Foreclosure Activity Decreases 4 Percent in October 2010

RealtyTrac, a leading online marketplace for foreclosure properties, released its U.S. Foreclosure Market Report for October 2010, which shows foreclosure filings—default notices, scheduled auctions and bank repossessions—were reported on 332,172 properties in October, a 4% decrease from the previous month and almost exactly the same total reported in October 2009. One in every 389 U.S. housing units received a foreclosure filing during the month.

“October marks the 20th consecutive month where over 300,000 U.S. homeowners received a foreclosure notice,” said James J. Saccacio, chief executive officer at RealtyTrac. “The numbers probably would have been higher except for the fallout from the recent ‘robo-signing’ controversy—which is the most likely reason for the 9% monthly drop in REOs we saw from September to October and which may result in further decreases in November.”

Foreclosure Activity by Type

A total of 100,575 U.S. properties received default notices (NOD, LIS) in October, a 2% decrease from the previous month and a 19% decrease from October 2009—the ninth straight month where default notices have decreased on a year-over-year basis.

Default notices were still up on a monthly basis in several states: Florida LIS were up 2% from the previous month; Ohio LIS were up 10%; and Illinois LIS were up 24%. Meanwhile, NODs decreased on a monthly basis in California (down 9% from the previous month), Nevada (down 17%), and Michigan (down 18%).

Foreclosure auctions (NTS, NFS) were scheduled for the first time on a total of 138,361 U.S. properties in October, a 3% decrease from the previous month but still a 6% increase from October 2009. Scheduled auctions decreased month-over-month in 26 states and the District of Columbia, while 16 states posted year-over-year decreases in scheduled auctions.

Lenders foreclosed on 93,236 U.S. properties in October, down 9% from the record high in the previous month but still up 21% from October 2009. Bank repossessions (REOs) decreased month-over month in 33 states and the District of Columbia, while 14 states posted year-over-year decreases in REOs. Including October, lenders have foreclosed on an average of more than 91,000 properties each month this year.

Nevada, Florida, Arizona post top state foreclosure rates

Nevada continued to document the nation’s highest state foreclosure rate in October, with one in every 79 housing units receiving a foreclosure filing during the month—nearly five times the national average. A total of 14,205 Nevada properties received a foreclosure filing during the month, a decrease of 13% from the previous month but an increase of nearly 3% from October 2009—the first year-over-year increase in Nevada foreclosure activity since September 2009.

Florida foreclosure activity increased on a year-over-year basis for the second straight month following five straight months of annual decreases, helping the state to maintain the nation’s second highest state foreclosure rate for the third month in a row. One in every 155 Florida housing units received a foreclosure filing during the month, 2.5 times the national average.

One in every 165 Arizona housing units received a foreclosure filing in October, the nation’s third highest state foreclosure rate for the third month in a row. A total of 16,538 Arizona properties received a foreclosure filing during the month, a decrease of 3% from the previous month but an increase of nearly 24% from October 2009—the second straight month where the state’s foreclosure activity increased on a year-over-year basis following seven straight months of annual decreases in foreclosure activity.

Other states with foreclosure rates ranking among the top 10 in October were California, Michigan, Utah, Georgia, Idaho, Illinois and Colorado.

Five states account for more than 50 percent of national total

California alone accounted for 20% of the national total in October, with 66,475 properties receiving a foreclosure filing during the month—a nearly 12% decrease from the previous month and a decrease of 22% from October 2009.

A total of 56,858 Florida properties received a foreclosure filing in October, the nation’s second highest state total and accounting for 17% of the national total.

With 19,288 properties receiving a foreclosure filing in October, Michigan posted the nation’s third highest state foreclosure activity total and accounted for nearly 6% of the national total. Michigan foreclosure activity decreased nearly 12% from the previous month but was still up 17% from October 2009.

Foreclosure filings were reported on 16,969 Illinois properties and 16,538 Arizona properties in October, with each state accounting for roughly 5% of the national total.

Other states with foreclosure activity totals among the nation’s 10 highest in October were Georgia (14,850), Nevada (14,205), Ohio (13,233), Texas (13,008), and Washington (6,346).

Top 10 metro foreclosure rates in Nevada, California and Florida

Foreclosure activity in Las Vegas-Paradise, Nev., increased less than 1% from October 2009 and the metro area continued to post the highest foreclosure rate among metropolitan areas with a population of 200,000 or more—one in every 70 housing units received a foreclosure filing during the month. Reno-Sparks, Nev., also documented a foreclosure rate in the top 10, at No. 9 with one in every 122 housing units receiving a foreclosure filing in October.

With one in every 96 housing units receiving a foreclosure filing in October, Cape Coral-Fort Myers, Fla., posted the nation’s second highest metro foreclosure rate for the month. Other Florida metro areas with foreclosure rates in the top 10 were Miami-Fort Lauderdale-Pompano Beach at No. 7 and Orlando-Kissimmee at No. 10.

Modesto, Calif., posted the nation’s third highest metro foreclosure rate, with one in every 102 housing units receiving a foreclosure filing in October. Other California metro areas with foreclosure rates in the top 10 were Riverside-San Bernardino-Ontario at No. 4, Stockton at No. 5, Merced at No. 6, and Vallejo-Fairfield at No. 8.

All top 10 metro areas posted month-over-month decreases in foreclosure activity, and seven of the top 10 posted year-over-year decreases in foreclosure activity.

For more information, visit www.RealtyTrac.com.

Picfair Village/Faircrest Heights Home Sales Update - Nov/Dec 2010

Hi All-

Here is the full list of homes sold and new on market for Nov-Dec 2010 in Picfair Village/Faircrest Heights:

New Listings
6101 Pickford Place - 2BR/1BA - $425,000
1806 S. Orange Grove - 4BR/3BA - $979,000

In Escrow
1569 S. Burnside Drive - 3BR/2BA - $359,000
1502 S. Dunsmuir Ave - 3BR/2BA - $429,000
1959 Stearns Drive - 3BR/2BA - $729,000
1435 Stearns Drive - 3BR/2BA - $635,000
1501 Stearns Drive - 3BR/2BA - $800,000
5311 Saturn St - 2BR/1BA - $435,000

SOLD
1521 S. Curson Ave - 2BR/1BA - $419,000
1629 Ellsmere Ave - 2BR/1Ba - $382,500
1451 S. Burnside Ave - 2BR/1BA - $565,000



For further details about any of these properties or for a free market evaluation of your own home, feel free to call me anytime on my cell at 310-228-8856.

-Jerry

Picfair Village/Faircrest Heights Home Sales Update - October 2010

Hi All-

Here is the full list of homes sold and new on market for Oct-Nov 2010 in Picfair Village/Faircrest Heights:

New Listings
1963 S. Crescent Heights Blvd - 3BR/2BA $729,000
1839 S. Crescent Heights Blvd - 3BR/2BA $599,000
5995 Saturn St - 2BR/1BA - $799,000
6101 Pickford Place - 2BR/1BA - $425,000
1806 S. Orange Grove - 4BR/3BA - $979,000

In Escrow
1917 Chariton St - 3BR/1.5BA - $499,000
1501 Stearns Drive - 3BR/2BA - $800,000

SOLD
1521 S. Curson Ave - 2BR/1BA - $419,000
5984 Saturn St - 3BR/2BA - $727,000
1451 S. Burnside Ave - 2BR/1BA - $565,000


For further details about any of these properties or for a free market evaluation of your own home, feel free to call me anytime on my cell at 310-228-8856.

