JERRY & RACHEL'S SPOT

2011-12-19T22:31:00.001-08:00

WISHING YOU HAPPY HOLIDAYS THIS SEASON! THANK YOU FOR ALL YOUR SUPPORT THIS YEAR AND WISHING YOU A VERY HAPPY NEW YEAR TOO!

All the Best,
Jerry & Rachel

Los Angeles Home Prices and Home Values - 11/10/11

2011-11-10T17:59:00.000-08:00

Hey everyone!

We just saw this graph on Zillow today and wanted to share it with you.

Email us at info@newhomesla.com if you'd like to view other search areas of interest!

Los Angeles Zillow Home Value Index

Los Angeles Home Values - Interactive chart

Jerry & Rachel Hsieh Realtors!

2011-10-05T19:24:00.001-07:00

Welcome, we are a Husband and Wife Team. :)

LA MORTGAGE UPDATE: "U.S. MORTGAGE RATES HIT RECORD LOW"

2011-10-03T18:42:00.001-07:00

U.S. MORTGAGE RATES HIT RECORD LOW
The average rate for a 30-year fixed loan dropped to 4.01%, the lowest level in Freddie Mac records. This comes after the Federal Reserve announced a plan to reduce borrowing costs even further.

By Bloomberg News

September 29, 2011 11:11 a.m.

(Bloomberg) - Mortgage rates in the U.S. fell to the lowest level in Freddie Mac records after the Federal Reserve announced a plan to reduce borrowing costs even further.

The average rate for a 30-year fixed loan dropped to 4.01% in the week ended Thursday from 4.09%, Freddie Mac said in a statement. That's the lowest in the McLean, Va.- based company's records dating back to 1971. The average 15-year rate declined to 3.28% from 3.29% last week.

Yields on 10-year Treasuries, a guide for consumer loans, touched the lowest level in more than a half-century, after the central bank said on Sept. 21 that it would begin a program aimed at boosting the economy and lowering mortgage rates. The effort, called Operation Twist, would replace shorter-term securities in the Fed's portfolio with longer-term debt. Policymakers also plan to support the home-loan market by reinvesting maturing housing debt into mortgage-backed securities.

“Mortgage rates have fallen some ways already, but they probably haven't fully caught up with the decline in the 10-year Treasury,” said Paul Dales, senior U.S. economist at Capital Economics Limited. “It's possible the effects of Operation Twist will drag 10-year yields down further, thereby weighing on mortgage rates more.”

The gap, or spread, between the average 30-year fixed mortgage rate and the benchmark 10-year Treasury yield widened to 2.26 percentage points last week, the biggest gap since 2009, according to data compiled by Bloomberg. If the spread matched the gap of 1.17 percentage points in February, the 2011 low, home-loan rates now would be close to 3%.

Homeowners are taking advantage of low borrowing costs to reduce their monthly payments. A Mortgage Bankers Association index of refinancing rose 11% in the week ended Sept. 23. The Washington-based trade group's purchase gauge increased 2.6%.

Declining interest rates have done little to stimulate the U.S. housing market as the unemployment rate sticks above 9% and lenders tighten credit. The number of contracts to purchase previously owned homes fell 1.2% in August, following a 1.3% decline the previous month, according to a National Association of Realtors index released Thursday.

Record-low borrowing costs “are only a marginal support right now,” said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. “Mortgage credit is still tight and secondly, on the demand side, households are concerned about the job market and falling house prices.”

The S&P Case-Shiller index of home values in 20 U.S. cities decreased 4.1% in July from a year earlier, the group reported Sept. 27.

Purchases of new houses fell in August to a six-month low, Commerce Department data showed this week. Sales of previously owned homes that month rose to a five-month high, boosted by demand for lower-priced distressed properties, the National Association of Realtors said Sept. 21. The median price dropped to $168,300 from $177,300 in August 2010.

Source: www.crainsnewyork.com

Picfair Village & Faircrest Heights Home Sales Update: August 2011

2011-08-23T16:52:00.000-07:00

Hi All-

Here is the full list of homes sold and new on market for August 2011 in Picfair Village/Faircrest Heights:

New Listings
1486 Stearns Drive - 2BR/1BA - $649,000
1806 S. Orange Grove - 4BR/3BA - $915,000
1841 S. Point View St - 3BR/1BA - $639,000
1632 S. Stanley Avenue - 2BR/2BA - $525,000
5980 Pickford Street - 2BR/1BA - $599,000
1636 Ellsmere Ave - 2BR/1BA - $469,000
1943 S. Point View St - 3BR/2BA - $590,000

In Escrow
1623 Carmona Avenue - 2BR/2BA - $489,000
1551 S. Orange Grove Ave - 2BR/1BA - $539,000
1922 S. Point View St - 2BR/2BA - $587,000
1646 Stearns Drive - 4BR/2BA - $829,950
1637 S. Hayworth Ave - 3BR/2BA - $699,900
1958 S. Crescent Heights Ave - 2BR/1BA - $589,000
1625 S. Sierra Bonita Ave - 2BR/2BA - $599,000

SOLD
1789 S. Fairfax Ave - 2BR/2BA - $452,000
1856 S. Hayworth Ave - 3BR/1.5BA - $560,000
1731 S. Hayworth Ave - 3BR/2BA - $570,000
1749 S. Orange Grove Ave - 4BR/2BA - $535,000

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

May 2011: Median Neighborhood Homes Sales - Quarter 1 of 2011

2011-05-10T09:17:00.000-07:00

CLICK CHART BELOW FOR LARGE VIEW

April 2011 Median Home Sales for Los Angeles

2011-04-20T00:41:00.000-07:00

Hi Everyone-

Sorry it's been a couple months since I posted. Here are the median sales stats from our MLS with latest MLS stats for 2011.
Jerry
310-228-8856

Owners and Renters Agree: Owning a Home Is a Smart Decision

2011-02-25T10:13:00.001-08:00

A substantial majority of both homeowners and current renters agree that owning a home is a smart decision over the long term. Thats according to the results of a National Association of REALTORS survey of 3,793 adults conducted online by Harris Interactive.

The American Attitudes About Homeownership survey found that in todays challenging economy, 95% of owners and 72% of renters believe that over a period of several years, it makes more sense to own a home. In addition, an overwhelming majority of homeowners are happy with their decision to own a home93% of owners surveyed would buy again.

Homeowners and renters agree that homeownership benefits individuals and families, strengthens our communities, and is integral to our nations economy, said NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I. The results of this survey illustrate just how important issues related to homeownership are to people in this country.

The survey uncovered some differences between homeowners and renters, as well. While more than half of owners are very or extremely satisfied with the overall quality of their family life, only one-third of renters report the same levels of satisfaction. Similarly, 43% of homeowners are very/extremely satisfied with their community life, compared with 30% of renters.

A majority of renters63%said it was at least somewhat likely that they would purchase a home at some point in the future. Among this group, young adults (18-29 years old) have the strongest aspirations for homeownership; only 8% of young adults said that it was not at all likely that they would purchase a home at some point in the future.

In todays market, many aspiring homeowners are faced with worries about job security and creditworthiness. Among renters who are very or extremely likely to buy a home in the future, three out of five consider confidence in job security and creditworthiness to be an obstacle. One point of agreement between renters and homeowners was support of the mortgage interest deduction (MID). Seventy-four percent of owners and 62% of renters say its extremely or very important that the MID remain in place.

At a time when the middle class is under increasing economic pressures, both homeowners and renters agree that the mortgage interest deduction should not be targeted for change, said Phipps. Given strong public support of and aspirations toward owning a home, we need to keep policies in place that support and encourage responsible, sustainable homeownership for our future.

This survey was conducted online within the U.S. and fielded October 6-20, 2010. A total of 3,793 adults 18 and older were surveyed, including 1,880 home owners, 1,115 renters, and 798 young adults. All samples came from the Harris Poll online database and were weighted for age, sex, race/ethnicity, education, region and household income to be representative of the U.S. general population of adults 18 and older. Propensity score weighting was also used to adjust for respondents propensity to be online.

For more information, visit www.realtor.org.

Jerry and Rachel Hsieh Realtors is a family-run, neighbor-centric team that is friendly and available! If you would like us to follow up with you, please call us at 310-228-8856 or jerry@kw.com and someone will touch base with you usually within 4 hours.

Wilshire Vista Home Sales Update - Jan 2011

2011-01-14T14:06:00.000-08:00

Dear Neighbors-

Here is the full list of homes sold and new on market for Dec 2010 through the first 2 weeks of 2011 in Wilshire Vista:

New Listings
1340 Hauser Blvd - 3BR/2BA - $535,000

In Escrow
1132 S. Curson Ave - 3BR/3BA - $895,000

SOLD
1203 S. Spaulding Ave - 3BR/2BA - $570,000
1308 S. Stanley Ave - 3BR/4BA - $1,125,000
1246 Hauser Blvd - 2BR/2BA - $699,000
1145 S. Curson Ave - 3BR/2BA - $845,000
1200 Hauser Blvd - 3BR/2BA - $700,000
1243 S. Sierra Bonita Ave - 3BR/2BA - $560,000
1159 S. Sierra Bonita Ave - 3BR/2BA - $800,000
1332 S. Orange Grove Ave - 3BR/2BA - $999,000

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

Foreclosure Activity Decreases 4 Percent in October 2010

2010-12-17T13:14:00.001-08:00

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

2010-12-11T17:13:00.000-08:00

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

2010-11-22T09:31:00.000-08:00

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

2010-10-14T13:55:00.001-07:00

"Foreclosures decline, but more probably are out there"

2010-10-14T11:00:00.000-07:00

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.

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"

2010-08-26T11:31:00.000-07:00

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

2010-08-12T12:55:00.000-07:00

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

2010-08-12T09:42:00.000-07:00

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

Picfair Village/Faircrest Heights Home Sales Update - July 2010

2010-08-05T17:32:00.000-07:00

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

2010-08-02T19:00:00.000-07:00

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

2010-07-27T09:05:00.000-07:00

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

2010-07-15T09:11:00.000-07:00

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

2010-07-11T01:28:00.000-07:00

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

2010-06-30T13:00:00.000-07:00

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

May 2010 Median Home Sales for Los Angeles

2010-05-10T21:10:00.000-07:00

LA Real Estate Advice: California Home Default Cases Plunge

2010-04-28T08:30:00.001-07:00

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

2010-04-01T14:55:00.001-07:00

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

California Rebound Boosts 20-city Home Price Index

2010-03-30T18:39:00.000-07:00

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?

2010-03-16T13:01:00.000-07:00

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

2010-03-10T10:43:00.000-08:00

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!

2010-03-07T16:59:00.000-08:00

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!

