Coming Soon in Glendale

Next week, I'll be listing this great northwest Glendale family home. I plan to have more pictures early next week, too. It is located at 848 Idlewood between Glenoaks and San Fernando and will list for $620,000. Features include 3 beds, 2 baths, den, separate dining room, big galley kitchen with new stove, 1787 sf, shaded patio, rose bushes, fruit trees and a lovely, private backyard. This diamond in the rough also features 2 wood burning fireplaces, ac, new paint, new carpet, 5 phone lines, detached garage inside laundry, and most appliances stay. We’re still spiffing it up, but please plan to see it at the beginning of April.

LA DWP's Invasion Plans for Burbank

Paula Allen, agent extraordinaire, reports in from the west side of Burbank about a notice that she's received: Los Angeles Department of Water and Power will be laying 5.92 miles of water pipe -- right through the middle of Burbank! That's a lot of pipe to lay. (I think there's a joke in here somewhere.) Does Burbank benefit or even get paid for this? It will probably follow Whitnall Highway. Paula has also sent the documents she got along with the map -- contact me if you'd like me to forward them.

News Flash! Macaroni Grill Restaurant is Muerte in Burbank

Macaroni Grill Restaurant at 1st and Magnolia has gone out of business. Too bad. Burbank just doesn't have enough national chain casual dining restaurants to serve the community.

Toluca Woods is Hot!

Update April 8, 2008: well, maybe not so much. This home is back on the market. The listing says that's due to first time buyer jitters. The Toluca Lake neighborhood of Toluca Woods continues to defy sales expectations. The area bordered on the north by Magnolia, south by Camarillo, with west/east boundaries of Cahuenga and Denny has seen the homes that have come on the market there lately go pending very quickly. Pictured to the left is 10637 Otsego, a 4+2 for $789,000. It went pending in 13 days. You can visit my February post for the house on Willowcrest that went pending in 7 days. This isn't surprising as the neighborhood has good housing stock at decent prices. But, wow, such fast sales really are rare these days.

How'd We Get Here? And I Don't Mean Burbank

Happy Spring, everybody! For those of you that are a little confused, as I am, about our national financial and mortgage crises and how we got here, here’s a tip: I find that the New York Times is a good source of understandable information. Okay, so is the L.A. Times. But back to what I was saying. Today’s NYTimes has a great editorial entitled Iraq, $5,000 Per Second? by Nicholas Kristof about the connection between the spending on the Iraq war and our current economic troubles. Nobel Prize-winning economist Joseph Stiglitz says, “[Tax] money spent on Iraq did not stimulate the economy as much as the same dollars spent at home would have done. To cover up these weaknesses in the American economy, the Fed let forth a flood of liquidity; that, together with lax regulations, led to a housing bubble and a consumption boom.”

Finally, a real price reduction

You may recall that I blogged about the pictured home at 601 Priscilla recently. It had a price reduction of -- hang on -- $100! Wowwee! This home has now had a more meaningful price reduction, down to $674,000 from $705,900. Much better. It's a 3+2 with a pool, redone kitchen that needs appliances, and is in one of the nicer areas of Burbank/Toluca Lake.

Quoted re FHA Guidelines

Our friend Patrick Duffy at Housing Chronicles.com has quoted this blog on FHA guidelines. Thanks, Patrick! My original post is below; it's dated March 11. I'm still finding that many lenders haven't received a lot of direction on this from their management.

Could it be any more crass? Oh no, wait...this is Glendale

Thanks, L.A. Curbed, for this story. Americana at Brand, the new destination shopping center in Glendale, will take delivery of a "Spirit of American Youth" statue to the garden area of a shopping center. Pictured above, the statue is a re-creation of the 1949 sculpture at the Omaha Beach Memorial in France that commemorates soldiers who died on Normandy Beach. Of course, before it's good enough to grace a Glendale shopping center, it has to be dipped in gold. Remember the soldiers who died for your right to shop. To the left is the statue, about to leave NYC for Glendale, and the smaller picture below is the original, in France.

I Want My Rate Cuts!!!

The Fed is cutting rates right and left. So why haven't mortgage interest rates gone down?! Click here for a great article from CNNmoney.com. It seems so unfair -- the housing retail level (mortgages on resale homes) should benefit from all the Washington shenanigans too, yes?

Sexiest Headline of the Week: Topless Water Heater Rebate!

