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

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.