Thursday, January 29, 2009

A new financing plan from Fannie Mae

Fannie Mae, the agency sponsored by the U.S. government to help make housing more affordable to all Americans, now offers HomePath, a special new home loan to finance the sale of its current real-estate owned (REO) properties across the country.

The benefits of a HomePath Mortgage Loan include:
-only 3% down required on a primary residence property
-no mortgage insurance required
-no property appraisal required
-only 10% down on 1-2 unit investment properties (this is huge)
-get up to 6% back in seller concessions

Only a very few lenders can do these loans, but Metrocities Mortgage is one of them.

One drawback is that there are just not very many Fannie Mae REOs in northern Los Angeles or the San Fernando Valley. Search for Fannie Mae REO properties eligible for HomePath financing at

Wednesday, January 28, 2009

How to turn Iceland around

This doesn't have much to do with real estate. You may know that Iceland's banking and government systems have collapsed. I have an idea about how they can get back on the beam and create revenue: legalize Bjork and Sigur Ros, and then tax them. Sorta like maybe we should do in this country, with marijuana.

New, noteworthy site

So much for privacy. I just discovered, courtesy of LALand. Yes, you can now easily search by block and learn what your neighbors paid for their homes. It appears that the site sources the L.A. County tax assessor's data, although some data for certain properties is missing -- like what we originally paid for our house, for some reason. It's a cool site, though, and fills in some Redfin/Zillow gaps.

Monday, January 26, 2009

Emerging neighborhoods by Los Angeles Magazine

Los Angeles Magazine interviewed me today for an upcoming real estate story about emerging neighborhoods in the area. Unfortunately, much of what I said won't be for attribution. However, here are some of the wheres and whys that we discussed:

  • Magnolia Park in Burbank for good price points and excellent schools;

  • Porter Ranch for brand new homes and decent prices;

  • Shadow Hills for proximity to mountain trails and equestrian property;

  • Studio City/Tujunga Village for great housing stock, Carpenter School and easy commutes;

  • Arleta for decent housing stock at low prices;

  • Adams Hill in Glendale for views; and

  • South Pasadena and Linda Vista for all-around lovely neighborhoods.

Thursday, January 22, 2009

Update on my refinance

Here's the latest on our home refinance, which we began on January 6: BofA asked for the last two years' tax returns. We turned those in last week. No news since then.

L.A. County home price reductions chart and wild -- or not -- prediction

Courtesy of the L.A. Times' LALand, here's a chart of average home price reduction percentages between 2007 and 2008 by neighborhood. This is the same L.A. Times that has been crowing about the 30%-50% price reductions we've seen in the area. Now, as you'll see from the chart, that's just not true in most of the San Fernando Valley and Hollywood Hills. Yes, prices have gone down. But Studio City, for example, is down just over 10% for SFRs and just over 9% for condos. Burbank's worst number is -21% for condos in 91506. Hollywood Hills, zip 90068, is down 15+%.

Just as I've been saying, all real estate markets are local. And I'll make another (safe) prediction: in the areas that I serve, for the remainder of the first and second quarters at least, we are at the bottom of the market for houses listed under $600,000. We may also be at the bottom in the $600,000 to $800,000 range. Lending has loosened up at the same time that inventory has shortened. I'm seeing multiple offers and over-bids again in that category.

Wednesday, January 21, 2009

Boots on the ground perspective: move-up buyers are getting the short end of the real estate stick

As we all know, lending conditions are currently favorable for buyers. Rates are low, and FHA loans are not nearly as restrictive as they've been in the past. While lenders favor buyers with large downpayments, FHA allows 3-1/2% down on a purchase, and there are 10% down loans and even some 5% down loans (hard to qualify for, but still).

Unless you're a move-up buyer, e.g., somebody who owns a home but would like to move to a larger house. Many move-ups need to sell their homes in order to buy a new one. Bridge loans are uncommon. And it's extremely difficult to pull equity of your existing home for a down payment, because so many people have suffered such equity erosion lately. Saving money and having a large nest egg for a down payment is a nice thing, but who do you know that has thousands and thousands of dollars sitting around for that?

To me, in my market, this is where the bottle-neck is. Lower-priced homes have been selling quickly to first-time buyers. It's the people who are trying to move up from their first-time purchase that are being stymied.

I think the solution will be for lenders to begin giving bridge loans again, if equity warrants it. Or even making 100% loans to buyers with excellent credit.

Fannie Mae will be charging certain extra fees

Fannie Mae has announced that it will charge certain extra fees as of Feb. 2. Here are the details in brief. Thanks to lender Dana Dukelow for bringing this to my attention.

Condos - rates will be .5% higher than for single family homes
Duplexes - rates will be .75% higher than for single family homes
Cash-out refinances - rates will be .5% higher than for rate-and-term-only refinances.

While this is not necessarily good for buyers, rates are still low. It indicates a policy that favors purchasers who want to live in neighborhood family homes over investors.

Monday, January 19, 2009

Short sale buyer beware

If you're a buyer out there who's looking to purchase a short sale, here's a little story for you. And it's not a pleasant one.

Some clients contacted me last Friday about seeing short sale property that had just come on the market. The house is at 401 N. Brighton, Burbank, and the mls is S559692. The house is a 3+2, 1446 square feet, and is in a nice neighborhood. I was a little suspicious because the house was only listed at $420,000 and is not a fixer. That's really low, even in this market, for a house that size. I can't see a lender ever approving anything that low -- the comps are much higher. And, as we all know, the lender has to sign off before a sale can be concluded. Was the agent courting a bidding war?

