Local home prices jump and sales fall. Yes, again. Or still.

L.A. Times sez: the shortage of available homes for sale here in Los Angeles has caused housing prices to jump.  See the article here.  The same number of buyers chasing limited choices tends to bid up prices, of course.  When will there be more inventory and when will the rise in prices end? According to the article, it won't be this year.  Home prices are expected to rise about 4% by year's end. Photo credit: Jay L. Clendenin / Los Angeles Times.

Shortage of homes creates fierce competition, says L.A. Times

Just as I've been saying and buyers have been experiencing, today's L.A. Times has a front page story about our current market, its low inventory and how wildly competitive it is.  Click here for link.  The entire article is fascinating; here are some of the more succinct quotes:

"Housing inventory has sunk to levels not seen since the bubble years. The number of American homes with a "for sale" sign hit 2.5 million in April, the lowest number for an April since 2006."

"The much-predicted foreclosure wave that was expected to dump more homes onto the market has not materialized. Fewer borrowers are entering default, and banks are better managing the properties they do have on their books."

"Also important is having enough cash to make up the difference between the negotiated price and whatever the appraised value of the home turns out to be, he said. (Lenders won't provide a mortgage for more than a home's appraised value.) Many deals these days are falling apart because appraisals are coming in low, given how many recent comparable sales have been foreclosures or other distressed properties."

What does the government/big bank foreclosure settlement mean to you? Well, perhaps a write-down in principal

We've all seen the headlines about the government settlement with the big banks, but what does it really mean? Check out this article from the Washington Post:
http://www.washingtonpost.com/blogs/where-we-live/post/what-does-the-foreclosure-settlement-mean-for-you/2012/02/09/gIQAxE9U1Q_blog.html
This is so new that these are the only details that I have, but it looks like -- don't get excited yet -- these five banks have agreed to PRINCIPAL reduction if you're underwater!!! I'm sure the devil is in the details, but...

In the meantime, here in our land, expect inventory to get even shorter as a lot of short sales may be cancelled because of this.

For real estate, these are the "dog days"

Regardless of how the r.e. market is doing, every mid- to late-August, the local real estate market slows down.  Of course, it's doing that this year, too.  I often refer to this period as "the dog days of summer."

The official definition of "dog days" on Wikipedia is really interesting; here's a quote: "A casual survey will usually find that many people believe the phrase is in reference to the conspicuous laziness of domesticated dogs (who are in danger of overheating with too much exercise) during the hottest days of the summer. When speaking of "Dog Days" there seems to be a connotation of lying or "dogging" around, or being "dog tired" on these hot and humid days. A similar myth asserts that the time is so-named because rabid dogs are supposed to be the most common then. Although these meanings have nothing to do with the original source of the phrase, they may have been attached to the phrase in recent years due to common usage or misunderstanding of the origin of the phrase."

Why does the real estate market slow down? People are getting in their last-minute vacations, getting kids ready for school, no longer feeling the imperative to close before the end of the summer, etc, etc.  Of course, bad economic news has an impact as well, but trust me, it's always slow at this time of year.

If you're a buyer, and are disappointed by how few homes there are for sale in Burbank, Studio City, Toluca Lake, Valley Village, etc., please know that you're not alone.  Inventory usually picks up about the second week in September.  And of course this is the time for price reductions on homes that have been on the market for awhile.  Remember, you're only looking for one house.