Los Angeles Home Prices Still Holding Strong!

Southern California's housing market settled into a typical seasonal pattern in September with sales falling from August, but prices continued making big gains from a year earlier, a market tracker said Wednesday.

However, the median has increased year-over-year for 18 consecutive months, DataQuick said. The increases have been in the 20 percent range for the last nine months as distressed properties have been weaned from the market and sales of more expensive homes increased.
Last month sales increased 7 percent to 19,112 properties from 17,859 a year earlier. Sales fell 17.1 percent from 23,057 in August as the summer buying season wound down.
"We've seen a fairly normal downshifting in the housing market this fall. Couple that with the rise in inventory, higher mortgage rates and the ongoing gradual drop in purchases by investors and cash buyers, and it's no wonder prices have leveled off in recent months," DataQuick president John Walsh said in a statement.

What is not yet clear is how the government shutdown, which ended last Wednesday, impacted the housing market. That won't be known for several months, Walsh said.
In San Bernardino County during September the median price jumped 32.4 percent to $225,000 from $170,000 a year earlier, the biggest increase in the region. Sales increased 15.4 percent, also the region's biggest gain, to 2,358 properties from 2,044 a year earlier.
Los Angeles County's median price increased 25 percent to $425,000 from $340,000 a year earlier and sales increased 5 percent to 6,494 from 6,188 in September 2012.
DataQuick tracks sales and prices of new and previously owned houses and condominiums.
During September the number of homes that sold from $300,000 through $800,000 -- a range that would include many move-up buyers -- increased 25.5 percent year-over-year. The number that sold for $500,000 or more jumped 42.1 percent from one year earlier, while $800,000-plus sales rose 43.4 percent.

Transactions involving foreclosed homes and short sales also continued trending down.
In September sales of homes foreclosed on in the prior 12 months accounted for 6.3 percent of the Southland's resale market, down from 6.9 percent in August and down from 16.6 percent a year earlier.
Last month's foreclosure resale rate was the lowest since 5.5 percent in May 2007. During the downturn foreclosure resales hit a high of 56.7 percent in February 2009.
Short sales, deals in which the sale price fell short of what was owed on the property, accounted for a 13.1 percent share, down from 13.3 percent the month before and down from 28 percent a year earlier.
September's level was the lowest since a 12.9 percent share in May 2009.
Absentee buyers, mostly investors and some second-home purchasers, bought 26.3 percent of the Southland homes sold last month. That was down from 26.7 percent the month before and down from 27.7 percent a year earlier.
DataQuick analyst Andrew LePage said that the market is downshifting a bit.
"I've heard of fewer multiple offers and properties are staying on the market a little bit longer," he said. "And there are some drops in asking prices. Some sellers are really trying to reach for the stars based on the appreciation we were seeing during the summer. The market has cooled somewhat from then."

WELL SAID! THE VALUE ADD OF EXPERIENCED REAL ESTATE AGENT IS ON AVERAGE $25k OVER NEW AGENT

The Price of Real-Estate Experience: $25,000

Veteran real-estate agents vastly outsell their rookie counterparts, according to one study

By Sanette Tanaka

Can you put a price on experience? In real estate, you can. It is about $25,000 for the average house.
Veteran agents sell homes for an average of 12% more than their less experienced counterparts, says Bennie Waller, professor of finance and real estate at Longwood University in Farmville, Va. Veteran agents also tend to list more new properties, more townhouses and condominiums and larger properties.

 

Associated Press

Two-thirds of properties listed by veteran agents sold, while only half of properties listed by rookies did.

"The more experience you have, the more likely you are to sell the properties that you list, the more likely you are to sell it at a higher price and the less time it stays on the market," Prof. Waller says.
Prof. Waller, along with Ali Jubran, a student at Longwood University at the time, examined 10,065 real-estate listings in a mid-Atlantic multiple-listing service from March 1999 to July 2009. They divided the listings into three groups—ones listed by agents who have been licensed for two years or less (called rookies), agents who have been licensed for two to 10 years and agents who have been licensed for 10 years or more (called veterans). They controlled for property characteristics such as size and location to isolate the "experience variable," and then compared the results for rookies and veterans. The study was published in the Journal of Housing Research in May 2012.

Prof. Waller became interested in quantifying experience when he noticed an increasing number of agents who chose not to renew their licenses after two years. Real estate has "very, very, very low barriers to entry," he says. But brokers then face a steep learning curve and many struggle to reach a level of expertise that is profitable, he adds.
Two-thirds of properties listed by veteran agents sold, while only half of properties listed by rookies did. That may be because rookie agents have to be more flexible in picking up listings, even if the chances of selling are low.

"If a house is priced ridiculously, they might say, 'Fine, I'll take the listing,' " Prof. Waller says.
Generally, experienced agents have greater knowledge of the neighborhoods and a larger network of buyers and sellers, as well as relationships with home inspectors, appraisers and mortgage brokers.
For some, confidence comes with time. James Stroupe, a real-estate agent at Realogics Sotheby's International Realty in Seattle, says he used to take listings priced above-market, but now, with nearly 20 years of experience under his belt, he isn't afraid to suggest an alternative price.