I spoke with the agent late Friday afternoon. She confirmed the house was available.

I went over on Saturday afternoon. The key was missing from the lockbox. Being the breaking-and-entering Realtor that I am, I entered through the side garage door. The house isn't bad. It needs decorating, but it's workable. There were several other Realtors trying to show the house to clients while I was there -- no surprise, with a price that (artificially) low. I called the Realtor, told her the key was missing, and asked if it could be replaced by Sunday at noon. She said she'd try.

I met my clients there on Sunday. Alas, now the entire lockbox was missing, and the house was shut up tight as a drum. The listing agent's voicemail was full.

This morning, the house appeared on the mls as pending. As in under contract, not taking back up offers, in escrow, la la la.

Uh-unh. Most lenders won't approve a short sale until the house has been on the market for thirty days. This has been on for five days. Most lenders will not approve a sale unless the price is at least somewhat in line with the comparables. And lenders don't work on legal holidays (today is Martin Luther King day), let alone weekends. It would be almost impossible to get a written approval that quickly. And no escrow companies are open today, either.

So what's up? How can a house that's impossible to show get sold this quickly? Does the agent not want it shown because she has her own offer? Are the sellers and agent in league with each other to try to sell it to somebody they know for that low price? Or does the listing broker just not know the short sale process? Am I jumping the gun here with these suppositions? I don't think so, and most banks are getting wise to these schemes. Personally, I'm irritated to have wasted my and my buyers' time on this.

Empty Big Box Store Count [Updated]

Let's list the empty big box stores in Burbank, shall we?

  • Mervyns

  • Shoe Pavillion

  • Linens and Things

  • Vons on San Fernando (although I hear that Jon's is going in there)

  • Empty grocery on Verdugo/Sparks/Olive intersection [Update 1/22/2009: I'm told Fresh and Easy is going in here.]

  • Circuit City (well, not quite empty yet)

And although it's not exactly a store, Black Angus has filed for bankruptcy. If it closes, a Mimi's would be nice in that space. What will be next to close? Great Indoors, perhaps?

Thursday, January 15, 2009

Sales statistics for Burbank and Studio City

Here are the latest Burbank and Studio City real estate sales statistics from the Tempo/MLS system. Please note these are sold figures for the last six months.
Burbank home and condo sales, 7/1/08-1/15/09:
Average price for 2 bedroom home: $498,500
Average price for 3 bedroom home: $620,700
Average price for 4 bedroom home: $714,800
Average days on market: 79

Studio City home and condo sales, 7/1/08-1/15/09:
Average price for 2 bedroom home: $655,000
Average price for 3 bedroom home: $955,000
Average price for 4 bedroom home: $1,395,000
Average days on market: 61

Please contact me if you'd like me to run the numbers on any other local areas.

Wednesday, January 14, 2009

New look for my website

My website at has a new look. It's still under construction, but is mostly done. Please check it out and tell me what you think.

Thursday, January 08, 2009

Big Box Rumors

First, the news I'm most excited about. Whole Foods may not be done with Burbank just yet. With all the big box retailers closing, there may be some "back channel" discussions going on regarding finally, finally opening a store here. You may recall that the Burbank City Council, and local residents, put the kaboosh on a Burbank Ranch-area store.

Next. Macy's announced store closings. So far, the Burbank, Glendale, and Sherman Oaks stores are safe. Yah!

And finally, Jon's grocery store is going into where the Von's on San Fernando used to be.

Tuesday, January 06, 2009

I just re-fi'd my own house for 4.375% plus points

Update: Well, maybe it wasn't so easy after all. I received a call on 1/9 saying that our re-finance is not yet approved. No telling if/when it will be. I'll keep you posted.

I walked into my Bank of America branch today to ask about re-financing our home. Twenty minutes later, I walked out with a loan lock. The application was taken via computer. Not to sing BofA's praises, but it couldn't have been easier. And my rate is 4.375% plus 2-1/2 points. Total closing costs, including points, are running at 4%. Okay, that's high. But I'm only re-financing $91,000 (we bought a long time ago), and I'm wrapping the closing costs into the loan. It will add an additional $11 to my loan payment every month.

I was surprised to get a commitment without offering any documentation. This was all done with our credit scores. I'll report more as this processes and closes.

Monday, January 05, 2009

Toluca Lake celebrity sighting

I spotted Jerry Ferrara at a Toluca Lake Starbucks this past weekend. For those that may not know, he plays Turtle on HBO's Entourage. He has very nice skin, for what it's worth. No, he was not with Jamie Lynn Sigler.

Boots on the ground report from Glendale open house

Yesterday, I held an open house at 1321 Virginia in Glendale. I had twelve to fifteen groups come through and all appeared to be serious buyers. Not at the list price of $809,000, mind you; most were looking for better bargains. But this is a lot of open house traffic -- about the same amount as there would be for an open house in the boom years. Are buyers getting off the sidelines?

Friday, January 02, 2009

Happy New Year! And prediction for 2009.

I hope 2009 is a great year for everybody! Here's my residential real estate prediction for the Los Angeles area: Move-up buyers (people who would like to move to larger homes) are going to be hurt by the current real estate climate. First, they will likely need to sell their existing homes in order to qualify for a loan for a new property. That's going to be hard, unless they've owned their current homes for over four years as their equity has diminished and they may even be upside-down. Second, there isn't a great supply of homes to move up to -- the existing supply of homes for sale are condos and other first-time buyer-type homes.