2010-03-07T16:52:00.001-08:00

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

2010-02-26T22:04:00.000-08:00

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"

2010-01-20T10:18:00.000-08:00

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

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

2009-12-17T07:59:00.000-08:00

Hi Everyone-

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

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

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

All this said, here is a list of 10 things you can possibly do that may make your home more saleable over the holidays:

Deck the halls, but don't go overboard.
Homes often look their best during the holidays, but sellers should be careful not to overdo it on the decor. Adornments that are too large or too many can crowd your home and distract buyers. Also, avoid offending buyers by opting for general fall and winter decorations rather than items with religious themes.
Hire a reliable real estate agent.
That means someone who will work hard for you and won't disappear during Thanksgiving, Christmas or New Year's. Ask your friends and family if they can recommend a listing agent who will go above and beyond to get your home sold. This will ease your stress and give you more time to enjoy the season.
Seek out motivated buyers.
Anyone house hunting during the holidays must have a good reason for doing so. Work with your agent to target buyers on a deadline, including people relocating for jobs in your area, investors on tax deadlines, college students and staff, and military personnel, if you live near a military base.
Price it to sell.
No matter what time of year, a home that's priced low for the market will make buyers feel merry. Rather than gradually making small price reductions, many real estate agents advise sellers to slash their prices before putting a home on the market.
Make curb appeal a top priority.
When autumn rolls around and the trees start to lose their leaves, maintaining the exterior of your home becomes even more important. Bare trees equal a more exposed home, so touch up the paint, clean the gutters and spruce up the yard. Keep buyers' safety in mind as well by making sure stairs and walkways are free of snow, ice and leaves.
Take top-notch real estate photos.
When the weather outside is frightful, homebuyers are likely to start their house hunt from the comfort of their homes by browsing listings on the Internet. Make a good first impression by offering lots of flattering, high-quality photos of your home. If possible, have a summer or spring photo of your home available so buyers can see how it looks year-round.
Create a video tour for the Web.
You'll get less foot traffic during the holidays, thanks to inclement weather and vacation plans. But shooting a video tour and posting it on the Web may attract house hunters who don't have time to physically see your home or would rather not drive in a snowstorm.
Give house hunters a place to escape from the cold.
Make your home feel cozy and inviting during showings by cranking up the heat, playing soft classical music and offering homemade holiday treats. When you encourage buyers to spend more time in your home, you also give them more time to admire its best features.
Offer holiday cheer in the form of financing.
Bah, humbug! Lenders are scrooges these days, but if you've got the means, then why not offer a home loan to a serious buyer? You could get a good rate of return on your money.
Relax -- the new year is just around the corner.
The holidays are stressful enough, with gifts to buy, dinners to prepare and relatives to entertain. Take a moment to remind yourself that if you don't sell now, there's always next year, which luckily is only a few days away.

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

2009-12-17T07:55:00.001-08:00

Hi Everyone-

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

BUYERS: Should you buy a home during the Holiday Season?
In most parts of the United States, house sales follow predictable seasonal patterns. They’re strongest in summer, and bottom out around Christmas and the New Year before picking up again in spring.

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

Here are five good reasons:

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

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

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

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

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

Happy Thanksgiving!

2009-11-25T21:59:00.000-08:00

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

All the Best,
Jerry Hsieh

Sept 2009 Median Statistics for Los Angeles Home Sales

2009-11-04T10:41:00.001-08:00

Hi All-

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

LINK - Median Home Sales for September 2009

All the Best,

Jerry
310-228-8856

LA Times reports - Good news: Home Sales overperformed for September. Bad News: 2010 will be the true test.

2009-10-14T14:29:00.000-07:00

VIDEO REPORT: Peter Hong from LA TIMES reports on the state of the housing market - 10/13/09

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

2009-10-08T15:27:00.001-07:00

Hi Folks!

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

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

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

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

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

2009-09-25T12:33:00.000-07:00

Francesca Levy, Forbes.com

Sep 24th, 2009

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

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

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

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

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

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

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

Behind the Numbers

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

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

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

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

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

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

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

The Bottom Line

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

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

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

Top 5 Cities Where Home Prices are Hitting Bottom

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

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

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

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

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

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

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

2009-09-17T14:32:00.000-07:00

Hi Everyone-

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

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

WHAT IS A SHORT SALE?

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

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

HOW ARE SHORT SALES DIFFERENT FROM FORECLOSURES?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

IN SUMMARY.......

WHAT'S GOOD ABOUT A SHORT SALE:

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

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

WHAT'S BAD ABOUT A SHORT SALE:

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

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

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

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

Jerry
310-228-8856

Summer 2009 CONDO Median Sales Area by Area of LA

2009-09-10T09:13:00.000-07:00

Hi Everyone!

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

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

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

2009 Condo Median Sales Chart for Los Angeles

All the Best,
Jerry
310-228-8856

Should Homeowners be allowed to rent their home back?

2009-08-12T09:23:00.000-07:00

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

New listing on 1815 S. Dunsmuir Ave!

2009-08-12T09:10:00.000-07:00

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

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

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

2009-07-27T16:10:00.000-07:00

Hi everyone-

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

It documents the median sales neighborhood by neighborhood!!

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

Western Home Sales Post 15 Pct Annual Jump in June

2009-07-27T11:43:00.001-07:00

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

By THE ASSOCIATED PRESS

Published: July 23, 2009

Filed at 9:18 p.m. ET

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

And not all are professional investors.

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

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

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

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

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

2009-07-25T12:34:00.000-07:00

Hi Folks-

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

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

All the Best,
Jerry

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

2009-07-06T22:22:00.000-07:00

Hi Everyone!

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

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

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

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

See article BELOW.

All the Best,
Jerry
310-228-8856

__________________________________________________________________________

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Forbes: Are you shopping?

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

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

Feder: Not a bad strategy anywhere, actually.

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

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

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

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

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

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

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

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

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

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

FINALLY! - Southern Cal Home Prices Rise Slightly for May

2009-06-18T17:47:00.000-07:00

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

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

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

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

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

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

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

All the Best,
Jerry
310-228-8856

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

2009-06-12T21:57:00.000-07:00

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

June 7th - Median Sales Chart

June 14th - Median Sales Chart

-Jerry
310-228-8856

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

2009-05-27T11:30:00.000-07:00

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

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

Hope this is helpful and talk to you soon!

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

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

All the Best,
Jerry Hsieh
310-228-8856

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

2009-05-08T11:03:00.000-07:00

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

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

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

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

-Jerry
310-228-8856

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

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

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

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

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

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

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

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

2009-05-05T10:46:00.000-07:00

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

6:15 PM PDT, May 2, 2009

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

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

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

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

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

So what's going on?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

realestate@latimes.com

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

2009-05-05T09:21:00.000-07:00

Hi Everyone!

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

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

-Jerry
310-228-8856

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

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

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

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

Differences Between REO's and Auctions

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

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

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

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

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

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

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

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

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

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

President Obama's First Time Home buyer $8000 Tax Credit Questions - ANSWERED!

2009-04-23T09:44:00.000-07:00

Greetings!

As you know, one of the biggest benefits of buying a first home now is Obama's Tax Credit. Many of my clients have been asking me for details about this. The most common question I get is "Can I still get a credit if I make over $75,000?" Here are your answers.

-Jerry
310-228-8856

President Obama's $8000 Tax Credit to First Time Home Buyers for 2009

TABLE OF CONTENTS

I. Introduction
II. American Recovery and Reinvestment Act
A. First-Time Homebuyer Tax Credit (Questions 1 to 20)
B. FHA, FANNIE MAE, AND FREDDIE MAC Loan Limits (Questions 21 to 27)
C. Other Provisions of the Recovery Act (Question 28)

I. INTRODUCTION

It was a big week in February for the California REALTOR® who keeps watch over legislative change. On Tuesday, February 17, 2009, a $787 billion economic stimulus package became law, including several important housing stimulus provisions. The next day, President Barack Obama announced a $275 billion Homeowner Affordability and Stability Plan for restructuring and refinancing mortgage loans for at-risk homeowners. By Friday, February 20, 2009, California passed a state budget which also included new laws to stimulate housing.

The scale of the lawmakers’ efforts in these three laws is massive. Both the federal and California government have enacted unprecedented measures aimed at stimulating the housing market and protecting homeowners from foreclosure.

II. AMERICAN RECOVERY AND REINVESTMENT ACT

On February 17, 2009, President Barack Obama signed into law a $787 billion economic stimulus package. This enormous 1,071-page legislation is called the American Recovery and Reinvestment Act of 2009 (ARRA) (H.R.1). It includes $575 billion in government spending and $212 billion in tax cuts. It aims to, among other things, create and preserve millions of jobs, build infrastructures, redevelop communities, increase consumer spending, improve energy efficiency and science, invest in education, transportation, and health-care projects, and assist the unemployed.

A centerpiece of the Recovery Act is for the federal government to carry out the law in full transparency and accountability. To track the progress of the economic recovery under the Recovery Act, go to www.recovery.gov. This website also contains the full text of the Recovery Act.

The major housing stimulus provisions of the Recovery Act are, among other things, the first-time homebuyer tax credit (see Questions 1 to 20) and the increase in FHA, Fannie Mae, and Freddie Mac loan limits (see Questions 21 to 27). Although the primary thrust of the Recovery Act is stimulating employment not housing, the creation and preservation of jobs under the Recovery Act may help jumpstart the housing market. Job loss has caused homeowners to lose their homes in foreclosure and their neighborhoods to become distressed. Job loss and the mere fear of job loss have also hindered potential homebuyers from acquiring their piece of the American dream. Stimulating and stabilizing the employment sector can stimulate housing.

A. FIRST-TIME HOMEBUYER TAX CREDIT

Q 1. What, in a nutshell, is the $8,000 tax credit for first-time homebuyers under the new law?

A A first-time homebuyer as defined may receive a refundable tax credit up to $8,000 for purchasing a principal residence in the U.S. from January 1, 2009 to November 30, 2009, inclusive (see Questions 5 to 16). No repayment is required if the buyer owns and occupies the property for 36 months (see Question 17). This new law enhances the preexisting $7,500 tax credit enacted in 2008 which still applies for purchases from April 9, 2008 to December 31, 2008 (see Questions 18 and 19).

Q 2. How will the new $8,000 tax credit affect REALTORS® and their clients?

A The new $8,000 tax credit provides a monetary incentive for first-time homebuyers to purchase homes. First time homebuyers represent a significant segment of U.S. homebuyers. According to the U.S. Department of the Treasury, nearly half of the homebuyers in 2008 were first-time homebuyers. Hence, the new tax credit for first-time homebuyers, along with affordable home prices and historically low mortgage rates, should help spur the housing market.

Q 3. What is a tax credit?

A A tax credit is a dollar-for-dollar reduction of tax owed. In contrast to a tax credit, a tax deduction is merely a reduction of taxable income. Hence, a tax credit is generally more valuable to the taxpayer than a tax deduction. To illustrate, an $8,000 tax deduction for a taxpayer in a 25% tax bracket would only save the taxpayer $2,000 in taxes, whereas an $8,000 tax credit would save the taxpayer $8,000 in taxes.

Q 4. What is the significance of a “refundable” tax credit?

A That a tax credit is “refundable” means that any credit amount not used to reduce the tax owed may be added to the taxpayer’s tax refund check. In other words, a taxpayer may receive a tax credit even if he or she has no tax liability to offset that credit.

As an example, let’s say a taxpayer filing his tax returns on April 15 would have owed $2,000 to the IRS. If the taxpayer can now claim an $8,000 refundable tax credit, he can expect to receive a refund check from the IRS for $6,000.

Q 5. Who is eligible as a “first-time homebuyer” for the $8,000 tax credit?

A For purposes of the $8,000 tax credit, a “first-time homebuyer” is defined as any individual (or spouse) with no present ownership interest in a principal residence during the 3-year period ending on the date of the purchase of the principal residence to which the tax credit applies (26 U.S.C. § 36(c)(1)). For income restrictions, see Question 9.

As an example, an unmarried buyer who closes escrow on a purchase on June 30, 2009, would qualify as a “first-time homebuyer” as long as the buyer did not own a principal residence during the period from July 1, 2006 to June 30, 2009. Even if the taxpayer owned another principal residence in the past, he or she can still qualify as a “first-time homebuyer” as long as the taxpayer transferred off title to that other home over three years ago.

Q 6. What constitutes a “principal residence” under the $8,000 tax credit?