-Jerry

Despite Freezes, US Still Racking Up Foreclosures

"Foreclosures decline, but more probably are out there"

11:42 PM PDT on Wednesday, October 13, 2010

By JACK KATZANEK
The Press-Enterprise

Foreclosure-related activity in Inland Southern California is still declining from where it was a year ago, a report released Wednesday found, but analysts say more distressed housing will probably hit the market in the coming months.

There were 7,454 homes in some phase of the foreclosure process in Riverside County in September and 6,244 in San Bernardino County, according to a report from RealtyTrac, an Irvine-based online marketer of foreclosure properties.

That's 16.37 percent fewer than September 2009.

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All 50 states join probe into foreclosure fraud

Foreclosure actions did increase 6.6 percent from August of this year, RealtyTrac reported. One in every 103 homes was somewhere in the foreclosure process in Riverside County, and one in every 110 in San Bernardino County.

Actions that include notices of default, trustee sales and repossessions were down slightly in the two Inland counties -- less than 1 percent -- in the third quarter of the year from the second but down more than 25 percent from the third quarter of 2009.

September was the ninth straight month Inland Southern California has seen fewer foreclosure-related actions than the same month in 2009 and the 10th consecutive month statewide, said RealtyTrac analyst Daren Blomquist.

Part of that is because lenders are more inclined to work with homeowners to devise some sort of workout program, including short sales, which allow borrowers to sell the house for a price that's greater than what they owe, Blomquist said.

Also, many of the banks holding mortgages of homeowners in trouble are not rushing to put foreclosed homes up for sale, meaning many more distressed properties could eventually hit the market. This leads Blomquist to call the decline "deceptive."

"It is good these numbers are going down, but California and the Inland Empire are not out of the woods yet," Blomquist said.

"There are still a lot of distressed properties out there to deal with."

Government officials are currently sorting out whether banks followed the proper procedures when foreclosing on hundreds of thousands of properties across the country, and that might slow foreclosure processes in the fourth quarter.

Blomquist said a fresh flood could happen next year.

Rich Simonin, owner of Westco Realtors in Riverside, agreed that there are a lot more properties that might be foreclosed on and hit the Inland sales market. But he said the banks are hesitant to put these properties on the market, and he said he's not sure that's the best strategy.

"The banks will release those homes in drips, and not in a flood," Simonin said. "I think that just extends the foreclosure issue in our market. It would be better for us if we can sell these homes. Then we can move on."

Inland homeowners received more than 15,000 default notices -- the first phase of the foreclosure process -- in the third quarter.

These notices are usually sent when a person is 60 or 90 days late with a payment.

In the second quarter there were fewer than 13,000 default notices, and Chapman University economist Esmael Adibi said that suggests more homeowners are having trouble making ends meet.

Adibi said that a true recovery in the housing market happens when prices hit bottom, and the distortion caused by an investigation of paperwork issues could delay that.

But he said he agrees with the banks' strategy of holding back on foreclosures.

"They don't want to flood the market," Adibi said.

"That would be bad for all the other homeowners."

Source: The Press Enterprise

CNN MONEY: "The Best Moves for Home Buyers and Sellers"

Los Angeles Real Estate Advice: Plenty of forces, from overly cautious lenders to inaccurate appraisals, are wrecking real estate deals right now. But one of the biggest roadblocks to getting a house sold these days is the disconnect between buyers and sellers.

In general, sellers have gotten more realistic in pricing their homes than they were right after the housing bubble burst, but agents say that many still don’t grasp how much they must concede to close a deal. And buyers are still spraying lowball offers around in hopes that sellers will be desperate enough to bite.

Take such unreasonable expectations, multiply by two, and what do you get? “A standoff,” says Glenn Kelman, CEO of real estate brokerage Redfin.

With the busy summer home-sale season drawing to a close, there’s little time to waste. Whether you’re trying to unload your place or land a new one, follow these dos and don’ts to negotiate the best deal — fast.

If you’re buying

Don’t say: “I’ll pay 85% of your asking price and not a penny more.”

Instead: Look for homes that are fairly priced and make a reasonable offer. “Coming in about 10% below list is a good starting place for negotiations now,” says Denver real estate broker Jeff Fogler. Yes, you have the upper hand in most markets, but the average homebuyer is paying only 2.7% below list price (see the chart). Set your expectations accordingly. You can always ask if the seller is willing to bridge a price gap in other ways — for example, by picking up your closing costs (which can run $7,500 on a $300,000 house).

Don’t say: “I haven’t put my own place on the market yet.”

Instead: List your current home before you start shopping seriously for the next one. Because it takes almost three months to move a house these days, sellers are loath to write home-sales contingencies into purchase contracts. You’ll have far more leverage if you’ve gotten rid of your house before you start negotiating: Sellers know there’s less chance of the deal falling apart. (Prequalifying for a mortgage helps too.) What’s more, you’ll know exactly how much money you can put into your new digs.

Don’t say: “This is my dream house.”

Instead: Stop imagining the great parties you’ll throw there and gird yourself to walk away if the seller won’t make reasonable concessions. Your ability to abandon negotiations is your most powerful bargaining chip. Given that plenty of other homes are on the market now, finding another place to love shouldn’t be too hard. You might let the seller know that. Nicely.

If you’re selling

Don’t say: “You’re offering how much? Forget you!”

Instead: When bidders lob low-balls at you, thank them for their interest — and ask that they come back with earnest offers. “If you become offended, enraged, or unreasonable, you’ve blown any chance at negotiation,” says Warwick, R.I., real estate agent Ron Phipps. These days many buyers are just testing you to see how big a discount they can get. Point the bidder to comparable recent sales that support your list price. (Received several super-low offers? Check the comps to make sure your price isn’t too high.)

Don’t say: “I didn’t know the deck was rotting.”

Instead: Pay a few hundred dollars to get your house inspected before you put it on the market. Then arrange to make any necessary repairs yourself. (In most states the law requires you to disclose to potential buyers any defects of which you’re aware.) “Taking care of any inspection issues upfront helps sellers limit the points that buyers can negotiate on,” says Pat Lashinsky, CEO of the national brokerage ZipRealty.

Don’t say: “It might take us a while to move out.”

Instead: Make sure to tell buyers — especially those who might have children starting school this month — that you’re willing to scram pronto, if possible. That will help you stand out from any short sales in your area, which may have lower list prices but can take months to close. “If the buyers have a strict time limit, they’re going to pay more money to get into a house quickly,” says Ellen Klein, a realtor in Rockaway, N.J. More money plus more speed: That’s what it’s all about.

Source: CNNMoney.com

Bank-owned Inventory Shrinks in California

More borrowers negotiating loan mods, short sales

By Inman News, Thursday, August 12, 2010.

Inman News

Inventories of bank-owned properties in California registered double-digit declines in July compared to a year ago, according to the latest numbers from data aggregator ForeclosureRadar.

Lenders took back 11,934 homes in July, an 18 percent decline from a year ago. That left them with an estimated 81,536 homes in their "real estate owned," or REO, inventories in July -- 19 percent less than a year ago.

About three times that many homes are still working their way through the foreclosure process in California. But Sean O'Toole, ForeclosureRadar's founder and CEO, said he sees "no evidence of a foreclosure wave anytime soon."

Lenders and government intervention continue to delay foreclosures, O'Toole said. Although that doesn't provide a long-term solution for homeowners who owe more than their homes are worth, it does push back the day of reckoning.

"We continue to hear a lot of concern about a double dip for housing, combined with increasing concern that another wave of foreclosures is coming as well," O'Toole said. "While there is clearly a huge 'shadow inventory' of homes that are delinquent in their mortgage payments, those homes still have to go through the entire foreclosure process before hitting the market as REO listings."

