Jerry & Rachel Hsieh Real Estate Team - Keller Williams Realty in Los Angeles

Jerry & Rachel Hsieh Real Estate Team - Keller Williams Realty in Los Angeles
IF YOU WANT THE LATEST INFORMATION ON THE LOCAL LOS ANGELES REAL ESTATE MARKET, FOLLOW THIS BLOG! FEEL FREE TO SEND OUR TEAM A REQUEST FOR ANY PROPERTY ON THE MARKET YOU'D LIKE TO VIEW BY CALLING US AT 310.623.1359. Our Cell: 424.242.8856 Email: jerryandrachel@newhomesLA.com DRE #: 01701809

Thursday, December 17, 2009

SELLERS: Should we sell our home during the Holiday Season?

Hi Everyone-

Many buyers and sellers have been asking me whether they should change their strategy now that the holiday season is here. The following is a two part response. Here is part 2, which is for SELLERS:

SELLERS: Should you SELL a home during the Holiday Season?
Conventional thinking is that the holiday season is a harder time to net the most out of your sale. I would say this definitely has some truth and is grounded in sound logic. There are less buyers out there over the holidays, and the holiday season is a time where homes are decorated in a much more personal manner, which can make potential buyers have a harder time seeing themselves there.

Really, in the end, it is a case by case basis. If you are not decorating your home, or the property is vacant, you home will show the same. The benefit of selling your home during the holidays is that the buyers are serious, and as long as you are open to the negotiation process and have a hardworking agent, you should ultimately be able to find a buyer who is willing to pay a market value for your home. Buyers who are making offers during the holidays aren't discount mentality shoppers. They are obviously serious.

All this said, here is a list of 10 things you can possibly do that may make your home more saleable over the holidays:
  1. Deck the halls, but don't go overboard.
    Homes often look their best during the holidays, but sellers should be careful not to overdo it on the decor. Adornments that are too large or too many can crowd your home and distract buyers. Also, avoid offending buyers by opting for general fall and winter decorations rather than items with religious themes.

  2. Hire a reliable real estate agent.
    That means someone who will work hard for you and won't disappear during Thanksgiving, Christmas or New Year's. Ask your friends and family if they can recommend a listing agent who will go above and beyond to get your home sold. This will ease your stress and give you more time to enjoy the season.

  3. Seek out motivated buyers.
    Anyone house hunting during the holidays must have a good reason for doing so. Work with your agent to target buyers on a deadline, including people relocating for jobs in your area, investors on tax deadlines, college students and staff, and military personnel, if you live near a military base.

  4. Price it to sell.
    No matter what time of year, a home that's priced low for the market will make buyers feel merry. Rather than gradually making small price reductions, many real estate agents advise sellers to slash their prices before putting a home on the market.

  5. Make curb appeal a top priority.
    When autumn rolls around and the trees start to lose their leaves, maintaining the exterior of your home becomes even more important. Bare trees equal a more exposed home, so touch up the paint, clean the gutters and spruce up the yard. Keep buyers' safety in mind as well by making sure stairs and walkways are free of snow, ice and leaves.

  6. Take top-notch real estate photos.
    When the weather outside is frightful, homebuyers are likely to start their house hunt from the comfort of their homes by browsing listings on the Internet. Make a good first impression by offering lots of flattering, high-quality photos of your home. If possible, have a summer or spring photo of your home available so buyers can see how it looks year-round.

  7. Create a video tour for the Web.
    You'll get less foot traffic during the holidays, thanks to inclement weather and vacation plans. But shooting a video tour and posting it on the Web may attract house hunters who don't have time to physically see your home or would rather not drive in a snowstorm.

  8. Give house hunters a place to escape from the cold.
    Make your home feel cozy and inviting during showings by cranking up the heat, playing soft classical music and offering homemade holiday treats. When you encourage buyers to spend more time in your home, you also give them more time to admire its best features.

  9. Offer holiday cheer in the form of financing.
    Bah, humbug! Lenders are scrooges these days, but if you've got the means, then why not offer a home loan to a serious buyer? You could get a good rate of return on your money.

  10. Relax -- the new year is just around the corner.
    The holidays are stressful enough, with gifts to buy, dinners to prepare and relatives to entertain. Take a moment to remind yourself that if you don't sell now, there's always next year, which luckily is only a few days away.

BUYERS: Should you buy a home during the holiday and New Year season?

Hi Everyone-

Many buyers and sellers have been asking me whether they should change their strategy now that the holiday season is here. The following is a two part response. The first is a great read for BUYERS:

BUYERS: Should you buy a home during the Holiday Season?

In most parts of the United States, house sales follow predictable seasonal patterns. They’re strongest in summer, and bottom out around Christmas and the New Year before picking up again in spring.

That means that late December/early January is a great time to look for a house. There are other advantages to buying at year-end, too. So if you are thinking of purchasing a home in the near future, consider fast-forwarding your plans and starting your house-hunt now.

Here are five good reasons:

1. Lower prices. A lot of people don’t have the time or the desire to look for a house during the holiday season -- they’re too busy shopping, going to holiday parties and catching up with family and friends. The slackening of demand is reflected in softer house prices. Houses that failed to sell in the pre-holiday period may be reduced; new listings -- though sparse -- will be priced to reflect the slow market, which picks up only gradually in the New Year. It’s a good time to find a bargain.

2. Less competition. With fewer active house-hunters out there, you are unlikely to end up in a bidding war that would drive up the price for the house you want or put it out of your financial reach. Less competition also means less stress for you during the bidding process.

3. Motivated sellers. Many sellers who failed to make a deal before the holidays will be very motivated now, especially if their houses have been on the market for several weeks. They will be eager to sell and to avoid scheduling their holiday plans around viewings by prospective purchasers, so they are likely to look at any reasonable offer favorably and to negotiate on price. They may also be open to requests for extras like appliances and window coverings, and to giving you the closing date you want.

4. Favorable mortgage terms. Fewer home sales translate into less demand for mortgage money during the holiday season. Lenders may be willing to shave a few basis points off the interest rate they offer you or to forgo some of their fees in order to get your business. Make sure you shop around to get the best deal available.

5. Tax deduction. If you close on or before December 31, you are likely to be eligible to deduct the interest component of your first monthly mortgage payment from your taxable income for that year. You may also be able to deduct any money you pay for points to reduce the interest rate on your loan. Consult a tax advisor to see how the mortgage interest deduction applies in your situation.

Wednesday, November 25, 2009

Happy Thanksgiving!

Wishing everyone a great and Happy Thanksgiving. It has been a pleasure spending time and getting to know each and every one of you. I look forward to celebrating this and many Thanksgivings with you in years to come.

All the Best,
Jerry Hsieh

Wednesday, November 4, 2009

Sept 2009 Median Statistics for Los Angeles Home Sales

Hi All-

Here is
the new Median Home Sales for Sept/October 2009. This was released this past Sunday in the Los Angeles Times Real Estate section. It is good b/c you can see the areas that declined the most in value and compare. Enjoy! Let me know if you need anything from me in the meantime. :)

LINK - Median Home Sales for September 2009
All the Best,
Jerry
310-228-8856

Thursday, October 8, 2009

3 more new escrows! 1 in Picfair. Trying to keep up.

Hi Folks!

Sorry for the lack of updates recently. 3 New escrows this month around the Pico Area. Here are some pictures:

2214 Buckingham Road, Los Angeles, 90016 - $650,000
4BR, 2BA, Remodeled, 9000 sq. ft. lot

















1422 Carmona Avenue, Los Angeles 90019 - $515,000
4BR, 2BA, Duplex, 5500 sq. ft. lot



1432 S. Redondo Avenue, Los Angeles 90019 - $699,000
3BR, 3BA, 2900 Sq. ft. HOME, 5,749 Sq. ft. LOT

Friday, September 25, 2009

Where Home Prices are hitting bottom - Yahoo! Real Estate News

Francesca Levy, Forbes.com

Sep 24th, 2009

In these areas, recovery may be in sight as sellers are scaling back on the price-slashing frenzy.

