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

Jerry & Rachel Hsieh Real Estate Team - Keller Williams Realty in Los Angeles
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Tuesday, December 18, 2012

FHA to extend rule permitting loans on 'flips' of fixed-up homes

The agency's policy has encouraged investors to buy foreclosed and deteriorating houses from lenders, then repair them and resell within short periods of time.

December 16, 2012|By Kenneth R. Harney
WASHINGTON — Rehabbers and real estate investors rejoice: You'll still be able to sell houses to first-time buyers using low-down-payment FHA-insured mortgages next year, even if you've owned the fixed-up property for less than 90 days.
The Federal Housing Administration has decided to extend its rule permitting loans on quick "flips" of renovated houses beyond the scheduled Dec. 31 expiration deadline. The policy is widely considered one of the key federal government moves that has encouraged private investors in large numbers — often mom-and-pop, small-scale operations — to buy foreclosed and deteriorating houses from lenders, then repair them and resell within short periods of time.
Since the plan was first put into place by the Obama administration in February 2010, more than 65,000 renovated homes have been financed using more than $11 billion in FHA-backed loans, according to federal officials. Roughly 23,000 of these properties were acquired and resold with FHA loans within the last year alone.
The idea, according to acting FHA Commissioner Carol J. Galante, is to help "stabilize real estate prices as well as neighborhoods and communities where foreclosure activity has been high" by making it easier for investors to buy, fix up and sell run-down homes that add to urban blight and depress values.
The primary purchasers of the renovated properties are first-time, moderate-income families who might otherwise be frozen out of the market because they don't have the down-payment cash required for a conventional loan. FHA down payments can be as low as 3.5%.
The Obama administration's initiative in 2010 represented a reversal of earlier restrictions on flips first imposed in 2003. After scandals in Los Angeles, New York, Baltimore, Washington, D.C., and other large cities over widespread fraudulent flips — in which houses were sometimes resold for double their previous price within days or even hours — the FHA stopped insuring loans on houses whose sellers had owned them for less than 90 days.
Paul Wylie, a Los Angeles-area investor active in renovating distressed properties, welcomed the extension of the FHA policy because "it allows predominantly first-time buyers to compete with cash buyers, investors and others" for houses at affordable prices that have been professionally repaired. In some neighborhoods in and around Los Angeles, many homes that have been rehabilitated for resale within 90 days are what Wylie calls "foreclosure flips, short-sale flips or standard-sale flips." The FHA is pretty much the only financing available for moderate-income, owner-occupant buyers of these renovated properties.
Bruce A. Calabrese, chief executive of Equitable Mortgage Corp. in Columbus, Ohio, says the essential ingredients in the FHA's revised approach are its strict controls on appraisals, inspections and chain of title — all designed to ensure "that there is no funny business going on."
The FHA's policy requires property sellers to comply with a detailed list of standards. Among the most prominent:
• You can't play games on ownership. All transactions must be arm's length with "no identity of interest between the buyer and seller or other parties" involved in the sale. You can't buy a house from your uncle at a bargain price, hire your brother to do a few quick repairs to it, then resell it for a huge profit to an unsophisticated buyer, supported by a hyped-up appraisal signed by a friend or partner.
• The seller of the rehabilitated house must have clear legal title to it. This may sound elementary, but some flippers during the late 1990s never bothered to acquire title and record it. They took over the property one day, slapped a little paint on the outside and sold it for cash the following day.
• If the selling price is 20% higher than what the house cost the seller, a second appraisal, conducted by a member of the FHA's panel of approved appraisers, is mandatory to be certain that the improvements made to the property justify the increased price.
• An independent inspection report, conducted by a professional with no connection to other participants in the transaction, is also mandatory when the price jump is more than 20%. If there are repairs that are still needed that could affect the "health and safety" of the purchasers, they must be completed and a re-inspection conducted before the closing.
Bottom line: Flipping under the FHA's rules should continue to be an important option for buyers of renovated, previously distressed houses and the investors who make it their business to find them and fix them up.

