No change...so far

As we all know, the bailout didn't pass. I keep waiting for the sky to fall, but so far, lenders are still making purchase money loans for real estate. BofA is still giving equity lines of credit. The phones are quiet, and that's about it.

The names have been changed to protect the equity

A 3 bedroom, 1 bath, character home recently listed in Burbank. I'm very familiar with this house. I met with the owners back in December when they asked me to prepare a comparative market analysis and determine a sales price for them. They contacted me because I had sold the house next door to them a few weeks before.

The owners/sellers were originally from the East coast. She was a stay-at-home mom, and he was a top executive at a prominent local institution. They didn't really like Burbank and were thinking of returning to the East coast. They had owned the home for about two years and had done some nice upgrades to it. I told them that I thought I could get about a maximum of $700,000 for the house. They were unhappy with that price and believed the house should sell for much more.

The house is now on the market with another Realtor, nine months later, for $499,000. It is a preforeclosure short sale. The neighbors tell me that it has been vacant for a couple of months.

It appears that these folks just walked away from their home and mortgage. Knowing what I know about the sellers, I don't believe there was significant financial hardship; they just didn't want the house anymore and couldn't sell it for what they paid for it. So, they're sticking the bank with the tab, and lowering their neighbors' value/equity in the process.

This price is significantly low for the excellent neighborhood. The house may draw multiple offers and go for over the $499k; I hope so for their neighbors' home value sake.

Search the MLS BY MAP from my site

I've just added a map search feature to my real estate site at http://www.judygraff.com/. This offers many of the same features as mega-sites Trulia, Property Shark, Redfin and Zillow. To access:

• Visit the home page of my site at http://www.judygraff.com/. Click on the "select page" box at the top right-hand corner for a drop-down menu.


• Scroll down to MLS Map Search and click. You'll be taken to a new page.


• Click on the link and have fun searching.

Of course, you can still conduct a standard property search from my site, as well. Just click on the "mls search" button at the left on the home page.

Can't buy without selling

For many years now, if you owned a home and wanted to buy another one, the banks said fine.

Not anymore. Now, most borrower/buyers will not qualify for any loan if they own their current residence and it has not been sold yet. Why? Because their debt-to-income ratios are likely going to be too high for the banks' taste. So if you own a home and are thinking about moving up, or moving down, or whatever, put your current house on the market now and make any sale "subject to sellers finding home of choice and successful close of escrow of same."

Lending guidelines are changing by the day, so this may change as well.

The Mortgages of the Future

Yesterday, Robert J. Shiller's editorial titled The Mortgages of the Future appeared in the NY Times' Business section. He calls for re-thinking and possibly re-structuring the typical 30-year mortgage into "continuous workout mortgages." These would adjust the mortgage balance and payment, automatically and systematically, in order to help homeowners continue to pay their mortgages even during harsh economic times.

I'm no economist, but hasn't this been tried many times before? Specifically, with the "negative amortization" loans that were so popular for so many years? Most folk with "neg" loans wound up owing more several years down the line than they did at the beginning of the mortgage. I guess I'd have to see one of these "continuous workout mortgages" in action before believing that this could work.

What bad national financial news may mean to our local real estate market

By now, everybody knows about the latest national financial crisis and many people are worried. What does it mean for our local real estate community? Here's my entirely subjective opinion. I think many buyers, who just took tentative steps to get into the market, will retreat again and wait for awhile. I think sellers will not put their properties up for sale if they don't have to. That leaves a market that will be mostly foreclosures (L.A.Times says 50%) plus new condo and new townhouse units (tons of new buildings are just being or have just been completed). At this point, I would not expect interest rates to bounce up -- the banks and lending institutions need to make money by lending it after all. But this Fall should be, uh, interesting.

Never to early to celebrate Halloween here in Burbank

I'm sure nobody wants to be left behind in the mad rush to purchase Halloween gear. Here's Halloween Town, on Magnolia Boulevard in Burbank, for all of your paraphernalia needs. Several years ago, a nice casual dining establishment was planned for this spot. But the Burbank city council, in their infinite wisdom, determined that a year-round Halloween store would serve the community much better. That's right, HT is open all year, for all of your costuming and horror needs.

Good news on interest rates

...Most interest rates are at or slightly under 6% again. This probably won't last, but it's a good sign.

However, there seem to be very few new listings during the past couple of weeks. Inventory is getting shorter, which is partly seasonal, but not a good sign for buyers.

Lenders are easing up on 2nd appraisals

For awhile this summer, just about every home in escrow underwent an "appraisal review" or even second appraisal. The banks didn't trust their own first appraisals in a declining market. This was problematic in that it added extra time to the escrow process, and of course, many homes were deemed over-priced that hadn't been considered so before.

Now, lenders are easing up. Yes, there are still lots of appraisal reviews, but that's happening as a final condition before loan funding, and usually don't involve an actual second appraisal. This is great news as it removes yet another stumbling block from the process. Oh, more great news: interest rates are back below 6%. I don't know how long they'll stay that way, though.

Burbank's commitment to environmental sustainability

Burbank Public Works has just sent out a terrific, 8-page brochure on recycling and environmental sustainability projects in Burbank. The brochure includes a profile of the recycle center, info on what's recyclable in Burbank, tips for "greening up" summer parties, the last laws, refund values of bottles and cans, info on city green workshops (call the Burbank Recycle Center for details at 818-238-3900), info on the Sustainability Action Plan, ideas for natural landscaping and more. If you'd like a copy, please phone 818-238-3900. Way to go, Burbank!

Foreclosures snapped up by...bobcats

Apparently, a family of bobcats have moved into some luxury foreclosed digs in Lake Elsinore. This is from a front page story on today's LAT, but unfortunately the on-line LAT didn't supply me with a link. Sorry. Anyway, there are at least two adults and three bobcat kittens living in the house. Wildlife experts say the cats gravitate to food and water, and this particular house has a koi pond in the back yard. The experts also say the cats will move on when the kittens are big enough to travel. According to the article, the neighbors don't seem to mind the new tenants, either. Personally, I think these animals are there because the got tired of trying to time the bottom of the r.e. market and know a good Inland Empire deal when they see one.

Lancaster to refurbish foreclosed homes

Sorry that I haven't posted for a few days -- I've been wrapped up in our national political circus. Anyway, the L.A. Times reports here that the city of Lancaster is going to buy foreclosed homes, fix them up, and sell them to low income people. As we all know, Lancaster has pretty much been ground zero for L.A. County foreclosures. In the main, I think this is a very good thing. Philosophically, I think this is how a small municipality should be handling this problem.

Of course, the devil is in the details. The program has $4.1 million in funds and hopes to fix/resell up to 41 homes. So, that's about $100k per home, which includes the purchase price. If the purchase price is $80k to $100k, that's, uh, not a lot left over for more than a cosmetic fix. But this program is a step in the right direction. And many people will be happy that the money is coming strictly from the City, not from the state, county or federal government. Let's stay tuned and see how it goes.