There's more to indicate that the housing recession has hit bottom than last Thursday's dual announcements that housing starts rose 1.5% from July, and new jobless claims dropped by 12,000 in early September.

Homeowners looking to sell are also putting the brakes on the trend of aggressive price cuts, indicating that the real estate market may be closer to salvation than previously thought. In 20 major U.S. housing markets, the percentage of homes that have suffered price reductions is dropping. (What is your home worth? Get home values and see comparable valuations in our Home Values Center.)

Thirty-nine percent of for-sale homes in 20 major U.S. metros have had their prices reduced. That's a drop of six percentage points, from 45% at the beginning of the year, according to data provided to Forbes by Altos Research. That the number of for-sale homes with startling cuts has dropped is a sign that the real estate market may soon reverse its downward slide.

"The percent of homes on the market with price reductions is a really insightful indicator of organic levels of demand," says Michael Simonsen, chief executive of Altos Research. "As this number is dropping, there's improving demand at current prices."

Realtors and homebuyers have gotten used to a market cluttered with homes whose price expectations have tumbled back down to earth. Currently, a $1.3 million 1950s home in central Washington, D.C. has 42.2% shaved off its original asking price. A designer mansion in Los Angeles may seem exorbitantly priced at $16.9 million, but that's 32.4% less costly than it was eight months ago. And a modest but presentable Vegas two-bedroom is going for a song at $65,000--55.8% less than its original quote. (Utilize these strategies to set the price on your home.)

Believe it or not, this is all good news. While shrunken quotes like these crop up far more frequently now than they did two years ago, these are only a few standouts in major metro areas that, by and large, are starting to see a reversal of the price-slashing trend.

Behind the Numbers

To find out where home prices are showing signs of recovery, Forbes used data produced by Altosresearch.com, a Mountain View, Calif.-based research firm that tracks the percentage of homes on the market that have seen price reductions. Altos watches these numbers for 20 Metropolitan Statistical Areas: geographic entities defined by the U.S. Office of Management and Budget, for use in collecting statistics. These MSAs were chosen based on the cities used for the S&P/Case-Schiller 20-city home price index, which is used to track U.S. residential real estate trends.

The news is best in Las Vegas, Phoenix and Miami, markets that saw the steepest price inflation a couple of years ago. In these places, the number of cut-price homes is down 24, 18 and 12 percentage points since Jan. 1, respectively.

Although the numbers are still high--40% of Phoenix homes have been discounted, compared to single-digit numbers in previous years--the dramatic reduction in price cuts here is a sign that buyer demand is rising to meet the excess of supply that was caused by irrationally exuberant building practices earlier in the decade.

The cities with the highest number of reduced-price homes are Minneapolis, Seattle and Portland. Although the percentage of on-sale homes in these cities has dropped by 7%, 6% and 4% respectively since January 1, these metros have price reductions on nearly half of all homes on the market.

While in Minneapolis, this may be a product of deeply rooted economic troubles facing manufacturing economies in general, in Portland and Seattle, the high number of priced-to-sell homes more likely reflects the excess housing inventory that the housing bubble brought to the West Coast. While Portland and Seattle were included in the Altos analysis, they were not among the ten cities with the biggest improvements in the percentage of home price reductions.

Cities like Cleveland and Dallas, however, have yet to see major improvement. The percentage of homes with lowered asking prices has stayed flat in the last nine months, at 38% and 44%, respectively. In Cleveland, this could mean that loosening of bank credit, increases in buyer confidence and effects of the government stimulus haven't successfully tipped the supply/demand balance, so prices are still being slashed aggressively.

But while Dallas has seen a relatively high number of reductions, those reductions are not drastic; Dallas home prices will have dropped less than 1% for the year by the end of 2009, according to data from Moody's Economy.com.

The Bottom Line

On the whole, these numbers show that excess inventory may be thinning--with realtors confidently holding firm on their prices, sensing that buyers are tiptoeing back into the market. But this newly buoyant buyer sentiment may be partly due to the first-time homebuyers' tax credit, a measure enacted as part of the Obama administration's stimulus package that offers an $8,000 tax credit to those buying their first home.

The credit is due to expire on Nov. 30, and while lobbyists for realtors and homebuilders are fighting to extend and expand the benefit, if they are unsuccessful, demand may once again recede, and the number of half-price for-sale signs could once again creep up in many neighborhoods.

"There are more people in the marketplace, because a fair number of them have this $8,000 tax credit behind them," says David Crowe, chief economist for the National Association of Home Builders. "The demand will fall off when the credit expires, and that could cause a backslide in house prices."

Top 5 Cities Where Home Prices are Hitting Bottom

1. Las Vegas, Nev.
Las Vegas-Paradise-Pahrump, Nev., Combined Statistical Area
Change: 24 percentage points
Homes with Price Reductions, 1/1/2009: 54%
Homes with Price Reductions, 9/11/2009: 30%
Moody's Economy.com forecasts that five years from now, home prices in Las Vegas will have risen by 3.53%

2. Phoenix, Ariz.
Phoenix Lake-Cedar Ridge, CA Metropolitan Statistical Area
Change: 18 percentage points
Homes with Price Reductions, 1/1/2009: 58%
Homes with Price Reductions, 9/11/2009: 40%
Moody's Economy.com forecasts that five years from now, home prices in Phoenix will have risen by 7.44%

3. San Diego, Calif.
San Diego-Carlsbad-San Marcos, Calif., Metropolitan Statistical Area
Change: 15 percentage points
Homes with Price Reductions, 1/1/2009: 45%
Homes with Price Reductions, 9/11/2009: 30%
Moody's Economy.com forecasts that five years from now, home prices in San Diego will have risen by 25.41%

4. Miami, Fla.
Miami-Fort Lauderdale-Miami Beach, Fla. Metropolitan Statistical Area
Change : 12 percentage points
Homes with Price Reductions, 1/1/2009: 43%
Homes with Price Reductions, 9/11/2009: 31%
Moody's Economy.com forecasts that five years from now, home prices in Miami will have dropped by -2.93%

5. Los Angeles, Calif.
Los Angeles-Long Beach-Riverside, Calif., Combined Statistical Area
Change: 10 percentage points
Homes with Price Reductions, 1/1/2009: 45%
Homes with Price Reductions, 9/11/2009: 35%
Moody's Economy.com forecasts that five years from now, home prices in Los Angeles will have risen by 12.36%

Click here for the full list of Where Home Prices Are Hitting Bottom

Thursday, September 17, 2009

The truth about Short Sales: Great Opportunities or Empty Promises?

Hi Everyone-

As promised, here is a new column about SHORT SALES. Many of my buyers have noticed, as I have, that the market is flooded with these seemingly great deals known as SHORT SALES. Are they bank owned properties? Are they really a great deal? What are the risks? Today I will explain what a short sale is and whether or not it is, in REALITY, a better deal opportunity than a regular sale.

Before going into my opinion about short sales, I wanted to first give newer buyers a basic understanding. I did some reserach online and have found that Redfin.com has a great section explaining Short Sales. The definition below is an excerpt from Redfin.com:

WHAT IS A SHORT SALE?

From Redfin.com:
"
A short sale listing is one in which the seller still owns the property, but owes more money on his mortgage than he will get from selling the property. Most often, more than one bank holds a mortgage on the property and each bank has to approve the sale. These banks and lenders will be evaluating multiple offers at once, many coming from wealthy investors with all cash offers and the patience to wait it out.