Courtesy of LA Times

Wednesday, November 28, 2012

LA REAL ESTATE ADVICE: "With Prices Sizzling in the Southland, Housing Market Looking Up"



Reporter: Laurel Erickson
Producer: Karen Foshay
Associate Producer: Alicia Clark
Editor: Michael Bloecher
November 12, 2012
Is Southern California's housing market finally headed for recovery? It's been a rough four or five years with home values collapsing and banks foreclosing. Terms like "underwater" and "upside down" are the new language of real estate. Now there are signs that the "bad old days" may be coming to an end. Prices are climbing again, up to 7 percent compared to a year ago. It's good news if you're looking to sell. And if you hope to buy, there's something you should know -- the pros have already jumped in.

Laurel Erickson: This is Robert. He's a Realtor. He drives back roads, boulevards and side streets scoping for deals. And this is Dan. He's a family guy looking for new digs. And these are the flippers, Phil and Deborah. And they are all competing to find homes in L.A. Flags are waving and signs are hanging all over Southern California.

The housing market is sizzling again after taking a few years off during the great recession. It's fueled in part by record-low interest rates and fewer foreclosed properties. Housing prices are up across the Southland, with some counties seeing double-digit increases. Orange County, 5.9 percent. Los Angeles, 9.7 percent. Riverside, 11.3 percent. And San Bernardino, 13.3 percent. 

While housing prices in Southern California are not back to their peak in 2007, they are 27.5 percent higher than the y were at the lowest point in 2009.

Here is the picture: California’s median house price is $287,000 -- that’s up from its bottom price of $221,000 in 2009, at the height of the recession.

Richard Green/USC Lusk Center for Real Estate: Until February, we weren't seeing this. And now we are seeing houses go on the market and they are off the market in a week or two with seven, eight, nine offers, and often above listing price. 

Erickson: Green told us the real estate hot spots are Pasadena, the Inland Empire, and anything along the coast. That's where we met Robert Meadows. 

Meadows: It's booming. People are having seven to 15 multiple offers on every house that is on the market. Where we used to see 70 houses on the market, you are down to 30 houses in the market.
Erickson: He took us on a tour of West L.A., where inventory is low and prices are up.

Meadows: Over my shoulder, we have a house that was listed for $1.1 million. It sold like that. And then we relisted it for 1.4 [million] and it sold instantly, like that. The first day, we had a hundred people come through the house -- a hundred people! I mean I could not keep the people from coming into the house. I had to "Stop! Stop!" That's how big it was.

Erickson: We drove a few miles and saw another hot property.

Meadows: About three months ago this house was on the market for 649 [thousand] and the minute they put the sign on the grass they had 20 offers. I had a client, and we put in a bid. We didn’t even come close to it. Twenty offers overnight. It sold well above the asking price.

Erickson: And just a few blocks over.

Meadows: This house went for 449 [thousand]. We called the agent up, we told her we wanted to put an offer in. She said she had three offers. Twelve hours later, they have 12 offers. We missed out. Gone.

Green: I think the reason this is so surprising is we went through such a long period, where it took a very long time to sell a house. There weren't that many people out there interested.

Erickson: Not anymore. This family, the Garrs, are struggling to find a home in a supply-starved market. For a year, they've been looking to buy. Forty open houses later, they are still looking. 

Dan Garr: We put bids down on three homes and once we initiated the bid, it started to go up and get competitive, and going up something in the neighborhood of $100,000. And it’s going fast, competitive. You are competing with people with all cash down.

Erickson: People like this woman, Deborah Cavallaro.

Deborah Cavallaro: I am public enemy number one for the typical purchaser, the family guy that wants to buy that property and live in it. 

Erickson: That's because Deborah Cavallaro is a "flipper." She buys homes, fixes them up, and quickly puts them back on the market at a higher price. Unlike most family guys, Deborah buys homes with cash.

Cavallaro: So we are a more desirable buyer to the seller, whomever that may be" because we can close faster.

Erickson: She's flipped four homes in the past year, including this one. 

Cavallaro: One of them was on West 48th street, I purchased that property for $115,000 and then we sold it about six months later for $268,000.

Erickson: Like Dan the family guy, Deborah also has enemies in the real estate game.

Cavallaro: I have lots of enemies and they get bigger and bigger and bigger. My enemies are the big corporate buyers. 

Erickson: Buyers like this man, Phil Gilboy of TLC investments. 

