Independent (of me) report that home sales are on the rise

Here's an AP story stating that sales of existing homes rose 5.1% last month. That's good news, and I'm happy to see that I'm not imagining things. I've been saying that we've been at the bottom now for awhile, and I've been seeing buyers coming out in droves. Finally, the mainstream press is seeing this, too.

Here are a couple of quotes: "If the economy stabilizes around midyear and financial conditions improve, then sales will probably begin to slowly increase as buyers step back into the market," wrote JPMorgan Chase analyst Abiel Reinhart. "An important reason for this is that affordability has already increased sharply, both as a result of lower prices and lower mortgage rates."
And: "However, in a positive sign, seller asking prices are starting to rise in places like San Diego and Orange County, Calif., where declines have been severe, said Lawrence Yun, chief economist for the Realtors. That could be an early indication that prices are stabilizing in the most distressed parts of the country."

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.

Have we hit bottom?

Here's an article from today's L.A. Times stating that local home sales prices have held steady since January. If you read this blog, you'll note that my boots-on-the-ground post in February said we are pretty much at the bottom for local prices. This is due to favorable lending conditions including low interest rates and the $8000 tax credit for first time buyers.

Caveat: if this year is like other years, sales will slow down in late July and stay slow through the end of the year. If that happens, we may see prices drop a little bit more.

If you are an FHA buyer and you are making an offer on a foreclosed property, the lender/owner of that property may never even see your offer.

Facts to know:

-As we all know, the government guarantees many loans through FHA.

-FHA puts some sensible restrictions, usually having to do with health and safety, on properties that it will back. For condo projects, restrictions have to do with HOA finances and ratio of renters to owners. Conventional lenders have the same restrictions on townhomes/condos.

-Right now, most of the buyer groups I am working with need to "go" FHA.

- There are "mega-lister" brokers out there who have hundreds of foreclosure listings.

-I had a great experience recently with a Realtor who has a normal amount of listings, some of which are foreclosures.

- Biggest fact: If you are an FHA buyer and you are making an offer on a foreclosed property, the lender/owner of that property may never even see your offer. Here's what happened to my clients this week in the form of an email string.

First, here's my email with names changed, of course: [Mega-Lister Realtor], on Sunday my clients wrote and we submitted an offer to you on [unit in large condo building in Burbank]. I had contacted your office on Friday and was told the property was available. My clients are Mr. and Mrs. _____. The offer was close to asking and was accompanied by financial information including a pre-approval. It is an FHA offer.

I phoned your office for status on Monday and spoke to [unlicensed assistant]. She told me another offer had already been submitted and that the townhouse complex was not FHA approved. She told me this was because there were too many renters in the complex. She also said that she could not submit the offer, because your company would get "in trouble" with the lender/seller for submitting an FHA offer on an un-approved complex... The mls says nothing about accepting or not accepting FHA offers.

I am very, very familiar with this complex and have been for years. It is extremely well maintained and I believe the HOA has very healthy reserves. I also find it hard to believe that it has less than 51% owner occupancy. I will check that in the next day with the HOA management company. I have also checked FHA's website, and the complex is not listed as approved or not approved. We've all been very educated about FHA requirements lately, and I know of no reason this unit/complex could not pass those.

I know this new market is a tough one for us all. But could you please guarantee and confirm that our offer has been submitted to the seller? It is a good offer and we need to know that the seller has seen it and responded.

Please phone me or email me with any questions or concerns. Thanks very much!

And here's the email that I got back from the mega-lister Realtor: I have reviewed the property prior to marketing and my recommendation is not to accept FHA offers based on the fact that it is not approved on huds website and the HOA verbally told us that there are only 45% owner occupied units. We don't have a condo cert yet however there is no sense in any of us getting into a deal that cannot be closed... I hope you understand.

Now, it probably sounds like I just have a case of sour grapes because my clients did not get the townhome. Well, okay. But, Realtors have a legal obligation to present all offers to their sellers. And Realtors should not be making the decision about what reasonable offers their clients should see. And Realtors also have an obligation to post on an mls listing if something is not eligible for FHA funding. And it seems to me that lenders who own bad assets and are getting bailed out with tax payer funds should be looking at everything.

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.

Judy's re-fi, chapter 562

Today, the nice folks at Bank of America told me our re-fi probably wouldn't be completed for 75 to 90 days. The last time I spoke with them, they said it would be 60 to 90 days, but the interest rate is locked at 4.375%. The excuse is the same: high volume of business.