Okay, it's not topless, it's tankless, but it got your attention, right? Per an insert in my gas co. bill (you wondered who read those, huh?) you residents of Burbank and Los Angeles can now get a $200 rebate from The Gas Company when you purchase one of these. They're great -- they give you hot water on demand, so you don't have a big, 40-gallon tank of boiling water sitting around. You'll use less energy and water. Visit www.socalgas.com/twh/for more info. The offer is good through December 31, 2008 of this year.

And, Yes, It Applies to the San Fernando Valley

There's a great post today on Housingchronicles.com about Alan Greenspan. Wordy, but worth it. Check it out at HousingChronicles.com.

Connection Between Bear Stearns Bailout and Spitzer

Here's an excellent article from Greg Pallast regarding the Spitzer/Bear Stearns connection. Robert Scheer said pretty much the same thing yesterday on NPR. I thought the timing of the Spitzer bring-down was a little strange myself (although it's clear he's a slime ball). Why am I putting this in this blog? Because many financial institutions are now at risk because of the sub-prime loan mess.

Sober Living in Burbank

Note: the post that follows originally appeared here on March 5. It continues to get many comments. Because of that, I've moved it to the top of this page so it doesn't disappear (as it will on Blogger when it gets to the bottom.) Please feel free to continue commenting here, and to also check out the other posts on sober living in Burbank. I am happy to be able to foster a community dialogue. [Today's] Burbank Leader reports that local residents are angry about a sober-living house on Clark Street. Sober-living residences usually house a half-dozen people who are recovering from alcohol and drug addiction. At a recent community meeting, neighbors complained that this home was endangering their children and lowering their property values. The article states that the police have been called to this particular home several times and made three arrests there in 2007. These state-funded residences currently cannot be regulated by municipalities, although there are on-going attempts to change that.

As an aside, I'll cop to being addicted to shows like A&E's Intervention. Yes, it's just another reality show. But it has performed a service, at least for me, in that it has educated me immensely about addiction -- and I had a death in my own family last year as a result of chronic alcoholism. I've learned that sober-living situations can be vital to those struggling to get well.

So here's the conundrum: don't we as a community and a society have a responsibility to help those trying to help themselves? Isn't giving recovering addicts an opportunity to live in a normal community a good thing? I think so. But would I feel safe living close to this particular facility? No. Any answers from anybody out there?

Quick Sale, Multiple Offers in Burbank

I thought fast sales and multiple offers were a thing of the past. Nope. My client wanted to write an offer on this property at 3131 Frederic in Burbank only two days after it listed (he knows what he wants; I've been working with him on various houses over the years). Imagine my surprise to find out that we were in multiple offers -- aren't those a thing of the past? How come my buyer gets stuck in that situation? There's a happy ending though: the sellers accepted the offer and we're now in escrow, nine days after the property listed (coulda been three days, but sorting out and countering the multiple offers took time). No, this wasn't a foreclosure or short sale. It was just a very well-priced home in a great neighborhood in very good condition. And my buyer's offer was under the list price, too. More details when this closes.

More NODs for Burbank but Not Studio City

I just looked at the Notices of Default for the week of 3/5-3/12. NODs are filed when a home owner is at least three months late on mortgage payments and is a first step to foreclosure. Palmdale and Lancaster are still the county's epicenter for NODs, but Burbank's numbers increased to 18 this week. Other community NOD stats: North Hollywood-29; Sherman Oaks-10; and Studio City has only one, which is a decrease from prior weeks.

LAT, Downtown and the Valley

There are some interesting stories in the L.A. Times today. The first, on the front page, is about the glut of brand-new downtown lofts. The story is extensively posted upon at both LACurbed.com and LAland.

The second story covers Adam Carolla's view of the San Fernando Valley, complete with "best ofs." Here's a quote from Adam about the usual progression from the Westside to the Valley: "People move here...They get themselves an apartment on the Westside. It's $2,500 a month and they have a roommate...They like to walk to their local coffee shop and say they'd never move. Eventually, they get a little bit older and they say, 'I guess I need to think about buying a house, I'm 37'...Five years go by...because they can't humble themselves to move to the Valley. This is the point where they move...and that's how people end up in the Valley."

Glendale, The Mattress Capital of the World

What gives in Glendale? Central Ave. has more mattress stores than I've ever seen clustered together in my life. One block has five mattress stores. Leeds. Serta. The Mattress Store. And two Orthos. Isn't that really a lot? How many mattresses does one community need? Are the employees of each store at perpetual war with the employees of other stores? Has there been any violence? Any explanations out there?