In California, the foreclosure process takes a minimum of 120 days, and the average is currently about 226 days, up 20 percent from a year ago, O'Toole said. After repossessing a home, it takes lenders another 269 days on average to resell it, compared with 238 days a year ago, he said.

Foreclosure cancellations were up 75 percent in July from a year ago, to 18,942, as more borrowers were able to negotiate loan modifications or short sales. Lenders are also demonstrating an increasing willingness to sell properties on the courthouse steps instead of repossessing them.

While O'Toole said he's not ruling out a double dip for housing, "at least in California it certainly won't be caused by an excess supply of foreclosures anytime soon."

California and other "sand states" that experienced rapid price appreciation during the boom -- including Florida, Arizona and Nevada -- could lead a housing recovery, because they saw foreclosures surge before Rust Belt states like Michigan, Illinois and Ohio that are now being hit hard by both unemployment and foreclosures.

The latest national numbers from RealtyTrac, released today, showed bank repossessions at near record levels in July, even as the number of homes entering the foreclosure process declines.

ForeclosureRadar estimates that in California, 25,148 homes were subjected to a notice of default in July -- down 47 percent from a year ago.

That left the inventory of what O'Toole calls "preforeclosure homes" -- properties that have been hit with a notice of default filing, but not yet scheduled for auction -- at 125,223, down 29 percent from a year ago.

Auction notices were served on 28,310 homes, a 30 percent decline from a year ago. That brought the total number of homes scheduled for auction in California at the end of July to 125,559 -- roughly the same number as a year ago.

Even after a home has been scheduled for auction, the sale can still be canceled if the owner is able to negotiate a loan modification or short sale.

If a home does make it all the way to auction, the bank will place the opening bid. If a third party puts in a higher bid, the bank will sell them the house. If not, the house goes back to the bank and is added to its REO inventory.

Although banks were still taking back three out of four properties that went to auction in July, auction sales to third parties were up 29 percent from a year ago, to 3,483. Banks elected to repossess 11,934 homes, down 18 percent from a year ago.

When the bank took back properties, its opening bid was 26 percent less than the outstanding loan amount, on average, but 21 percent higher than estimated market value.

When properties were auctioned to third-party investors, the bid amount was typically 39 percent less than the loan amount, and 22 percent below market value.

Investors who plan to resell those properties will often have to deal with a home's current occupant, past-due property taxes, outstanding liens, repairs, and resale expenses including commissions to real estate brokers.

Competition between bidders was fiercest in Orange County, with discounts from market value of only 15 percent. The best deals were in California's Central Valley, where investors averaged discounts of 30 percent in Fresno County and 29 percent in Kern County.

But lenders repossessed eight out of 10 homes that went to auction in Fresno and Kern counties in July rather than sell them on the courthouse steps, completing only 190 third-party sales -- 95 in each county.

Sales to third parties were still up 116 percent in Fresno County compared to a year ago, while bank repossessions were essentially flat at 396 homes. In Kern County, third-party sales were up 36 percent while bank repossessions declined 4 percent, to 500 homes.

Other hot spots for auction sales in July included Los Angeles County, where 643 homes were sold to investors and other third parties, a 50 percent increase from a year ago. Bank repossessions were down 28 percent, to 1,847.

Riverside County also saw double-digit growth in July, with third-party sales up 28 percent from a year ago to 428 homes. As was the case in Riverside County, bank repossessions were down from a year ago, falling 27 percent to 1,434.

Source: Inman News

"Foreclosure activity in U.S. falls in July" - from LA TIMES

Although default notices, scheduled auctions and bank repossessions dropped 10% compared with a year earlier, the number of filings rose 4% from June.

By Tiffany Hsu, Los Angeles Times

August 12, 2010

Foreclosure activity in July was down, especially in California, compared with last year, according to data released Thursday. But nationwide it was up slightly from June.

Default notices, scheduled auctions and bank repossessions were reported for 325,229 properties in the U.S. in July, according to Irvine research firm RealtyTrac. Compared with the same month last year, that was down 10%.

"It's not so much a sign that the housing market is righting itself as a sign that the various foreclosure prevention efforts, including government-sponsored loan modification, refinance and short sale programs, are being implemented more aggressively by lenders," said Daren Blomquist, a spokesman for the company.

But things are still shaky, with total foreclosure filings jumping 4% from June. Although the number of default notices compared with year-earlier numbers have been slipping for six months, bank repossessions have been booming for eight months to near record levels.

And the volatility will continue as lenders try to push distressed properties into foreclosure prevention programs, according to RealtyTrac.

"Those alternatives will not work in every case, resulting in a bit of a rollercoaster ride in the foreclosure numbers over the next several months," Blomquist said."

California still has the most filings of any state, with 21% of the national total and the fourth-highest foreclosure rate in the country. July's total of 66,910 affected properties, however, is 38% lower than a year earlier.

Six of the top 10 metropolitan areas with the highest foreclosure rates are in California: Modesto, Merced, the Riverside- San Bernardino- Ontario region, Stockton, Bakersfield and the Vallejo and Fairfield pocket.

For the 43rd straight month, Nevada had the highest rate among states, with 1 in every 82 homes hit with a foreclosure filing. At 13,727 properties, that was still 30% lower than July 2009. The Las Vegas and Paradise area's foreclosure rate — five times the national average at 1 in every 71 housing units — was the highest among major population centers.

tiffany.hsu@latimes.com

Copyright © 2010, Los Angeles Times

Picfair Village/Faircrest Heights Home Sales Update - July 2010

Hi All-

Here is the full list of homes sold and new on market for July 2010 in Picfair Village/Faircrest Heights:

New Listings
1606 Spaulding Ave - $699,000
6101 Pickford Place - $525,000
1800 S. Hayworth Ave - $899,000
1623 S. Curson Ave - $569,000


In Escrow
1501 Stearns Drive - $695,000
1815 Stearns Drive - $799,000
1768 S. Hayworth Ave - $345,000
1523 S. Curson Ave - $599,000
5995 Saturn St - $699,000


SOLD
1647 S. Orange Grove - $725,000
1569 S. Hayworth Ave - $480,000
1523 S. Curson Ave - $420,000
1533 S. Point View St - $890,000
1504 S. Curson Ave - $633,033
1829 Stearns Drive - $900,000
1776 S. Orange Grove Ave - $569,000
6075 Pickford Place - $523,000


For further details about any of these properties or for a free market evaluation of your own home, feel free to call me anytime on my cell at 310-228-8856.

-Jerry

"Top Seven Reasons Banks are Denying Home Loan Requests" from RISMedia

The lending landscape has changed quite drastically over the past several years. Practices, approvals and standards that were once widely accepted have either vanished or transformed beyond the point of recognition. Many banks, which were once extremely careless with their loan underwriting techniques and approvals, have dug themselves into a significant hole that will take many years to climb out of. Promotions such as “100% Financing” and “No Doc Loans” were both major contributors to the financial crisis banks and consumers are facing today.

Today, banks are making sure they don’t make the same mistakes again, so loan underwriting standards have become more stringent than ever before.

According to a recent Federal Reserve survey, it was found that about 75% of the banks surveyed indicated they had tightened their lending standards for prime, subprime and commercial mortgages. That was up from about 60% in the previous survey. With this sharp increase in lending standards, borrowers are being turned down for real estate loans at an alarming rate.

Here are the top seven reasons banks are denying home loan requests:
1. Poor credit: The borrower may have a heavy down payment or excellent equity built-up in their house, but if their credit score is under a certain threshold, obtaining a new loan or refinance from a traditional bank is challenging. Even FHA (Federal Housing Administration) loans, which have traditionally catered to borrowers with lower FICO scores, have an average borrower credit score of 693, according to CNN Money, which is above the national average.