Unfortunately, there's nothing short about the process of buying a short sale. In fact, the chance of closing a deal on this type of home sale is a long-shot. If you'd like to make an offer on a short sale listing, you should be ready to wait several months for all the parties involved in the process to approve or reject your offer."

HOW ARE SHORT SALES DIFFERENT FROM FORECLOSURES?

From Redfin.com: "Short sale homes are still owned by the home-owner, while foreclosures are owned by banks. If the home-owner cannot sell the home through a short sale, the bank initiates foreclosure to try to sell the home directly, often in an auction. If the auction fails to turn up a buyer willing to pay at least what the bank was owed on the home, the home becomes Real Estate Owned (REO), where the owner is the bank. The bank then typically sells the property through a real estate agent."

Also, a foreclosure sale is always being sold my one primary seller. In a Short sale, one major problem most buyers encounter is that it requires the approval of all the lien holders of the subject property. If a property has a first, second and third loan, not only do all three need to sign off on the approval, all three lenders also need to negotiate with each other for how the proceeds of the sale will be divided up. Imagine how hard that must be for 3 competing lenders, who are all losing money, to agree on something like that. Sound difficult? You better believe it is.


------------------------------------------------------

So...Now that we've layed out the basic definition of a short sale, the question everyone would like to know is: ARE SHORT SALES REALLY SUCH GREAT DEALS OR ARE THEY JUST EMPTY PROMISES?

The truth of the matter is, Short Sales are probably the most difficult transaction to complete with a very low success rate. However, I know many of you out there are saying, "Jerry, I'm willing to wait it out and jump through the hoops if it means I can get a good deal."

This leads me to the first THREE QUESTIONS which I am asked the most regarding short sales. Once you see my answers, I think it will open up your perspective a little.


QUESTION 1: WHY ARE SHORT SALES ALWAYS PRICED SO LOW?

ANSWER: When a seller who is in financial trouble calls a Realtor to sell their home as a short sale, the first thing the Realtor advises the seller is: "We must price this property lower than market value and get offers AS SOON AS POSSIBLE." If a property is a short sale, the seller is usually in desperate times and foreclosure is looming. If the Realtor can not get an offer to the bank immediately, then the foreclosure will usually happen before the short sale can be done. In fact, often times, even with a short sale process started the home will still be foreclosed on anyways.

As a buyer, you may be thinking. "yippee, time to get that property for CHEAP!". Not so fast. What do you think will happen when every buyer in Los Angeles sees the home hit the market for 15% under market value? Do you really believe there will not be multiple buyers who will be jumping all over it just like you. This is the first thing you as a buyer must realize about short sales: They are priced low with the intention of starting bidding wars that will drive the price up. The most common strategy in Short sales is to list the property so far below market, that many buyers will submit offers over asking. Therefore, if you are the buyer willing to pay list price competing against multiple buyers who all willing to pay much more than the list price, you will end up spinning your wheels with no results. Second, even if you are the highest offer on the property, it does not guarantee that the bank will accept that offer. In fact, the only way a bank will accept your offer is if, after your offer is reviewed, it is deemed a "fair market" offer.

Think about that. The only way the bank is going to accept an offer is if they feel you are NOT getting a "below market" deal, but are paying "fair market" pricing for it. If you are paying a fair market price for a property, is it really worth waiting around and jumping through hoops for 6 months just for the chance to be accepted or rejected by a bank?


QUESTION #2: HOW DID SHORT SALES GET THE REPUTATION OF BEING GOOD DEALS?

Ever since bank foreclosures began flooding the market in late 2007, they have represented some of the best real estate bargains. Anything related to the bank or that would involved the bank or lender automatically became the best thing since sliced bread. Unfortunately, this included "Bank Short Sales" which would require not only the seller's approval but, lucky you, the bank's approval too.

Another reason Short sales were perceived as such great deals was that they always hit the market with very low initial list prices. When new buyers saw these list prices that, time after time, said "Short sale", they became the hot property to chase after.

Now that reality has set in, most buyers who have been burned a number of times, can attest that Short Sales are most often more trouble than they're worth. Short sales can still be good deals, but you need to be realistic, and you also need to make sure your agent, as well as the listing agent, are working hard to get the deal done. If you sense a complacent listing agent, don't waste your time, the sale will not be going through anytime soon.

QUESTION #3: CAN ANY TYPE OF SHORT SALE CLOSE WITHOUT HAVING TO WAIT?

Suprisingly, YES. A Short Sale that is Bank Approved can open escrow and close as soon as the buyer is able. So if you see a bank approved short sale at a price you are happy with, you should jump on it as soon as possible because there aren't many!

So I'm sure you're asking: "What exactly is a bank approved short sale?". A bank approved short sale is a short sale that has already been on the market for some time and the property had an offer from another potential buyer. After a number of months, the bank finally approved that offer at that purchase price. However, for one reason or another, the buyer bailed before they were able to close the sale. If you as a buyer are willing to now make an offer at the approved purchase price, you can open escrow immediately.

However, please understand just because it is an "approved" short sale, does not mean things are negotiable. If you are not happy with the property at the approved price, you might as well not even submit an offer; The time it will take to renegotiate an approval at a lower price will likely be more work and more time than the listing agent, seller, or bank has. Also, if there is something wrong with the property, I would not count on getting a credit as the bank usually draw a hard line once an offer has been accepted.

IN SUMMARY.......

WHAT'S GOOD ABOUT A SHORT SALE:

If you find the home of your dreams and it is a short sale...I'm sorry for you. However, if it is the home of your dreams, and you are willing to wait it out, you may be able to get a property that other buyers simply weren't willing to wait for.

The other good thing about Short Sales is that they usually send appraisers out to determine whether your offer is at "fair market" value. If you get lucky, you get an appraiser who knows nothing about the area and will severely under value the subject property. If this happens, you should be able to get an approval even if your offer is much lower than market value.

WHAT'S BAD ABOUT A SHORT SALE:

If you find your dream home at your dream price and it is a short sale, be prepared for a long road ahead. First off, Short Sales are almost always priced severely under market value with the intention of starting a bidding war. As long as you know this, you may be able to save yourself from running all over town looking at properties you thought were a good deal only to find out there are 25 offers on the property.

If you are the "accepted" offer on the property, this means your offer is the one that will be sent to the bank. Offers submitted to the bank usually take anywhere from 60-120 days (as of Sept 2009) to get in front of a negotiator to review for approval. During this time, all you can do, literally, is wait. A pro-active listing agent will make sure that things get done as quickly as possible. If you sense that you have a lazy or unmotivated listing agent, you may as well find another property, because chances are, they will not be organized or pro-active enough to get everything needed to the bank in time. I'm serious about this: IF THE LISTING IS NOT WITH A MOTIVATED LISTING AGENT, YOU ARE WASTING YOUR TIME.

If after many months of waiting, you are the offer that is finally approved, you get to open escrow. However, what makes a short sale much less attractive than a regular sale is that the bank will very rarely approve and credits or price adjustments once the approval has been issued. If you have a foundation issue, your choice is simple as far as the bank is concerned: Accept it or walk away. I know what your thinking: you're wishing the bank wasn't involved in this sale anymore, right? :)

If you have any other questions about real estate in Los Angeles, feel free to give me a call anytime.

Jerry
310-228-8856




Thursday, September 10, 2009

Summer 2009 CONDO Median Sales Area by Area of LA

Hi Everyone!

Sorry it's been awhile. I've been on vacation the last week, but I promise now I'm back, I'm committed to keeping my blog updated as regularly as my schedule allows. Hopefully every week!