Gilboy: She probably has the opportunity to do two or three, whereas we a have a bunch of money behind us.

Erickson: Phil has bought over thirty homes in the past two years. This is his latest flip. It’s a home in Westwood he and his investors picked up for $1.3 million. He'll soon put it back on the market for over $2 million. After investing a few hundred thousand on remodeling, his company is expecting to make a nice return.

Gilboy: This should be $455,000 profit on this property.

Erickson: Home flipping is up in the Southland, accounting for 5.5 percent of all homes sold in September.

Gilboy: It's not just us. We are small fish in this deal. There are guys that purchase 30 houses a month. They are all over Los Angeles.

Green: They are able to come in with cash they raise through, very often, private equity funds and they will go to a seller, particularly a financial institution that has a lot of homes on the books, and they will say, "You know what? We will take 30 of them all at once." But of course, for the family that needs to get a loan, and needs to get underwritten on that home, they are just not able to compete with those kinds of offers.

Erickson: And that's exactly what happened to this home.

Meadows: This went on the market for 649 [thousand]. It had multiple offers. A corporation came in with an all-cash offer, 14-day close, and they put it back in the market and sold it for 899 [thousand].
Erickson: Are these tales of bidding frenzies the prologue of another housing bust? Green says "no" thanks to low mortgage-to-income ratios and stricter lending practices. Financial institutions don't want folks buying homes they can't afford. That was a big contributor to the housing meltdown. While this is a healthier housing bubble than in previous years, Green says we shouldn't ignore California’s patterns of booms and busts. 

Green: What I worry about is, again, you don't want to be too enthusiastic -- you hope that people have learned their lesson, that we don't get the kind of frothiness we had before because 20 percent increases in housing prices are not good for anybody.

Erickson: Back in West L.A., there's a lot of foot traffic at this home. Today is the first open house. And who else is there? Robert and Dan.

It's nice, but not quite the right fit. Robert has some advice for Dan and others looking to get in this "hot right now" market. 

Meadow: If he sees something that he likes, make an offer. Pull the trigger. Otherwise he will miss out on an opportunity and he might go on to next year.
Erickson: Perhaps good advice, but then again, when did a realtor ever tell you not to buy? And who knows if next year brings a fizzle to the sizzle. In the meantime, the flippers, the big investors, and the family guys, are all crowding the open houses, trying to get a piece of what is, for right now, a seller's market.

Wednesday, October 31, 2012

Hurricane Sandy disrupts real estate market

thinkstock


The U.S. real estate recovery that’s gained strength this year faces a setback from flooding and property damage inflicted by Hurricane Sandy, the biggest tropical gale to hit the Atlantic seaboard.
The storm battered homes in Eastern coastal states that account for about one out of every five U.S. real estate sales and threatened inland areas with flooding and blackouts. Lenders put transactions on hold and companies like Coastline Realty in Cape May, New Jersey, pulled in their for-sale signs to prevent the wind from turning them into projectiles.

“We’ll definitely see lower numbers in new sales and new applications,” said David Stevens, president of the Mortgage Bankers Association. “We do expect to see lenders put a freeze on properties across the northeast on the shoreline until they can be inspected and assessed for damages.”

Sandy, about 1,000 miles wide, prompted warnings of life- threatening storm surges from Virginia to Massachusetts, emptied the streets of the nation’s largest cities, paralyzed mass- transit systems and lashed the area with gales, rain and even snow. U.S. airlines grounded 9,500 flights, U.S. stock trading is closed through today in the first back-to-back shutdowns for weather since 1888. Losses may total as much as $20 billion, with $5 billion to $10 billion of that insured, according to Eqecat Inc., an Oakland, California-based provider of catastrophic risk models.

Property Damage

Almost $88 billion of homes in seven states are at risk of damage, according to a report by CoreLogic Inc., a mortgage software and data firm in Irvine, California. New York has $35.1 billion of property in harm’s way, New Jersey has $22.6 billion, Virginia has $11.3 billion, and Massachusetts has $7.8 billion. Maryland, Delaware and Pennsylvania have a combined $11 billion of property at risk, CoreLogic said.

