The California Association of Realtors Expo and what I learned there

I attended several interesting panels at this past week's C.A.R. Expo and actually learned stuff! The most interesting speaker was Joel Kotkin. (Name should link.) That's him on the right, with the C.A.R. president. If his name is familiar, it's because he is an internationally-recognized authority on global, economic, political and social trends.  He also is an expert statistician. Major takeaways:
- California is losing population, not gaining population.
- Most Gen-Xers and Millennials want to own a home.
- Of those, 81% want a single family home.
- The biggest exodus from the state is by Gen-Xers. Hence, we are losing our work force.
- One of the major reasons for the exit is the lack of housing affordability. (No surprise there.)
This is certainly contrary to most of the factoids that we've heard, such as "we have to build more housing for our increasing population," "the housing needs to be in a high-rise close to major transit centers (i.e. downtown)." He also said that the regulatory climate in CA makes it almost impossible to build anything but multi-family housing near public transportation.  Interesting.  Mr. Kotkin has just published a book titled "The Human City: Urbanism for the Rest of Us." I bought a copy and am looking forward to starting it.

Other convention take-aways: Instagram! Snapchat! 3-D marketing! Info on independent brokerages (like Judy Graff Properties). The unsustainability of rising housing prices except in the luxury market! PM me for more info.

New interest rates and new r.e. stats

Yes, interest rates went up this week.  Again.  Conforming loan rates are now hovering around 4.2%-4.3%. The lenders that I've spoken with don't expect them to go down much in the near future, if at all.  They are still at historic lows, but that probably doesn't make you feel much better if you're a buyer.

And here are some interesting local stats from California Association of Realtors:

- From 2001 - 2007, all-cash purchases were about 6.2%-8.4% of total sales,

- In April 2013, all cash purchases were 29.3% of total sales,

- 27% of California sales are to non-U.S. citizens,

- 66% of investor buyers are holding for the long term,

- 75% plan to hold for about 6 years,

- 25% are flippers,

- 67% investors are paying cash,

- For those who sell, the return on investment is around 14%,

- 78% of investor purchases were single family homes,

- 14% were multi-family homes.

Will this all change? Of course.  When? I don't know.  But the real estate market has really surprised all of us with its quick turn arounds in the last few years.

What do robots have to do with real estate?

I received a box from California Association of Realtors the other day.  Actually, it was from their ad agency.  It contained this robot (which, yes, spins and shoots fake lasers) and a card announcing a new ad campaign.  But can somebody tell me what robots have to do with real estate?  Is this new equipment that we'll be required to buy?

Beware of the evil clowns of Los Angeles short sales

Of course I couldn't go a month without saying something about short sales, right? Lately, I've been made aware of new and different scams perpetrated on short sale sellers in Los Angeles and the San Fernando Valley.  If you or anybody you know is thinking about selling short, there are a few things you should know to protect yourself. 

First and foremost, you shouldn't pay any money to anybody upfront to handle a short sale for you.  They get paid through the commission when the sale closes.  This is California law.

Second, you need to sign all legally binding contracts, starting with the listing paperwork.  No matter how dire your straits are, please take the time to review the paperwork your Realtor gives you.

Third, you'll need to disclose everything you know about your property in standard forms.  Your Realtor can help you fill these out, but don't let him/her do it for you.  You're liable for non-disclosure long after escrow closes.

Fourth, yes, you do have a say in who buys your place, and the terms and conditions of the sale.  You'll sign off on this paperwork, too.  You're probably thinking, "But I'm walking away with nothing in a short sale; why should I care?" Well, there are many contractual terms that still concern you besides money, such as when possession will be given to the new buyer (negotiable), what appliances stay, whether leases are still in force, etc.  One thing to know: you can't short sale your property to a relative.  The bank will insist that the transaction be "arms length."

Five, and this is important, you can take your property off the market (just in case, say, you get a windfall and no longer have to short sale it).

Remember, sellers, your short sale negotiator/Realtor is working for you, first and foremost.  Don't be afraid to ask questions.  If you'd like to educate yourself more about the process, the California Department of Real Estate has lots of info on its website, as does the California Association of Realtors.

L.A. Times "message" from C.A.R. re short sales

I was surprised and pleased to find a full-page "message" from the California Association of Realtors in the first section of today's (3/10) L.A. Times.  (Since it's a paid announcement, there is no link.) It is an impassioned plea to streamline and speed up the short sale process.

'Bout time.  CAR claims to have advocated for improvements to short sale guidelines with major banks, U.S. Treasury officials, government-sponsored entities and others to standardize the process, comply with federal guidelines, increase staffing, etc.

CAR is also "calling on regulators, elected officials, nonprofits, business organizations, companies, and individuals ...to resolve this issue and others that get in the way of a recovery."

Here in So. Cal., you know that short sales can be up to 50% of a particular local market.  I also believe short sales -- or the way they are NOT conducted by the banks -- are partially responsible for the current market slowdown in many areas.  They are a large part of the market inventory, and nobody wants to go through the long, agonizing process of trying to buy one. (Seriously, I'd take 10 court confirmation-required probate sales over one short sale.) Hopefully, the C.A.R. message will be heard by our major mortgage servicers.

Annual Economic Outlook

Every year in October, Dilbeck presents its Realtors (including me) with the California Association of Realtors annual economic outlook.  It's a power point document but is in pdf format here.  Yes, it's heavy on the charts and graphs.  The take-away this year to me is that we've bottomed out on home prices and interest rates.  Thoughts?

From today's L.A. Times: Realtor org says prices will rise next year

L.A. Times clipping service here! Today's business section has the following article: State median home price to increase next year, Realtors group says. This is from the California Association of Realtors, and they predict a 3.3% rise in prices next year. Candidly, since this is statewide, it really has very little meaning for each individual neighborhood. But anyway, here are a few other quotes that I agree with [emphasis mine]: the number of purchases will decline slightly because there will be fewer foreclosures available and It will continue to be hard to sell higher-priced houses because values have dropped and financing is hard to get.

Home inventory drops as sales rise, as if we didn't know

California Association of Realtors is reporting that the supply of available homes for sale is diminishing as sales increase. Oh, really? Gosh, how long has that been happening? Thanks to LALand, the LATimes real estate blog, for picking up this story, as I am never particularly interested in what CAR says.

Another perk for first-time buyers - job loss insurance

Thanks, Mr. & Mrs. Hill, for pointing out another new perk for first-time home buyers in California: the C.A.R.H.A.F. Mortgage Protection program. This gives first time buyers free mortgage insurance in case of job loss. Check out the link here. (This is not to be confused with lender mortgage insurance.) Here are the requirements:

• Be a first time buyer or have not owned a home in three years;
• Close before December 31, 2009;
• Use a California Realtor (it is a CAR program, after all); and
• Be w-2'd, not self-employed.

A qualified buyer who has involuntarily lost their job can be eligible for up to $1,500 a month in mortgage payments for up to six months. A co-buyer can be eligible for up to $750 a month for six months.

Finally -- an easy-to-read chart on mortgage workouts

Confused about the plethora of mortgage workout programs? Me too. Finally, here's an easy-to-read chart that details specific programs, eligibility, restrictions, etc. Please feel free to cut, paste, and send this on to anybody who may be having difficulty paying their monthly mortgage. Thanks for this, C.A.R.