Nest week, I'll write an article explaining my opinions of Short Sales - Is it worth the wait or is it just empty promises?

For today, here's the the 2009 Median Condo Sales "Climate Map" that was released by the MLS a couple weeks ago. ENJOY! This is a great chart because it breaks down median prices for each neighborhood in LA.

2009 Condo Median Sales Chart for Los Angeles


All the Best,
Jerry
310-228-8856

Wednesday, August 12, 2009

Should Homeowners be allowed to rent their home back?

If a home is foreclosed, should the previous owner be allowed to stay in their home and continue renting? What would be the economic impact of this in lieu of standard foreclosure? check it out: http://www.huffingtonpost.com/2009/08/12/right-to-rent-to-avoid-fo_n_257272.html

New listing on 1815 S. Dunsmuir Ave!



Come check out our new listing on 1815 S. Dunsmuir Avenue. Open Thursday from 5-7 PM and Sunday from 2-5 PM!

This is a short sale, so it is priced to sell at $303,000. 2BR, 1BR. http://homesite.obeo.com/viewer/default.aspx?tourid=498485&refURL=obeo.com&locale=en-US

Monday, July 27, 2009

2009 LA Times Median Home Sales Chart - All neighborhoods!!

Hi everyone-

Here is the 2009 Los Angeles Homes Sales Median chart that everyone has been waiting for. The MLS releases a lot of statistics and information throughout the year, but this is by FAR, ONE OF THE MOST USEFUL.

It documents the median sales neighborhood by neighborhood!!

Please continue here and enjoy: 2009 LA Times Median Sales Chart

Western Home Sales Post 15 Pct Annual Jump in June

As you all know I keep saying: (1) Homes above the median average, we are still waiting to see what will happen, and (2) For homes below the median average, "we've hit a floor".

Published: July 23, 2009

Filed at 9:18 p.m. ET

LOS ANGELES (AP) -- Homebuyers across the Western U.S., many convinced home prices are close to the bottom, helped fuel a 15 percent annual increase in the region's home sales in June, according to two reports released Thursday.

Fire-sale prices on foreclosures and other distressed properties lured many buyers, particularly in California, Nevada and Phoenix. Those sales also dragged down the median home sales price in the 13-state region. It tumbled nearly 25 percent from June of last year to $214,800, the National Association of Realtors said.

That was the biggest median price decline in any region and helped pull the national median down about 15 percent from year-ago levels to $181,800. Nationally, sales rose 4 percent, without adjusting for seasonal factors. But more importantly, sales posted their third monthly increase, indicating the housing market has turned the corner and is recovering.

Leonard Baron, a real estate professor at San Diego State University, said for homes in the lower end of the market at least, where many properties are getting multiple bids, ''we've hit a floor.'' But the same is not trueof homes above the median price.

''For higher-dollar properties, it's harder to tell,'' Baron said.

The turnaround in the West, has also been geographically uneven.

Las Vegas, Phoenix, Los Angeles, San Francisco, San Diego and Boise, Idaho, were the only major metros in the West to register an increase in home sales last month, according to The Associated Press-Re/Max Monthly Housing Report, released Thursday.

''Interest rates are very favorable, so I've had a lot of people looking and getting off the fence,'' said Laura Zajdman, a ZipRealty agent in Los Angeles.

Elsewhere in the West, home sales fell last month in Anchorage, Alaska, Denver, Albuquerque, N.M., Billings, Mont., Honolulu, Portland, Ore., and Seattle, according to the report, which tallies all home sales in the metropolitan statistical area by all real estate agents, regardless of company affiliation.

The demand for bargain-priced properties has created a traffic jam of buyers for lenders trying to unload homes. Often, banks are fielding multiple offers for a single property and buyers are finding themselves forced to put in bids higher than asking price -- a market dynamic not seen since the heady days of the housing boom.

''There's an extreme amount of multiple offers on those (bank-owned) properties,'' said Mike West, broker-owner of Century 21 MoneyWorld in Las Vegas. ''A decent property, within days on the market, could literally have 10 to 20 offers.''

Those bidding wars are correcting the oversupply of homes on the market. The inventory of homes for sale was down by 25 percent or more from year-ago levels in Las Vegas, Los Angeles, San Francisco, San Diego, Phoenix and Portland, Ore., according to the AP-Re/Max report.

Sellers who are not facing foreclosure are under pressure to lower prices to compete with the distressed homes on the market. Rather than do so, however, many are opting to rent out their home in hopes of waiting out the landslide in housing values.

''They realize they're not going to be able to make a significant profit on the property'' if they sell now, said Rick Cheever, broker-owner of Century 21 Performance in the Denver suburb of Castle Rock.

''There's a glut of rental property on the market right now because so many sellers have opted to consider renting the process rather than selling them,'' he added.

Cheever said his homebuyer traffic rose in June but has begun to ease this month as interest rates have crept higher.

Home sales in Denver tumbled 18 percent last month from June 2008, according to the AP/Re-Max report.

Real estate agents also are seeing more buyers pay cash or make down payments in the 30 percent range.

And not all are professional investors.

Many are people who are seeking alternatives to the stock market or retirement plans for their money. In some cities, rental income, after expenses and taxes, can provide a better return than a savings account.

That kind of thinking prompted Mira Kubiak, 57, to pay cash for the three-bedroom, two and a half-bath town house she bought a few weeks ago in northern San Diego County.

The former mechanical engineer opted not to finance the $280,000 purchase because it made no sense to her to get a mortgage and leave the rest in a risky investment or a savings account offering a paltry return.

''I thought the prices had bottomed out or they were close to the bottom,'' Kubiak said.

Saturday, July 25, 2009

Pricing Your Home in a Recovering Market - From Wall Street Journal

Hi Folks-

Here's another GREAT READ, from Wall Street Journal. There has been a lot of speculation about whether the market will still trend down or if home prices are actually starting to come back up again. As this article explains, it's not black and white, there are a lot of factors one should consider when deciding how to price one's home.

Here's the link Enjoy!: From Wall Street Journal - "Pricing Your Home in a Recovering Market"

All the Best,
Jerry

Monday, July 6, 2009

"FORBES: Los Angeles Real Estate Seeing Seasonal Uptick for Summer 2009."

Hi Everyone!

Hope you all had a great 4th of July weekend. :) With summertime fresh on everyone's mind, just wanted to pass along an early report regarding summer 2009 home sales in LA from FORBES.com. Released today!

From FORBES.com: "REAL ESTATE SEEING UPTICK IN SUMMER 2009": LINK

Also, "FORBES: Los Angeles Among Best Place to Buy a Home - June 09" - LINK

In these articles, lots of speculation about when recovery may be. A lot of positives regarding where Southern California is compared to the rest of the nation. The main thing I took away from these articles is that last year(2008), there was not a seasonal "uptick" or traditional increase in summer sales, but this year, it looks like the traditional uptick is happening. This may or may not have any relevance as to whether we're in full recovery at all, but it SEEMS to be a good sign because it is a normal, healthy pattern. Anyhow, feel free to call me if you have any questions about how homes in your price range are faring. I'll be in touch with more soon, and hope everyone had a great holiday weekend!! My cell is 310-228-8856.

See article BELOW.

All the Best,
Jerry
310-228-8856

__________________________________________________________________________

Forbes.com


Intelligent Investing Panel
Real Estate Seeing Uptick
Stephane Fitch, 07.06.09, 6:00 AM ET

Welcome again to our lively discussion of property investments and the economy. We've assembled our panel of real estate experts: Donald Trump Jr. of the Trump Organization, Peter Slatin of Real Capital Analytics and Michael Feder of Radar Logic, all based in New York. (Two of our regular panelists from the West Coast, Spencer Rascoff of Zillow.com and Patrick Lashinsky of ZipRealty, are away today.)