2. Insufficient liquidity: If the borrower doesn’t have a heavy down payment (20%-30% for most banks) and strong excess liquidity, banks don’t want to take the risk on funding their loan.

3. Lack of income: The borrower doesn’t have consistent proof of income for the last two to five years. Regardless of how good their credit score is or how much equity they have in their home, if they can’t show the bank proof of income, loan approval will be tough. This can be a big hurdle in the loan process, particularly for retired borrowers.

4. Lying on the application: Banks have learned their lesson and are no longer putting up with borrowers stretching the truth on their applications.

5. Debt: Borrower has excessive debt and their debt-to-income ratio exceeds the bank’s guidelines.

6. Unemployment: Most lenders will like to see at least two years of stable work to issue loan approval.

7. Self employment: Lenders are looking at self-employed applicants with a lot more scrutiny these days, making it very tough for these borrowers to get approved.

Obviously some of these newly structured standards are for the betterment of the industry, and our overall economy, but at the same time, home buyers across the country are realizing quickly that reputable credit and stable income aren’t always enough in qualifying for a loan through a traditional bank.

This predicament is not only affecting potential home buyers, but also the real estate professionals who represent them. Real estate professionals nationwide have expressed that this has become a challenging part of the transaction.

According to Monique Bryher (http://www.californiarealestatefraudreport.com/), a broker associate at Keller Williams Realty, “Home buyers are definitely having a harder time in being qualified. Several of the loan officers with whom I work have complained that loans that would have been approved 6 months ago are being denied now. What’s interesting is that loan applications in terms of volume are up, lenders are busy processing them, but it’s harder to get them approved and it’s taking longer to close even simple, straight-forward transactions.”

Once the traditional lending route has been exhausted, both Realtors and potential buyers are often times at a loss of what to do as a backup plan. Private lending has been around for many years, but most borrowers and brokers have no idea that it’s even an option.

“With the strict underwriting guidelines banks are governed by these days, private lending is the wave of the future for getting real estate loans funded,” explains Eric Wohl, president of NoteFlo, an online private lending marketplace launching today. NoteFlo’s unique service allows borrowers to post loan funding requests for free, which will be broadcast out to thousands of private lenders that will bid for the opportunity to fund their loan. “Our goal is to make sure borrowers know that they have plenty of other options if their loan application is denied by a traditional bank,” says Wohl.

Source: RISMedia

LA Real Estate Advice: Doubling Down on Housing

Record-Low Interest Rates and a Scary Stock Market Are Prompting Investors To Sink Even More Money Into Their Homes

By M.P. MCQUEEN

The housing crash has left at least 11 million people in the unenviable position of owing more on their homes than they are worth—and many more millions with properties worth far less than they paid for them.

But some might not be as trapped as they think.

Record-low mortgage rates and a new slump in home prices are presenting unusual opportunities in the housing market these days—even for so-called underwater borrowers.

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Larry and Mary Schuck paid about $29,000 to refinance into a 15-year mortgage at a rate of just 4.5%. That's like an investment return of about 10% a year over five years. They also reduced their total interest payment by more than $95,000.

Some intrepid homeowners are intentionally taking a loss on their current house—and writing a big check to retire their old mortgage—in order to buy twice the home for not much more money. Others, eschewing conventional personal-finance advice, are even opting for "cash-in" refinancings, paying thousands of dollars out of pocket to settle old loans—and then taking out new mortgages with lower payments, shorter durations or both.

Katie Everett, a real-estate broker in Denver, says none of her clients kicked in cash when selling their homes last year. This year, "about half are willing to bring money to closing, anywhere from $5,000 to $45,000," she says.

Are these people crazy to be tying up even more of their cash in their homes, in effect doubling down on what has been a losing bet thus far? After all, any number of variables, from the employment picture to the credit markets, could weigh on housing for years to come.

Yet economists say trading up to new homes or refinancing existing ones can be smart—even if it means plunking down more cash to get out of old mortgages. People living in less-desirable neighborhoods might be able to find better homes in tonier ones that offer better appreciation potential. And with mortgage rates so low, such buyers can keep their monthly payments manageable, even though the new homes are more expensive.

"If you are trading up, what better time than when interest rates are at record lows and the cost of the trade-up is much less than it used to be?" says Christopher J. Mayer, a Columbia Business School economist.

The refinancing equation is changing, too. Thanks to rock-bottom interest rates and liberal lending terms for Federal Housing Administration loans, a person who plunks down cash to retire a higher-rate mortgage might be able to reduce his monthly payments, even as he shortens his loan term to 20, 15 or 10 years.

In the past, financial planners typically recommended that homeowners devote as little cash to real estate as possible, and to invest it in the financial markets instead. But with stocks essentially where they were 11 years ago and market volatility seemingly on the rise, people are rethinking that wisdom. Devoting extra cash to repay a mortgage early is among the safest ways to produce an investment return.

"At this point," says Jay Brinkmann, chief economist of the Mortgage Bankers Association in Washington, "if they don't have anything else that is bringing a tremendous return, then they are buying themselves an annuity by paying their house off sooner than they needed to."

During the fourth quarter of 2009, 33% of refinancings were of the cash-in variety, the highest percentage since Freddie Mac began tracking the characteristics of refinance transactions in 1985. Figures for the second quarter are due next week.

"Historically high percentages of borrowers are paying down their principal when they refinance their mortgages," says Brad German, a Freddie Mac spokesman.

It helps that interest rates are lower than they have been in decades. The average rate on a 30-year fixed-rate loan was about 4.74% on July 21, according to Bankrate.com. That is down from 5.26% in January. Rates on 15-year loans averaged about 4.18%.

The Mortgage Bankers Association said Wednesday that low interest rates sent the volume of mortgage applications 7.6% higher during the week ended July 16. Purchase applications increased for just the second time since the expiration of a temporary federal tax break in May. Refinance applications grew 8.6%, to the highest level since May 2009.

The attractive terms are spurring people like Scott Ayler, 35 years old, into action. He and his wife, Jaclyn, 33, recently decided to trade up to a larger home in their native Denver, despite taking a loss on their current house. In 2004, they paid $234,000 for a three-bedroom, 2½-bath house builtthat same year in Green Valley Ranch, a subdivision that has among the highest foreclosure rates in the city and lacks upscale amenities. They are in contract to sell the home for about $204,000.

Their new home, built this year, cost about $323,000, comes with four bedrooms and three baths, and sits on a corner lot overlooking a reservoir. The house, which was initially listed at $379,000, is in Denver's desirable Cherry Creek area, known for excellent schools, plentiful amenities and few foreclosures.

With $195,000 remaining on their original 6.625%, 30-year fixed-rate loan, the Aylers estimate their total paper loss will be around $45,000. They are putting down only $11,500 on the new house. But because the new FHA loan carries a 4.5% rate, their monthly payment will rise by only $290 a month.

They say they expect better price appreciation in their new home. And with a young daughter and plans for another child, they need more space anyway.

"We don't want to wait for the market to come back," says Mr. Ayler, general counsel for an energy company. "We wanted a better quality of life now."

Of course, many homeowners in states like Arizona, Florida and Michigan are seriously underwater, having overpaid for houses now worth as little as half their value at the market's peak. Making up that yawning gap and scraping up additional cash for a new down payment is beyond their means.

Some of those people are going to extremes by engaging in "strategic defaults," a highly controversial strategy in which they stop paying their mortgages and go into foreclosure to get out of their obligations. But while cutting losses on a bad housing investment might seem liberating, it can stain a person's credit report for years.