And then there are the lessons learned. Michael Rankin, principal and managing partner of TTR Sotheby's International Realty in Washington, D.C., began selling real estate right out of college, so he faced the twin pitfalls of inexperience and youth.

"I would meet people and say I'm a real-estate agent. They would joke and say, 'I've got children older than you. Are you sure you're a real-estate agent?' " he says.

Mr. Rankin says he didn't get referrals until his third year in the business. Referrals now make up about 70% of his sales. His listings stock also has changed dramatically. In his 20s, his average sale price was about $300,000 to $400,000. Now, it is more than $2 million.

Experience taught him how to deal with consumer behavior. "Residential real estate is really an emotional transaction. I don't think I was prepared for any of it. It's about understanding and knowing people. That, to me, is what an experienced broker brings to the table," he says.

When Pamela J. Hagan first began practicing real estate about 30 years ago, she had a listing that just wouldn't sell. After zero offers in eight months, she asked a more experienced agent to help. "We tweaked the price and staged it properly, removed clutter and everything. I just didn't think of that when I was new," says Ms. Hagan, of Century 21 Beggins Enterprises in Longboat Key, Fla. "After we got it all set up and dropped the price, we sold it within 30 days."

Write to Sanette Tanaka at sanette.tanaka@wsj.com

Home Sales Crush Expectations, Surge 6.5%

Existing home sales crushed expectations climbing 6.5% in July to an annualized pace of 5.39 million units. This was up 17.2% year-over-year. 
June's numbers were revised lower to show a 1.6% fall to 5.06 million units.
Meanwhile, total housing inventory was up 5.6% at the end of July to 2.28 million. This represents a 5.1-month supply at the current sales pace. The median time that most homes spend on the market was 42 days in July, this is up from 37 the previous month
The national median price for existing homes was 13.7% higher than a year ago at $213,500. This is the seventeenth straight monthly rise. A key finding was that first time buyers were down from 34% of all purchases a year ago, to 29% this time around.
Distressed homes, which include foreclosures and short sales accounted for 15% of July sales, the same as June.
Economists have been watching for the impact of the run up in mortgage rates on existing and new home sales. The 30-year mortgage rate stands at 4.4% according to Freddie Mac's primary mortgage market survey (PMMS).
"Mortgage interest rates are at the highest level in two years, pushing some buyers off the sidelines," said Lawrence Yun chief economist at NAR in a press release.
"The initial rise in interest rates provided strong incentive for closing deals.  However, further rate increases will diminish the pool of eligible buyers."
Economists at Credit Suisse expect existing home sales to fall to the lowest level in three months and post the first consecutive decline in over two years.
"One percent increases in mortgage rates over a two-month span are rare," they write. "When they have happened in the past, home sales — both existing and new — usually register a monthly decline in the second month of the two-month back-up (in our case, that's July)."

But their July monthly survey of real estate agents showed that most buyers don't expect mortgage rates to go much higher and they're waiting to see if there's a pullback in rates that could create a buying opportunity.

"There is still not a lot to choose from for homebuyers, and this tight inventory continues to limit sales gains.  Other headwinds include tight underwriting standards, protracted bank approval processes, and a delayed selling process."
Existing home sales account for a larger share of the market than new homes.

How Our Miracle Mile Got Its Name

Circa 1940 view of the Miracle Mile sign on Wilshire Boulevard, with the May Company department story in the background. Courtesy of the Dick Whittington Photography Collection, USC Libraries.

In 1921, the stretch of Wilshire Boulevard now known as the Miracle Mile was a 20-foot-wide dirt road, flanked by oil wells and barley fields. Today, the strip is a busy thoroughfare, home to museums, the La Brea Tar Pits, and a collection of historic Art Deco structures. The story of the Miracle Mile's stunning transformation from cow path to commercial artery -- told through selected images from the region's photographic archives -- is part of the larger narrative of L.A.'s decentralization, as electric railways and automobiles encouraged sprawl and drained the downtown retail district of its vitality.

The Miracle Mile was the brainchild of real estate developer A.W. Ross, who in 1921 paid $54,000 for 18 acres of land along the south side of Wilshire Boulevard between La Brea and Fairfax avenues. Ross envisioned a retail district there, subdividing the land and offering it to suitors for as little as $100 a front foot, but the tract's commercial potential appeared bleak to many. Retail was then concentrated in the downtown business district, and with no electric railway line along Wilshire, the remote location was inaccessible to many Southern Californians. Ross' detractors dismissed the tract -- surrounded by grain fields, a primitive airport, and an active oil field where asphalt seeped up from the ground -- as "Ross' bean patch" and "Ross' folly." Ross pressed forward with his plan anyway.
"I went to men of wealth," he told the Los Angeles Times in 1939. "They turned me down; I was visionary. Even friends who had the means to help me laughed and wished me luck."
But the developer foresaw how the rise of the personal automobile would change settlement patterns and upset the balance of power between downtown and what were then the city's hinterlands.
"When I started out to plan the Miracle Mile I saw Beverly Hills gaining ground in the west, Hollywood progressing to the north, business forging nearer from the east and fine residences going up in the south," he told the Times.