We have a guest: Sami Inkinen, of Trulia.com. Trulia.com is a San Francisco company that publishes house listings, data and analytics about neighborhoods all around the U.S. for free on its Web site. Sami is chief operating officer of Trulia.com.

Gentlemen, we'll talk a little later about capitulation, which I think of as the moment when home sellers finally stop calling every bid they see "lowball." But first--Michael of Radar Logic reported this week that its RPX index of housing prices for U.S. metros was up in April, for the first time since June 2007. What's to say this isn't just a seasonal uptick?

Follow Intelligent Investing on Twitter.

Sign up for the Weekly Intelligent Investing Newsletter.

Feder: It's too soon to tell for certain, but given that the seasonal uptick we would have expected this time last year didn't come and this year it has returned with some strength, it's clearly a very positive sign. The issues of affordability and excess inventory are still meaningful and could dampen a recovery, but the numbers right now are very encouraging.

Trump: It would be rare to see a seasonal tick up at the end of June. This is historically the dead zone of real estate sales in my experience, and certainly in the high end.

Forbes: I should emphasize here that although Michael's report just came out, he's reporting numbers for April.

Trump: OK. Well, April would have historically strong sales perhaps the best of the year, along with late September and October. I thought the reference was to May and June, which would typically be the start of the summer doldrums.

Feder: It's true that we have seen strength this time of year every year in our history except 2008. But we've previously seen the strength through September, with perhaps a slight reduction in rate of growth through June. It will be interesting to see what happens this year.

Forbes: Michael, take it to the city level. Of all the 25 metros you're looking at, which is showing the clearest signs to be in a classic recovery?

Feder: As we said in our report, all five of the metros we track in California--Sacramento, San Jose, San Francisco, San Diego and Los Angeles--are showing better price strength than they have in the last several years. I don't think we can say definitively this is a recovery, but it won't surprise me if we look back at it and discover it was. Let's see next spring ...

Forbes: You mentioned affordability earlier. Have you seen any affordability numbers you trust? I like the idea of measuring the cost of owning the median value of a home against the median local income, but I've never found a dependable source. Too many variables, including the question of how much the average buyers put down.

Feder: I'm not sure "affordability" is just numbers. I had an economist I respect tell me yesterday that she knew people who had the cash, could afford the down payment and had found their dream house, but decided to wait out of fear that they might lose their jobs.

Trump: I know people doing the same thing. It's good to see that people are no longer banking their salaries as a guaranteed perpetuity, which seemed to be the norm over the last decade.

Forbes: OK, so it's about confidence even more than affordability. Don, how about your buyers? You've traditionally had the most confident buyers in the world, willing to pay extra to live in homes with the Trump name attached. Many are from overseas. You meet many of them in person. How many are moving into wait-and-see mode?

Trump: I think most are in a wait-and-see mode. Most people would have bet that there would be a lot more BIG deals (though not necessarily single-family-type investors) happening by now, and that has not been the case. But sellers' expectations seem to be dropping into line so, it will be a matter of time until bid and ask start to get close enough for things to start happening.

Forbes: Regarding capitulation, we report in the current issue of Forbes magazine that the housing collapse appears to have finally reached the most upscale neighborhoods in the country, including Manhattan, Chicago's Lincoln Park and Santa Monica, Calif. Is capitulation in markets like this bad news? Some people insist it's essential to establish a foundation for recovery in these fancy markets.

Sami Inkinen, can we pull you into this? Trulia.com reported recently that it had studied all the listings in its enormous database and found that home sellers had cut their asking prices by $27 billion collectively. What's it mean?

Inkinen: You're right, $27.4 billion was slashed off homes currently for sale, and that represents an average of 10% drop from the original asking price. To me this is a sign that sellers are eager to move their homes in the market and realize that the ask hasn't been at a reasonable level.

The cities with highest percentage reductions (11% to 16%) were:

Las Vegas
Miami
Los Angeles
Phoenix
Mesa, Ariz.
New York City
Long Beach
San Francisco

The No. 1 city was Detroit, which had 23% reductions.

You may see this as a step toward capitulation. Time to move!

Forbes: Yeah, but you report that 76% of home sellers haven't dropped their asking prices. What's that mean?

Slatin: It means that people are still clinging to a) what they thought they had, b) their belief in what they swallowed--real estate only goes up and c) [the idea that] to cut prices indicates that they are guilty of having made a poor or wrong choice, even if that's not the case.

Inkinen: I would look at the trends, rather than the 76% who haven't dropped prices yet. The number of people who are dropping has been trending up, and that means people are realizing what it takes to sell the home. Of course I would assume a large portion of the 76% represents homes that are priced closer to the market already.

If a seller can wait and see, then that's what they do. In areas (take many neighborhoods in San Francisco, for example) where people aren't forced to sell their home--they can afford to pay the bills--there is a big shortage of supply, and the few homes that hit the market create a bidding war already. I'm hearing this anecdotally from many of our local brokers. There's little movement in these higher-end neighborhoods, and therefore the bid and ask may stay well apart for a long time.

But go to leveraged neighborhoods, and you get to that $27.4 billion in price cuts.

Slatin: These could also be people who still have jobs and aren't pressured to sell in the same way that price-cutters are.

People are always asking me if Manhattan prices are done falling, and I always say, "not yet." One big unknown among those who are unemployed from Wall Street or other white-collar jobs is what kind of cushion they have. So far, it hasn't eroded, which is keeping prices from crashing.

Trump: It may mean that they are clueless, and that they will hemorrhage cash to carry the assets even though it may not be logical to do so. Sort of the same reason as why Manhattan hasn't dropped as much as other places. ... Because they could afford to hold.

Forbes: So for those places other than Manhattan, where there has already been capitulation, can it be a good thing?

Feder: If you consider housing as an asset with a core or base value (obviously different from place to place), then one impact of a boom is to drive that core value up, perhaps beyond its fundamental value. For that to adjust to a point of equilibrium, some capitulation is necessary. So, yes, we would say this is a good thing and necessary for a recovery.

Trump: It's great. When sellers are unrealistic, nothing will happen. When people get over the notion of what their real estate was and come to terms with what it really is worth, we can get back to work.

Forbes: Don, we all have some appreciation for our newfound financial sobriety. But is it going too far? We saw it reported this morning that the savings rate has jumped to 5.7% in April. That's an awful lot of prudence. Could it sour the recovery?

Trump: When people have their families to worry about, they are a lot less concerned about being the ones to bear the burden of stimulating the economy.

Forbes: OK, so given all the prudence, doesn't capitulation create the foundation for a boom? Don, your dad made an awful lot of money buying 40 Wall Street after a series of previous owners capitulated to lower and lower prices. What did he pay, $1 million? It's worth perhaps $300 million to $400 million now, I guess.

Trump: At least he actually paid $1 million but got $4 million in tax credits so was in for negative $3 million. I would say the best internal rate of return I have ever seen. I just want a few infinite IRR deals for myself when I grow up.

Forbes: Interesting you mentioned earlier that high-end markets stagnate in summer, Don. You're our liaison to the high end. I dug through Trulia.com data and found an awful lot of fancy neighborhoods where the inventory of unsold homes is 20 or 30 times the current monthly rate at which houses were being absorbed. Should we be worried?

Trump: There is certainly not a shortage of high-end inventory on the market. I am not big on generalizations across the market as you know, but a lot of the homes that were built during the last up cycle were built to cater to a market that could not really afford them. In other words, everyone wants the million-dollar house but only a few can actually carry them. When interest rates moved up from 2% (which we all should have seen coming), the buyer pool for the $1 million homes dropped substantially.