A fire tore through more than 50 homes today in a Queens beach community that suffered heavy flooding, the New York Times reported. On 57th Street in Manhattan, a crane on a 90-story residential building under construction partially collapsed and was dangling over the street. The storm has accounted for 16 deaths, according to the Associated Press.

The storm may also adversely affect commercial properties and securities linked to their debt. New York accounts for 13.2 percent of property loans contained in commercial-mortgage bonds, according to Standard & Poor’s. Loans in Virginia make up 4 percent of deals, while mortgages in Pennsylvania account for 3.4 percent, S&P said yesterday in a note to clients. Debt on New Jersey properties accounts for 3.1 percent of outstanding bonds.

Adequate Insurance’

“Given the magnitude of the storm there will be some impact on performance but more so on smaller properties, to the extent there is structural damage to the property and they require significant capital expenditures,” said Deutsche Bank AG debt analyst Harris Trifon. It won’t lead to any significant increase in delinquencies, he said, because most properties should have adequate insurance.
Still, the storm, which forced cancellations of U.S. stock trading and fixed-income markets, means Wall Street also had to put on hold about $3 billion of commercial mortgage bond sales that included loans to shopping malls, hotels and office buildings.

The U.S. housing market has been recovering this year. Median sales prices rose to $188,800, up 11 percent over a year earlier, according to the National Association of Realtors. Home sales reached an annualized pace of 4.75 million in September, up 11 percent from a year ago. Pending home sales edged up in September for the 17th consecutive month on a year-over-year basis.

Martha’s Vineyard

The storm’s central barometric pressure is lower than that of the 1938 hurricane that devastated homes in New York and New England. Flooding has been reported along the coast from Martha’s Vineyard in Massachusetts through New Jersey. The storm submerged Plymouth Rock, the landmark in Massachusetts traditionally represented as the place where Pilgrims first stepped onshore in the New World in 1620.

“I have never seen a storm this large in regards to wind flow,” said Rob Carolan, a meteorologist at Hometown Forecast Services Inc. in Nashua, New Hampshire. “So many bad things had to come together all at once. It is going to make the Perfect Storm’ look small. It’s remarkable what an impact this is going to have.”

Perfect Storm’

The “Perfect Storm” struck the U.S. East Coast in October 1991. It later became the subject of a book by Sebastian Junger and a movie starring George Clooney.

Fannie Mae, Freddie Mac, Bank of America Corp. and Wells Fargo & Co. told property managers to make sure their foreclosed homes were secured, David Benham, co-owner of Benham Real Estate Group, a property management company based in Charlotte, North Carolina, said in a telephone interview.

“They told us to do what we can in terms of the building but keep ourselves safe,” said Benham, whose company manages 2,000 bank-owned homes nationwide. Their assignments start with boarding up windows and doors, he said. They expect to complete field reports, including photos, within five days showing damage from the weather, he said.

Over the long run, the storm could worsen blight on properties in the foreclosure pipeline where owners don’t have the resources — or the intention — to maintain the property and the loan servicers don’t have full legal responsibility for maintaining the property, Chris Whalen, senior managing director at Tangent Capital Partners LLC, said during a telephone interview from New York.

Floating Inventory’

There’s a “floating inventory” of abandoned or delinquent properties not available for sale that has been growing in states like New York and New Jersey, where the foreclosure process takes longest, Whalen said.

About 20,000 New Jersey properties facing foreclosure or already repossessed by banks are in Sandy’s path, in the counties of Burlington, Camden, Gloucester, Salem, Ocean, Atlantic, Cape May, Cumberland, Daren Blomquist, RealtyTrac vice president, said in a telephone interview.

More than 50,000 New York foreclosures are threatened in New York City’s five boroughs and the counties of Ulster, Dutchess, Westchester, Suffolk, Nassau, Rockland, Putnam, Orange, Greene, Columbia, he said.

In Connecticut 3,055 homes in foreclosure will be affected in New London, New Haven, Middlesex and Fairfield counties, Blomquist said.

Closed Courthouses

The storm closed many courthouses where lenders pursue foreclosures, another wrench in a process that takes an average of 1,072 days to complete in New York, the longest process among U.S. states. Foreclosures take an average of 931 days in New Jersey, second-longest, and 661 days in Connecticut, the sixth longest, according to RealtyTrac.