The vast majority of homeowners remain reluctant to sell their primary residence at a loss, perhaps irrationally so. In a study of seller behavior in condominium transactions in downtown Boston from 1990 to 1997, economists David Genesove of Hebrew University in Jerusalem and Prof. Mayer of Columbia showed that sellers were so "averse to nominal losses" that it affected their behavior. Those who were selling their homes in down markets and faced the possibility of nominal losses kept their homes on the market for much longer than other sellers, in some cases to their detriment.

"Loss aversion is a very, very strong force," Prof. Mayer says. "People don't like to sell their homes for less than they paid for it."

But, he adds: "Why should it matter? If you sell a home for less than you pay for it, you would buy for less, too."

Others are coming around to that view. In Minneapolis, real-estate agent Jason Walgrave says he recently helped a couple buy a 2,800 square-foot home in nearby Plymouth, Minn., an affluent suburb, for $325,000. To get there, they sold for $175,000 a 1,500 square-foot house for which they had paid $190,000 in 2005. Their existing home is financed with a 7.5% mortgage; they will get 4.5% on the new one.

The couple is bringing $25,000 to the closing table to pay off the old loan and closing costs. "They want to take advantage of the bigger house at a lower price and the lower interest rate," Mr. Walgrave says. Now, for an extra $390 a month, they are getting almost twice as much house.

Just as old beliefs about selling houses are being upended, the conventional wisdom surrounding refinancing is changing, too. Time was when the only question about a refinance deal was how much money the homeowner could take out of the house. From the 1980s through the mid-2000s, the so-called cash-out refi became an easy way for homeowners to spend beyond their means.

Now, some homeowners are doing the opposite: writing big checks to pay off their old mortgages and taking out new ones with far lower interest rates, shorter repayment terms or both.

Anthony Hsieh, chief executive officer and founder of loan broker LoanDepot.com, says that because home values have fallen so much, many people have to bring cash to qualify for refinancing these days. "Surprisingly to us, they are willing to do it," he says.

Skeptics question why people would throw more cash at a depreciated asset. But according to Prof. Mayer, the Columbia economist, the decision centers on whether the homeowner thinks he or she can find better ways to invest the cash being sunk into housing.

During most of the 1980s and 1990s, the answer was unquestionably yes. The stock market was rising, and investing in housing seemed comparatively dull. During those years, personal-finance experts even argued against paying "points" on a mortgage to reduce the interest rate. With banks lending at 7% to 8% throughout much of the period and the stock market returning more, it was foolish to devote more cash to housing than was necessary.

But since 2000, stocks have essentially gone nowhere. Meanwhile, the recent recession gave new currency to the idea of living as close to debt-free as possible, a process economists call deleveraging. "Today, people are a lot more conservative," Mr. Hsieh says.

Larry Schuck, 60, a semiretired security consultant, is among them. Mr. Schuck is opting to pay money out of his own pocket to refinance into a shorter-term mortgage. The goal: to reduce his total interest payments over the life of the loan.

He and his wife, Mary, 56, like their Winston, Ga., community and plan to stay there. They bought their home in December 2008 for $246,000, and it appraised recently at $228,000.

Mr. Schuck this month paid $29,000 in principal and closing costs to refinance his 30-year fixed-rate mortgage, which carried a 5.87% interest rate, into a 20-year loan at 4.5%. The deal will save him more than $95,000 in interest charges over the life of the loan, he estimates, while lowering his monthly payment by $147. In investment terms, the deal produces a return of about 10% a year for five years, which about as long as most people keep a mortgage, according to Paul Habibi, professor of real estate at the UCLA Anderson School of Business.

"You are lucky if you get 1% interest in your savings account," he says. The average savings account pays interest of 0.21%, says Greg McBride of Bankrate.com.

Economist Laurence Kotlikoff, a professor at Boston University and president of Economic Security Planning, a financial-planning software company, calculates that by refinancing the mortgage to a lower rate and a shorter term, Mr. Schuck and his wife were able to increase the amount of money they can spend during retirement by about 3% each year. The short-term cost: a four-year period of belt-tightening resulting from their forgoing the ability to spend the $29,000 they paid for the new loan.

"Even though things will be a little bit tight for the next four years, on balance it was a good move," Prof. Kotlikoff says.

For scores of other homeowners, summoning the courage to take a loss now could lead to gains later on.

"People who have suffered losses and would like to refinance hesitate to do so because they have to acknowledge this loss and come up with money to get a decent rate," Prof. Kotlikoff says. "But it might still be in their interest to do it."

LA Real Estate Advice: Southland Home Sales Edge Up, Prices Level Off

Southern California’s housing market continued its slow crawl toward normalcy in June as sales volume rose and the median price slipped back a notch from May, but remained 13 percent higher than a year ago. Red-hot, fire-sale deals continued to give way to mere bargains in the lower- cost inland markets where first-time buyers and investors have competed fiercely, a real estate information service reported.

A total of 23,871 new and resale homes were sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was up 7.2 percent from 22,270 in May, and up 2.6 percent from 23,262 for June 2009, according to MDA DataQuick of San Diego.

The sales count was the highest since July last year when 24,104 homes were sold. It was the strongest month of June since 2006 when 31,602 homes sold. The average June since 1988 has had 28,086 sales.

“The market was wildly out of kilter a year ago, now it’s just somewhat out of kilter. We’re still seeing lots of bargain hunting, and we’re not seeing much discretionary buying. The single-biggest issue is still mortgage financing. Rates may be at record lows, but that doesn’t mean much if the lender won’t qualify you,” said John Walsh, MDA DataQuick president.

“Still, more money was spent last month buying homes in Southern California than in the past two years, and more money was loaned. The tax credits had something to do with that, though it’s not clear exactly how much. With the impact of the credits fading fast, the next few months will tell us a lot.”

The median price paid for a Southland home was $300,000 last month. That was down 1.6 percent from $305,000 in May, and up 13.2 percent from $265,000 for June 2009. The low point of the current cycle was $247,000 in April 2009, the high point was $505,000 in mid 2007. The median’s peak-to-trough drop was due to a decline in home values as well as a shift in sales toward low-cost homes, especially foreclosures.

Foreclosure resales accounted for 33.0 percent of the resale market last month, down from 33.9 percent in May, and down from 45.3 percent a year ago. The all-time high was February 2009 at 56.7 percent, DataQuick reported.

Government-insured FHA loans, a popular choice among first-time buyers, accounted for 39.0 percent of all mortgages used to purchase homes in June.

Last month 20.8 percent of all sales were for $500,000 or more, compared with 22.2 percent in May and 19.3 percent a year ago. Zip codes in the top one-third of the Southland housing market, based on historical prices, accounted for 29.6 percent of existing single-family house sales last month, down from 31.0 percent in May but up from 27.8 percent a year ago. Over the last decade those high-end areas have contributed a monthly average of 33.3 percent of regional sales. Their contribution to overall sales hit a low of 21.0 percent in January 2009.

High-end sales would be stronger, and the overall market recovery more robust, if adjustable-rate mortgages (ARMs) and “jumbo” loans were more available. Both have become much more difficult to obtain since the August 2007 credit crisis.

While 43.9 percent of all Southland purchase mortgages since 2000 have been ARMs, it was 6.6 percent last month, up from 6.5 percent in May and up from 2.7 percent in June last year.

Jumbo loans, mortgages above the old conforming limit of $417,000, accounted for 17.3 percent of last month’s purchase lending, up from 17.2 percent in May and from 14.9 percent in June 2009. Before the credit crisis, jumbos accounted for 40 percent of the market.

Absentee buyers – mostly investors and some second-home purchasers – bought 19.7 percent of the homes sold in June, paying a median of $220,000. Buyers who appeared to have paid all cash – meaning there was no indication that a corresponding purchase loan was recorded – accounted for 23.5 percent of June sales, paying a median $213,000. In February this year cash sales peaked at 30.1 percent. The 22-year monthly average for Southland homes purchased with cash is 14.1 percent.