Located within a four-mile drive of the city's most fashionable residential districts, Ross' subdivision boomed as L.A.'s population continued to swell and fill in the automobile suburbs west of downtown. First, a structure consisting of two small storerooms rose sometime before 1924 at the corner of La Brea and Wilshire. Then, a two-story building at Cochran and Wilshire appeared, followed by a fruit market at Curson and Wilshire.
It was not until 1928 that the Miracle Mile acquired its glamorous appellation. Ross originally gave his development a much less-memorable name: Wilshire Boulevard Center. According to a story -- perhaps apocryphal -- Ross was describing his vision for the development when a friend interjected: "From the way you talk, A.W., one would think this is really a miracle mile." The name, with its obvious promotional value, stuck.
But what finally signaled the Miracle Mile's success was the 1929 arrival of a Desmond's inside the Wilshire Tower at Dunsmuir Avenue. With three downtown locations, the department store validated Ross's foresight by placing its fourth branch miles west of the central business district.
When it opened on March 15, 1929, the Wilshire Tower fronted an entire city block and featured an 11-story Art Deco tower. Desmond's main entrance opened onto the sidewalk, but many shoppers entered through the rear; in a nod to the automobile's ascendency, the store's owners built a large parking lot behind the store and reserved additional space for future parking needs.
Other retailers soon followed Desmond's to the Miracle Mile, and they, too, provided ample parking for their customers behind their buildings. Silverwood's arrived in September 1929. In a move laden with symbolism, Coulter's shuttered its downtown location in 1938 and opened its Miracle Mile store at Hauser and Wilshire. Two years later, the May Company opened its new Wilshire Branch at Fairfax.

By 1930, when this aerial photo was taken, buildings fronted much of the Miracle Mile. This view looks west down Wilshire Boulevard. The oil field on the top-right is the present-day site of Park La Brea. Courtesy of the Photo Collection, Los Angeles Public Library.

1929 view of the newly-opened Desmond's department store. Courtesy of the Security Pacific National Bank Collection, Los Angeles Public Library.

The May Company under construction, circa 1939. Courtesy of the Dick Whittington Photography Collection, USC Libraries.

Coulter's, circa 1939. Courtesy of the Title Insurance and Trust / C.C. Pierce Photography Collection, USC Libraries.

Circa 1940 view of the Miracle Mile, facing east. Courtesy of the Dick Whittington Photography Collection, USC Libraries.

Circa 1950 view of the Miracle Mile. Courtesy of the Security Pacific National Bank Collection, Los Angeles Public Library.

In the 1960s, Santa Claus would greet shoppers, some of whom arrived by bus, in the Miracle Mile. It was one of several gimmicks that Miracle Mile retailers employed in the face of new competition from suburban shopping malls. Courtesy of the Metro Transportation Library and Archive. Used under a Creative Commons license.

Eventually, the Miracle Mile was overwhelmed by the same forces of change that once made it a success. Increasing reliance on the personal automobile and uncontrolled sprawl ushered in the age of suburban shopping malls, which challenged older, automobile-oriented retail districts like the Miracle Mile just as the Miracle Mile had previously challenged the pedestrian-oriented retail district downtown. Unable to compete, retailers once at the vanguard of L.A's decentralization relocated, leaving vacant storefronts and shabby discount stores in their place.
By the 1980s, the mile-long stretch of Wilshire Boulevard was in need of a second miracle. Even the president of the Miracle Mile Residential Association compared the area to "a slum." Representing local residents, he called on the city to declare the Miracle Mile a historic district, hoping the designation would spur revitalization and attract interest in the area's many elegant Art Deco and Streamline Moderne structures. But property owners rejected the call, and despite preservationists' protest, many cherished buildings have since fallen to make way for apartment complexes.
Instead, it was museums and office centers that injected new life into the Miracle Mile. Patrons flocked to the Los Angeles County Museum of Art (LACMA), which had moved to Hancock Park in 1965. Across the street, the former Orbach's department store found new life in 1994 as the Petersen Automotive Museum, and four years later the abandoned May Company building at Fairfax and Wilshire reopened as LACMA West.
With LACMA, the Petersen, and other museums -- including the Craft and Folk Art Museum, the Page Museum at the La Brea Tar Pits, and the Architecture and Design Museum -- the Miracle Mile has gained a reputation today as L.A.'s museum row. Meanwhile, publications like Variety, The Hollywood Reporter, and Los Angeles Magazine now call the district home. While the Miracle Mile can no longer claim to be the city's premier retail district, the area once derided as "Ross' bean patch" remains fertile commercial ground.

Southland Home Sales Decline As Prices Continue To Rise

LOS ANGELES (AP) — Southern California’s surging housing market stumbled last month with home sales falling as strapped homeowners refused to sell, fewer investors bought and the median sales price rose to $385,000, its highest level in more than five years, a real estate research firm reported Wednesday.

