Is the housing market going to crash soon?

Every day, somebody tells me that the housing market is going to crash.  I am not an economist or statistician, so take the following with a grain of salt.  With all due respect to the experts, I just don't see the fundamentals necessary for a crash in the near future.  

• First, yes, our housing price rises here in CA can't go on forever.  I said that in 2006, too.  Prices are now above what they were in 2008, though. Housing prices are high due to two factors in L.A.: 1) not enough inventory, and 2) there's a lot of money concentrated here.
• Currently, unemployment is low.  It would have to go up by several points to have an impact on local housing sales.  Last time, it was 8%-9% before we saw a lot of foreclosures here.
• Interest rates are still relatively low.  When I started in this business, interest rates for mortgage loans were around 8%.
• Banks and lending institutions have tightened up quite a bit and are no longer giving mortgage loans to anybody that can fog a mirror.  Buyers now have to show that they can actually pay a mortgage back.
• Even at the height of the Great Recession, home prices here in the Southland, in areas with desirable housing stock, low crime, and good schools, only went down an average of 8%.  Do the math -- even if there's a 10% price reduction, say, in Sherman Oaks, Studio City, or Burbank, an $800,000 home here will be selling for $720,000.  That's not really enough of  difference to make a home super-affordable.

Again, I'm not an expert, but I know what I see.  Could there be cataclysmic event that turns the market on its ear? Sure, but if that happens, we will all have bigger fish to fry than housing prices.  And on that cheery note...feel free to challenge my assumptions or ask questions.

Listing your home for sale? Here's an easy way to make it smell really g-o-o-d

Happy new year! If you're showing your home for sale, it always helps if it smells really nice.  You already know the tricks of baking cookies (save me some), lighting scented candles, sending Fido and Puff to daycare, etc. You may know about this too, but if not, here's something even easier -- homemade potpourri. (Thanks, Serafina Magnussen!)

In a medium pot, put a few cinnamon sticks (not the ground kind pictured above; I just didn't have any sticks today), some whole nutmeg pods, whole cloves, orange peel or lemon peel, cover with water and simmer.  After a few minutes, your home will smell really wonderful.  You don't have to keep it simmering for long as the scent will linger, and you can reuse the same mixture over and over -- just make sure to add more water before you simmer. You might even like to do this when you're not showing your house.

A couple of other hints: feel free to experiment with savory spices, bay leaves, rosemary twigs, apple peels, etc.  And cinnamon sticks in the Hispanic section of your grocery store are half the price of the ones on the spice aisle.  Happy home selling.

Please visit my Examiner.com page

I am now writing short features about San Fernando Valley real estate and the home buying and selling process for Examiner.com.  Please visit my page there at http://www.examiner.com/real-estate-in-los-angeles/judy-graff and subscribe.  Thanks!

Maybe think twice about buying a condo or townhouse?

When we asked our neighbor why he wouldn't let the pest inspector into his townhouse unit, he replied, "Because I came to this country for freedom."  Right on! Isn't there something in the Constitution about the right to bear vermin?

14 Reasons why the San Fernando Valley and L.A. are superior to San Francisco and the SF peninsula

I just spent a weekend in Palo Alto and San Francisco visiting my in-laws. Yes, everybody loves San Francisco with its big-city vibe and 20 kinds of olive oil, blah, blah blah, big vacation destination, etc. But really, I missed our land and think we have it all over the SF Bay Area. Here's why.

1. We have more homes for sale. Many more. (Had to get that search term in there, but it's true.)
2. We have Universal City and Disneyland. They have Pier 39. Please.
3. We have less traffic. Really.
4. They have Stanford. We have UCLA, USC and Makeup Art Designory.
5. There, everybody wears hoodies and looks like the Unibomber. We have Aloha shirts and fat kids in baggy, calf-length shorts. Way more cheerful!
6. We have more tattoos and piercings.
7. We have Zankou Chicken.
8. Many of us can see a Costco or Target from our houses. What can they see? The Golden Gate Bridge, maybe? Meh.
9. We have more parking. You can actually turn your car off close to your house here.
10. Housing costs less here.
11. We have more Armenians, and more of every other ethnic group, too. Except maybe Chinese.
12. We have the Lakers. (We'll leave the Dodgers v. Giants argument for another time.)
13. We have The Arclight(s).
14. They have upscale shopping in Union Square and Stanford Shopping Center. We have upscale AND downscale shopping everywhere.