A A “principal residence” is generally the home the taxpayer lives in most of the time (26 U.S.C. § 121). It can be a house, condominium, townhome, manufactured home, or similar type of property located in the U.S. To qualify for the federal $8,000 tax credit, the property can be new construction or a resale. It cannot, however, be a vacation home or rental property.

Q 7. What constitutes a “purchase” to be eligible for the $8,000 tax credit?

A A “purchase” for purposes of this tax credit is defined as any acquisition, except as set forth in Question 15 (26 U.S.C. § 36(c)(3)). For a home that the taxpayer constructs, the purchase date is the date the taxpayer first occupies the home (26 U.S.C. § 36(c)(3)(B)).

Because a purchase is defined as an acquisition, it generally occurs when escrow closes and title to the property transfers to the buyer, and not when the underlying purchase contract is signed. To illustrate, a buyer who enters into a contract to purchase a property on November 13, 2009, but closes escrow on December 23, 2009, would not qualify for the $8,000 tax credit because, based on the law as it is currently written, acquisition does not occur before the law expires on November 30, 2009.

Q 8. How is the amount of the tax credit calculated?

A The maximum tax credit for an individual first-time homebuyer is 10 percent of the purchase price, not to exceed $8,000 (26 U.S.C. § 36(b)(1)(A)). For married individuals filing separate tax returns, the tax credit is capped at $4,000 (26 U.S.C. § 36(b)(1)(B)).

For a purchase price over $80,000, as is often the case in California, the first-time homebuyer tax credit will be capped off at $8,000. “Purchase price” under this law is defined as the adjusted basis of the principal residence on the date such residence is purchased (26 U.S.C. § 36(c)(4)).

Q 9. Is there an income restriction to be eligible for the $8,000 tax credit?

A Yes. The first-time homebuyer tax credit may be restricted by the taxpayer’s income. The tax credit starts to phase out for an individual taxpayer with a modified adjusted gross income from $75,001 to $95,000 (or $150,001 to $170,000 for joint filers). The tax credit is eliminated entirely if an individual’s modified adjusted gross income is over $95,000 (or $170,000 for joint filers). (26 U.S.C. § 36(b)(2).)

Q 10. What is a modified adjusted gross income?

A First, a modified adjusted gross income or MAGI is a taxpayer’s adjusted gross income (AGI) plus certain items, such as IRA deductions, student loan deductions, higher education costs, foreign income, and foreign housing deductions, among other things. Second, an adjusted gross income (AGI) is a taxpayer’s gross income minus certain deductions, which are often called “above the line” deductions. Most tax deductions are “above the line” deductions, except itemized deductions from Schedule A and personal exemptions.

Q 11. When must a first-time homebuyer purchase a property to qualify for the $8,000 tax credit?

A To be eligible for the $8,000 tax credit, a first-time homebuyer must purchase a principal residence from January 1, 2009 to November 30, 2009, inclusive (26 U.S.C. § 36(f) and (h)). The deadline is November 30, 2009, and not December 31, 2009. That the deadline is not at the end of the year may work as a trap for unwary buyers.

For the first-time homebuyer tax credit for acquisitions from April 9, 2008 to December 31, 2008, see Question 18.

Q 12. When can a taxpayer claim the $8,000 tax credit?

A According to an IRS announcement on February 25, 2009, first-time homebuyers who qualify for the $8,000 tax credit by purchasing a home before December 1, 2009 have a special option of claiming the tax credit on either their 2008 or 2009 tax returns (IR 2009 14).

Q 13. Does a married person qualify for the $8,000 tax credit if his or her spouse has owned a principal residence in the last three years?

A No. For a married taxpayer to qualify for the $8,000 tax credit, both spouses must be “first-time homebuyers” as defined in Question 5. In other words, neither spouse qualifies for the $8,000 tax credit unless both of them have not owned a principal residence over the last three years.

Q 14. Are two unmarried individuals both eligible for the first-time homebuyer tax credit if they buy a house together?

A Yes. Two or more unmarried individuals can buy a principal residence together, but the maximum tax credit for all of them is only $8,000. If all co-owners qualify as first-time homebuyers, they must allocate the $8,000 tax credit between themselves in any reasonable manner. According to the IRS, a reasonable method is any method that does not allocate all or a part of the credit to a co-owner who is not eligible to claim that part of the credit (see IRS Form 5405).

Q 15. Who cannot claim the first-time homebuyer tax credit?

A The first-time homebuyer tax credit is not allowed under any of the following circumstances:

• The property is acquired from a related person as defined (26 U.S.C. § 36(c)(3)(A)) (see Question 16);

• The property is acquired by gift or inheritance (26 U.S.C. § 36(c)(3)(A));

• The buyer is a nonresident alien (26 U.S.C. § 36(d)(1)); or

• The buyer disposes of the property (or the property ceases to be the principal residence of the buyer and, if married, the buyer’s spouse) before the end of such taxable year (26 U.S.C. § 36(d)(2)).

Q 16. What acquisitions from related persons do not qualify for the first-time homebuyer tax credit?

A A buyer is ineligible for the first-time homebuyer tax credit if the property is acquired from certain related persons, including, but not limited to, the following:

• The buyer’s spouse, ancestors (such as parents and grandparents), or lineal descendants (such as children or grandchildren);

• A corporation in which the buyer owns more than 50% of the outstanding stock; or

• A partnership in which the buyer owns more than 50% interest.

(26 U.S.C. § 36(c)(3)(A) (citing §§ 267 and 707).)

Q 17. Is a first-time homebuyer required to repay the $8,000 tax credit?

A No, the tax credit need not be repaid if the buyer owns and occupies the property for at least 36 months. If, however, the buyer disposes of the property or it ceases to be the buyer’s principal residence within 36 months of purchase, the buyer may be required to repay the tax credit (26 U.S.C. § 36(f)(4)). This includes situations where the buyer sells the home, converts it into a rental property or business, or the home is destroyed, condemned, or disposed of under threat of condemnation. In these situations, the tax credit must generally be repaid by including it as additional tax for the year the home ceases to be the buyer’s principal residence (26 U.S.C. § 36(f)(4)(D)).

Q 18. What is the $7,500 first-time homebuyer tax credit for a principal residence purchased in 2008?

A With certain exceptions, a first-time homebuyer may receive a 10% tax credit not to exceed $7,500 for purchasing a principal residence from April 9, 2008 to December 31, 2008 (26 U.S.C. § 36(a) and (b)). This tax credit was enacted as part of the federal Housing and Economic Recovery Act of 2008. As with the $8,000 tax credit discussed above, the $7,500 tax credit phases out if an individual’s modified adjusted gross income exceeds $75,000 (or $150,000 for joint filers) (26 U.S.C. § 36(b)(2)). The $7,500 tax credit phases out completely if an individual’s modified adjusted gross income exceeds $95,000 (or 170,000 for joint filers) (26 U.S.C. § 36(b)(2)).

The $7,500 tax credit must generally be repaid like an interest-free loan in equal annual installments over a 15-year period, or in full if the homebuyer sells the property for a gain (26 U.S.C. § 36(f)). For example, to repay a $7,500 tax credit for 2008, about $500 should be added to the buyer’s income tax liability every year for 15 years starting 2010.

Q 19. What are the major differences between the new $8,000 tax credit and the previous $7,500 tax credit?

A The $8,000 tax credit is $500 more and applicable to first-time homebuyers who purchase a principal residence from January 1, 2009 to November 30, 2009. The $8,000 tax credit need not be repaid if the buyer stays in the property for 36 months.

On the other hand, the $7,500 tax credit applies to first-time homebuyers who purchased a principal residence from April 9, 2008 to December 31, 2008. The $7,500 tax credit must generally be repaid over 15 years.

Q 20. How does a first-time homebuyer apply for the tax credit?

A A first-time buyer may claim the tax credit on their federal tax returns using IRS Form 5405, which is available at http://www.irs.gov/pub/irs-pdf/f5405.pdf.

B. FHA, FANNIE MAE, AND FREDDIE MAC LOAN LIMITS

Q 21. What are the loan limits under the Recovery Act?

A The Recovery Act has increased the maximum conforming loan limit from $625,500 to $729,750 for FHA, Fannie Mae and Freddie Mac loans. These higher loan limits are intended to ease the mortgage crisis of the late 2000s by helping homeowners and homebuyers get more affordable mortgage loans.

As background, the $729,750 loan limit was originally established in 2008, but dropped down to $625,500 on January 1, 2009. The new law reinstates the conforming loan limit to 125% of the 2008 local area median home price, not to exceed $729,750.

Q 22. What are the FHA loan limits in California?

A The new FHA loan limit is 125% of the 2008 local area median home price or $271,050, whichever is greater, but not to exceed $729,750 for one-unit properties. The higher FHA loan limit will assist REALTORS® and their clients to obtain safe mortgage loans with fixed interest rates, low down payment requirements, and other affordable terms.

Counties in California at the maximum FHA loan limit of $729,750 are Alameda, Contra Costa, Los Angeles, Marin, Monterey, Napa, Orange, San Benito, San Francisco, San Mateo, Santa Barbara, Santa Clara, Santa Cruz, and Ventura. The FHA loan limits for the other counties in California range from $271,050 to $679,500. For FHA’s Mortgage Limits List, go to https://entp.hud.gov/idapp/html/hicost1.cfm.

The Secretary of the Department of Housing and Urban Development (HUD) has the discretionary authority to increase the FHA loan limit for any sub-area smaller than a county if the median home price in that sub-area warrants a higher loan limit.

Q 23. Which loans qualify for the new FHA loan limits?

A The new FHA loan limits apply to loans for which credit is approved for the borrower in the calendar year 2009 (until December 31, 2009).

Q 24. Where can I obtain more information about FHA loans?

A For more information about FHA loans, go to HUD’s website at http://www.hud.gov/fha/choosefha.cfm or the FHA’s website at http://portal.hud.gov/portal/page?_pageid=73,1&_dad=portal&_schema=PORTAL.

Q 25. What are the Fannie Mae and Freddie Mac loan limits in California?

A The new Fannie Mae and Freddie Mac conforming loan limit is 125% of the median home price or $417,000, whichever is greater, but not to exceed $729,750. Counties in California that are at the maximum loan limit of $729,750 are Alameda, Contra Costa, Los Angeles, Marin, Monterey, Napa, Orange, San Benito, San Francisco, San Mateo, Santa Barbara, Santa Clara, Santa Cruz, and Ventura. The loan limits for the other counties in California range from $417,000 to $679,500.

For more information about Fannie Mae and Freddie Mac, including lookup tables for the loan limits for specific counties and high-cost areas in California, go to the website of the Office of Federal Housing Enterprise Oversight at http://www.ofheo.gov/regulations.aspx?nav=128.

The director of the Federal Housing Finance Agency (FHFA) has the discretionary authority to increase the Fannie Mae or Freddie Mac loan limit for any sub-area smaller than a county if the median home price in that sub-area warrants a higher loan limit.

Q 26. Which loans qualify for the new Fannie Mae and Freddie Mac loan limits?

A The new Fannie Mae and Freddie Mac loan limits apply to all loans originated in 2009. They also apply to loans purchased in 2009 that were originated from July 1, 2007 through December 31, 2008.

Q 27. Where can I obtain more information about Fannie Mae and Freddie Mac loans?

A For more information about Fannie Mae and Freddie Mac, go to the website of the Federal Housing Finance Agency at http://www.fhfa.gov/. Fannie Mae’s website is http://www.fanniemae.com/index.jhtml. Freddie Mac’s website is http://www.freddiemac.com/.