At the current pace of foreclosures, the pipeline of homes with seriously-delinquent mortgages would take 495 months — more than 41 years — to work through in New York and 425 months in New Jersey, the longest of any states, according to Lender Processing Services Inc.

“The magnitude of the damage is not yet known, but none of this can be good for the prospect of getting the foreclosure crisis behind us,” said David Dunn, an attorney with Hogan Lovells in New York.

The Hamptons, on the eastern tip of New York’s Long Island, had lost electricity yesterday afternoon, according to Judi Desiderio, president of Town and Country Real Estate in East Hampton. Owners and buyers who plan to live there during hurricane season should factor in the approximately $50,000 cost of having a generator as part of the price of owning property, she said.

Another necessity, she said, is “a bunch of friends who live nearby so you can have a hurricane party.”

(Courtesy of Bloomberg.com)

Wednesday, October 24, 2012

Freddie Mac: Mortgage rates edge lower; 30-year average at 3.37%

 
Mortgage rates

Mortgage rates hovered near their all-time lows this week, with the average 30-year fixed loan at 3.37%, down from 3.39% last week, Freddie Mac said in its latest survey of what lenders are offering to solid borrowers.

The record low of 3.36% was set two weeks ago.

Freddie said the average offering rate for a 15-year home loan was 2.66%, a new record low. Borrowers would have paid an average 0.7% of the loan amount in upfront lender fees and points for the 30-year loan and 0.6% for the 15-year mortgage.

The initial rates for adjustable-rate mortgages rose slightly.

Observations on the recovering housing markets from Freddie Mac economist Frank Nothaft:

"Construction on single-family homes jumped to an annualized rate of 11% in August, the strongest pace since August 2008. Over the first nine months of the year, single-family starts were 23% higher than the same period last year. Moreover, homebuilder confidence rose for the sixth consecutive month in October to the highest level since June 2006.”

Freddie Mac asks lenders each Monday through Wednesday about the terms they are offering on popular types of loans. Solid borrowers who shop around can often do somewhat better, and many pay additional upfront points to lower the rate. Third-party costs such as appraisals and title insurance are not included in the survey.
(Courtesy of LA Times)

Wednesday, October 10, 2012

Does Your Los Angeles Real Estate Agent Have Your Best Interests in Mind?

When buying or selling Los Angeles real estate with a real estate agent, one of the first forms that California requires to be signed is a “Disclosure Regarding Real Estate Agency Relationship”. This form is basically just an explanation of the different types of agency relationships that a buyer or seller can have with their real estate agent.

Many buyers and sellers do not, however, understand what this important disclosure means or how it affects their real estate transaction. The purpose of this tip sheet is to explain the differences and similarities between the three real estate agency relationships -- Seller’s Agent, Buyer’s Agent, and Dual Agency.

But first, it is necessary to define what an agency relationship even is and how it relates to Los Angeles real estate.

In 1988, California became the first state to pass laws that explicitly defined real estate agency relationships. The concept of “agency” is one of the most important when it comes to real estate. What these laws of agency basically say is that real estate agent has a fiduciary responsibility to their client. This in turn means that the agent must always act in the best financial interest of their client.

Today, all real estate agents licensed by California are governed by these laws of agency. The three types of agency, as outlined by Californian law, are (1) Seller’s Agent, (2) Buyer’s Agent, and (3) Dual Agency.

Seller’s Agent Most of those with Los Angeles homes for sale are represented by a Seller’s Agent. According to California law, the Seller’s Agent is obligated to have “a fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Seller.”

The Seller’s Agent must always act in the financial interest of the seller. In general, this means negotiating the highest possible sale price a home. Consequently, the agent must not provide any information to the buyer that might be disadvantageous to the seller’s interest. Likewise, if the buyer provides any pertinent information to the Seller’s Agent, the agent will likely pass it on to the seller. Therefore, the buyer should tread carefully when speaking with a Seller’s Agent.

Buyer’s Agent When searching through the Los Angeles homes for sale, it really helps to be represented by a Buyer’s Agent. Like the Seller’s Agent, the Buyer’s Agent is obligated by California law to have “a fiduciary duty of utmost care, integrity, honesty, and loyalty,” but when “in dealings with the Buyer.”