Forbes: Michael, you're out in the Hamptons all the time. Sami's firm, Trulia.com, reports there were 885 homes for sale in Southampton recently. But people have been purchasing homes out there at a snail's pace. Will all your neighbors eventually wake up and cut prices?

Feder: If they want to sell, they will probably need to do exactly that.

Trump: Yes, especially in September, when the realize that they will have to hold on to that pig until at least May before they can sell or generate any income from it.

Forbes: Are you shopping?

Trump: Honestly, I have no interest in the Hamptons. Been there, done that. If I want to go out a couple times each summer, I have friends there--a place to stay with zero carry or maintenance. Fits well with one of my favorite sayings, "If it's for free, it's for me."

Forbes: Lucky you. But for the rest of us, I guess, it's a good year to rent, not own, in the Hamptons? At least until prices come down?

Feder: Not a bad strategy anywhere, actually.

Forbes: What about banks and private equity firms that own big, busted developments of high-end homes? Why haven't we seen them dumping these?

Trump: They are coming around but are not there yet. There's still way too much risk for the most part. Ironically, but not at all surprisingly, the banks and private equity firms are willing to face the music and discount the hell out of properties that they syndicated most of the loans on but won't face the music on similar or virtually identical real estate they actually own on their own books. None of the banks holding notes on these seems willing to capitulate, so nothing big has happened. It's a lot easier to sit back and let others take losses.

Inkinen: Our data says that price per square foot has fallen considerably from its peak to now. As sellers begin to understand that this is the market, they have two choices: price to sell or wait. That said, activity is clearly picking up, so quite a few must have accepted this new valuation.

Slatin: That's encouraging--are lenders more flexible? Anyone?

Forbes: It's hard to see it in the interest rates. They're up above 5.5% now, from sub-5% this spring. Obviously, that's because the cost of funding has risen, due to the sell-off in Treasury bonds.

Inkinen: We don't publish official lender data, but our broker partners' affiliate companies are making a killing now, more than ever, for two reasons: 1) many small to mid-size lenders went out of biz; 2) the remaining, what I've heard, are becoming more flexible/aggressive.

Trump: I agree rates are no longer low. They're up a full point and in a few months will likely be painful.

Forbes: OK, last question. Don, Michael Jackson was a friend of your family. He stayed at Mar-a-Lago when he was newly wed to Lisa Marie Presley. Now he's gone, and that's painful. I'm curious about Neverland Ranch. What might happen to it?

Trump: Yes, he was a friend. And it's tragic. "Thriller" was the first concert I have been to, and I doubt I will ever see a show quite like that for the time ever again. I know the guys who hold the note on Neverland, and I am not sure what the plans are. There is a lot of emotion tied to that property, both good and also bad. So it will depend on how well they play the public relations game to see if they get any value out of it. If they play it well, they will do great, but it could also go quite bad.

Forbes: That's all for now. Thank you gentlemen.

Thursday, June 18, 2009

FINALLY! - Southern Cal Home Prices Rise Slightly for May

As I'm sure many have already seen in the news today or in the LA Times, Southern California homes pricing finally went up last month - the FIRST time in over 11 months! Just wanted to send out a quick email with my few quick thoughts. Hope everyone is doing well. :)

For those of you, who haven't had a chance to read the article about the socal Home price increase yet, here are the articles that came out today, Enjoy:
From LA TIMES - LINK
From - BUSINESS WEEK - LINK
From WALL STREET JOURNAL - LINK
From LA OBSERVED - LINK


Well, as we all live here in LA, this is, first off, a good sign and promising for not only current homeowners, but the economy of the city in general. This does not, in my opinion, mean that the down market is over. In some price ranges, we are extremely close. However, in higher price ranges for instance, I believe their will likely be quite a bit of correction left.

I wanted to let you know that what I'm seeing out does concur with what many analysts are saying about this increase - That it is a result of "more action" finally in the $500k+ price range. Previously, sales were dominated by sub-400k sales that were, obviously, mostly foreclosures or in non-prime areas.

As I've stated and discussed with quite a few of you already, I've had 3 personal theories that I'd been testing:
1)
For buyers looking under $700,000, the correction has been substantial. The market may fluctuate, as any market will, but I believe a large amount of the correction has happened. The lower the value of the home, the more of the correction, since lower value homes have largely been foreclosure-dominated, driving those prices down down down.

2) For buyers looking over $1million, not much correction has happened. I believe, if it were me who were looking, I would wait. I believe there still needs to be pretty substantial correction. I've heard that banks have held on jumbo loan foreclosures, but that they may be coming in the next 12 months in large volume. Prices in this price range have not come down enough IMO, and as a result there has been a "freeze out" in this price range (Here's a good article about that: http://www.laobserved.com/biz/2009/06/selling_1_million_ho.php)

3) Back in January, I anticipated that interest rates would bottom out at 4.5% around summer time at the latest. In fact, Interest rates did end up hitting 4.5% in April, they have slowly been increasing back towards normal since then. I do not believe rates will fall back to 4.5% again in the foreseeable future, but I do believe rates are still very favorable, and if you are thinking about buying, you should understand that time is of the essence regarding the current rates.



All the Best,
Jerry
310-228-8856

Friday, June 12, 2009

June 2009 - LA Median Home Sales Statistics - from LA Times.

Just wanted to pass along the 2 new Median Statistics charts for June 2009 from the MLS and Los Angeles Times. Enjoy!

June 7th - Median Sales Chart

June 14th - Median Sales Chart

-Jerry
310-228-8856

Wednesday, May 27, 2009

May 2009 - From LA Times...May Median Home Sales Charts and Statistics

Hi Everyone- hope all's been well and sorry I've been MIA on the blog a couple weeks. A couple new escrows, new buyers and last weekend Stay-cation between LA and Santa Barbara! Good Times.

Anyhow, Just wanted to pass along the latest Los Angeles Times' Median Home Pricing Charts showing sales trends for April 2009 in Los Angeles. Two Charts attached. The latter chart hasn't been released yet and will be appearing in the LA Times REAL ESTATE section this coming Sunday, 5/31/09. Our office received the information early, so just wanted to get it to you early as well. :)

Hope this is helpful and talk to you soon!

5/17/09 Article - Median Pricing from April 08 - April 2009

5/31/09 Article (To be released) - Comparison between Number of Active Listings vs. Solds - April 2009 - April 09

All the Best,
Jerry Hsieh
310-228-8856

Friday, May 8, 2009

Westside LA Pricing still has a long way to Come Down?

It seems that Los Angeles pricing for homes over a million mark may still have a ways to come down. I'm not sure if anyone has noticed, but prices in higher end areas like Beverly Hills and Brentwood simply haven't come down as much as you would expect, and in some areas, homes prices have actually increased over the last year!

My feeling is that it is a great time to buy if you are looking in the under 1 million dollar price range. The fact is foreclosures have already made an impact on those neighborhoods, where values have come down around 30% now. I am in escrow on a property for myself for right around $600,000. In that neighborhood, home prices have already come down about 30-35%.

However, if you are looking over 1 million and in the more prime areas of Los Angeles, I believe there will definitely be an impact with a second wave of foreclosures as well as jumbo loan related defaults.

One of my clients passed this article to me. While I do believe the blogger takes a pessimistic viewpoint, I think there are some good points made and worth the read. Check out this article from his blog, Westside Real Estate Meltdown: westsideremeltdown.blogspot.com

-Jerry
310-228-8856


Second Title Wave of Foreclosures to hit the Westside Later this Year

Notice of Defaults (NODs) in California hit an alarming 135,431 during the 1st quarter of 2009. An all time high. That's up 80% from 75,230 during the 4th quarter of 2008. This is primarily due to a foreclosure moratorium by banks, to keep their losses from snowballing. Now we are back to normal, with excess homes piled up in the foreclosure pipeline.