C. OTHER PROVISIONS OF THE RECOVERY ACT

Q 28. What are the other housing stimulus provisions or provisions of interest in the Recovery Act?

A A brief summary of some of the remaining provisions of the Recovery Act that stimulate housing or may otherwise be of interest to REALTORS® are as follows:

• Making Work Pay Credit: Both wage earners and self-employed workers will receive a work credit of 6.2% of earned income or $400, whichever is less, for individuals earning up to $75,000 (or $800 for married couples earning up to $150,000). Wage earners will generally receive about $8 to $13 per week more on their paychecks as a result of a reduction in their FICA withholdings. Self employed workers can receive this work credit by claiming it on their tax returns. This program ends on December 31, 2010.

• Neighborhood Stabilization Program: $2 billion will be added to the Neighborhood Stabilization Program. This program provides funds to state and local governments for stabilizing and reviving distressed neighborhoods, rehabilitating affordable housing, improving public facilities, and other community development efforts.

• Net Operating Loss Carryback for Businesses: This provision allows eligible businesses with a net operating loss for 2008 to carry back the loss to offset profits earned over the past 5 years.

• Bonus Depreciation for Businesses: This provision allows businesses to deduct a 50% first-year bonus depreciation for new equipment purchased in 2009.

• Vehicle Sales Tax Deduction: Taxpayers may deduct state, local, and excises taxes on the purchase of a new car, light truck, or other vehicles in 2009 for individuals earning less than $150,000 (or $250,000 for joint filers). The deduction cannot exceed the tax for the first $49,500 of the vehicle’s purchase price.

• Energy-Efficient Homes and Buildings: Clean-energy provisions include $16 billion to make homes and buildings more energy efficient, such as a 30% tax credit to homeowners who purchase new furnaces, windows, and insulation.

• Rural Housing Service: $500 million will be used to fund federal loan programs for rural housing.

• Lead Hazard Reduction: About $100 million has been allocated for HUD’s lead based paint and hazard reduction and remediation activities.

• Section 8 Assistance: $2 billion will be used to fund Section 8 project-based housing contracts for 12 months.

• Emergency Shelter for Homeless: $1.5 billion has been earmarked to help homeless persons and families in shelters.

Readers who require specific advice should consult an attorney. C.A.R. members requiring legal assistance may contact C.A.R.'s Member Legal Hotline at (213) 739 8282, Monday through Friday, 9:00 a.m. to 6:00 p.m. C.A.R. members who are broker-owners, office managers, or Designated REALTORS® may contact the Member Legal Hotline at (213) 739 8350 to receive expedited service. Members may also fax or e-mail inquiries to the Member Legal Hotline at 213.480.7724 or legal_hotline@car.org. Written correspondence should be addressed to:

CALIFORNIA ASSOCIATION OF REALTORS®
Member Legal Services
525 South Virgil Avenue
Los Angeles, California 90020

2009 Q1 Home Sales Report - for Los Angeles, CA

2009-04-13T12:34:00.000-07:00

Hi everyone-

Here is the latest market update from the Los Angeles MLS (CLAW) with 2009 Q1 market and sales statistics. It does a side by side comparison with Q1 of 2008.

MLS MARKET UPDATE

I'm currently in escrow on a home in Picfair Village for myself. With the rates where they are, it made sense for me.

What do all you our there think? Is it time to buy or better to still wait? Thoughts??

-Jerry

Home Sales Jump 69% in February

2009-03-27T12:23:00.000-07:00

Hi folks, this week there was a lot of buzz about the suprise 80% nationwide jump in home sales volume for February, but this is one of the only ones I could find that broke it down specifically for California and Los Angeles. Enjoy.

-Jerry
310-228-8856

Home Sales Jump 69% in February (Direct Link)
From Fox 11 News Website
By: David Dain

Los Angeles (myFOXla.com) - Home sales jumped 69.3 percent in the Los Angeles area in February, compared to the same period a year ago, while the median home price fell 35.5 percent, according to figures released today.

The median price of an existing single-family home in Los Angeles was $308,540 in February, compared to $304,750 the previous month and $478,350 last year, according to the California Association of Realtors.

In Orange County, home sales increased 44.6 percent in February, compared to the same month last year, while the median home price was $433,690, down 28.9 percent from $609,970 in February 2008.

Home sales increased 83 percent in February in California, compared with the same period a year ago, while the median price of an existing home declined 40.8 percent, according to CAR's report.

"Home sales in California continue to be considerably stronger than the nationwide sales figures," said James Liptak, CAR's president. "The market will continue to register large, but diminishing year-to-year percentage gains in the coming months, as current sales are compared against the extremely low numbers that prevailed during the early months of the credit crunch."

The median price of an existing, single-family detached home in California in February was $247,590, compared to $253,330 the previous month and $418,260 in February of last year, according to CAR.

"The California median price has declined by a larger margin than the nationwide price," Leslie Appleton-Young, CAR's vice president and chief economist, said in a statement.

"This can be attributed to the under $500,000 portion of the market, which has experienced larger price declines than the other market segments due to the large share of distressed homes for sale," she said. "This further contributed to the decline in the statewide median."

The median number of days it took to sell a single-family home statewide declined to 51.5 days in February, compared to 69.3 days during the same month last year, according to CAR.

Busy month in Picfair Village!!

2009-03-25T15:17:00.000-07:00

Dear all my wonderful current (and future) Picfair Village neighbors-

Busy month! The homes in Picfair Village are really starting to sell. We just closed escrow on 1600 Ellsmere, which is a little 2BR, 2BA bungalow home I listed about a month ago. www.1600ellsmere.com. We listed it for $689,000 and immediately got a great offer. We just finished a 30 day escrow. Currently, I have 2 more homes in the neighborhood in escrow, 1 on Genesee, and another on Carmona.

The home on Genesee is a pocket listed 4BR, 2BA Spanish fixer, that has been waiting to be remodeled for sometime now. It was listed for $500,000. The home on Carmona was listed for just a few days at a price of $515,000 before it recieved 5 offers that were all over asking and the bidding war was on! Though there has been a lot of news about pricing, homes are definitely still selling! It's been busy and it looks like more and more buyers are recognizing what a great deal of a neighborhood Picfair Village is. I have about 6 buyers who are actively looking for properties in Picfair Village, and another 10-20 clients passively looking in the neighborhood for fixers/development opportunities. If you or anyone you know is thinking about selling their Picfair Village home, Please let me know!

-Jerry
310-228-8856

From LA Times: LA Median Home Sales pricing chart - 2009 vs 2007

2009-03-11T10:45:00.000-07:00

Hi everyone!

Hope everyone's doing well. it's been a couple weeks since I've updated this as I've been busy finishing a few escrows and there have been a lot of new foreclosures hitting the market.

Last weekend, the Los Angeles Times published this graph and I just wanted to pass it along. It shows the median price change from 2009 to 2007. This is very relevant because, as you will recall, 2007 is when the bubble began to burst.

According to this, the median price change for homes in LA in the past 2 years: $342,500.

LINK TO ARTICLE

-Jerry

"End of Home Price Slide in Sight?" - from Mark Trumbull, CSMonitor.com

2009-02-26T14:42:00.000-08:00

January prices slipped more, but may help clear the glut of homes, stabilizing the market.

By Mark Trumbull | Staff writer/ February 25, 2009 edition
SOURCE: Moody's Economy.com, with data from the National Association of Realtors - Rich Clabaugh/Staff

The bright side of falling home prices is this: Most of the decline is probably over, and it should help to correct the nation’s serious imbalance between housing supply and demand.

That’s the view that many housing experts take, after a year of historically sharp home-price declines. The median sales price of existing homes fell in January to $170,000, down from $176,000 a month earlier and $200,000 a year ago, according to numbers released Wednesday by the National Association of Realtors.

Of course, the negative side of this trend also is real and weighs on the economy. As home prices fall, so does the net worth of homeowning families. The prospect of more foreclosures grows. That won’t do anything to help the nation’s troubled banking sector, which would be stuck with many of those losses.

But somehow the economy needs to work through a glut of homes on the market, an imbalance so large that falling prices are seen by many as the way to get there.

The big question is where prices will settle. The answer could vary a lot by region and will depend on where the broader economy heads.

“I think house prices will be done declining within the year,” says Morris Davis, a University of Wisconsin economist who studies real estate. But, given today’s uncertainties, he cautions that “anyone that tells you that they know, doesn’t know.”

January saw not only a price decline but also a reduction in sales volume for previously owned homes. Sales ran at an annualized pace of 4.5 million units, down from 4.7 million in December and 4.9 million for much of last year.

That pushed up the inventory of homes for sale. A 9.6-month supply of homes is now on the market, well above typical rates of six months or so. Some analysts say the inventory could rise still higher during the busier spring season, as more sellers put homes on the market.

“We’re going to learn more [about activity and prices] in the spring market,” Karl Case, a housing expert who helped create the Standard & Poor’s Case-Shiller index of home prices, told reporters Tuesday.

By the Case-Shiller index, home prices are now down 26.7 percent from their peak in 2006.

While the real estate downturn is nationwide, it varies greatly by location.

Mr. Case, a professor at Wellesley College near Boston, says that 1 million of all homes sales in the past year were distressed auction sales. But more than half of those have come from just four hard-hit states: California, Arizona, Nevada, and Florida.

In many cities, prices are down by a more modest 5 or 10 percent.

One reason for the slower sales volume in the past few months may be that market participants are in a holding pattern, waiting to see what a new administration in the White House will do.

That was clarified recently when President Obama unveiled a plan to reduce foreclosures. It includes:

•Incentives for lenders to reduce payments for at-risk borrowers to 31 percent of income.

•Refinancing for many borrowers whose loans have turned modestly “upside down,” with balances larger than the current home value.

•A proposal to allow bankruptcy judges to adjust loan terms, such as forcing banks to write down the principal balance.

If the plan succeeds in its goal of preventing several million foreclosures, it could help stabilize the housing market, some experts say.

“[Steps] to try to reduce preventable foreclosures … will reduce the supply of homes in the market,” Federal Reserve Chairman Ben Bernanke said Tuesday in testimony to Congress.

He said the Fed is also having some success in efforts to bring down mortgage interest rates, which could help entice buyers into the market. With affordability now high, a key factor for home buyers is uncertainty about jobs. Access to mortgage loans is also constrained by the current credit crunch, Mr. Bernanke said.

Some experts say the Obama plan will have only a limited effect on foreclosures. For one thing, Mr. Davis notes, a key cause of foreclosures is a sudden loss of income, a problem the president’s plan doesn’t address. One approach might be to offer a government loan to help unemployed homeowners pay their mortgages while they find new jobs, he says.

Over time, he says, home prices tend to be correlated with rental prices – since people have a choice of whether to buy or rent. The price-to-rent ratio remains above its long-term trend.

There are some signs that, even amid the current real estate upheaval, market-participants are working toward a new equilibrium. In California, home prices have fallen 41 percent in the past year, but the discounts have lured more buyers into the market. Sales volume in December was up 85 percent from the same month in 2008.

“The faster prices reach levels that clear the market … the quicker this recession will be over,” argues Scott Grannis, a California-based economist, on his website.

"Help for Homeowners" - from Barack Obama/White House Blog

2009-02-19T17:27:00.000-08:00

Hi Folks-
The following is from the www.whitehouse.gov (aka The U.S. President's Website). Article is called "HELP FOR HOMEOWNERS" and outlines some options that the government is providing for homes in distress.

