New price heights for L.A. area homes

I know, I know -- this blog is getting to be just a news clipping service.  But bear with me for yet another article from yesterday's L.A. Times by Andrew Khouri.  Here's the link.  The title is "Home prices in Southern California reach bubble-era highs." Among the other data points is this: L.A. County home prices have risen 9.5% this year to $505,000, which is $25,000 higher than the highest 2007 pre-recession price.  The article also states that economists aren't as worried this time around, since the rise is not driven by risky loans.  Instead, it is driven by an improving economy, historically low interest rates and a shortage of homes for sale.

Do I see prices getting soft and perhaps even dropping a little? Not in the foreseeable future.  I predict another rise in prices in the Spring.  I wish I could foresee more affordability instead.
Photo courtesy of  Brian Chan/Los Angeles Times

Coming next month but I can show it now: North Hollywood 4+2

Early next month, I will be listing a 4 bed, 2 bath home in a really nice residential section of North Hollywood.  It has been in the same family for years and needs updating and decorating, but the rooms are spacious and the house is ripe for a new family's vision.  It has a covered patio, family room, fireplace, and big back yard.  Here's the best part: it will list for about $400,000.  With the new 3% down payments and low interest rates, here's a wonderful opportunity for folks who otherwise thought they might not be able to buy a home this year.  No pictures yet, but I can show it to qualified buyers.

Record-breaking crowd at yesterday's open house

I counted over 200 people at yesterday's open house at 1122 N. Cordova in Burbank.  This is a record for an open house of mine. (Previous record was 135 last summer.) This is due to the still-low interest rates and the shortage of inventory.  Yes, the property has offers on it.

San Fernando Valley real estate 2012 year in review - part one

I'm jumping on the end-of-year list bandwagon here.  If you real estate news in Studio City, Burbank, Sherman Oaks, Hollywood Hills or anywhere else in L.A. for that matter, here are the big news stories -- to me, anyway -- for the year.  You'll know most of these already.

1.  Return of the real estate market.  Thanks to the feds and the super-low interest rates, buyers are out in droves.  Unfortunately, housing stock hasn't kept up and everything is going in multiple offers.  I am hoping that we'll have more inventory coming on to the market as rising prices catch up to what would-be sellers owe on their houses.

2.  Cash is king, and there's a lot of it out there.  It's mind-boggling as to how many all-cash transactions are out there now.  Where is all the money coming from? Foreign countries (the U.S. is still looking like a safe bet to stash your cash), investor pools, and boomers who have recently inherited money from their recently deceased parents.

3.  Trusted brands -- can they be?  As we all know, internet-based real estate sites like Zillow and Redfin are the trusted brands in real estate these days.  That's not surprising as their websites are very user-friendly and contain a lot of information on each page.  And people believe what they read, especially from big sites.  But is the info accurate? Be skeptical, friends -- Zillow, especially, can be way off on their zestimates from what a value really is (and they admit it in the small print).  Actually working with Redfin can be a mixed bag but yes, it can be with non-Redfin agents too.

The next post will include my personal favorite and not-so favorite transactions and clients, so stay tuned!

Home prices going up?

LATimes posted an article about rising home prices today.  Click here for the link.  Of course, the increases are miniscule and concentrated in the north of California.  But still... Prediction: we are going to see more headlines like this, at least through the rest of the quarter.  Inventory is short and a lot of buyers want to take advantage of the still-low interest rates.

I predict the short-term future of the local real estate market

Although I don't have a crystal ball, I think we're in for a strong first and second yearly quarters, as far as San Fernando Valley and Los Angeles real estate goes. Why do I say that? It appears that buyers are coming out of the woodwork.  There's a nexus right now between low interest rates and lower-than-in-recent-memory home prices and short inventory.  Everything is going into multiple offers.  There are lots of cash buyers out there.  Plus, I think that potential buyers may just be tired of sitting on their hands and may be feeling a little more confident than they have in the recent past.  I wouldn't be surprised to see prices go up before the summer. We'll see...

Is the Burbank Board of Realtors tone deaf? Or are they really secret members of the 1%?

I received the above engraved invitation to the annual Burbank Board of Realtors installation dinner.  WTF? Lakeside Country Club? Black Tie? Big Band? Really? For Burbank, which is not exactly the hoity-toity-est of cities to begin with? Is this appropriate in this economic environment? When we're in the middle of a recession and most of our seller clients have lost 10-20% of the value of their homes? And our buyer clients can't afford to buy no matter how low interest rates are? No wonder there's such a downward pressure on the Realtor commission structure.