The “flipping” of homes has also trended higher over the past year. Last month the percentage of Southland homes flipped – bought and re-sold – within a six-month period was 3.4 percent, while a year ago it was 1.9 percent. Last month it varied from as little as 3.0 percent in Orange and San Diego counties to as much as 3.8 percent in Los Angeles County.

MDA DataQuick, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates, monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.

The typical monthly mortgage payment that Southland buyers committed themselves to paying was $1,251 last month, down from $1,293 for May, and up from $1,193 for June a year ago. Adjusted for inflation, current payments are 44.3 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They were 54.4 percent below the current cycle’s peak in July 2007.

Indicators of market distress continue to move in different directions. Foreclosure activity remains high by historical standards but is lower than peak levels reached over the last two years. Financing with multiple mortgages is low, down payment sizes are stable, and non-owner occupied buying is above- average, MDA DataQuick reported.

	Sales Volume			Median Price
All homes	Jun-09	Jun-10	%Chng	Jun-09	Jun-10	%Chng
Los Angeles	7,636	7,849	2.8%	$320,000	$335,000	4.7%
Orange	2,958	3,423	15.7%	$418,000	$445,000	6.5%
Riverside	4,694	4,645	-1.0%	$185,000	$210,000	13.50%
San Bernardino	3,438	3,179	-7.5%	$140,000	$160,000	14.30%
San Diego	3,692	3,885	5.2%	$314,250	$335,500	6.8%
Ventura	844	890	5.5%	$365,000	$384,000	5.2%
SoCal	23,262	23,871	2.6%	$265,000	$300,000	13.20%

Source: DQNews.com

Picfair Village/Faircrest Heights Home Sales Update - June 2010

Hi All-

Here is the full list of homes sold and new on market for June 2010 in Picfair Village/Faircrest Heights:

New Listings
1800 Hayworth Ave - $950,000
1561 Carmona Ave - $720,000
2007 S. Point View St - $599,000
1814 S. Point View St. $950,000
1723 Alvira St - $815,000
1807 S. Genesee Ave - $557,000
1768 S. Hayworth Ave - $345,000
6101 Pickford Place - $525,000
1631 Alvira St. - $475,000

In Escrow
1776 S. Orange Grove Ave - $569,000
1657 S. Orange Grove Ave - $699,000
1523 S. Curson Ave - $431,000
6075 S. Pickford Place - $650,000
1708 S. Ogden Drive - $499,900

SOLD
1496 Stearns Drive - $749,000
1610 Stearns Drive - $860,000
1504 S. Curson Ave. - $633,033
1540 S. Genesee Ave. - 615,000
1600 Hi Point St. - $570,000
1569 S. Hayworth Ave - $480,000
1829 Stearns Dr. - $900,000

For further details about any of these properties or for a free market evaluation of your own home, feel free to call me anytime on my cell at 310-228-8856.

-Jerry

"Many More Foreclosures hitting market soon" - NEW LA TIMES Article

Hi Everyone-

I'm back in action again! I took a little time off from updating my blog for a month or so to take a much needed "web" sebatacle, and also focus on some of the current business in the neighborhood. The rest was well needed after a whirlwhind of activity due to the expiration of the $8000 tax credit deadline in April (April-May was a busy months with many sales. whew!). Anyhow, here is a great article from LA Times released today with update on what to expect regarding foreclosure market coming up.

-Jerry
310-228-8856

Foreclosure Sales Decline, but Housing Recovery still has Far to Go.
Though fewer distressed properties changed hands in the first quarter, many more are in the pipeline, data firm RealtyTrac says.

By Alejandro Lazo, Los Angeles Times
June 30, 2010

Fewer bank-owned homes and properties in foreclosure sold in the first three months of 2010, according to a report released Tuesday. But experts said the nation's housing market will remain troubled for years to come.

A total of 232,959 U.S. homes that sold in the first quarter were either bank-owned or in some stage of the foreclosure process. That's a 14% decrease from the prior quarter and a 33% decline from a peak in the first quarter of 2009, according to Irvine-based RealtyTrac.

Those distressed properties made up 31% of all previously owned homes sold in the U.S. in the first quarter, RealtyTrac said. And while the number of homes sold in foreclosure has declined this year, the housing market probably won't return to a more normal state until the second half of 2013 as foreclosure activity by banks remains elevated, said Rick Sharga, RealtyTrac senior vice president.

"It is a much longer recovery cycle than we have seen in housing," Sharga said. "But the boom was also unprecedented."

In California, 59,823 distressed homes sold in the first quarter, a 21% decline from the prior quarter and a 47% drop from the first quarter of 2009. In Los Angeles County, 10,823 distressed homes sold, a 22% decline from the prior quarter and a drop of 41% from the first quarter of 2009.

Prices of foreclosed homes are getting slightly cheaper. The average sale price for a foreclosed home in the U.S. was $171,971 in the first quarter of 2010, a 1% decline from the fourth quarter of 2009 and a 3% decline from the first quarter of 2009.

More housing inventory from foreclosures probably is on the way. Although fewer people appear to be entering foreclosure, banks stepped up their repossession of homes at a record pace in the first quarter, according to RealtyTrac.

The rise in property seizures by banks was attributed to the expiration of several moratoriums on foreclosures last year and the failure of the Obama administration's effort to provide widespread permanent mortgage relief for borrowers.

alejandro.lazo@latimes.com

Copyright © 2010, The Los Angeles Times

May 2010 Median Home Sales for Los Angeles

LA Real Estate Advice: California Home Default Cases Plunge

From Los Angeles Times
A 40.2% drop in the first quarter suggests that the foreclosure crisis is easing.

The California foreclosure crisis appears to be abating, new data show, as the federal government and big lenders step up efforts to keep troubled borrowers in their homes.

Mortgage default notices — the first step toward foreclosure — plunged 40.2% statewide in the first three months of the year compared with the same period in 2009, according to San Diego research firm MDA DataQuick.

Foreclosure sales dropped 1.7% from a year earlier and 16.1% from the last three months of 2009, DataQuick said Tuesday.

The numbers suggest that the housing market won’t be flooded by a fresh wave of bank repossessions, which had been seen as a major threat to the market’s recovery.

“It is surprisingly good news,” said Gerd-Ulf Krueger, principal economist at Housingecon.com. “There is still a lot of supply lurking out there, but at this point, it looks like it is pretty much under control.”

Stuart A. Gabriel, director of UCLA’s Ziman Center for Real Estate, said the declining foreclosure numbers are “consistent with a broad range of indicators that are suggestive of not only a healing economy but the beginning of healing in the housing market.”

Southern California home prices jumped 14% in March from the same month a year ago, to a median $285,000.

Even so, economists note that further gains statewide are jeopardized by continued high unemployment, particularly in the Inland Empire and the Central Valley.

Foreclosure activity remains concentrated in these inland areas, which suffer from above-average unemployment. DataQuick said mortgages were most likely to go into default in Merced, Stanislaus and San Joaquin counties. Conversely, defaults were least likely in the Bay Area counties of Marin, San Francisco and San Mateo.

“In coastal California, things are looking pretty decent,” said Richard Green, director of the USC Lusk Center for Real Estate. “I still think if you get into the Inland Empire, Fresno, Bakersfield, Modesto, people are really struggling because the unemployment rate is so high — so that people just need help to get out from under.”

California loan default notices peaked at 135,431 in the first quarter of 2009. Since then, the federal government has put increasing pressure on banks to work with homeowners behind on their payments. At the same time, experts say, banks have recognized that flooding the market with foreclosures weakens the value of the properties they have taken back and must resell.

