion at the end of the blog!)

Leslie Appleton-Young, chief economist for the California Association of Realtors just generated a fresh report hot off the press. Most important/notable findings for those of us thinking of buying, selling and/or investing:

1. The number of California sales hit bottom in 2007 at a -44% decline. Now in 2008, the number of California homes sold is on the upswing - an increase of 15% in volume sold over last year - and our year isn't over yet.

2. First-time Buyer Housing Affordability Index has improved from its bottom in 3rd Quarter 2007; due to prices having dropped on California homes, the ability for buyers to qualify has begun to improve.

3. The number of California sales is improving over the U.S. rate (which is still flat-lined) - on the uptick since March of 2008. The fastest selling home category are homes under $500K; homes over $1M are flat and haven't changed much since 2004. The category which has had the biggest decline in sales is the $500k-999K price range.

4. The number of unsold California homes (inventory index) has decreased from its peak in January 2008 - when it would take 16-17 months to sell all the homes sitting in inventory. Currently as of July 2008, the number of months to sell all homes in California is down to 6 months.

How about the number of REOs/Foreclosures/Short Sales in California?

1. In L.A. County, 19% of all home sales are REOs/Short Sales. For April 2008 alone, 29% of all homes sold in L.A. County were REOs/Short Sales.

2. Defaults and ensuing foreclosures are still on the upswing in L.A. County - the less expensive the homes, the greater the number of foreclosures/defaults. Homes most likely to default are in the under $500K price range.

What about Mortgage Rates right now?

Well, due to the continued turbulence in the financial markets, the Federal Reserve has been forced to keep as much cash as liquid as possible in the marketplace to help prevent more firms from cratering. How does this help you and I?

Right now, interest rates are the lowest they have been in over a year:
Under 6% for loans - even for the no-doc loans if you have a FICO of over 700.
Only difference - the amount of cash to put down for no-doc loans has increased to 15-20%.

For qualified borrowers with good credit, rates can be as low as 5.5% -- the lowest in a very long time.

Conclusions
1. There will be more foreclosures/REOs coming down the pike in the under $500K range for the next few months
2. Interest rates are at an historic low
3. Home sales in L.A. County are now on the upswing but there is still a lot of inventory out there which can cause sellers to be more ready to reduce pricing

If you have been "waiting" for the market to bottom, we are at the perfect time now...As inventory decreases, multiple offers are starting to show up...

So wait no more - this is it!

If you're ready call us today - we are hopping at the office - writing offers and landing deals. Single family homes, condos, multi-units - we work both sides of the hill and are ready to rock and roll!

REAL ESTATE A-GO-GO OR A STOP-STOP?

2008-03-25T14:11:00.000-07:00

So many of the people I know have been sitting on the sidelines wondering like chicken little if the real estate “sky is falling?” Or more accurately, when will it stop falling!

Well, its definitely true that prices have been dropping, and dropping pretty rapidly – as bubbles will do when they pop. According to the S&P Case/Shiller Home Price Index of 20 key markets released today (Tuesday. March 25, 2008), home prices dropped 10.7% within the last 12 months – the lowest drop since 1987.

Prices have dropped by over 12% in most major urban areas, and in the cities where prices had shot up the highest, the drop has also been the greatest. The biggest losers: Los Angeles (-16.5%), San Diego (-16.7%), Phoenix (-18.2%), Las Vegas (-19.3%), Miami (-19.3%). Median prices of existing homes are now restored by May 2004 price levels.

BUT for the first time in 6+ months, the national real estate market is starting to come around. Sales of existing homes increased by 2.8% on average for January, which reduced the inventory of houses sitting on the marketplace from over 10 months of inventory to around 9 ½ months of inventory.

So for all you investing/real estate Divas out there what to do? Well, if you have been waiting on the sidelines in cities like Los Angeles or Phoenix for the right time to buy – wait no longer. There is no perfect way to “time a market bottom or top” but when the number of active buyers start to increase it means that the pendulum is slowly shifting. There are lots of fabulous homes on the market now in every neighborhood and in every price range – partner with a great realtor and start writing offers.

Here in L.A., clients of mine have been picking up beautiful homes in great parts of the Westside and the San Fernando Valley for 80-90cents on the dollar. Houses that a year ago would have listed at $1,000,000 are now available for $850-900K, and in many cases depending on the amount of inventory in the neighborhood – far lower.

Top Tips For Real Estate Buyers:
1. Don’t be afraid to write offers – if your realtor knows the neighborhood they can tell you what price makes sense for the property. If the property is an REO (“real estate owned” aka foreclosed property), the banks are already capitulating and slashing prices on their inventory so the likelihood is that the price is already as discounted as it will get. Case in point, a house in Lake Balboa (in the San Fernando Valley in L.A.) that would normally have been priced at $525,000 was listed by the bank at $399,000. 30 offers were submitted within 48 hours – and the property sold for $415,000. So full price or over full-price offers will win in situations where the property is already heavily discounted.
2. Avoid gimmicky REO/Foreclosure sites – the Multiple Listing Service has every foreclosure listed on it. Don’t throw your money away subscribing to foreclosure lists – your realtor can access everything you need through the Multiple Listing Service and update you in real time as the properties hit the market.
3. Investing in real estate as a landlord – choose wisely and find properties that CASHFLOW. Now that prices are down to 2004 levels, its easier than ever to find properties that will pay the mortgage and put cash in your pockets. Again – a great realtor will help you to identify investment properties that make sense. 2-4 units can be great investments and use the same financing as single family homes. 5+ units are also excellent money-making machines, but will require that you cough up at least 25% if not more as your down payment for the purchase.