4604 Norwich, Sherman Oaks - heaviest activity that I've seen in a long, long time

Showings begin for my new listing at 4604 Norwich, Sherman Oaks today.  It's by-appointment-only as it's tenant-occupied.  Sixteen separate buyer groups have made appointments today -- that's really, really a lot, and way more than I was expecting.  Is it because interest rates are so low? Or is it because the townhouse is gorgeous, and it has four bedrooms, 4 baths, a bonus room, an attached garage, luxe kitchen, etc, etc.?  Stay tuned for more details.

Low interest rates. It's not supposed to be like this.

Haven't we all been told that interest rates would rise this year? And didn't interest rates tease us a little bit by rising in the late winter?  But now they're down again.  Buyer clients of mine got an FHA loan for 4.75% with no points on Monday.  And jumbo conforming loans -- up to $729k -- can be had at 4.85%.  And jumbo-jumbos at 5.5% (with 25% down).  Thanks, for once, banks.  You're just full of surprises, and this one is delightful for a change.

Just reduced! 4552 Morse, Studio City is now listed at $639,000

We've reduced the price on 4552 Morse, Studio City to $639,000.  It's definitely the nicest house in Studio City in the price range.  Please visit JudyGraff.com for more pictures or to arrange a showing.  With this new reduction plus low interest rates, yes, you can afford Studio City!

Interest rates below 5%? True.

Check out this story from today's L.A. Times regarding below-5% interest rates. Personally, I think interest rates are heating up the market more than the first-time buyer tax credit. Here are a couple of very interesting quotes:

But look out ahead: The Fed also said this week it would stop buying mortgage bonds at the end of March. Although that's three months later than previously planned, the central bank's withdrawal from the market is likely to push mortgage rates back up.

The FHA buyers are getting outbid by people putting down 20% or 30%,... "Houses are affordable, rates are low, but there's just not enough inventory."

I'll say.

Rates are down again -- yes, even FHA rates

Conforming rates are down again. Even FHA loans can be had for under 5%! That's about three-quarters of a point lower than they were last month. Thanks to that, I expect that more buyers will be looking in the next few weeks and we can expect more multiple offer situations.

Words of the week: FHA, tax credit

First-time buyers are really out in force. Lines of people have been snaking through the open houses that I've attended, piles of broker cards are at every listing, and properties are going in multiple offers.

I think this is due to three things: the availability of FHA loans for first-time buyers, the low interest rates, and the $8000 tax credit offered to first-time buyers. Plus, I think people are feeling optimistic again. Could the worst be over?

The one thing the local r.e. market needs now is more inventory.

NBC wants news

Earlier today, I received a call from an NBC Nightly News producer. He was looking for a Realtor whose business has increased since the recent mortgage interest rate cuts. He wanted to interview me and clients of mine who are now hot on the trail to buy a new home since rates have gone down.

Problem: most of my buyer clients are still too scared to make a move right now, regardless of the low interest rates. The one couple I have that are eager to buy now 1) has already written an offer on a short sale and 2) are leaving for a month in India tomorrow.

I'm hoping that my buyer clients will feel differently after the new year -- these rates are pretty spectacular. I'm also hoping that housing inventory will rise -- right now, if a home in my area is priced well, it sells right away.

On another topic, how about this old-school NBC logo?

4.5% interest rate? Believe it.

Today, rates for conforming loans dipped under 5%. Experts say the interest rates may go as low as 4.5%. This is the lowest rates have been since I've been in real estate.

This is great news for buyers, and also great news for home owners: If this happens, refinancing may save you a lot of money. Caveat: you have to have equity in your home, and otherwise qualify.

I'm sure you know this, but the questions to ask your lender are: 1) how much will it cost to refinance? and 2) how much will you save on your mortgage payments per month if you can get this low rate.

I hope this is helpful. Of course, please let me know if you'd like a referral to a great lender.

"What is your tolerance for loss?" and a bright note

It should come as no surprise that many sellers are still quite unrealistic about what their houses are worth in the current market. Even sellers who will soon be short sellers. Our manager suggests that we ask prospective sellers who want to list high: "What is your tolerance for loss?" See, not just risk, but loss. And who says the brokerage managers aren't realistic? Okay, our manager also wants us to cold call and door-knock for new business, but still. On a brighter note, interest rates are down again and some believe they may dip below 5%!.