Nestor Fabian, 44, and his wife, Ada, 41, are among those who are hoping for a break from their lender.

The couple bought a four-bedroom, three-bath home in Victorville in 2006 and said they owe Wells Fargo Bank about $305,000 on a property they believe is worth about $128,000. Ada lost her job at a Mervyn’s store about two years ago and has since been jobless.

“I feel like a prisoner in my home,” said Nestor Fabian, an audio technician who commutes to Pasadena. “Basically, I am asking for any peanuts they can give me.”

Fabian is trying to arrange a lowered mortgage with Wells Fargo through the Obama administration’s $75-billion effort to help troubled borrowers.

While the Fabians are hoping for relief, many others are still losing their homes. Paula Murray, 65, and her husband, Roger, 58, lost their Apple Valley home to a foreclosure sale in January. They are scrambling to find an apartment before they are evicted June 1.

But it isn’t easy, Paula Murray noted, because both she and her husband are unemployed and the foreclosure has damaged their credit rating.

“It hurts me because the government gives all this money to these big rich guys to bail them out, bails out the banks, but the little guy can’t get bailed out,” Murray said.

In March, the Obama administration unveiled measures aimed at getting lenders to reduce principal balances on problem mortgages and refinance “underwater” borrowers, those who owe more on their home than it is worth. Another provision would allow many unemployed homeowners to get three to six months of reduced mortgage payments while they look for a job.

Kevin Stein, associate director at the California Reinvestment Coalition, said that although the program has added some uniformity to efforts to modify loans, it remains fundamentally flawed.

“Its main limitation is it continues to rely on voluntary participation and financial incentives for the banks to do what it is we all want them to do, which is work with families to avoid foreclosure,” Stein said.

Foreclosures may also be slowing because banks are deliberately putting fewer homes on the market, experts said. It’s now taking homes about 7.5 months on average to go from a default notice to a foreclosure sale. A year ago, it was 6.8 months, according to DataQuick.

“They may be a little bit reluctant to put homes on the market all at one time,” said Celia Chen, a housing economist with Moody’s Economy.com. “I also think the process is lengthy and there are many homes in the foreclosure process, and so the process may just be clogged up.”

Across California, 81,054 borrowers received a notice of default in the first quarter of this year, down 4.2% from 84,568 in the fourth quarter of 2009. It was the fourth straight quarter in which default notices declined.

There were 42,857 foreclosure sales, a decrease of 16% from 51,060 in the fourth quarter of 2009 and 1.7% from 43,620 in the same period a year ago.

Source: Los Angeles Times

2010 Pico Area Market Snapshot/NewHomesLA.com Recent SALES

CLICK SNAPSHOT FOR RECENT SALES BY JERRY IN PICO: Mar. 2009-2010

California Rebound Boosts 20-city Home Price Index

LOS ANGELES — A surprisingly strong rebound in California's real estate market helped lift a key home price index for the eighth month in a row.

That's good news for people who plan to sell their homes this spring. Prices are now up almost 4 percent from the bottom in May 2009, but still almost 30 percent below the May 2006 peak.

Prices rose 0.3 percent from December to January on a seasonally adjusted basis, according to the Standard & Poor's/Case-Shiller 20-city home price index released Tuesday. Prices increased in 12 cities in the index.

The biggest monthly gain was in Los Angeles, where prices rose 1.8 percent from December. And real estate agents say there's a distinct sense the worst of the downturn is over.

Buyers are "seeing that prices are creeping up," said Tony Middleton, a real estate agent with ZIP Realty who concentrates on the San Fernando Valley. "They're losing bids on homes and they have to bid again."

Prices in San Diego, meanwhile, rose by almost 0.9 percent. Phoenix had the third-largest gain at 0.8 percent.

Compared with the same month last year, the 20-city index was off just 0.7 percent from last year at a reading of 146.32. That was the smallest decline in almost three years and in line with analysts' expectations, according to Thomson Reuters.

Rising home prices also could boost consumer optimism. For most Americans, their home is their largest asset, so as values climb from the depths of the housing bust, homeowners feel wealthier and more comfortable spending. And, for homeowners who owe more on their mortgages than their properties are worth, rising prices rebuild equity.

Consumer confidence rebounded in March after a February plunge, according to a survey released Tuesday. The Conference Board's Consumer Confidence Index rose to 52.5 in March, recovering about half of the nearly 11 points it lost in February.

Still, shoppers remain cautious and there are signs that last year's housing rebound won't last. Home sales sank during the winter, and government incentives that have propped up the market are ending.

Another reason for the positive news is simply that the Case-Shiller index measures a three-month average of home prices. So January's report included November's strong home sales.

However, bargain-hunting homebuyers continue to pack open houses in California, often facing off with investors for foreclosed homes.

"We're seeing multiple offers in most of the markets here in the San Francisco Bay area," said David Kerr, an agent with ZipRealty in Oakland, Calif. "People are getting off the fence."

In February, bank-owned properties made up 44 percent of all resales in the state, according to MDA DataQuick. In Southern California, they accounted for more than half of resales.

With such high demand, supply is dwindling, driving prices higher.

Meanwhile, the state's unemployment rate has flat-lined of late, and that's made buyers more comfortable about purchasing a home than they were just six months ago, said Richard Green, director of the Lusk Center for Real Estate at the University of Southern California.

California home sales will likely get a boost in coming months thanks to a new serving of government stimulus.

Last week, state lawmakers enacted a tax credit of up to $10,000 for homebuyers that kicks in May 1. The state allotted $100 million for first-time buyers and another $100 million to anyone who buys a newly built home. California had a round of tax credits last year that proved to be popular; that program ended in July.

The latest incentive picks up where a federal first-time homebuyer tax credit of up to $8,000 is scheduled to leave off when it expires at the end of April. Should the Obama administration extend the federal tax break, that could give homebuyers in California even more reasons to buy.

Still, there remain pockets of weakness. Sales of homes priced above $500,000 are sluggish. And despite rising prices, more than one-third of all homeowners with a mortgage still owe more on their loans than their homes are worth, according to First American CoreLogic.

Among the cities showing monthly price declines in January, the biggest drop was in Portland, Ore., where prices fell 1.8 percent from December. Chicago and Seattle saw declines of 1.7 percent, while prices in Atlanta fell 1.5 percent.

Many analysts expect the Case-Shiller 20-city index will again turn downward in the coming months as more foreclosures in other states hit the market.

"It is only a matter of time before the index records a double-dip in prices," wrote Paul Dales, U.S. economist with Capital Economics, who forecasts a 5 percent drop. The market will be tested in the second half of the year, he wrote, when a tax credit that has boosted sales is gone.

The Case-Shiller index measures home price increases and decreases relative to prices in January 2000. The base reading is 100; so a reading of 150 would mean that home prices increased 50 percent since the beginning of the index.

Source: The Associated Press.

Pico Area Real Estate Advice: Is it time to rush out and buy a house before mortgage rates go up?

1601 S. Curson - New Listing in Picfair Village

As the Federal Reserve winds down its intervention in the mortgage market, rates on home loans are generally expected to rise at least modestly during the rest of this year from today’s unusually low levels. Some analysts believe mortgage rates will jump to around 6% by year end from 5% in recent weeks, while others see only a slight increase. Meanwhile, federal tax credits available for some home buyers are due to expire at the end of April, adding to the sense of urgency many shoppers feel. “I’d hate to miss out on really low [mortgage] rates” or the tax credit, says Jennifer Hale, a veterinarian who is looking for a new home near Minneapolis with her fiance, Lawrence Nystrom.