There were 21,608 houses and condominiums sold last month in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties, according to San Diego-based DataQuick. Sales were down 6.2 percent from May and 2.1 percent from June 2012. That year-over-year decline was the first for any month since September.

“Investor and cash buyers are starting to back off a bit,” said John Walsh, president of DataQuick.
At the same time, the median sales price of $385,000 was the highest for any month since April 2008. It was up 4.6 percent from May and 28.3 percent higher than the June 2012 figure, according to the real estate information company.

The median price has regained more than half of the value it lost after the market crashed from the peak of $505,000 in the spring and summer of 2007.
However, there are signs that the “blistering pace” may slow, Walsh said.
“If mortgage interest rates shoot up again then that’s virtually a given,” he added.
Middle- and high-end home sales did well while lower-cost properties languished. About a third of sales were for $500,000 or more, up a bit from May, while the number of homes that sold for less than $200,000 dropped.

“Weak demand isn’t the culprit,” DataQuick said in a statement. “The main problems are a fussy mortgage market and an inadequate supply of homes for sale. Many owners can’t afford to sell their homes because they still owe more than they are worth, and lenders aren’t foreclosing on as many properties, further limiting supply.”
About 16 percent of sales were short, meaning the price was less than what was owed on the property. That was the lowest level in nearly four years, DataQuick said.

Bankrate: Mortgage Rates Hit a 2-Year High

NEW YORK, July 11, 2013 -- /PRNewswire/ -- Mortgage rates rebounded following a better-than-expected jobs report, with the benchmark 30-year fixed mortgage rate rising to 4.66 percent, according to Bankrate.com's weekly national survey. The average 30-year fixed mortgage has an average of 0.28 discount and origination points.
(Logo: http://photos.prnewswire.com/prnh/20040122/FLTHLOGO)
To see mortgage rates in your area, go to http://www.bankrate.com/funnel/mortgages/.
The average 15-year fixed mortgage increased to 3.75 percent, while the larger jumbo 30-year fixed mortgage rate climbed to 4.82 percent. Adjustable rate mortgages moved higher also. The popular 5-year adjustable rate jumped to 3.63 percent, the highest in more than two years, while the 10-year adjustable hit 4.07 percent.
This week's jump in mortgage rates, which more than wiped out last week's retreat, came after the release of the monthly employment report. Job growth for June that exceeded expectations, coupled with upward revisions to April and May payrolls, were evidence of the type of improvement the Fed will need to see to begin curtailing their bond purchases. And for that reason, we saw further increases in both bond yields and mortgage rates, to levels above where they were following Ben Bernanke's late June press conference.
As recently as May 1^st, the average 30-year fixed mortgage rate was 3.52 percent. At that time, a $200,000 loan would have carried a monthly payment of $900.32. With the average rate currently at 4.66 percent, the monthly payment for the same size loan would be $1,032.47, a difference of $132 per month for anyone that waited just a little too long.
SURVEY RESULTS
30-year fixed: 4.66% -- up from 4.48% last week (avg. points: 0.28)
15-year fixed: 3.75% -- up from 3.62% last week (avg. points: 0.26)
5/1 ARM: 3.63% -- up from 3.48% last week (avg. points: 0.33)
Bankrate's national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets.
For a full analysis of this week's move in mortgage rates, go to http://www.bankrate.com/.
The survey is complemented by Bankrate's weekly Rate Trend Index, in which a panel of mortgage experts predicts which way the rates are headed over the next seven days. There is no clear consensus this week, with 42 percent of respondents expecting mortgage rates to remain more or less unchanged. One-third predict that rates will continue to rise, while 25 percent forecast a retreat in mortgage rates over the coming week.
For the full mortgage Rate Trend Index, go to http://www.bankrate.com/RTI
To download the Bankrate Mortgage Calculator & Mortgage Rates iPhone App 2.0 go to https://itunes.apple.com/us/app/bankrate-mortgage-calculator/id551454062?mt=8.
About Bankrate, Inc.
Bankrate is a leading publisher, aggregator, and distributor of personal finance content on the Internet. Bankrateprovides consumers with proprietary, fully researched, comprehensive, independent and objective personal finance editorial content across multiple vertical categories including mortgages, deposits, insurance, credit cards, and other categories, such as retirement, automobile loans, and taxes. The Bankrate network includes Bankrate.com, our flagship website, and other owned and operated personal finance websites, including CreditCards.com, Interest.com, Bankaholic.com, Mortgage-calc.com, CreditCardGuide.com, InsuranceQuotes.com, CarInsuranceQuotes.com, InsureMe.com, and NetQuote.com. Bankrate aggregates rate information from over 4,800 institutions on more than 300 financial products. With coverage of nearly 600 local markets in all 50 U.S. states,Bankrate generates over 172,000 distinct rate tables capturing on average over three million pieces of information daily. Bankrate develops and provides web services to over 80 co-branded websites with online partners, including some of the most trusted and frequently visited personal finance sites on the Internet such as Yahoo!, CNN Money, CNBC, and Comcast. In addition, Bankrate licenses editorial content to over 500 newspapers on a daily basis including The Wall Street Journal, USA Today, The New York Times, The Los Angeles Times, and The Boston Globe.