-Jerry

HELP FOR HOMEOWNERS
Wednesday, February 18th, 2009 at 9:36 am

The President’s strategy for economic recovery is a stool with several legs, as he’s said, and one of them is solving the foreclosure crisis.

"We must stem the spread of foreclosures and falling home values for all Americans, and do everything we can to help responsible homeowners stay in their homes," he said yesterday as he signed the American Recovery and Reinvestment Act into law.

Though communities across the country have been affected by the crisis, Arizona has been hit particularly hard -- in 2008, only two states had more foreclosures.

And President Obama is there today, in Phoenix, to unveil his "Homeowner Affordability and Stability Plan," which will help bring relief to homeowners and bring some order to the housing market.

The President will talk more about his plan a little later today. In the meantime, we’re sure you have a lot of questions, like, Am I eligible for assistance? Might I be able to modify my loan? When do I apply? We've put together an example sheet that will show you what options might be available to you, depending on the circumstances of your mortgage, as well as answers to some common questions (below).

Questions and Answers for Borrowers about the Homeowner Affordability and Stability Plan

Borrowers Who Are Current on Their Mortgage Are Asking:

* What help is available for borrowers who stay current on their mortgage payments but have seen their homes decrease in value?

Under the Homeowner Affordability and Stability Plan, eligible borrowers who stay current on their mortgages but have been unable to refinance to lower their interest rates because their homes have decreased in value, may now have the opportunity to refinance into a 30 or 15 year, fixed rate loan. Through the program, Fannie Mae and Freddie Mac will allow the refinancing of mortgage loans that they hold in their portfolios or that they placed in mortgage backed securities.

* I owe more than my property is worth, do I still qualify to refinance under the Homeowner Affordability and Stability Plan?

Eligible loans will now include those where the new first mortgage (including any refinancing costs) will not exceed 105% of the current market value of the property. For example, if your property is worth $200,000 but you owe $210,000 or less you may qualify. The current value of your property will be determined after you apply to refinance.

* How do I know if I am eligible?

Complete eligibility details will be announced on March 4th when the program starts. The criteria for eligibility will include having sufficient income to make the new payment and an acceptable mortgage payment history. The program is limited to loans held or securitized by Fannie Mae or Freddie Mac.

* I have both a first and a second mortgage. Do I still qualify to refinance under the Homeowner Affordability and Stability Plan?

As long as the amount due on the first mortgage is less than 105% of the value of the property, borrowers with more than one mortgage may be eligible to refinance under the Homeowner Affordability and Stability Plan. Your eligibility will depend, in part, on agreement by the lender that has your second mortgage to remain in a second position, and on your ability to meet the new payment terms on the first mortgage.

* Will refinancing lower my payments?

The objective of the Homeowner Affordability and Stability Plan is to provide creditworthy borrowers who have shown a commitment to paying their mortgage with affordable payments that are sustainable for the life of the loan. Borrowers whose mortgage interest rates are much higher than the current market rate should see an immediate reduction in their payments. Borrowers who are paying interest only, or who have a low introductory rate that will increase in the future, may not see their current payment go down if they refinance to a fixed rate. These borrowers, however, could save a great deal over the life of the loan. When you submit a loan application, your lender will give you a "Good Faith Estimate" that includes your new interest rate, mortgage payment and the amount that you will pay over the life of the loan. Compare this to your current loan terms. If it is not an improvement, a refinancing may not be right for you.

* What are the interest rate and other terms of this refinance offer?

The objective of the Homeowner Affordability and Stability Plan is to provide borrowers with a safe loan program with a fixed, affordable payment. All loans refinanced under the plan will have a 30 or 15 year term with a fixed interest rate. The rate will be based on market rates in effect at the time of the refinance and any associated points and fees quoted by the lender. Interest rates may vary across lenders and over time as market rates adjust. The refinanced loans will have no prepayment penalties or balloon notes.

* Will refinancing reduce the amount that I owe on my loan?

No. The objective of the Homeowner Affordability and Stability Plan is to help borrowers refinance into safer, more affordable fixed rate loans. Refinancing will not reduce the amount you owe to the first mortgage holder or any other debt you owe. However, by reducing the interest rate, refinancing should save you money by reducing the amount of interest that you repay over the life of the loan.

* How do I know if my loan is owned or has been securitized by Fannie Mae or Freddie Mac?

To determine if your loan is owned or has been securitized by Fannie Mae or Freddie Mac and is eligible to be refinanced, you should contact your mortgage lender after March 4, 2009.

* When can I apply?

Mortgage lenders will begin accepting applications after the details of the program are announced on March 4, 2009.

* What should I do in the meantime?

You should gather the information that you will need to provide to your lender after March 4, when the refinance program becomes available. This includes:

o information about the gross monthly income of all borrowers, including your most recent pay stubs if you receive them or documentation of income you receive from other sources
o your most recent income tax return
o information about any second mortgage on the house
o payments on each of your credit cards if you are carrying balances from month to month, and
o payments on other loans such as student loans and car loans.

Borrowers Who Are at Risk of Foreclosure Are Asking:

* What help is available for borrowers who are at risk of foreclosure either because they are behind on their mortgage or are struggling to make the payments?

The Homeowner Affordability and Stability Plan offers help to borrowers who are already behind on their mortgage payments or who are struggling to keep their loans current. By providing mortgage lenders with financial incentives to modify existing first mortgages, the Treasury hopes to help as many as 3 to 4 million homeowners avoid foreclosure regardless of who owns or services the mortgage.

* Do I need to be behind on my mortgage payments to be eligible for a modification?

No. Borrowers who are struggling to stay current on their mortgage payments may be eligible if their income is not sufficient to continue to make their mortgage payments and they are at risk of imminent default. This may be due to several factors, such as a loss of income, a significant increase in expenses, or an interest rate that will reset to an unaffordable level.

* How do I know if I qualify for a payment reduction under the Homeowner Affordability and Stability Plan?

In general, you may qualify for a mortgage modification if (a) you occupy your house as your primary residence; (b) your monthly mortgage payment is greater than 31% of your monthly gross income; and (c) your loan is not large enough to exceed current Fannie Mae and Freddie Mac loan limits. Final eligibility will be determined by your mortgage lender based on your financial situation and detailed guidelines that will be available on March 4, 2009.

* I do not live in the house that secures the mortgage I’d like to modify. Is this mortgage eligible for the Homeowner Affordability and Stability Plan?

No. For example, if you own a house that you use as a vacation home or that you rent out to tenants, the mortgage on that house is not eligible. If you used to live in the home but you moved out, the mortgage is not eligible. Only the mortgage on your primary residence is eligible. The mortgage lender will check to see if the dwelling is your primary residence.

* I have a mortgage on a duplex. I live in one unit and rent the other. Will I still be eligible?

Yes. Mortgages on 2, 3 and 4 unit properties are eligible as long as you live in one unit as your primary residence.

* I have two mortgages. Will the Homeowner Affordability and Stability Plan reduce the payments on both?

Only the first mortgage is eligible for a modification.

* I owe more than my house is worth. Will the Homeowner Affordability and Stability Plan reduce what I owe?

The primary objective of the Homeowner Affordability and Stability Plan is to help borrowers avoid foreclosure by modifying troubled loans to achieve a payment the borrower can afford. Lenders are likely to lower payments mainly by reducing loan interest rates. However, the program offers incentives for principal reductions and at your lender’s discretion modifications may include upfront reductions of loan principal.

* I heard the government was providing a financial incentive to borrowers. Is that true?

Yes. To encourage borrowers who work hard to retain homeownership, the Homeowner Affordability and Stability Plan provides incentive payments as a borrower makes timely payments on the modified loan. The incentive will accrue on a monthly basis and will be applied directly to reduce your mortgage debt. Borrowers who pay on time for five years can have up to $5,000 applied to reduce their debt by the end of that period.

* How much will a modification cost me?

There is no cost to borrowers for a modification under the Homeowner Affordability and Stability Plan. If you wish to get assistance from a HUD-approved housing counseling agency or are referred to a counselor as a condition of the modification, you will not be charged a fee. Borrowers should beware of any organization that attempts to charge a fee for housing counseling or modification of a delinquent loan, especially if they require a fee in advance.

* Is my lender required to modify my loan?

No. Mortgage lenders participate in the program on a voluntary basis and loans are evaluated for modification on a case-by-case basis. But the government is offering substantial incentives and it is expected that most major lenders will participate.

* I'm already working with my lender / housing counselor on a loan workout. Can I still be considered for the Homeowner Affordability and Stability Plan?

Ask your lender or counselor to be considered under the Homeowner Affordability and Stability Plan.

* How do I apply for a modification under the Homeowner Affordability and Stability Plan?

You may not need to do anything at this time. Most mortgage lenders will evaluate loans in their portfolio to identify borrowers who may meet the eligibility criteria. After March 4 they will send letters to potentially eligible homeowners, a process that may take several weeks. If you think you qualify for a modification and do not receive a letter within several weeks, contact your mortgage servicer or a HUD-approved housing counselor. Please be aware that servicers and counseling agencies are expected to receive an extraordinary number of calls about this program.

* What should I do in the meantime?

You should gather the information that you will need to provide to your lender on or after March 4, when the modification program becomes available. This includes

o information about the monthly gross income of your household including recent pay stubs if you receive them or documentation of income you receive from other sources
o your most recent income tax return
o information about any second mortgage on the house
o payments on each of your credit cards if you are carrying balances from month to month, and
o payments on other loans such as student loans and car loans.

* My loan is scheduled for foreclosure soon. What should I do?

Contact your mortgage servicer or credit counselor. Many mortgage lenders have expressed their intention to postpone foreclosure sales on all mortgages that may qualify for the modification in order to allow sufficient time to evaluate the borrower's eligibility. We support this effort.

Probate Sales - What are the risks?

2009-02-17T14:49:00.000-08:00

Hi everyone!

Hope all is well. Today, a new client of mine emailed me asking me about probate sales. Probate sales, specifically "court confirmation required" sales, have many differences compared to normal real estate sales, and different risks that you, as a buyer, should be aware of. Here was my response to her question about probates:

Probates

Probate sale is when the owner of property passes away and there are executors of the will who, with the help of an agent and lawyers, are selling the property.

There are 2 kinds of probate sales, “court confirmation required” and “no court confirmation required”. “No court confirmation required” is much less risky and much more like a normal sale. If it is no court confirmation required, I would not be against a first time buyer pursuing the property.

Court confirmation is exactly what it sounds like. It means, before the sale can be completed it must be approved by a court to make sure the estate has been appropriately satisfied. The court date is not set until the offer is recieved and usually, until, after the buyer has committed to the property by removing contingencies.

If it is “court confirmation required”, I would not advise a first time buyer pursue the property. A couple of reasons why I say this:

1) Court confirmation probates are best suited for all cash buyers, experienced investors. This is because the loan contingency will not affect them. There is no risk of them not being able to secure financing.

2) Court confirmation often require that many if not all contingencies (including loan) be removed prior to court date. Keep in mind, the court date may be scheduled at any time and can be months down the road. In that time, if something happens with your financing, or rates go up, etc, you cannot back out of the deal without losing your deposit.

3) Court confirmation probates often require your deposit to be 10% of purchase price. In standard contracts, good faith deposit is 3% max.

4) Court overbids: On the day of the court approval, people can come and overbid you. So if you have a really good deal, you may get overbid. If no one shows up to overbid you, then you may not have gotten that good of a deal.

With all that said, I have still had first time buyers who have done “court conf” probates, and we have been successful. However, if you are a first time buyer who is not big on RISK, I would advise you to make sure you understand the level of risk you are taking on prior to proceeding.