If rates do go up sharply, that will have a big effect on home buyers. Richard Redmond, a mortgage adviser at All California Mortgage in Larkspur, Calif., offers the example of a couple with combined pretax income of $100,000 a year and debt obligations (excluding mortgage) of $500 a month. At a 5% mortgage rate, he figures, the couple could qualify for a loan big enough to buy a $590,000 house, assuming a 20% down payment. At 6%, that would fall to $540,000. Since late 2008, 30-year fixed-rate mortgages have been available for people with strong credit records at around 5%, near the lowest levels since the 1950s, thanks to the Federal Reserve’s heavy purchases of mortgage securities.

At the end of March, the Fed is due to stop buying the securities. Most mortgage analysts think the immediate effect of the Fed’s withdrawal will be modest. Laurie Goodman, a senior managing director at mortgage-bond trader Amherst Securities Group LP in New York, estimates that the Fed move will add a maximum of about 0.25 percentage point to mortgage rates. “There is a lot of private money on the sidelines,” waiting to buy mortgage securities once the Fed stops gobbling most of them up, Ms. Goodman says. She points to banks, money managers and foreign investors.

What happens to interest rates over the rest of this year depends on many factors that are hard to predict, including the strength of the economy, Fed policies and foreign investors’ willingness to buy U.S. debt. Projections vary widely. At the lower end of the scale, analysts at Credit Suisse and FTN Financial Capital Markets forecast that mortgage rates will be in a range of roughly 5% to 5.25% at the end of 2010. Moody’s Economy.com projects about 5.7%, and Barclays Capital 6%. Barclays cites a general rise in interest rates propelled by heavy government borrowing and a strengthening economy as the main factors.

John W. Anderson, a broker at Twin Oaks Realty of Crystal, Minn., who is helping Ms. Hale and Mr. Nystrom search for a house, says the tax credit and fear of higher interest rates are motivating buyers “to move a little faster.” But he cautions against moving too fast because of the risk of overpaying or ending up with a home you don’t really like. “Getting the right home is the No. 1 thing,” he says.

Source: Wall Street Journal

LA Real Estate Advice: Appraisals- The Problem We’re Facing

Hi everyone-

One of my fellow colleagues, Clinton Wade over at our local Prudential office, posted a webblog that I thought was a great explanation about the issues the industry is having with appraisals. Currently, failed appraisals are one of the primary reason sales are being cancelled here in Los Angeles. Please check it out and let me know your thoughts. thanks!

Jerry
310-228-8856

LA Times: 2010 Home Sales Charts (Area-by-Area) for LA!

Please check out here the latest MLS Home Sales Charts for 2010, tracking the sales volume for each neighborhood of LA. This is a very informative Data chart!! Enjoy. :)

LINK: MLS Home Sales Volume Chart: 2009-2010

All the best,
Jerry
P.S. Later this week I will be posting a blog about the changes in appraisal issues and the real impact it's had on real buyers in LA.

New escrow and another new listing in Picfair Village!

Hi Folks!

It's been a busy month for me, and we have a couple new sales and new listings in Picfair Village.

New Listing: 1601 S. Curson Ave. Newly Remodeled, Charming Spanish 2BR, 2Ba Home. Will hit the market on March 17th!! - $599,000. Pictures to Follow.

Current Escrows in Picfair: 1727 S. Stanley Ave. Previously remodeled, Classic Spanish 3Br Home. Move-in Condition on a nice quiet Picfair Street. Listed at $520,000


1727 S. Stanley Ave - IN ESCROW!

All the Best,
Jerry
310-228-8856

New Turnkey Listing in Pasadena's Highly-coveted Cal Tech Area! - 1710 Rose Villa Street - $699,000

Just got a great new 3BR, 2BA Listing in Pasadena's super popular Cal Tech Neighborhood! Turnkey Traditional Home. We'll be having our first open houses next Thursday, 3/4, from 10AM-4 PM and Sunday, 3/7, from 1-4PM. Please stop by and say hello!

1710 Rose Villa Street, Pasadena, CA - Listed at $699,000

"Despite 4% December Increase, Foreclosures Threaten to Keep Housing Market Down"

Hope everyone has been dealing with the rain ok and has been staying dry. LA Times and Bloomberg recently reported the news that, in a period traditionally classified as sluggish, the median Home sales price for Los Angeles actually increased 4% year-over-year for December. Is that good news, yes? Does it mean the worst is over? well, not so fast...

If you haven't read the latest report from LA Times, here it is: http://www.latimes.com/business/la-fi-home-sales20-2010jan20,0,3261823.story?track=rss

On one hand, we should acknowledge that it is, ultimately, a good sign that home sales increase. However, there were some very specific factors that I believe caused the increase. Factors that will not exist anymore in the coming months and may set bullish minded real estate analysts up for disappointment.

Before I continue, let me say that there are definitely a few VERY POSITIVE TRUTHS to note in the LA Times article. Namely:

1) The interest rates really are rock bottom right now. In that regard, GREAT reason to have bought in December.
2) As Chris Cortazzo at Coldwell Banker says: We are having a lot of cash deals, so there is a lot of money out there, and there is amazing opportunity and great deals to be had " There are great deals out there for buyers who are aggressive and have cash.

Unfortunately, the December increase may turn out to be more of an anomaly then a trend. As I mentioned there were some very specific factors that led to the increase in the December median price that we simply cannot expect in the first few months of 2010.
First, you need to know that the foreclosure market was put on a major halt late last year, suspending their action for the holiday season. This softened their impact on home prices in December.

As a result, the sales prices of single family homes and condo units climbed up on a year-over-year basis.

Based on data from New York-based real estate research firm HomeData, the median sales price for a single-family home in December was $348,000, marking a jump from the November median of $339,000 and from the December 2008 median of $345,000.

The median sales price of condo units was $315,000, an increase from the November median of $305,000 and the December 2008 median of $310,000.

The total number of houses sold in December 2009 was higher by 30 percent than December 2008, although it was lower by around seven percent than November 2009.

Analysts have been encouraged by the price and sales improvements, but they are concerned that the improvements are only temporary because of the forbearance efforts by lenders.

Christopher Thornberg, chief analyst for Los Angeles-based real estate consulting firm Beacon Economics, said that the drop in Los Angeles foreclosed homes for sale in December was only temporary because lenders just suspended their foreclosure actions during the holidays. It is expected that they will continue to pursue home and land foreclosures in the first months of the year.

Thornberg added that the federal tax credit, the low mortgage rates and other federal policies are temporarily propping up the housing market. He reiterated that existing home and condo foreclosures need to be absorbed before new foreclosures enter the market so that property prices do not plunge further.

Meanwhile, based on data from another research firm, default notices in California fell by almost 18 percent in December, after dropping by more than 32 percent on a daily basis, as lenders suspended their foreclosure actions. Fannie Mae, sister company Freddie Mac and Citigroup are among those which suspended their foreclosure acquisitions and evictions.

Foreclosure auction sales were also temporarily suspended, as auction sales dropped by 3.5 percent on a daily basis. With these suspensions, research firms said that foreclosure figures in December did not represent housing sector realities, considering that mortgage defaults increased in November and in December.

In the LA Times article, Chris Cortazzo mentioned that Spring sales are going to start early this year. He is right.

Many of these are foreclosures that have been waiting to hit the market, and surely this year, there are going to be a lot of great opportunities for bank-owned properties and regular sales alike - No property is immune from the stigma of being the over-priced home in the neighborhood. We are already seeing an influx of new, well priced properties hitting the market this year, and I'm optimistic about the buyer's market continuing through the spring.

All the Best,

Jerry Hsieh

310-228-8856