Read more here: http://www.sacbee.com/2013/07/11/5559766/bankrate-mortgage-rates-hit-a.html#storylink=cpy

Home prices went up WHAT in the last year?!

Southland home prices soar 24.7% in May from a year earlier

The median price reaches $368,000 for all homes sold in the six-county region, the highest in five years.

By Andrew Khouri, Los Angeles Times

Southern California's housing recovery surged last month as buyers scrambled for a short supply of homes.
The median price reached $368,000 for all homes sold in the six-county Southland — a 24.7% increase from the same month a year earlier and the highest price in five years. The number of sales, 23,034, hit the highest level for a May in seven years, real estate information provider DataQuick said Tuesday.
"We're deep into uncharted territory," DataQuick President John Walsh said, citing "razor-thin" inventory, pent-up demand, low interest rates and all-cash purchases by investors and wealthy individuals. "How this all plays out is educated guesswork at this point."

Home prices in Los Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura counties all posted double-digit increases last month compared with May 2012. In Los Angeles, the median skyrocketed 30.2% to $410,000.

The price increases have raised concerns of another housing bubble, but prices remain far from the peak and experts say the market is likely to cool off as inventory expands. As prices rise, more homeowners and builders will list homes for sale. May's median price was 27.1% below a peak of $505,000 reached in spring and summer 2007.
"I think where we are right now we are still OK, but a year from now — another year like this — that is not OK," said Richard Green, director of USC's Lusk Center for Real Estate.
By late fall or early winter, the year-over-year price increases should ease as monthly numbers are compared with a period of more robust growth, Green said. Also, rising mortgage interest rates and a lack of strong wage growth should put the brakes on price hikes, he said.
"Ultimately, people don't have the income," Green said.
For now, buyers are continuing to compete fiercely for available homes. According to a report from Redfin, the online real estate brokerage, buyers faced competing bids on 86.1% of offers Redfin handled in Los Angeles, on 83.9% of offers in Orange County and on 72.6% in San Diego. Those percentages, however, represented declines in Orange County and San Diego from the previous month, while bidding wars in Los Angeles remained essentially flat.
Extremely low inventory and mortgage rates have ignited those bidding wars and helped turn the housing market into an economic bright spot — both in the Southland and nationwide. Investors have also played a major role in the recovery that began last year, buying run-down, lower-cost properties to fix up and rent out.
South Bay real estate agent David Keller said multiple offers are common, although he's slowly noticing a change.
"I do think it has slowed just a little bit, because it can only go so high before the people that have financing can't qualify," he said. "Or people say 'I need to take a break. This is kind of ridiculous.'"
But plenty of buyers are still waiting in line to buy homes, Keller said.
During a recent Sunday open house, about 20 groups of people strolled through a South Redondo Beach town home. The property sold quickly for $710,000, or $11,000 over the asking price, said Keller, the manager at the Manhattan Beach office of Re/Max Estate Properties.
"We had a deal by Tuesday or Wednesday," he said.
The median sales price is the point at which half of homes sold for more and half sold for less; it is influenced by the types of homes selling as well as a general rise or fall in values. DataQuick said most of May's increase represents a general rise in value, while about a quarter of the increase came from a more expensive mix of homes being sold.
The number of homes sold between $300,000 and $800,000, the typical move-up range for the region, jumped 30.3% from last year. Homes that sold for $800,000 or more rose 46.7%. Meanwhile, homes selling for less than $300,000 declined, probably because investors flush with cash have already scooped up most low-end properties.
The home price increases have helped households rebuild wealth lost during the recession, enabling homeowners to once again start building equity while spurring builders to ramp up construction and add jobs.
But the price increases are also eating away at affordability. Only 44% of home buyers could reasonably afford an existing median-priced single family home in the state last quarter, the California Assn. of Realtors reported last month. That's a decline of four percentage points from the final three months of 2012.
Sales declined in Ventura, Riverside and San Bernardino counties in May, but increased in Orange, Los Angeles and San Diego counties, DataQuick reported.
The sales of distressed properties also continued to fall. Homes that had been foreclosed upon within the last year constituted 10.8% of resold homes in May, a decline from 26.9% a year earlier.
Investors continued to play a large role in May, although slightly less than a month earlier. Absentee buyers — mostly investors — purchased 29.5% of homes in May, down from 30.6% in April but up from 27.5% a year earlier.
Cash buyers made up 31.9% of home sales in May, a drop from 34.4% in April and 32.1% in May 2012.

Great insight into this Crazy Market...from our friend and New York Times writer Jennifer Medina

As Home Sales Heat Up Again, Buyers Must Resort to Cold Cash

Monica Almeida/The New York Times

Jeff and Lorena Leininger with their children. The family had nine offers on their house three days after showing it.