Top Tips for Real Estate Sellers:
1. If you are looking to sell: The Price Is Right is critical. If there are 40 homes in your neighborhood for sale and only 4 have gone in escrow in the last 30 days, that means that your neighborhood has a 10 month supply of housing inventory. If you can’t wait 10 months to sell your home, price it right.
2. Make your house show itself in its best possible condition: if your realtor makes suggestions as to how to best show your home – trust her and take her advice. Buyers have lots and lots of choices now, so do everything you can to make your home open and available for buyers to come in.
3. If you are planning on selling and buying another property: remember that the discount in your current home’s sale price will be offset by the discount in the price you will pay to purchase your new home. If you are looking to step up to a higher level home, a 10% discount on a $1,000,000 = $100,000 less for the purchase price, while the 10% discount on your $700,000 = $70,000 less for the sales price. You still end up saving more on moving up, even in a down market.

What's Happening in Your Neck of The Woods? Making Sense of Real Estate Forecasts

2007-10-18T21:48:00.000-07:00

So here was the latest news from California Association Realtor reported on The CAR website back on October 10th:

LOS ANGELES (Oct. 10) – Home prices throughout most of California will post modest declines next year while sales of existing homes will stabilize from the precipitous decrease experienced in 2007, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) "2008 California Housing Market Forecast". .....“Geographically, more affordable regions such as the Central Valley and Inland Empire will experience greater softness in the resale market because of the large number of new homes coming onto the market in recent years,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “Higher priced regions of the state, such as the San Francisco Bay Area and parts of San Diego, Los Angeles, and Orange counties will react more to affordability constraints.”

“By price-range, the highest-priced markets – those with medians over $1 million -- will show less stress,” she said. “The lower-priced markets will continue to face fallout from the subprime crisis, tighter underwriting standards, and competition from new home developments where price-cutting has been even more severe.”

In other words, the more desirable areas of Los Angeles, both on throughout the Westside, and in the more upscale areas of the San Fernando Valley including Sherman Oaks, Studio City, and Encino are likely to be mostly sheltered from significant price drops.

But here's the truth - this status of residential real estate varies on a micro as well as macro level. For example, in Culver City, a house just across the street from me in the cute little neighborhood of Sunkist Park had 4 offers on the table within 3 days of the first public open which took place this past Sunday, October 14th. The sellers countered all 4 offers, and accepted the buyer who stepped forward with an over full-price offer and strong terms - escrow opened within 4 days. Meanwhile, in the Crenshaw District, a property that we have with two houses on one lot, has been on the market for approximately 40 days now. We have had a steady - if slow - stream of agents previewing, neighbors lookylooing, and would-be buyers have submitted offers. In this neighborhood, there are dozens of homes sitting (languishing) on the market, with very little activity occuring. But a combination of old-fashioned and new-fangled methods on our Team's part including door knocking, flyers, MLS, weekly open houses, and web-blasting Listing Widget announcements to all agents in the area - have helped to bring buyers in. The issue is finding qualified buyers who can get through the current liquidity crunch and find a suitable loan product to get them into home ownership - but such loan products are out there once again. BofA and IndyMac offer "community" loans for teachers, firefighters, paramedics, parole and police officers and other public servants - with low rates and 100% financing. There are a variety of other decent loan products on the market as well, and a savvy lender who knows how to help clean up credit and procure the appropriate loan can get deals through.

So what to do? There are definitely more homes on the market and the irony is that a time when buyers should be out shopping and negotiating for great pricing and terms, buyers are sitting on the sidelines with a wait until the market drops further attitude. I can't keep count of how many people I have spoken to in the last 2 weeks who have responded to me that they are waiting until the market drops lower, and speak confidently that there will be even more property at even cheaper prices in 3, 4, 6 or 8 (take your pick) months.

Most of us really do have a herd mentality - we wait for the media to give the green light that things are on the upswing before we come out and buy -- but by then, the smart investors have come in, negotiated great deals and are already enjoying appreciation - while everyone else now chases an upticking market place. The testers, the initiators, the bold few -- they are out now shopping carefully and deliberately - writing offers and jumping on the ones that stick.

We are reviewing the numbers weekly in Sherman Oaks, West Hollywood, Studio City, Encino, and Culver City (among other areas) and we know what the market inventory is in each location.

If you are ready to buy, you can name your price range, style of home, # of bedrooms, bathrooms and other features - and we can send a list your way within 24 hours. We are helping others daily - but we are never too busy to serve you!

Team Costas Bergman: Nicole & Natalie

2007-10-18T21:33:00.000-07:00