How do you find out if any property is “court confirmation” or “not court confirmation”? Easy, email me the property, and I’ll find out for you.

LA Median Price Change Chart (2008 v. 2007) - Neighborhood by Neighborhood

2009-02-04T13:07:00.000-08:00

Hi everyone-
MLS just released this on Feb 1, 2009 to brokers and on the LA Times. Take a look at your neighborhood of interest and see what the median price is and the pattern change has been year over year.

LINK: LA Times/MLS Median Sales Chart - 2009

-Jerry

New Listing - 1600 Ellsmere Avenue

2009-01-29T17:19:00.000-08:00

www.1600Ellsmere.com
(Neighborhood: Picfair Village)

Buying from a Bank vs. Buying from a Traditional Seller

2009-01-29T16:03:00.000-08:00

In the past year, almost 75% of the homes and properties I've previewed on behalf of my clients have been bank-owned foreclosures. Of course, this is due to a major shift in the inventory given the current economic and housing crisis, but it probably also has a lot to do with the fact that my clients only want to see these foreclosures because they are priced so low. Because of this, many of my clients have also asked me for advice so they can understand what the "real, practical" differences are between buying from a regular seller as opposed to the bank. Here are my thoughts on this:

Before Offer
This is the period before the offer, when you're doing research or considering properties to write on. The main differences between foreclosure properties and regular properties during this time are that foreclosure properties are usually priced much lower than homes priced by sellers. This makes sense. Private sellers generally have the mentality of "let's get that one special buyer who will pay a premium for our property." Banks run more like an emotionless machine: "Let's price it at our bottom line, get multiple offers, and liquidate our inventory fast."

Forclosures on average generally are priced lower. However, it is important to also realize that, as with any capitalistic system, incentives (like, in this case, low pricing) creates stronger demand. With well priced foreclosures, you can almost always expect a bidding war, and if you want the property, you will probably have to make a best and final offer that needs to be over list price.

Foreclosure properties also tend to have more deferred maintenance. People who are maintaining and remodeling their homes generally don't stop paying their mortgages. It's usually people who can't afford to do any repairs that are. Therefore, homes that are owned by the bank are generally in worse shape, vacant, and dirty. As a buyer, you must have the imagination to vision past this.

Finally, foreclosure properties are usually always on lockbox.

During Offer Negotiation
This is the period from when you decide to put an offer on the property until you have an accepted offer. This period can be quite frustrating for buyers who are not familiar with how banks operate.

When you are buying a home from a private seller, they will generally do their best to work with you to create a win-win during the negotiations. They understand it is in their best interest to keep you, the buyer, in a good mood during negotations. Banks are much more impersonal.

Specifically, private sellers will usually counter with a clean written counter that addresses specifics. They will do so in a timely manner and you will likely get the sense that they are working in the spirit of compromise to make a deal. Banks are less concerned with keeping you in the deal as they are recovering their loss. They can counter however they want, and often times as a buyer, you will find the process much colder and almost as if they don't want to work with you. For instance, the bank may respond to your offer the following ways:

1) A Straight verbal rejection (If you submit a lowball offer to a bank, expect a straight verbal rejection)
2) A verbal counter
3) A counter for your best and final - no mention of them coming down on price
4) Bank counters to you at their full list price or almost full price - forcing you to either come up or walk away.

More often then not, the counter will be exclusively about price. And more often then not, they will just ask for your best and final.

The reason they only counter on price is because banks also have what we in the real estate industry know as a "boiler plate" addendum that you will need to sign as part of the acceptance that lays out THEIR terms. This addendum lays out all the terms of the contract for you, and supercedes any offer you may have put in previously. You can not adjust any of them, and they generally favor the bank heavily.

For instance, if you found a great property and offered $400,000 with a 17 day inspection contingency period, they could counter you back best and final. Say the list price was $450,000, and you told your agents you'll come up to $450,000: The bank would say, "OK. We have a deal. We'll send you the addendum with the price of $450,000. Just sign and we'll be in escrow." This means you have a deal, but in order to have the deal in writing, you must sign the banks addendum, which likely says inspection contingency shall be 7 days.

With the boilerplate Addendum, be aware of the following common changes:
1) Shortening of contingency periods.
2) Changing contingency removal from active to passive.
3) Per Diem penalty if you are not able to close on time
4) Penalty if you change your financing down payment amounts (even if you are able to close).
5) They will not pay for Termite work or retrofitting work.

The boilerplate addendum is non-negotiable. If you try to cross anything out, the bank will pass on your offer. As California real estate agents, we are expert in C.A.R Forms primarily. Legal addendums drafted by banks are outside the realtors scope (with the exception of Realtors with law degrees). Therefore, with bank owned properties, for your protection, it is also advisable to have a lawyer who specializes in real estate law review the bank addendum prior to signing. Unfortunately, realtors are not qualified to advise on these documents.

During Escrow and Beyond
In a traditional sale with a tradional seller, escrow will generally be opened immediately with a standard escrow company. With a foreclosure, it may 7-10 days before escrow is opened. Furthermore, banks tend to opt for low-rent, high volume escrow companies. How does this effect you:

1) You will have trouble getting someone on the phone when you need assistance on loan docs, ordering homeowner's insurance, getting necessary disclosures like preliminary title report or a copy of the Natural Hazards disclosure.
2) They will not keep track of timeframes on your escrow to make sure things are happening according to schedule. It will be up to you and your agent to keep track of them.
3) You loan is dependent on a number of things happening on a timely manner from escrow's end. If this does not happen, you can expect the bank to charge you a hefty per diem (around $125 a day) upon closing.

Once you have an accepted offer, a traditional seller will fill out a number of disclosures that will reveal as much as that seller knows about the property. Banks are excused from having to fill these out because they have a limited knowledge of the property.

During escrow, most buyers will do inspections on the property. If there are hidden defects with the property (i.e. the sewerline is cracked, Chimney doesn't work), most buyers and sellers will work together to find a reasonable credit to address the issue.

With bank-sold foreclosures (and per the boilerplate addendum), you are buying the property "As-is". Keep in mind, this is important as foreclosure homes are usually in much worse shape than homes sold by traditional sellers.

All this said, it is possible to negotiate for repair credits from the bank if (a) you have a strong offer that they probably wont get again, and (b) you have a willingness to walk away. I cannot stress "(b)" enough. With foreclosures, the bank generally will be unwilling to give any type of credit, until they see you cancelling escrow. You must be willing to walk away if the credit for repairs is that important to you. Otherwise, just accept that you are buying the property as is.

One common misconception, is that bank-owned properties take longer to sell or have delayed escrows. I would say it is actually the contrary: Bank-owned properties are pushing for fast closes, and will penalize you if you cannot close within the standard 30-40 day time window.

The properties that do take a long time and have delays are "short sales": A situation that happens when a traditional seller is trying to sell their home, but requires the involvement of the bank because the home is worth less than the amount of debt that is owed on it.

Please feel free to comment or email me if you have further questions. Thanks!

-Jerry

Frequently Asked Questions for First Time Buyers

2009-01-20T03:35:00.000-08:00

Hi Folks! I just put these packets of FAQs in real estate together this weekend. If you're a first time buyer, or haven't been actively involved in real estate for awhile, I think this information is great and TREMENDOUSLY informative.

For my clients who are actively in the market now, this is a great resource and a MUST READ! Click on the links below:

First Time Buyer FAQ's
Highlights
"Five Common First Time Home Buyer Mistakes"
"Ten Questions to Ask Your Home Inspector"
"Five Property Tax Questions You Need to Ask"

Mortgage and Escrow FAQ's
Highlights
"Ten Questions to Ask Your Lender"
"Five Things to Understand About Title Insurance"
"Common Closing Costs for Buyer"

10 FAQ's in Real Estate
Highlights
"Tips on Buying in a Tight Market"
"Questions to Ask when Choosing a Realtor"
"Ten Steps to Prepare for Homeownership"

Stay tuned next week. I am going to talk about foreclosures and will explain the differences to you, the buyer, between buying a home from a bank vs. a private party(normal seller).

-Jerry

"Mortgage Rate Relief Might not Last Long" from REUTERS, published Jan 8, 2009

2009-01-12T17:19:00.000-08:00

" 'The downward trend we have seen in mortgage rates will not last beyond the first half of this year,' said Celia Chen, senior director of housing economics at Moody's Economy.com in West Chester, Pennsylvania..."

Hello again folks! Passing along an article regarding mortgage rates for 2009. This was just released last week on Reuters.com and it echoes the sentiments of most of the mortgage brokers I've been in touch with in the past couple of months. The general consensus I'm hearing is that there is a possiblity (keyword: POSSIBILITY) mortgage rates could get as low as 4.5%, but once that bottom hits, rates will start creeping up sooner than most buyers who are currently stradling the fence will realize.

-Jerry

Mortgage Rate Relief Might Not Last Long
Thu Jan 8, 2009 4:50pm EST
By Julie Haviv - Analysis
Direct Link

NEW YORK (Reuters) - Massive efforts by the Federal Reserve to bring down mortgage rates have so far been a success, but homeowners had better act fast because analysts say record low rates could be gone as soon as this summer.

Thirty-year mortgage rates dropped to a low of 5.01 percent this week -- their lowest since 1971 -- after the Federal Reserve unveiled a plan in late November to buy as much as $500 billion of securities backed by Fannie Mae (FNM.P), Freddie Mac (FRE.P) and Ginnie Mae. They could touch as low as 4.50 percent, but the cheap loans will not last long, mortgage experts warned.

"The downward trend we have seen in mortgage rates will not last beyond the first half of this year," said Celia Chen, senior director of housing economics at Moody's Economy.com in West Chester, Pennsylvania.

"By then, the Federal Reserve's program will have run its course and other issues will move to the forefront that could push mortgage rates higher," she said.

The Fed has also embarked on a program to buy up to $100 billion in unsecured debt of Fannie Mae, Freddie Mac and the Federal Home Loan Banks in a move also aimed at lowering interest rates on mortgages.The prospect of affordable home financing has provided a glimmer of hope for the U.S. economy with the housing market in the worst downturn since the Great Depression. But if mortgage rates rise, they will further paralyze a housing market already beset by plunging home prices, an unwieldy supply of homes for sale, tighter lending standards by risk-shy banks and surging foreclosures.

Even if the Fed extends its mortgage bond buying program past the summer, its other efforts to flood financial markets with cash will work against low rates. They include the inflationary impact of both the Federal Reserve's near-zero interest rate policy and the massive looming fiscal stimulus from the government which must be paid for by more government debt, pushing up interest rates. A 30-year fixed-rate mortgage at 4.50 percent is a level apparently targeted by policy makers.

Moody's Economy.com forecasts interest rates hitting 4.50 percent by the middle of 2009 after dropping to a low of 4.37 percent in the second quarter. But, by the third quarter and fourth quarter interest rates will be climbing to 4.57 percent and 5.18 percent, respectively. By the first quarter of 2010, rates should be at 5.87 percent, Chen said.

"Low mortgage rates are important, but there is no evidence that lenders are lending and that is crucial," she said.

Treasury yields, which move inversely to price, are linked to mortgage rates. The Treasury is seeking to fund an estimated deficit of $1 trillion or more over the coming year.

TOO LOFTY A GOAL

Cameron Findlay, chief economist at online loan broker LendingTree.com in Charlotte, North Carolina, said mortgage rates at 4.50 percent remained possible, but not probable. "For now the Fed has implemented change to entice rates to decline and are in a holding pattern to see the impact," he said.

"Up until a few weeks ago, people thought 4.50 percent was a realistic target for rates within 60-90 days, but that idea has dissolved," he said.