The Buyer’s Agent must always act in the financial interest of the buyer. Generally speaking, this means negotiating the lowest possible sale price for a home. In the same way that the Seller’s Agent must be careful with their client’s information, the Buyer’s Agent must act in the financial interest of the buyer. Therefore, sellers should not let important information slip when communicating with the Buyer’s Agent.

Dual Agency Of all the Los Angeles real estate agency relationships, Dual Agency is easily the most controversial. Dual Agency is when a real estate agent -- meaning, either a real estate firm or an individual --represents both the buyer and the seller. In this case, the agent is still obligated to have a “fiduciary duty of utmost care, integrity, honesty and loyalty,” but when “in the dealings with either the Seller or the Buyer.”

This is obviously a fine line to walk, because the Dual Agent cannot reveal any information that would give an unfair advantage to either the buyer or seller. Some argue that this balance is essentially impossible to maintain. Others claim that a talented Dual Agent can speed up the process while mediating a fair compromise between the buyer and seller.

While some states have outlawed Dual Agency, it remains to be seen how this controversy will ultimately play out in California.

Wednesday, October 3, 2012

Los Angeles Real Estate Update, September 2012

The Los Angeles real estate market has shifted considerably over the last 12 – 18 months. A major reduction in inventory has turned L.A. into a sellers’ market, where properties sell quickly and often for the full asking price.
Home prices are still in the red when measured annually, but improvements can be seen month to month. The same goes for condo prices.
Here are the latest numbers coming out of the L.A. real estate market.

Condo and Home Prices are Up, Monthly

The latest release of the S&P/Case-Shiller Home Price Index was published on August 28. It included data through the end of June 2012. According to the report, L.A. real estate prices are improving at the monthly level. Prices rose by 2.2% from April to May, and 1.7% from May to June of this year.
While the annual numbers are still negative, they also seem to be improving. This time last year, the year-over-year price change was -3.4%. In May of this year, the annual return was slightly better at -2.0%. In June, the annual return improved again to -0.6%.
The next Case-Shiller report will be released on September 25, and will contain data through July of this year. Based on recent trends within the Los Angeles real estate market, we will likely see a positive annual return in L.A. home prices — for the first time in months.
Bear in mind the Case-Shiller report is limited by a two-month lag. More recent data shows positive price trends, even when measured annually. Trulia’s website, for example, shows a year-over-year improvement in the median sale price for this metro area. Additionally, a recent report by real-estate data provider DataQuick shows a 3.1% increase in the median price, from July 2011 to July 2012.
Condo prices in L.A. have mirrored home-price trends, for the most part. Both indicators are still negative when measured year over year (using the Case-Shiller numbers), with positive gains in the more recent months. Condo prices rose each month from March to June, reaching late-2003 level.
The Los Angeles condo market has fallen 40% from its July 2006 peak. Despite the recent monthly gains, condo prices will probably never reach that peak level again. Nor should we expect them to. What’s noteworthy here are the monthly gains and the increasing stability of the market as a whole.

Fewer Homes for Sale, Year Over Year

The number of homes for sale in the L.A. metro area has declined sharply over the last year or so. According to Realtor.com, the total number of listings dropped by 29% from July 2011 to July of this year. This allows homeowners to set — and justify — higher asking prices when listing their homes. The median list price for this market rose 6.43% during the one-year period mentioned above.
Currently, real estate conditions in Los Angeles appear to favor the seller over the buyer. In fact, this metro area was recently ranked as one of the top ten sellers’ markets in the United States. In July, the real-estate information company Zillow ranked the top buyers’ and sellers’ markets in the U.S. The comparison group included 50 of the largest metro areas in the country. According to that report, Los Angeles was the #8 sellers’ market in the country. This means homes are selling fast, and often for the full list price.
The median age of inventory for the L.A. metro area dropped by nearly 10% over the last year, according to Realtor.com. This comes as no surprise, given the reduction in inventory and other market conditions.