What is different now however, is the type of loans that will be heading toward foreclosure. Up through 2008 we saw the Subprime Wave hit the lower tier of housing . Mainly the outlying areas of Los Angeles were affected like Riverside, San Bernadino, Palmdale, and Lancaster, where lenders could prey on subprime buyers. The proverbial bottom of the Real Estate Food Chain. Many of those homes are now selling at a 50% discount or more . The next wave to hit will be concentrated in the Alt-A, Option ARM and Prime arenas. These loans are much larger in size and include mainly higher end properties. $300,000,000,000 alone are in California and begin resetting in the 3rd and 4th quarter of 2009. The peak of loan resets will be from December 2009 through August 2010. Even though the peak will last through next year, it will remain highly elevated until 2012. This is disaster waiting for the Westside. Many of the Westside loans made from 2004 and on, are Alt-A, Option ARM or Prime and begin resetting in 2009. Especially those 5/1 ARMs that became so popular. As prices have already sunk to 2005 and 2004 in some places, homeowners will already be underwater once their payments increase. If they bought with little or no down payment, walking away from a mortgage becomes a no-brainer.

In addition, we are now seeing accelerated layoffs and some will be forced to sell. With many Westside households requiring 2 incomes, the job loss threat is magnified. Sure, you will hear pundits, realtors, banks, economists preaching now is the time to buy while interest rates are 4-5%. And some will think, they want to get "in" before prices go back up. Don't make that mistake. It is better to buy when prices are lower and interest rates higher. Then you have a chance of rates coming down. Can you imagine trying to sell a property at bubble prices with higher interest rates?

The Westside is down about 20-25% and the downside risk of losing another 20-25% is increasing every day. Smart money is waiting for 40-50% declines before buying. If you read between the irresponsible headlines, you can see that. The bulk of the sales activity is distressed sales. They're few "organic" sales right now. With down payments of 10-25% required to purchase property, you stand a good chance of losing your entire down payment in a year or two.

Now is the time to clean up your finances, get familiar with areas you like and watch the Westside market change this summer. Take a look around during late summer, after the traditional selling season for signs of distress. Later this year should be a possible entry point for some properties on the Westside.

Above all, be patient. There is absolutely, no hurry now.

Tuesday, May 5, 2009

From LA TIMES: House Hunting? It's Not a Buyer's Market Everywhere

The median price in Southern California may have plummeted, but in more desirable neighborhoods, home buyers are still engaging in bidding wars.
By Chip Jacobs
(Link to Article Download)

6:15 PM PDT, May 2, 2009

The confident smile Sam Rivero wore as he hunted for his first house had a lot to do with the buzz thumping in his ears. Ever since home values began sinking, pundits have touted the juicy opportunities for aspiring buyers priced out of the market before, and the young business-development executive heard that cue like a sonic boom.

Out he ventured into Mount Washington, Glassell Park, Eagle Rock, Montecito Heights and other desirable middle-class communities northeast of downtown Los Angeles, searching for a bargain in the $400,000 range. Candidates came and went, and Rivero, who is getting married, was upbeat. Considering the pulverized housing values, with the median price of a Southland home today -- $250,000 -- at half of its 2007 level, the properties should come gift-wrapped, right?

As the Glendale resident and his fiancee, a makeup artist for the television show "Entourage," discovered, the supposedly wondrous buyers' market seems more consumer myth than easy pickings.

They bid $50,000 over asking price for a "great" four-bedroom contemporary in Valley Village, only to lose out to one of the 16 other offers tendered, Rivero, 33, said. A North Hollywood house he had been eager to see attracted so many people walking around with sales fliers that he couldn't find parking and drove off from the "vultures" who got there first.

"Every open house I've been to has been a zoo," said Rivero, who has examined 35 properties during the last three months. "If you follow what the [general] media say, you'd think sellers are desperate to sell a house, but when you get there it's totally the opposite."

So what's going on?

Real estate brokers and investors say would-be buyers misunderstand how the drop in housing prices has affected desirable neighborhoods. Just because an abandoned house in a troubled part of San Bernardino County might be going for $200,000, it doesn't mean you can get a nice place in Sherman Oaks for that amount -- or even twice that amount.

House hunters are trying to pounce on deals from sellers they expected to be frantic -- if not curled in the fetal position. What they're finding instead are bidding wars as low interest rates and pent-up demand in traditionally stable or chic areas have kept prices up -- not as high as the market's peak, but not nearly as low as they had hoped.

"The biggest problem," said agent Phyllis Harb, "is that people are overreacting to housing statistics, thinking they can come in and make an offer 20% below price."

As sales figures and home buyers' anecdotes are underscoring, when the residential real estate bubble burst, it set off several distinct sprays that created false hopes and confusion.

Though nearly 20,000 homes in Southern California sold in March, a 52% jump from a year earlier, a sizable number of those transactions occurred in Riverside and San Bernardino counties, where foreclosures exploded. In the region overall, foreclosure sales accounted for 55% of March's deals.

Bank-owned or not, the cheaper properties are dominating the sellers' block in the notoriously expensive L.A. County real estate market. In March, 2,871 homes under $300,000 were sold compared with only 734 a year earlier, according to real estate information firm MDA DataQuick.

At the higher end, just 202 homes priced above $1.2 million changed hands last month, compared with 354 in March 2008.

Houses priced from $400,000 to $800,000 represented less than a quarter of the market in March, down from about 45%, meaning fewer offerings for would-be buyers in that mid-market or pickier sellers, according to DataQuick.

Mark down Nicky and Bunny DeMarinis as frustrated. They offered about $1 million for a 3,300-square-foot traditional in the Los Feliz area. Though it boasted a magnificent view, the house was an ode to passe, with cheesy frescoes, gold trimming and 1970s-era kitchen appliances, they said. For all the updating it required, the owner came down only a fraction from his $1.7-million asking price and passed on the DeMarinises.

The couple, who own Nicky D's Wood-Fired Pizza in Silver Lake, have seen about 50 houses so far. They don't know where to vent their anger: lenders demanding higher down payments and less-favorable terms, talking heads distorting the market with oversimplifications or listing agents itching for bidding wars.

"You get out there and think you can grab something at a fantastic price, but that's not the case," Bunny DeMarinis said. "Each time we look at a house and see these inflated prices and our offer is rejected, we feel rejected too. We had an unrealistic portrait of what was really happening. It's disillusioning."

It's becoming a populist theme among potential local buyers and a contentious topic on websites devoted to the post-bubble market.

Real estate investor Burt Slusher said home shoppers should disregard the broad trends and focus instead on nuances and inventory in finely drawn areas.

Take the 40% jump in L.A. County home sales in March compared with a year earlier. In studying the data, Slusher said, he found that a large batch of those deals transpired in Palmdale, Compton, Inglewood and other communities that suffered as a result of "treacherous subprime mortgages."

People interested in properties in coveted niche markets such as Pasadena, Culver City and Santa Monica have read or heard too much about frenzied activity in the bottom of the market, he said, without comprehending that it held little relevance for them.

Slusher's advice is to muster patience, because he believes there's still an over-inventory of mid- and upper-priced properties that will drive overall prices down into 2011.

"Buyers hear about foreclosures and bank sales and a bad economy and think they can offer a beer price for a wine home," Slusher said. "But the market is not a homogenous place, where everything is the same."