Burbank Sober Living in My Office

Further to all the sober-living posts on this blog: Today during my weekly office meeting, I learned that there was a community meeting recently to complain about the particular house on Clark Street in Burbank. At least one of my co-workers attended, and said there were 50 people there, including 3 city council members. There were differing opinions on whether a sober-living home lowers surrounding property values and endangers the neighbors. I say "no" to both of those. I spoke about my own neighbor situations (we've had bad ones [see posts below])(3/11/08-oops, update: although I've spoken about my family situation, I just realized that neglected to talk about neighbors in my previous posts. That's updated in the comment here. Sorry) and also my family situation, and I also suggested that my co-workers look at the numerous posts on this issue here.

New FHA Loans: What You Need to Know

• New FHA restrictions just came out. Here’s the upside.
• The loan limits for SFR in L.A. are $729,750 (same as “jumbo conforming”).
• Loan limits for 2 units are $934,200.
• The interest rate is 6% as of this writing; however, there is mortgage insurance (see below).
• Minimum down payment is 3% (not including closing costs).
• Fixed rate and Adjustable rate programs are available.
• NO MINIMUM FICO REQUIREMENT (this is huge).
• Must be full documentation loan. No stated income loans.
• No buyer reserve requirement (this is also huge).
• No income limits.
• The seller can contribute up to 6%, including closing costs, although the seller does not have to pay the closing costs.
• There can be non-occupant co-signers on the loan.
• You do not have to be a first-time buyer.
• Gifts are permitted for the entire 3% borrower investment and don’t need to be “seasoned.”
• Gifts are also permitted for all closing costs & pre-paid items.
• Down payment assistance programs are permitted, such as city first-time buyer housing programs.

Now, here’s the downside:

• There is mortgage insurance. It equals either 0.5% point per month, or 1.5% points up front. The up-front payment is deductible from your taxes during the year that you buy.
• There are stricter appraisal requirements:
• Any operable or useful element in the subject property must have at least 2 or more years of useful life or it must be replaced.
• The appraiser must be FHA-approved.
• The appraiser can require a separate inspection upon any “visible” defect or if he/she has knowledge of any existing problem.
• The property must be structurally sound.
• It must have a useable garage.
• The property cannot have code violations.
• Each living unit much contain domestic hot water, sanitary facilities and a safe method of sewage disposal. Connection to public systems is required if available.
• Heating systems must be adequate for healthful and comfortable living conditions.
• Condo projects must be pre-approved; they can be spot-approved but this is much more difficult.
• Condo projects must have sufficient reserve funds.

Home Ownership Deception Scheme

There was a great post from Maggie Knowles on LALand this weekend about the housing crisis. Maggie has given me permission to print it here:

The mortgage crisis has never been about home ownership. There are 6 major players in this scheme, the home ownership deception scheme.
1. Brokers, 2. Lenders, 3. Investment Bankers, 4. Rating Agencies - and the ones they lure 5. Investors and 6. Borrowers (you could think of 1-4 as fishermen and 5 and 6 as fish). 1 thru 4 have no skin in the game and they are working for Wall St. and have made off with billions of dollars.

After the high tech boom, the housing market was the next investment vehicle that Wall St. was going to push.

Before 2007, real estate was the best investment in America. How does Wall St. take advantage of that? They package mortgages together and sell them at a higher return. "They can't lose, they're the best investment in the world!" There was a high demand, but there was one problem - there wasn't enough product (borrowers - there were only so many people who had 20% down, high credit ratings, etc.)

Where do you get more product (borrowers)? Start creating products that a wider market can qualify for. So first came the A. sub-prime loans, then came the B. high-rate "strangulation" ARMS (interest rate only goes up, not connected to LIBOR or Prime Rate) where payments will double no matter what happens in the market and principle is never paid down, then came C. a negative amortization product (where principle grows and is never paid off), then came D. Option ARMs, then came E. no doc loans. (I may have missed some data regarding these loan products, but you get the idea.)

The point is, the loan products are defective by definition. When you recognize that these are defective products and this is orchestrated to generate billions of dollars out there for the four players in the middle (1 thru 4 above), then what's the solution?

More on Sober Living in Burbank

If you've followed the posts and comments regarding the sober-living house in Burbank, you'll know that I asked one of the posters for more info on the sober-living process. Here's the link that was sent back to me: http://www.soberhousing.net/san_fernando.html. As poster "Anonymous" says, "Go to this website to find all you need to know about sober-living networks of one addict helping another." Thanks, Anon.