What has changed since November is the Fed's decision to ax interest rates to almost zero to help revive the economy, leaving the central bank with fewer options to cut rates. Findlay said mortgage rates should stay in a range between 5.00 percent and 5.50 percent for the next eight weeks or so barring any additional Federal Reserve action. Expectations of a 30-year fixed-rate mortgage at 4.50 percent are too ambitious, said Greg McBride, senior financial analyst at Bankrate, Inc, in North Palm Beach, Florida.

"Inflation worries may begin to spook investors and that could send Treasury yields higher, which would cause a corresponding move higher in mortgage rates," he said.

"Real Estate Resurrection Begins in California" from Forbes.com on Jan 8, 2009. "U.S. Treasury May Look to Take Rates down to 4.5%"

2009-01-12T16:21:00.000-08:00

"In some of the hardest-hit areas, like California, Florida and Nevada, sales in some areas have been rising in recent months..."

I admit, this is an optimistic article. There are just as many articles that are saying 2009 will be another very depressing year. I will update my blog weekly, and will try to be as even handed as possible about including real estate articles from both perspectives, and most importantly, passing along relevant statistics for the Los Angeles Market.

FYI, this article is in line with what I'm seeing so far this year. My current clients as well as the buyers I meet out in the field, all seem to be of the mindset that 2008 was their time to wait, but now that the new year (2009) is here, they want to be more aggressive about finding something.

-Jerry

Real Estate Resurrection Begins
Hugh Bromma, Entrust Group, 01.08.09, 03:45 PM EST
Direct Link

While the data on prices and sales are still awful on a nationwide basis, there are rays of hope emerging for real estate.

Sales of new and existing homes continue to decline in the U.S., as assets of all stripes are re-priced lower and consumers become more risk averse. But the news in real estate is not all bad, and in some of the hardest-hit areas, like California, Florida and Nevada, sales in some areas have been rising in recent months.

While the national real estate figures show the country continues to be mired in a downturn that started more than two years ago, there are increasingly pockets of hope out there. It's true that much of the recent uptick in real estate activity reflects distressed sales, such as foreclosures. But the fact is that drastically lower home prices and more attractive mortgage rates--rates are down almost a full percentage point on a 30-year loan--are creating more buying interest, especially in the areas that have been hurt the most.

In fact, October existing-home sales surged more than 37% in the West, primarily because of the rise in sales in California and Nevada. And in Florida, existing-home sales jumped 15%, the second straight month of rising sales in the Sunshine State. Meanwhile, mortgage applications more than doubled during the week of Thanksgiving because of the rapid decline in rates.

Adding to the budding sense of optimism are reports that the U.S. Treasury will look to take mortgage rates all the way down to 4.5%, which would provide a huge boost to would-be home buyers across the country. Of course, real estate, even more than politics, is all about understanding the local area, which is precisely where astute investors are finding extraordinary opportunities.

Experienced real estate investors who have been able to keep some powder dry and understand their local markets are now able to buy properties for 50 cents on the dollar, or even less than just a year ago. In many cases, these are the kind of prices that represent once-in-a-lifetime opportunities, where the downside is now very limited and the upside is incredibly compelling.
Comment On This Story

One of the keys to finding a great real estate investment is understanding the importance of cash flow. We recently had a client utilize his self-directed IRA to purchase a brand new property just outside of Los Angeles. The property, a three-bedroom, two-bath single family home, was purchased for about $150,000, half what the exact same home would have cost a year earlier.

The purchaser had about $60,000 in the IRA and put down about 30% of the purchase price, making his monthly mortgage payment approximately $1,100 per month. In this area, similar properties rent for at least $1,400, so the property should have no problem showing positive cash flow right from the start. In addition, if there is a pick-up in the real estate market, the purchaser should be able to sell it outright for a handsome profit.

This is the kind of activity we are seeing more of in what were the hardest-hit areas. The key, of course, is having available cash--if you're buying real estate in a self-directed retirement account, you will need to put down 30% of the purchase price--and understanding the unique dynamics of the market you are buying in.
Dugg on Forbes.com

As a large administrator of self-directed IRAs, we've witnessed thousands of investors use their self-directed retirement plans to buy properties and realize excellent returns by selling them at a later date or renting them and allowing them to cash flow, as discussed earlier.

If you do decide to explore some of the more downtrodden areas, do your due diligence and understand the market in which you plan to invest. How is the local job market there? How has the area done in previous economic downturns? There's no substitute for knowing your market and doing your homework.

Q & A with Jerry: When should I get pre-qualified? How do I get realtors to stop soliciting me?

2009-01-08T12:14:00.000-08:00

Happy New Year folks! My new years resolutions regarding my real estate business was to find a more efficient way to keep my clients and friends informed about real estate. So with that, i present to you....ta da...My new blog. :)

Last week I was talking to two friends of mine who are dating and looking to buy their first home in the Brentwood and Pacific Palisades soon. They asked a lot of questions, but there were two that stood out. I followed up with them through email and here are the responses:

Question: So we've started looking at open houses, but we don't really have a time frame. We are mainly looking for the right deal, so we don't feel like we need to be in a rush to meet with a mortgage broker as we both have stable, well-paying incomes. At what point in the process do we need to get pre-qualified? Also, how hard it the pre-qual process?

The process in and of itself is quite easy, I have no doubt you two will qualify. Pre-qualification is the easier first phase. Pre-approval requires a bit more, but is also fairly painless. In real estate, any good agent will tell you that any offer you write should always be accompanied by a pre-approval letter…no exception. Usually, the pre-qual process when you first meet with a mortgage broker goes like this: (1) You fill out a one page form stating how much money you make per month and year, what your expenses are, and what your savings are, (2) They will run your credit, (3) they will probably ask for your last 2 check stubs. From this, they should be able to pre-qualify you. To move forward to full pre-approval, they may ask to see more verification of income and probably will want to see your last years tax returns. There’s really not much more than that. Your mortgage broker can advise you on what program will suit your needs best, everyone has different needs.

As far as when to get pre-approved, I would advise you do it sooner rather than later. It’s a fairly easy process that really requires no further obligation, and I’ve always felt it’s better to know exactly what to expect before getting your wheels turning. From a professional standpoint as a realtor, I have found that the best properties come on the market and get swept up within the first week (yes, even in this market, a deal is still a deal, and buyers will recognize it.), and I’ve had clients that missed out on homes because they had a delay getting their pre-approval together. Good agents will generally have their clients pre-approved as early as possible so there won’t be any delay when the right home comes along.

Finally, find someone you can trust. Referrals from friends and family are a good way to go. I have a great lender I work with, and am happy to pass his information along.

Question: So, I think someone told me that realtors make 6% on a deal, split between the agents, but if the listing agent represents both sides, he gets the entire 6%. So is there any discount for working without an agent?

As we discussed yesterday, the seller will pay a commission on the sale of a home that is agreed upon at the time of listing. When the home sells, the buyer’s agent and listing agent split that commission. Usually it’s 6%, but for homes over a million it is often 5%. The buyer never pays any commission. If you are a buyer, you should probably find your own agent. Someone you can trust and will work for you. The idea of working without an agent is one that is often misunderstood. When you go through the listing agent, the listing agent then becomes your agent and gets the entire commission. Furthermore, it is important to understand that it is hard, if not impossible, to simultaneously represent two opposing interests, in this case, the seller and the buyer.

In the end, most listing agents loyalty, as you could understand, will lie with the seller first. They will do what you ask, but will not proactively fight for you. That is not what the seller would want. That said, it is possible for a listing agent representing both sides to discount his commission, however, this is all a little grey. What I mean is, in the end, who knows if this money benefitted the buyer or the seller. Furthermore, a good buyers agent will fight for a better deal for you and fight to get you credits in escrow. Having a buyer's agent is FREE. Think about that. It's free. Why would you not want to choose someone you know specifically will give you the best representation if it does not cost you anything, right?

Question: Since we've started looking at homes, I swear I get about 4 calls a day from realtors. At this point, if I don't recognize the number, i just let it go to voice mail. I think I had 3 calls already today! Is there a different way we should be going about this?

The ONE piece of advice I would give you as a first timer ABOVE all else is this: It is much better to have one agent working for you diligently than to have a few or more agents working for you on a haphazard basis. Per our conversation yesterday, I think you are already starting to feel what it feels like to be bombarded by realtors trying to become your agent. It’s annoying. You might as well find someone who really willing to go all out for you and just stick with them. As mentioned before, all agents have access to the same information. In the end, what sets agents apart are (1) the legwork they put in behind the scenes (previewing properties, making calls, going to broker’s opens for you) and (2) Their negotiation expertise and how hard they are willing to fight for you for credits in escrow.

For me personally, once I know you want me to be your guy, I would definitely start doing a lot more research behind the scenes for your benefit. In laymans terms, that means I will start previewing properties for you all the time, looking for the “deal” properties/opportunities, and letting you know about them as quickly as possible. That’s it in a nutshell.

The other advice I would give is, stop signing in at open houses. That’s like an invitation for solicitation. When you decide that you have found your agent, call all those other agents, and tell them “Thank you, but could you please stop contacting me as I’m working with a Realtor.” Any good agent will respect that. No more explanation needed. Keep in mind, if you don't communicate to realtors to stop contacting you, don't blame them if they continue contacting you. It's their job to put buyers and sellers together, and contacting people like you is part of the job description!

There’s a lot more information about stuff like this at my website’s Frequently Asked Question section: http://www.newhomesla.com/frequently_asked_questions-c4986.html

-Jerry

From New York Times: "It May Be Time to Think About Buying That House" - Dec 5th

2008-12-07T20:07:00.000-08:00

Season's Greetings! Hope your Holiday Season is off to a great start. :) Here's a great article for FIRST TIME BUYERS that was published in the New York Times last Friday. Enjoy and Happy Holidays!

-Jerry

It May Be Time to Think About Buying a House
By RON LIEBER
Published: December 5, 2008
Direct Link

Five or 10 years from now, when the financial crisis has ended and housing prices are up smartly once more, we will look in the rearview mirror and realize that we missed a golden age for first-time home buyers.

Then, everyone who sat on their down payment savings accounts for a few years too long will kick themselves for not taking advantage of what may turn out to be the buying opportunity of a lifetime for those who can qualify for a mortgage.

Unfortunately, we do not know when this golden age will begin, because we will be able to identify a bottom to the housing market only with the benefit of hindsight. But as it does with the stock market, the moment will probably arrive when everyone is feeling the most pessimistic.

That moment is certainly getting closer. Housing prices have fallen drastically from their peak levels in many areas of the country. Rates on 30-year fixed-rate mortgages are already close to 5.5 percent, and this week there were suggestions that the federal government might try to drive them down to 4.5 percent, a truly incredible figure to be able to lock in for three decades.

Meanwhile, first-time home buyers have the same advantage they have always had, which is that they do not have to sell their old place before buying a new one. That is an added advantage in areas where many available houses simply are not moving, because the people trying to sell them will not be bidding against you.

If you’re hoping for a recovery in the housing market, you ought to be cheering on the first-time home buyers. When they purchase homes, their sellers are free to move on or move up, stimulating further sales.

But if you are a potential first-time buyer yourself, or lending or giving the down payment to one, you are probably as frightened as you are tempted by all the “For Sale” signs that have become “On Sale” signs. So let’s quickly review some of the still-grim pricing data in certain areas — and consider the reasoning offered up by first-time buyers who have forged ahead anyhow.