The L.A. Real Estate Market in 2013

The Los Angeles housing market will likely strengthen in 2013, but improvements will be modest. The weak job market will continue to limit demand for housing. The unemployment rate in L.A. neared 12% in July, according to the Labor Department. That’s well above the July national average of 8.3%.
Low mortgage rates will continue to attract buyers. The benchmark 30-year mortgage rate is expected to hover below 4% through at least the first quarter of next year (disclaimer below). This, combined with the prospect of rising home prices, will pull many home buyers off the fence and into the market.
Inventory will be a primary driver of the L.A. real estate market, well into 2013. If the number of homes for sale continues to drop, as it has since last summer, we could see a modest but consistent rise in home prices. Time will tell.

Disclaimers: This story contains forward-looking statements about the Los Angeles housing market, home prices, and other economic factors. These statements were made based on current market conditions, and these conditions may change over time.
This information has been provided for educational use only and does not constitute a guarantee about future economic conditions. Please do not make any financial decisions based solely on this report. We encourage all home buyers to seek the assistance of an experience real estate agent.


Full article: http://www.homebuyinginstitute.com/news/los-angeles-update-264/#ixzz28GvWGGGr

Sunday, September 30, 2012

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Thursday, June 28, 2012

LA REAL ESTATE ADVICE: Southern California real estate gets a boost in May with more Homes Sold for Higher Prices

Published June 13, 2012

Southern California's real estate market got its buying season bump in May with home sales increasing more than 20 percent and the median price hitting a 20-month high, a market tracker said Wednesday. 

Sales increased in all six Southern California counties, according to San Diego-based DataQuick.
"The market is being slowly nursed back to health by low interest rates, a modestly improved economy and, we suspect, a widening sense that the housing sector is at or near bottom," DataQuick President John Walsh said in a statement. 

Last month home sales increased 20.6 percent to 22,192 properties from 18,394 a year ago. DataQuick's count includes new and previously owned houses and condominiums. Los Angeles County did even better, with sales jumping 25.3 percent to 7,496 properties from 5,983 a year ago.
Sales have now increased on a year-over-year basis for five consecutive months with last month's gain the biggest, DataQuick said. 

May's regional median price increased 5.4 percent to $295,000 from $280,000 a year ago. It was up 1.7 percent from $290,000 in April, DataQuick said. 

Last month's median was the highest since $295,500 in September 2010. The year-over-year gain in the May followed a 3.6 percent annual increase in April. Before then, the median had fallen year-over-year for 13 straight months. 

DataQuick attributed the price increase to higher demand, a drop in the number of distressed property sales and more sales in the higher-cost coastal markets. 

Last month sales in San Diego, Orange, Los Angeles and Ventura counties represented about 70 percent of all sales, up from 67.6 percent a year ago. 

The higher end is finally getting some action, too. Last month sales between $300,000 and $800,000 - a range that would include many move-up buyers - jumped 23.1 percent year-over-year. And sales over $800,000 rose 11.8 percent from May 2011. 

The report showed that in May:
The median price in Los Angeles slipped 1.6 percent to $315,000 from $320,000 a year earlier
Sales in Ventura County soared 43.3 percent to 993 from 693 a year ago. The median price fell slightly to $360,000 from $360,500. 

In San Bernardino County, sales increased 16.3 percent to 2,702 from 2,323 a year ago. The median price rose 5.7 percent to $158,500 from $150,000 a year earlier. 

Distressed sales - the combination of foreclosure resales and short sales - made up 44.8 percent of last month's resale market. That was the lowest level since the figure was 44.4 percent in March 2008.
Investor and cash-only home purchases remain near record levels. 

Absentee buyers - mostly investors and some second-home purchasers - bought 27 percent of the homes sold in May. That's down from 28.4 percent in April but up from 25.1 percent a year earlier.
Buyers paying with cash accounted for 31.3 percent of May home sales, down from 32.2 percent the month before and up from 29.2 percent a year earlier. 

Indicators of market distress continue to move in different directions. Foreclosure activity remains high by historical standards but is much lower than peak levels reached in recent years. Financing with multiple mortgages is very low, and down payment sizes are stable, DataQuick said.
It all adds up to a market still on the mend. 

"There's still plenty of uncertainty swirling around out there," Walsh said. 

greg.wilcox@dailynews.com
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