By JENNIFER MEDINA and KATHARINE Q. SEELYE

Published: June 8, 2013

LOS ANGELES — Bidding wars sound almost quaint. These days, the only way for would-be buyers to secure a home, it often seems, is to offer all cash and be ready to do so within hours, not days.

Homes like this one near Los Angeles are selling quickly.

The bursting of last decade’s housing bubble feels like ancient history here, where first-time home buyers are competing with investors to get into single-family homes with prices approaching $1 million.

“It’s everyone from a kid out of law school to an investor from China, walking around with thousands to spend,” said Kameron Eliassian, a Los Angeles real estate agent. “I don’t know where it’s coming from, and I don’t care. Just show me proof that it’s there, and we’re good.”

After saving money for years, waiting for the residential real estate market to hit bottom, buyers all over the country appear eager to get back in, lured by low interest rates and the prospect of a good deal.

But with the number of homes for sale at historically low levels and large investors purchasing thousands of properties, buyers are facing a radically changed market and prices are quickly rising.

The percentage of homes bought with cash has shot up in many markets across the nation. Nearly a third of all homes purchased in Los Angeles during the first quarter of this year went for all cash, compared with just 7 percent in 2007. In Miami, 65 percent of homes sold were for cash deals, compared with 16 percent six years ago.

The prices on all-cash deals are also rising significantly. In Los Angeles, the median price on an all-cash home this year is about $351,000, compared with $230,000 in 2009. Over the same period, the median price over all increased to $410,000, up $85,000. In fact, last month, home prices in Southern California hit their highest level in the last five years.

All-cash buyers, typically investors eager to renovate and quickly resell or rent out homes, are making it more difficult for first-time buyers, who typically rely on mortgage loans that can take weeks or months to materialize. More California homes have been flipped in the last year than in any year since 2005.

And while Los Angeles may be a center of the frenzy, it is not an anomaly. Buyers in Boston are offering $100,000 more than the asking price or placing offers on homes they have spent only minutes in. In San Francisco, Miami and Phoenix, sellers are looking at dozens of offers within days of putting their home on the market, often accompanied by letters from would-be buyers professing their love for the property. New York City has seen similar drops in inventory, and prices have been rising steadily since 2009.

Shortly after Andres Alvarez, 36, got married last fall, he began to look for a home with his wife, figuring that their steady jobs, savings and good credit would make them the perfect buyers in Los Angeles. They were ready to spend $700,000. Their optimism deflated quickly.

“We thought we were the cream of the crop, but anything that was in our price range and move-in ready, there was this insane competition,” Mr. Alvarez said. They put in nearly a dozen bids, often losing to cash buyers, before finding a two-bedroom home for $650,000. “It might be a great time to buy, but it’s a horrible time to be a buyer,” he said.

Dick and Susan Yost can vouch for that. They wanted to downsize while leaving their home in Cambridge, Mass., to their son and his family. “We bid on eight places before we finally got one,” Mr. Yost said. “The worst we bid was $85,000 over the asking price, and we didn’t get it.”

Even unappealing homes, he said, had “people all over them.”

Still, there are plenty of skeptics wondering how long the sharp price increases can last.

“People are realizing we’ve probably hit bottom, but the kinds of spikes we’re seeing in places like California seems like history is repeating itself,” said Daren Blomquist of RealtyTrac, which monitors residential sales. “That’s not sustainable for the long term, at least not for the regular home buyer, so I think there are some warning flags there.”

For agents who spent the last several years scrounging for business, the change is welcome. When Mr. Eliassian listed a three-bedroom home in the Hollywood Hills for $699,000 this year, he worried that the current renters would make it difficult to schedule prospective buyers. But with just two open houses — one meant only for other agents — nearly 300 people came through.

“I had to turn the phone off to avoid people asking to see the place,” Mr. Eliassian said.

Within the week, he had six offers, and the home sold for $745,000. He said he had represented and sold homes to more cash buyers in the last year than at any other time in his career. 

Lewis Legon, a developer in Salem, Mass., jumped into the Boston market after he saw how many people were showing up at open houses. “It was like Times Square,” he said of one open house, at a property listed for $1.5 million. He beat out two dozen other bidders by offering $1.8 million in cash, not the first time he had made an all-cash offer.

“The first time I was ready to have a heart attack,” he said of all-cash buy. “But it makes you a more attractive buyer and helps you stand out.”

He also waived the inspection clause, an increasingly common practice. While offers have typically included appraisal clauses, allowing buyers to back out if the home was valued below what they were willing to pay, offers today are more likely to include escalation clauses, saying buyers will pay an additional amount over the highest bid.

“Buyers are taking a lot more risks than they ever would before,” said Dana DeSimone, a Boston real estate agent who called the current market an “insane asylum.” “I don’t know that I’ve ever heard of waiving the inspection contingency on a 150-year-old brownstone until now.”

Now, agents say their biggest challenge is potential sellers who are wary of putting their home on the market because they fear they cannot find a place to buy.

Jeff and Lorena Leininger considered moving from their suburban Los Angeles home over the last several years, but they feared they would not get as much as they paid for it. But this year, with their youngest child getting ready for kindergarten, they decided it was time. Three days after showing the home, they had nine offers.