I can wait. However, if BofA can't expedite a simple, low-balance re-finance, how are they going to handle mortgage work-outs and the new plan to lower interest rates to help keep people in their homes? Why can't this be just like the credit card companies, where you call your credit card company (say, Capital One) and tell them you've been offered a lower rate on your Visa through another company than they are offering you and then they offer to knock two points off your existing card interest rate?

A voice from the Inland Empire

As you may know, I often comment on the L.A. Times' real estate blog, LA Land. Over the years, I've actually developed relationships with some of the other posters. "Inland Empire," one of the regulars, responded to my recent posts stating that the local market seemed to be accelerating again. Here's the post:

"Hi Judy,I don't go to the Times real estate blog much any more but when I do its nice to see a sane voice there (yours). I can believe you when you say things are going fairly fast in your neck of the woods - we probably made offers on 12 houses ourselves this past year only to get outbid. (Riverside Co.)We have a house in North San Bernardino. Its a custom home in a so-called exclusive area (on a hillside, city lights view, lots of custom homes and rich folk with trust funds). We couldn't sell it so we will be renting it out for the duration. We went there today and I could not believe how few for sale signs and foreclosure notices there were in comparison to recent months. Houses that had been on the market for ages are now occupied and show signs of people fixing them up. This was in the streets near our house - maybe a couple of square miles of area. Things are perfect but they are not the pit of gloom lots seem to think we are in.I think the blog [LA Land] is full of people who are either terribly afraid of life in general, fear the future or just plain idiotic. I am "Inland Empire" on the blog."

I love fan mail, Inland Empire!

REOs are not that bad! Really!

I just closed an REO, which is a property that has gone through the foreclosure process and is now owned by the bank. It was much easier than I expected. The house (pictured) at 1101 N. Catalina in Burbank, was owed by Wells Fargo. It listed for $500,000 and my buyers, knowing that there were other offers, came in at $501,000 -- just as the bank accepted another offer. During that escrow, we kept checking back with the listing agent re the status. Sure enough, it fell out of escrow at the last minute and the bank accepted our offer. Escrow was a little bit slow to open. The seller/bank agreed to credit my buyers $2,000 towards repairs and had already done all pest work. Great!-- we were not expecting that. There was a last-minute glitch regarding the home warranty company, but we still closed escrow right at 30 days. Of course, it helped to have very heads-up, proactive buyers and a great lender (thanks, Dana).

And further...

The post below talks about all the buyers who seemed to be out last weekend. It appears they were buying, not just looking: The house above is 1110 N. Avon in Magnolia Park. It's a 3+2, 1309 sf, 6750 sf lot with pool, and needed a lot of updating (the kitchen, especially). It listed last Friday for $439,000. It is now in escrow, less than 7 days later, for $490,000. Yes, it went in multiple offers.

FHA buyers out in force

There appear to be lots and lots of first-time buyers out looking for properties now in L.A. and the San Fernando Valley. I attribute that to the ability of buyers to obtain FHA loans -- only 3.5% down! And it can all be a gift!, low interest rates, and the new $8,000 tax credit. As we all know, prices have fallen, too.

Problem: for single family homes, inventory is very short. Once again, half-way decent properties are listing and selling in a few days. No, I haven't seen a price spike, but if everything starts selling with multiple offers, that will follow.

There is a better supply of condos, although not all of them can be approved for an FHA loan, which will be the subject of another post. Many of the condos I've seen lately are new, too, and the developers are still attempting to get top dollar for them. Or they're really old, and need mondo updating. Stay tuned for news about our ever-changing market.

Shooting in Burbank

The Toluca Woods/Lake part of Burbank is one of the nicest, most peaceful neighborhoods in town. However, early Wednesday morning, a woman was shot dead in the doorway of her home on Jacaranda. The shooters were caught shortly thereafter and have already been arraigned. Here's the Burbank Leader article. I've been told that this was an organized crime-related event. How sad for the victim, her family, and the community.

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.