FLIP, uh, I mean FORECLOSE This House

I just showed this house at 2219 N. Brighton in Burbank. It's a "3" bedroom (although 1 bed is converted from 1/2 the garage), 1.75 bath, 1280 sf, foreclosure listed at $519,900. It has been largely, but not completely, remodeled, although the floor plan is not good. It also looks as though the flipper/owners/walkaway-ers may have run out of money before they finished this. You can just tell that the owners thought they'd buy an inexpensive house, flip it, and make a killing. But they forgot one very important element of successful flipping: location, location, location. This poor house is located at the confluence of San Fernando, the 5 Fwy, the train tracks, and the airport, plus there's a liquour store one house away. It's hard to imagine a worse location. Seriously, this is a text-book case of what NOT to do to make money in real estate. I predict this house will sell in the high $300's.

Whiplash! Lots of "Pendings" in the Last Day

In the last day, 10 properties have been reported pending in Burbank, from condos to mid-priced homes. This is a lot for even a warm market. The two to the left are both on Maple -- the condo is in the project at 355 N. Maple and the house is in the 700 block. And, nine properties have reported pending in all price ranges in Studio City. Yes, these aren't "solds" -- but this many "pendings" indicate a surprisingly large amount of activity. Could the Spring selling season be better than we think?

Follow Up on Sober Living Post

See the post below about the sober living facility on Clark. The owner of the home responded with a comment, and I sent that along to the writer of the Burbank Leader story, Jeremy Oberstein. Here's part of his response:

Thanks for passing along that comment from the blog. I did speak to the owner of the house and we are running another story about conditions in the home.

Thanks, Jeremy.

Update: click here for the 3/7/2008 updated Burbank Leader story.

Asking Prices are Going Thru the Floor! Reduction of $100!

This is 601 N. Priscilla in Burbank. It just had a major price reduction -- of $100 dollars! Whee! Start packing! Okay, perhaps this isn't fair. This is a particularly excellent Burbank/Toluca Lake neighborhood and this house has 3 bedrooms, 2 baths, a pool, 1600+ square feet, and a redone kitchen (without appliances, however). It's a short sale, and the bank approved the listing price. I assume they approved the reduction as well. It was listed for $706,000 and is now listed at $705,900. Either way, it's a pretty good price for the neighborhood.

Raising Conforming Limits, Part 2

What's taking the new, lower interest rates so long to arrive? In part, the details have still not been worked out from last month's passage of the economic stimulus bill. Apparently, the first step will be determining median home prices. The Department of Housing and Urban Development has been given 30 days to publish median-home-price data from the date of the bill signing, so we should see those numbers in the next week. Fannie Mae and Freddie Mac still need to determine their criteria for guaranteeing the loans, too. In other words, these agencies will need to decide about minimum downpayments, borrower's credit histories, and fees. Sigh. Hang in there, borrowers.

Magnolia Blvd. 1, Burbank Blvd. 0

There's a new weapon in Magnolia Blvd.'s ongoing war for global domination with Burbank Blvd. -- flower baskets. These geranium baskets grace just about every light pole on Magnolia between Buena Vista and Hollywood Way. I've learned that they are paid for by the Magnolia Park merchants, although they will be maintained by the City. How will Burbank Blvd. counter this?

Foreclosure Fightback! With the Aid of Plastic Sharks

Here's an article just out on AP about Cleveland folks organizing and fighting Countrywide over foreclosures. I love this grassroots stuff. I need to know what company is manufacturing the plastic sharks and where can I get some.

Ignore the Headlines

There was a very good article in Time Magazine last week entitled "Ignore the Headlines." So good, in fact, that it was emailed to me by about five people, including lender Dana, my wonderful manager Mike Napolitano, and the owner of Dilbeck, Mark Dilbeck. In it, famed money guy Stan Lynch is extensively quoted about timing regarding buying housing. Click to read it here. Among other things, it says:

"Consider a typical home that sells for $218,900. You put down 20% and get a 30-year fixed-rate mortgage at today's rate of 5.5%. Monthly principal and interest come to $994.31. Let's say that 12 months from now the same house goes for 10% less, or $197,010. But by then the recession is history and the Fed is jacking up rates to stem inflation. If mortgage costs rise a point, to 6.5%, your monthly payment would be $994.94 and you'd have saved nothing. Meanwhile, home prices might steady and sellers might become less willing to negotiate. And you have spent a year living someplace you'd rather not be."

In short, your monthly housing payment is going to be about the same, because the lower housing prices go, the higher interest rates will likely go.