“It felt as crazy as it was back when we bought 10 years ago,” Mr. Leininger said. “But it was much worse on the other side. We would show up to an open house, and it was already sold. The clear message was: be ready to move fast or just get left out.”

Even in Florida, where the market was once swamped with foreclosures, there are signs of the latest boom, with cash purchases fueled in part by international investors and retirees awash in cash after selling their homes elsewhere.

Don Faught, a manager with Alain Pinel Realtors near San Francisco, said the current market is turning buyers to desperation, particularly because the turnaround has come so quickly.

“A year ago, people didn’t want a deal, they wanted a steal,” he said. “Sellers were listing homes for less than what they originally paid for them and offering all these concessions. Now, the only concessions are coming from the buyers.”

His office has begun to track the number of offers clients make before landing a property. The current record: 27 offers, nearly all at or above asking price.

The Truth About Mortgage Rates: Where we've been and where we're going. . .

Written by: Amanda Thompson

If you’ve been seriously thinking about buying a home, then you’ve been thinking about mortgage rates.  This April was the perfect time to buy.  Why do I say that?  Because this April  interest rates were at an all time low of 3.4%  (according to freddie mac).   Now they’re creeping back up.  Today,  May 31st they’re 3.8%.

In dollars and cents: According to Trulia, the median home price in Los Angeles County is $405k.  If you put the standard 20% down, on a home that price you’ll need a loan for $324,000.

 IF you bought a home in April, when interest rates were 3.4%, with a 30 yr fixed mortgage you would pay $193,276.51 in total interest.

 IF you buy a home TODAY, while interest rates are 3.8%, with a 30 yr fixed mortgage you will  pay $220,156.86 total interest.  

 

THATS A DIFFERENCE OF $26,880.35!! or as I like to say  a new car.

 

IF you wait until interest rates are 5%, with a 30 yr fixed mortgage you will pay, $302,148.74 total interest.  That means you’ll be spending  $81,991.88 more than if you buy  TODAY.  That could have been my college tuition.  That’s why educated buyers are taking advantage of these low rates .   

 

Well I am here to tell you that Ben Bernanke, Chairman of the Federal Reserve, stated that as early as June interest rates could rise to 4%.

 

Bernanke also stated the Fed would keep pumping money into the economy until the unemployment rate is at a solid 6.5%.  Which he believes will take place in 2015.  That means they wouldn’t raise  rates significantly but you could see them go up to 5% by the beginning of 2014, after all they went up almost half a percent in the last month!

 

So if you are a buyer on the fence about if you should buy right now or wait, here's my advice:

If you'd rather give your money to the bank, than take a vacation, or buy a new car, I suggest you buy later. 

If you want the most for your money, BUY NOW!!      

 

5 Things That Home Buyers Must Have!!

A recent survey shows that 77 percent of Gen X & Gen Y home buyers want their homes “equipped with the technological capabilities they have grown accustomed to.” 

 

5 Things Home Buyers Want In 2013

 

Many people shopping for real estate today are younger than previous generations of home buyers, and they’re extremely tech savvy. They grew up with smartphones, apps, and Google searches. And they want to use technology not only in their search for a home but throughout the home itself.

A recent survey by Better Homes & Gardens Real Estate shows that 77 percent of Gen X & Gen Y home buyers want their homes “equipped with the technological capabilities they have grown accustomed to.” And it doesn’t stop there. This new generation of home buyers is “rewriting the rules to home ownership and reinterpreting traditional norms to fit their values,” says Better Homes & Gardens Real Estate.

These aren’t your standard-issue young home buyers from 30 or 40 years ago, who were often married couples looking for a starter home in the suburbs to raise a family. Today, single women make up a large percentage of first-time buyers, as do gay couples and the always-connected mobile professional.

As the home buyer evolves, so does the home. Here are five major shifts in homes you can expect to see today and in the coming years.

1. Man Caves and Smart Homes

The media room or “man cave” emerged in real estate marketing a few years back. Many buyers now prefer high-tech rooms with surround sound, large-screen TV’s, and the most up-to-date A/V equipment to the coveted formal dining room of a generation’s past.

But some aren’t limiting technology to just one room. They’re transforming an entire property into a “smart home” with home automation systems.

At a recent Maple Ridge, N.J. open house, the real estate agent demonstrated the features of the home automation system to excited buyers. With one tap on a touch screen, the owner of that home could remotely lock/unlock doors to let in their kids from school, automatically turn on the A/C or heat before they leave work, or monitor the family dog via webcam.

Given how technology is only going to be more important in our lives, transforming a home into a “smart home” is likely to be a good investment.

2. Carrie Bradshaw Closets

In the first Sex and the City movie, Carrie Bradshaw excitedly tours her future Manhattan apartment with Mr. Big — and is woefully disappointed at the tiny closet space. He surprises her by dramatically remodeling the cramped space into a dream closet, with glowing, glass-enclosed sub-closets.