In classic economics, buyers should have a decided advantage in neighborhoods in which supply dwarfs demand. Where there's typically a six-month inventory of houses for sale in coveted Beverly Hills, Pacific Palisades and West Hollywood, for instance, there's a year to two years' worth today, agent Christopher Hain said.

Hain has a theory about why all that supply hasn't translated into blocks full of delirious new homeowners. He calls it the "sucker syndrome," in which buyers are nervous about overbidding when nobody truly knows whether Southland home values have reached their bottom.

Said Slusher, "Nobody wants to be the sucker who paid too much, so they combat that fear by offering unrealistically low amounts. But if you're trying to time the bottom, you're going to end up with junk. It's always the best houses and cheapest houses that sell first."

More should be known about the market for more-expensive properties when "jumbo" loans -- ones exceeding $417,000 -- become available this summer, according to DataQuick. In a sign of how locked-up conditions are, jumbo loans represented 40% of all Southern California purchases in 2007. In March they accounted for 10% of the activity.

On a recent Sunday, an open house for a vintage 3,159-square-foot Craftsman near Occidental College in Eagle Rock drew 105 people in the first hour despite sweltering temperatures, a Lakers playoff game and a list price of $699,000. Never mind the hilly curb appeal or the aroma of freshly baked cookies that listing agent Tracy King baked. There was plenty of head-shaking among would-be buyers about the absence of bargains.

Jose Mares, 38, a Huntington Park police officer, said he'd been searching for eight years for a house. To him, the dark-shingled house needed too much renovation to justify the tab. He thinks he knows why it's priced where it is: There's not a glut of quality competition close by, and the owner and listing agent know their edge.

"Some want to charge $550,000 for a starter house," Mares said.

King, the agent, said she'd heard earfuls about that, and noted that this was not your father's housing crash. Today, everyone is savvier, able to analyze properties with a few keystrokes or see a street view using Google.

Instant information, though, also means fiercer competition and fewer hidden gems. As an example, King cited a 1,625-square-foot, midcentury-style fixer-upper in La Crescenta priced at $299,000. Forty people were standing on the front lawn within an hour of its listing, she said. Ultimately, there were 80 bids, 15 of them exceeding $400,000. The winning bid was $480,000.

"What I'm seeing is that perceived bargains are going in multiple offers for more than the asking, and buyers are very disappointed," King said. "Real estate is hyperlocal, so a [regional] $250,000 median price is meaningless here."

Predicting where values are headed is hardly a science either, no matter what the cable-TV experts or the galaxy of websites with every imaginable statistic say. For one thing, people selling costlier homes tend to have deep pockets buffering them from needing a fire sale to stay afloat. If they don't like the bids, they can pull their property off the market.

Banks are an even bigger X factor, and not just because of their stricter lending requirements and bailout havoc. USC real estate professor Tracey Seslen said she'd heard that lenders were carefully timing the release of homes they'd repossessed to avoid further flooding the market and driving prices down more. Those institutions also know that a fresh avalanche of foreclosures from people with resetting loans may be looming.

"So the banks are playing this game too," Seslen said. "They're keeping prices artificially high."

Rivero, the soon-to-be-married business-development exec, wishes that weren't so, and hopes his tenacity pays off.

"We've learned not to get our hopes up because it sets us up for heartbreak," he said. "What's driving me is that I actually want a house."

realestate@latimes.com

Bank Foreclosure Sales: Differences and Risks between Auction and REO-sales

Hi Everyone!

A new client of mind found a home on Realtytrac.com the other day and emailed me to get more information and see if I could represent him. For those who don't know Realtytrac.com is not a listing portal, it is an information and public records database (that is somewhat deceptively presented as a homes listing website). Most of the homes on Realtytrac are not actual listings, but rather bank notices for Auctions. Traditional brokers do not work with Auctions because there is (1) too much liability, (2) No ways to protect clients with inspection and loan contingency periods, and (3) Auctions are not commissionable.

Below I will explain the difference between Auctions and the normal REO-foreclosure sales that we as realtors work with.

-Jerry

310-228-8856

What is RealtyTrac.com and how is it different than other Websites (i.e. Trulia, Zillow, etc)?

RealtyTrac is not a listing source. Rather, it is an informational database that lists public information about properties. Homes found on Realtytrac are not posted by the seller or the seller’s agent, but rather they are posted by realtytrac the moment the home goes in default. In that sense, it is very informative. However, just because a home is in default doesn't mean it is for sale. It does often mean that there is an auction scheduled. At this point it is important for me to explain the distinction between "auction" and "REOs (Real Estate Owned)". When realtors refer to foreclosures, they are referring to “REOs” which are different than “AUCTIONS”. REO homes are properties that have been officially taken back and are now owned by the bank. The bank has full legal right as the seller and will put all their properties for sale through the local MLS. I have FULL ACCESS to ALL THESE LISTINGS.

When RealtyTrac posts information about a home, it is an AUCTION. An auction means, the private owner still owns the home unto the day of the auction. The auction is most likely being scheduled by the bank without the private owner's consent (though legally, he likely must oblige) He can still get the property re-instated back up to this day. This happens quite often. For these properties, the extent I can help you is by pulling title and contact information. Because of liability, I’m not allowed to advise you beyond that.

The reason I warn people about spending too much time spinning there wheels about homes on Realtytrac is that the auction process is the most difficult and the most risky of all home purchases. You will compete with auction professionals in a very fast paced environment, and often you need all cash to purchase the homes.


Differences Between REO's and Auctions

In January, I discussed exactly what REO's (the ones realtors work with) are and how they are different than normal sales: http://newhomesla.blogspot.com/2009/01/buying-from-bank-vs-buying-from.html

Today, I wanted to explain the differences that make Auctions so much more risky that REO's. They are not the same. REO's are homes that have been bought back by the bank and the bank is now selling. AUCTIONS are homes that are still owned by the trustee (private party) who is in default, and the trustor(bank) is now auctioning it off.

Hypothetically speaking, if you decided you wanted to start pursuing AUCTIONS, a popular way to do this would be to join a membership with a public information database such as RealtyTrac.com. However, please note, that websites like RealtyTrac have a reputation for deceptive practices and if you do a google search on “RealtyTrac” or “RealtyTrac Scam”, you will find a lot of information about this.

Once you found a property with Notice of Trustee Sale that you were interested in, you would call the trustee number and reference the corresponding order number. Usually there will be an automated line that will tell you (a) the status of the property and (b) The date, time and location of the auction.

On the day of the auction, you must show up with 10% cashier’s check for your purchase price. Keep in mind, this is a live auction, so you must bring increments for every increased bid you will be making. Without a 10% cashier’s check you will not get the property. The bidding begins at the minimum reserve price. The auction will likely be filled with professional investors and saavy auctionees, so don't expect it to be a walk in the park. If that price is not met, the bank buys and takes ownership.

You must bring the remaining 90% of the funds within a timeframe set by the auctioners - usually between 10 to 30 days. There is no contingency. You don't close on time, you lose your deposit and the property. For this reason, it is very important that if you bid on an auction property, it probably best if you have the ability to pay all cash just in case.

You should be aware that Auctions are the RISKIEST of all types of foreclosure purchases. There are no real estate agents to advise clients, just saavy auction investors. You won’t get a title report, inspections, contingencies, or guarantees that the seller can actually sell, that they are not bankrupt, that there aren’t liens on the home, or that the owner hasn’t wrecked the home (which you probably haven’t had access to see).

I found this article online, and if you're more interested in learning about the risks involved with each kind of purchase, feel free to check it out: http://www.creonline.com/money-ideas/mm-056.html

Also, http://www.streetdirectory.com/travel_guide/64784/foreclosures/how_does_a_foreclosure_auction_work.html

I don’t want to discourage you from pursuing an auction, but the risks are worth understanding.