From today's L.A. Times: Young couples are buying again. Yes, but that commute!

Today's L.A. Times' biz section has an article entitled A new generation of  young home buyers is tiptoeing into the market.   The number of first-time, under-35-year-old home buyers has ticked up since the recession.  Yes, the article does go into how tough it is for most first-time buyers and how unaffordable most r.e. is.  One of the profiled couples (pictured above) bought in the Riverside County "exurb"of Murietta and are delighted by their new big house.  Of course, the man now has a 75-mile commute to work.  Seventy-five miles.  Let that sink in...
Photo courtesy of Glenn Koenig/LA Times

Karen and JB closed escrow on their Sherman Oaks condo today!

My wonderful first-time home buyers, Karen and JB, closed escrow on their new home today.  This couple met in college and will be married next year.  Even though they are still in their 20's, they wanted to take the plunge into home ownership and we looked at Sherman Oaks condos for about a month until we found the perfect place. Best of luck with everything, K&JB, and thanks for introducing me to Local Peasant in Sherman Oaks!

Yes, some home sales can go smoothly in every way - such as 2008 N. Rose in Burbank

This is 2008 N. Rose in Burbank and it closed last week for $515,000 after listing for $505,000.  My seller, Laura, had just retired and wished to move out of the area.  She had kept the house up nicely and had remodeled the kitchen and baths.  The buyers are a young couple and this is their first home.  Everybody moved through the escrow very smoothly and we faced no big hurdles.  Yes, that's a surprise to me, too! East West Bank did a very impressive job at getting the appraisal done, getting the loan documents early, and closing the loan right on time.  I will miss Laura, and I wish the buyers lots of luck.

Check out my new Yelp Realtor review!

Cathy D has just written a glowing Yelp review about me. I recently represented Cathy and her family members in a Burbank home purchase.  I've worked with this family for over a decade and this is the fifth transaction that I've helped them with.  Needless to say, I've become extremely fond of the family and look forward to our next real estate fun.

Good luck finding a house? Now, good luck finding a Realtor, too!

This will make you hate us Realtors even more.  But many of us are now turning down the opportunity to work with buyers, especially in certain price/location ranges.  Why? Because we can't find you anything.  Not only that, but we already have two, three, or even four client groups looking in the same price range/general vicinity and we can't find them anything either.  Oh, if only inventory would increase...

Home buyers Ryan and Misty discuss their experiences

My home buyer clients, Ryan and Misty, have been looking for a home in Burbank for some time now. They discuss their experiences here.  Excuse the poor sound quality.

If buying a house seems hard, that's because it is.

I recently worked with some first-time buyers in Studio City who made an offer on a gorgeous foreclosed condo.  They were very qualified, had 20% down, made a really good offer, were told they had it -- and then they freaked out.  And backed out.  Why? The process was really painful for them.  Issues arose that they had no previous idea that they'd have to deal with. (And yes, it was a huge time-suck for me, too.)

So let me set the record straight, first-time buyers: buying a home is no day at the beach.  Here's what you need to know:
There is pain in every transaction.  This is true whether the pain is in the negotiating or in the physical inspection or in getting the loan.  There are lots and lots of moving parts to a real estate transaction.  If you're a buyer, no matter what kind of offer you make, there will be a time when things don't go your way.  And opening escrow can be just the beginning of the story.  But if you stay focused on the end result -- how you're going to be living in the house -- it will be a little more bearable.
All your friends and family will tell you a horror story and likely try to talk you out of buying.  Your friends and family are well-meaning, especially in this economic environment, but they can't live your life for you.  I myself had such a first-time buyer horror story that I became a Realtor so nobody else would go through what I did.  Let's talk about your fears.
I have no magic that I can use that will counter-act a seller's mental illness.  A seller can be crazy as a bedbug and still have a very nice house to sell.  If it seems they are being mean and recalcitrant, they probably are.  Their emotions are running very high, too. We just need to get through this; you won't remember their name in six months.
Sometimes it's not meant to be.  Don't give up even if you have to cancel a transaction; the right house is out there for you.  Educate yourself about the process, be prepared and you'll find it.

Info on Cal's $10k home buyer tax rebate program

If you're buying a home which is closing after May 1, here's a link to the info on the Cal State tax credit.  Beware, however: experts predict that this fund will run out of money very shortly, so close and get your application in very soon.  Thanks, client Michael Nomoto, for researching this and for the link!

Two GREAT articles from today's L.A. Times

I know, this blog seems like just a clipping service for the L.A. Times. But today the Sunday business section has two great real estate articles.

The first is from Peter Hong and is titled Don't bank on the home as an ATM. It's full of all sorts of interesting statistics and facts about the housing market over the last several years. Personal story: I know somebody that bought a duplex with partners in 1994 for $200+k. She bought her partners out a couple years later. Two years ago she sold it for $1.1 million. But she had no profit as she had pulled every cent out of it by refinancing and spent it on god-knows-what. Don't be like her.

The second story is A primer for the first-time home buyer. Although it doesn't really pertain much to our home prices here, the advice is excellent.

Interest rates are up and tax credit news

Bad news: interest rates are up. This will likely put the brakes on our local market somewhat. The good news for buyers is that houses will likely be staying on the market longer.

Remember HUD's move to monetize the $8000 first-time buyer tax credit? So a buyer could actually apply it towards down payment or closing costs? Guidelines and details are still not out on that yet. I predict that very few people will actually be able to use the credit this way.

And speaking of: did you know there are income caps on the $8k tax credit? If you are single, and make more than $75,000, the credit is reduced. If you make over $100k, it is eliminated. For couples, the salary threshold is $150,000.

$8000 1st-time buyer tax credit can now be used for a downpayment

As we all know, The American Recovery and Reinvestment Act of 2009 offers homebuyers a tax credit of up to $8,000 for purchasing their first home. Now, according to this HUD press release, first-time buyers can now use their $8000 tax credit towards their down payment or closing costs. While I don't quite get the mechanics of how this will work, it's good news.

Here's a quote: "Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate." Here's what that means. Often, a buyer's interest rate is a little higher for a government-backed loan, like FHA. This will enable a buyer to "buy down" their interest rate and therefore have a lower monthly payment.

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.

Boots-on-the-ground perspective for the end of February

Here's my perspective on our local market. Inventory is very, very low for single family homes under $600,000. I'm seeing properties go under contract in a short amount of time -- a few days, even -- and often in multiple offers. Of course "under contract" is relative when you're talking about REOs and short sales, but you get the picture.

I attribute this to favorable loan conditions for first-time buyers. FHA loans ask for only 3.5% down (which can be a gift from a relative) and let the seller contribute to closing costs. Interest rates are low. And there's an $8000 tax credit for first time buyers.