That 2008 movie raised the bar and set the tone for closets. Today, the walk-in closet is a must-have on many buyers’ wish list. Some homeowners are paring down a four-bedroom home to three by transforming one bedroom into an oversized walk-in closet. It’s a far cry from the Victorian era, when bedroom closets were often the size of a coat closet today.

A large closet will probably never go out of style. If you intend to expand a closet or bedroom into a grand walk-in closet, just be careful not to overly customize it. The more specific you get with your taste, the fewer people your closet will appeal to when you go to sell later.

3. Home Offices

Even though a few companies (most notably Yahoo!) are instituting a ban on working from home, most encourage it. And so, in our always-on culture, many people entering the real estate market are tethered to email well into the evening hours and on weekends.

A home office tops this buyer’s wish list. Depending on the number of bedrooms, some will create a home office with built-in desks, shelving and cabinets. The customized home office with built-ins could deter some buyers, however, who feel they’ve lost a bedroom or other space. But many prefer to have one place dedicated to their laptops, printers and work-related stuff. (A dedicated home office is better for tax purposes, too). Either way, try to make your home office as appealing to the next buyer as it is to you. And keep in mind that, provided you don’t create a built-in a desk or bookshelf, the space can easily be reverted back to a bedroom.

4. Hardwood Floors

If you walk into a home that hasn’t been on the market for decades, you’ll probably see a lot of wall-to-wall carpeting. This was common in the mid 20th century. Not only did carpeting help reduce heating bills, it was seen as physically comforting and less sterile.

Fast forward 50 years, a time when most buyers prefer gleaming hardwood floors. Hardwood floors make a space feel less confined and give it a new, clean feeling. No matter how many times the carpet has been cleaned, there’s something about stepping on someone else’s carpet with your bare feet that turns off today’s buyers.

If you see a home you love, with wall-to-wall carpeting you don’t love, ask the agent what’s underneath it. You might be surprised to find a hardwood floor that, with some sanding and polishing, will give the home that updated, lighter look you want.

5. Urban Homes With Amenities

Home buyers used to covet a three-quarter acre lot. Today’s buyers — both the Gen X and Gen Y generations as well as empty-nest retirees—see that same lot and think “maintenance.”

Instead, they’re opting for city living, in big cities like New York as well as smaller urban centers such as Baltimore, Pittsburgh, and San Jose. These buyers seek active lifestyles and opportunities to socialize. They want to be near transit hubs. And they’re looking for buildings with amenities. They want a full-time concierge, a full-service gym, even an in-house spa or business center. If this type of property appeals to you, make sure you’re fully aware of the homeowners’ dues and other associated costs. You might be willing and able to absorb those expenses, but future buyers might not be.

Think Long-Term

Trends in kitchen countertops, paint colors and bath fixtures come and go. They’re based on larger design or style trends and even fashion trends. However, as our society and our culture changes, the larger fixtures and features of our homes change more gradually. They don’t mirror the latest trends so much as they reflect shifts in how we live. As a result, investing in long-term home shifts will usually be a better idea than paying extra money for the latest home fad.

Though the world has changed dramatically in the past 30 years, some things will always remain the same. People will always need a place to rest their head at night. And real estate, despite its recent ups and downs, is still a good investment — if you’re in it for the long haul.

See Original Post from Forbes.com

Home Sales in March Hit Highest Level in Three Years!

Spring home sales rose 1.5% last month to the highest level in nearly three years!

March pending home sales hit highest level in nearly 3 years

 

By Jim Puzzanghera

April 29, 2013, 9:25 a.m.

WASHINGTON -- New contracts signed for home sales rose 1.5% last month to the highest level in nearly three years, though limited supply is causing the market to level off, the National Assn. of Realtors said Monday.

The trade group's Pending Home Sales Index rose to 105.7 in March, up from the previous month's 104.1 and exceeding analysts' expectations.

Compared to a year earlier, the index was up 7% last month, marking the 23rd straight month of year-over-year increases.

•  
• Number of homes entering foreclosure plunges in California
• After a long fall, Antelope Valley is back on upswing
• Housing starts jump dramatically in March; building permits fall
• Obama budget projects $943-million bailout for key housing agency
• L.A., other hot housing markets are getting frothy, report says

The last time the closely watched reading was as high was in April 2010 as people scrambled to sign contracts before the expiration of a special home-buyers tax credit.

QUIZ: How much do you know about mortgages?

New contracts for home sales increased the most last month -- 2.7% -- in Southern states. The West showed a 1.5% increase, while the Midwest was up 0.3% and the Northeast was flat.

The index was another indication of improvement in the housing market. But there are signs the recently hot real-estate market is cooling off, said Lawrence Yun, the group's chief economist.

"Contract activity has been in a narrow range in recent months, not from a pause in demand but because of limited supply," he said. 

Yun expected closings to show little movement in the short term, but said "they should edge up modestly as the year progresses."

The group expects existing home sales to rise to nearly 5 million sales this year, an increase of about 6.5% to 7% over 2012. The median price for existing home sales is expected to rise about 7.5%

Click here to see original post from Latimes.com