So let's stop with the inferiority complex, folks, and learn to appreciate where we live!

Foreclosures and statistics

For those of you waiting for an increase in home inventory due to foreclosures, and sure that the banks are going to dump a bunch on the market any minute, here's the latest from Realtors who handle many bank-owned properties: it's going to be a trickle, not a flood. One of the reasons: the banks don't want to dump a lot of houses on the market at once because it will depress prices further.

And Market Metrics has come out with this statistic: there is only a month-and-a-half supply of inventory right now in the SFV. No surprise. The supply of houses for sale is as low as I've ever seen it, not counting brand new condos.

New Listing! Remodeled Tudor in Burbank

I'm pleased to have this new listing at 934 N. Avon. It's priced at $749,000, and more pictures can be found on my site. Here are the details: 4 bedrooms, 2.5 baths, vintage charm + modern updates + the best Magnolia Park has to offer. This gorgeous, 1674 sf. Tudor offers a formal living room with built-ins, formal dining room, remodeled sunny kitchen with new maple cabinets, and new, long countertops and appliances. The circular floor plan also features a special central living space that would be perfect for a breakfast area, a family computer or a play area. Three bedrooms and 1 + ½ baths are also downstairs. The private new master suite is upstairs and features a peek-a-boo view, new luxe bathroom with separate shower and tub and lots of closets with built-ins. A custom bonus office is wired for digital video. Of course, there’s a special security parking area plus a two car garage. The rear of the home features a charming patio area with custom brick work and a large green backyard with a solid shed and lemon tree. Other features include dual zone a/c, newer all-copper plumbing, newer electrical, newer windows and cat 5 wiring throughout the home.

3 Ways Sellers Sabotage Their Sales

The current real estate climate here in Southern California has changed considerably, as we all know. It is a buyers’ market now, just like it was a sellers’ market a short time ago. These days, there are fewer qualified buyers, lower house prices and more inventory. Somehow, though, many sellers have just not gotten the message, no matter how loudly it has been broadcast. If you’re a seller, here’s what not to do.

1. Price your home according to what you “need” to get in proceeds
I can’t tell you how many times I’ve heard, “If we price it that low, we won’t have the money to buy a new house.” Or, “We need to get X amount of dollars because…well, we just need to.” What a seller needs to get and what a home is worth in any market are two different things. I’d love for you to make a fortune off your sale and retire, but that’s probably not going to happen, and you need to price your home according to your local market now. To price your house correctly, look at comparable sales. “Comps” are those sales closest in time (no more than 90 days old), closest in size/amenities, and closest in distance. Then, listen to advice from broker caravans and also see how many showings you’re getting. The less showings means the more over-priced you are. The sooner you adjust your price to reflect the market, the more likely you are to get maximum proceeds. The longer you wait to appropriately price your home, the less likely you are to realize profits in a declining market.

2. Assume that the Condition of your Home Doesn’t Matter.
It’s tempting to think that buyers with vision will see past your home’s defects. Nope. They can’t and they won’t. Buyers these days are very educated. Buyers are watching the fix-up shows on HGTV, visiting model homes, going to open houses, and looking at beautiful interior shots on the internet. You’re competing with other homes, so please do what you can to make your home show really well, starting with the outside. I’m not asking for a remodel, just garden, clean, clear, paint, contemporize and repair if necessary. See my showing tips page for ideas.

3. Refuse to Work with Offers.
As a seller, you may receive offers that you think are too low. Don't get mad. You’re probably right – it is too low. But I’ve heard several rationales for dropping an offer: “We haven’t been on the market long enough,” and “Those buyers don’t realize how nice this house is,” etc., etc. If the buyers didn’t really like your home, they wouldn’t have put in an offer in the first place – and these days, they have plenty of choices. They, too, want a good deal, and are probably willing to negotiate. You’ll never know what that offer can work into unless you submit a counter offer, or two, or five. Don’t let your pride get in the way of a sale – work with every offer that comes your way. You can’t win unless you get into the game.