As is always the case with real estate, much depends on location. One study, “The Changing Prospects for Building Home Equity,” tries to predict where today’s first-time buyers in the 100 biggest metropolitan areas may actually have less home equity by 2012 as a result of continued price declines. The verdict was that buyers in 33 of the markets could see a decline by 2012, including potential six-figure drops on an average home in the New York City, Los Angeles, San Francisco and Seattle metropolitan areas. This is obviously scary. (I’ve linked to the study, a joint effort of the Center for Economic and Policy Research and the National Low Income Housing Coalition, from the version of this article at nytimes.com/yourmoney.) It’s worth noting, however, that these predictions came before the government made its most recent move to reduce borrowing costs.

Also, the price projections in the study are based, in part, on the fact that the ratio of purchase prices to annual rents is still higher in many areas than the historical average, which is roughly 15 times rents. While past figures may well have some predictive value, I have never been convinced that first-time buyers compare a home that they could own and one that they would rent in purely or even primarily economic terms. When Jaime and Michael Proman moved this fall to Minneapolis, his hometown, from New York City, they craved a different sort of life after two years together in a 450- square-foot studio apartment. “We didn’t want a sterile apartment feel,” said Mr. Proman, who is 28 (his wife is 26). “We wanted something that was permanent and very much a reflection of us.”

The fact is, in many parts of the country there are few if any attractive rentals for people looking to put down roots and enjoy the sort of amenities they may spot on cable television home improvement shows. Comparing a rental with a place that you may own seems almost pointless in these situations, especially for those who are now grown up enough to want to make their own decisions about décor without consulting the landlord. Still, for anyone feeling the urge to buy, a number of practical considerations have changed in the last year or two. The basics are back, like spending no more than 28 percent of your pretax income on mortgage payments, taxes and insurance. Even if a lender does not hold you to this when you go in for preapproval, you should hold yourself to it.

You will also want to start now on any project to improve your credit score because it may take several months to get it above the 720 level that qualifies you for many of the best mortgage rates.

John Ulzheimer, president of consumer education for credit.com, a consumer credit information and application site, suggests starting to pay down and put away credit cards months before you apply for a loan. That is because the credit scoring system could penalize you if you use a lot of credit each month, even if you always pay in full. Also, check your three credit reports (it’s free) at annualcreditreport.com and dispute errors. While no one can easily predict the likelihood of losing a job, Friday’s startling unemployment figures suggest the need for caution if you think you might be vulnerable. A. C. Panella, who teaches communications at Pasadena City College in California, waited until she had a tenure-track job before buying a home in the Highland Park section of Los Angeles with her partner, Amy Goldman, a lawyer for a nonprofit organization. “We could afford the mortgage payment on one salary, were something to come up,” Ms. Panella, 31, said. “It’s really about being able to stay within our means.” For many first-time home buyers, that philosophy stretches to the down payment, too. Ms. Panella and her partner put down 20 percent when they bought their home in September, as did the Promans when they bought their home in the Lowry Hill neighborhood of Minneapolis.

Alison Nowak, 29, put just 3 percent down on a Federal Housing Administration-backed loan last month when she and her partner, Lacey Mamak, bought a $149,900, 800-square-foot home several miles south of where the Promans live. “Anything that is an opportunity also has a bit of risk,” she said. Her house was in foreclosure before a plumber bought it and fixed it up. “One way we mitigated it was that we bought a really tiny house in a very good neighborhood.”

One other strategy might be to buy new instead of used. Ian Shepherdson, chief United States economist for the research firm High Frequency Economics, says he believes that a steep drop-off in inventory of new homes is coming soon, thanks to a rapid decrease in home builder activity.

Since prices generally soften in the winter, it may make sense to start looking seriously once the mercury bottoms out. “If you look at new developments next spring, you may not have the choice you thought you would have or be in the bargaining position you thought you would be,” Mr. Shepherdson said. Also, if you wait after June 30, you will miss out on a $7,500 federal tax credit for income-eligible first-time home buyers that works like an interest-free loan.

Finally, allow yourself to consider how it would feel if you bought and then prices dropped another 10 or 15 percent. It might not bother you if you plan to stick around. Plenty of people seem to be making a longer commitment to their homes. According to a survey that the National Association of Realtors released last month, typical first-time buyers plan to stay in their home 10 years, up from 7 last year.

Perhaps people are more aware that they will not be able to build equity as rapidly as others did in the real estate boom. Or they simply have more confidence in hard, hometown assets now than in other markets.

“We wouldn’t let another decline bother us,” said Michael Proman. “You can never time a bottom. This is a long-term investment for us, and it truly is the best investment we have in our portfolio right now.”

LA Times Real Estate Update - Nov 16, 2008

2008-11-22T18:56:00.000-08:00

As we're all winding down towards the holidays, just wanted to pass along the last 2 Single Family Homes Median Sales Charts for November 2008 that were released on the MLS and the Los Angeles Times the past 2 weekends, Nov. 9 and Nov. 16.

1) Market Trends - Newly listed Median Price and information for Singly Family Homes in LA (Released Nov 9)
2) Market Trends - Number of Accepted Offer, BOM listings and Price Changes for Single Family Homes in LA (Released Nov 16)

MLS Article November 2

MLS_Article_November_9

MLS Article November 16

Read this at your own leisure as I'm sure we're all focused on the Holidays this week! Hope you have a very Happy Thanksgiving, and thank you for the opportunity you've given me help you this year. Many Thanks from myself to you.

-Jerry
310-228-8856

"LA County Home Sales fall under $400k" - From LA Business Journal - Sept 2008

2008-10-04T17:09:00.000-07:00

Here's an article from October 2008 discussing about how the median sales amount have come down in LA real estate for September...

Thought from perspective as a potential buyer, might be fairly interesting. Of course this covers all of LA County, so it includes all those areas like Palmdale, Lancaster, etc... Prime-heart of LA-westside that we've been looking is not a sub-400k area...but still gives some good perspective on the softening market.

-Jerry

Click here for Article

UNDER $400,000
By ALEXA HYLAND - 10/13/2008
Los Angeles Business Journal Staff

The median price of homes sold in Los Angeles County crashed through the $400,000 level in September and landed at $380,000, according to sale data supplied to the Business Journal. Home prices here have not been that low since early 2004 – about the time the dramatic run-up in home prices was gaining steam. The number surprised even some veteran real estate experts.

“I didn’t think that there was going to be a significant downturn in values, certainly not this quickly,” said Harvey Mark, a real estate agent with Long Beach brokerage Coldwell Banker Coastal Alliance.

By any measure, the drop in home prices was dramatic. The median price in September 2007 was $580,000. That means the price sunk $200,000, or 35 percent, in one year, according to data supplied by Hicksville, N.Y.-based HomeData Corp. The drop was sharp even from the previous month. In August, the median price was $404,000, which means the price dropped $24,000, or 6 percent, in one month. Experts said the cause of the dramatic slide was clear: a rising tide of distressed and cut-rate properties. Many of the bargains are being snatched up despite the credit crunch.

The buyers? They were said to be investors flush with cash, sometimes buying several homes at once, as well as first-time homeowners who qualify for federal programs aimed at propping up the housing market. “This morning, we had an office meeting and one of my agents told me that 30 percent of our inventory is in escrow,” said Chris Boumann, a broker owner at Red Carpet Heritage Realty in Downey. Indeed, the number of homes that changed hands went up sharply. There were 4,769 homes sold in the county in September. That was up 22 percent from August and up 18 percent compared with September 2007. By comparison, even during the height of the boom, volumes typically fell in September after the strong summer sales season.

(All comparisons are adjusted to reflect inconsistencies in HomeData’s monthly reporting period.)

Many of the sellers were banks, which are starting to slash prices on foreclosed properties they have sometimes held for months. The failed IndyMac Bank, taken over by the Federal Deposit Insurance Corp. in July, had 46 foreclosed homes for sale in L.A. city alone recently, according to the bank’s Web site. “We are seeing these low prices in the market because right now quite a few foreclosures are up for sale by the banks,” said Delores Conway, director of the Casden Forecast at the USC Lusk Center for Real Estate. “People are buying the foreclosures, and many are investors who want vacation homes or see it as an investment to rent.” Investors continue to target foreclosed properties in some of the cheapest markets, including Lancaster and Palmdale, Conway said. Builders, too, are cutting deals to unload bloated inventory. KB Home has been offering zero-down deals with price protection. The protection guarantees homeowners will get the lowest possible price at the time of closing. In its second quarter results, the Los Angeles builder reported that it had reduced inventory and debt as a result of such incentives. But agents on the ground said not all home sales can be attributed to bottom-fishing investors. While the median prices in many ZIP codes dropped, the prices were not always low enough to attract investors. Instead, agents said they are seeing an increasing number of first-time buyers previously priced out of the market who are now purchasing single-family homes.

Jimmy Spathos, a real estate agent who has been selling homes in Downey for nine years, said more first-time buyers are bypassing banks to secure a loan and instead are getting funding from the Federal Housing Administration. Spathos said these first-time buyers are qualifying for FHA mortgages, which are insured by the government and require only a 3 percent down payment. As a result, the buyers are entering markets like Downey, where the median home price dropped to $354,000 in one ZIP code.

“The majority are first-time home buyers,” Spathos said. “They are buyers who are out and are serious buyers.”

Westside Blues

The price weakness was spread throughout the county in September as 101 of the 261 ZIP codes had a median price below $380,000. Meanwhile, there was a significant decline in the number of ZIP codes with median home prices at $1 million or above. There were just 25 such ZIP codes in September, down from 36 one year earlier. However, unlike middle- and working-class neighborhoods, where cash investors and FHA-backed loans were supercharging sales, nothing was propping up wealthy neighborhoods.

ZIP codes in Beverly Hills, Brentwood, Bel-Air and Santa Monica all saw the number of homes sales decline by at least 30 percent last month compared with a year ago. And it wasn’t just the credit crunch at work. Agents noted that many buyers were fearful that price declines weren’t close to an end, and even if they were, there was a general skittishness among would-be buyers about laying down big money in such a bad economy. “Rich people have savings, stock accounts and pension funds, but as everyone suffers, it starts to impact them, too,” said Mike Nourmand, president of Nourmand & Associates Realtors in Beverly Hills.

Last week, Nourmand said his firm had a $5.5 million deal in escrow, but the negative stock market scared the buyer. “They backed out of the deal. A month ago, it would have gone through.”

Indeed, the plunging stock market coupled with the takeovers and acquisitions of the country’s largest financial institutions are expected to continue to take a toll on wealthier residents. As these institutions work through the current economic crisis, they are likely to lay off executives in addition to their middle-income and lower-level employees. “With the mergers and consolidations – just look at Countrywide being acquired by Bank of America – we are going to be seeing layoffs due to consolidation,” said USC’s Conway. “We just don’t know how many and how far that is going to go. It could affect housing prices throughout the county.”

Condo Boost

Meanwhile, the condominium market, which had cooled a bit in August, also picked up in September in terms of deal-making. But despite a spike in transactions, the median price of a condo fell to $350,000; that’s off 22 percent from a year earlier and 8 percent from August.

September sales increased to 1,708 units, up an adjusted 33 percent from last year and an adjusted 17 percent from August. The sales increase surprised some experts.

Paul Habibi, a professor at the UCLA Anderson School of Management, said he wouldn’t have expected such a rise, but ventured that developers were likely offering deep price incentives in order to move their inventory quickly.

“Builders are squeezed right now,” Habibi said. “They have been offering incentives in price reductions.”

Habibi said condo sales also likely were boosted by residents who are downsizing from single-family homes as a result of a worsening economy.