Tax Deductions and Home Ownership

Friend and client Cathy DeFrancesco sent me this online article from H&R Block. It's great because it reminds first-time buyers, and other home owners, about all the tax deductions they can take:
First-Time Homebuyers in 2009 to Reap Recovery Act BenefitsHomeownership Could Unlock Variety of Additional Deductions
February 23, 2009: 02:31 PM ET
Taxpayers on the fence about buying their first home may want to consider the American Recovery and Reinvestment Act's tax credit that could mean up to an $8,000 break on their taxes. Not only will this tax credit lower a taxpayer's tax liability by the amount of the credit, but these first-time homebuyers may reap additional benefits when filing their tax return now and for years to come while they own the home.
According to Amy McAnarney, executive directory of The Tax Institute at H&R Block (NYSE: HRB), many first-time homeowners aren't aware they may be eligible to itemize deductions for the first time. "Homeownership is the key that could unlock thousands of dollars of tax savings," McAnarney said. "The taxpayer's joy from signing on the dotted line can extend to recognizing all of the additional tax deductions they can claim on their taxes -- if only they know how."
The benefit of the Recovery Act credit can be received now because taxpayers who have purchased a home in 2009, or who will do so before Dec. 1, 2009, can claim this credit on their 2008 original or amended return. Taxpayers, who purchased a home in 2009 and already claimed the $7,500 credit that was part of the Economic Stimulus Act, should amend their 2008 return to claim the additional credit, up to $500. "The Recovery Act is doing its job of trying to stimulate the housing market," said McAnarney. "This is one credit where taxpayers can reap the benefits almost immediately."
To qualify for this year's first-time homebuyer credit, the homebuyer must not have owned a home in the previous three years and the home must be the primary residence. Unlike last year's credit, if the property remains as the homeowner's primary residence for at least three years, then the payback requirement is waived. However, if a taxpayer bought the home in 2008, when the maximum credit was $7,500, the payback provision still applies and the credit must be repaid to the government over 15 years starting in 2010.
There are also a number of other tax benefits to consider in owning a home. For example, owning a home makes a taxpayer more likely to itemize deductions on Schedule A. Possible tax deductions to consider when itemizing include:
-- Mortgage interest
-- Real and personal property taxes
-- Charitable contributions
-- State and local income taxes
-- Loan origination fees
-- Qualified medical and dental expenses
-- Employee business expenses
-- Tax preparation fees
-- Investment interest and expenses

There is something in the Recovery Act for existing homeowners, as well. The Act also includes increased tax credits for energy-efficient improvements such as qualified new furnaces, windows and doors to existing homes. The amount of eligible credit was increased from 10 percent of the equipment cost to 30 percent. The credit applies to 2009 and 2010 tax returns, with a lifetime cap of $1,500.

So. Cal home prices fall to 2002 levels -- not really

Today's L.A. Times has an article stating that So. Cal. home prices have fallen to 2002 levels. Well, maybe if they're measuring all So. Cal. counties. But that's not true here in most of the San Fernando Valley. I just ran the sales data from all multiple listing services from Jan. 1 to Feb. 20 for Burbank, Toluca Lake and Studio City. Here's the dope:
Burbank Avg. Sales Price:
2 beds = $471k
3 beds = $520k
4 beds = $712k
Toluca Lake Avg. Sales Price:
2 beds = $617k
no data for 3 and 4 beds (I think due to short inventory/long time on market)
Studio City Avg. Sales Price:
no data for 2 beds
3 beds = $696k
4 beds = $1344k
I really love the L.A. Times, but I wish they would better qualify some of the information they print.

Gosh, I have such deep and abiding faith in Bank of America

For those of you who are following the progress of my Bank of America home re-finance: I got through to BofA yesterday and they now say it will take 60+ days to wrap up the re-fi. Mind you, we applied for this on January 6 and received a loan commitment on January 15. We've long since turned in income documentation and the other paperwork the bank asked for. And we have plenty of equity and aren't asking to take any cash out. I asked the kind person why it was taking so long and she told me, "Bank of America is hiring and training new people." So good to know. You'd think they might have wanted to do that before promoting re-fi rates below 5%. But what do I know about the inner workings of a giant multinational banking institution?

How the stimulus bill helps home owners

The recently-passed national Stimulus bill contains good news for home buyers. If you're a first-time buyer, or haven't owned property in three years or more, you are entitled to an up-to $8000 tax credit. Also, the jumbo-conforming loan limits in expensive areas have been raised to $727,000. This is good until December 31, 2009.

Best of Burbank - vegetables

I know that produce isn't particularly real-estate related. But I recently discovered Gefer Farms, at 822 N. San Fernando, in Burbank and can't stop going on about it. Here's the place to save money on fresh produce -- it's way cheaper than Ralph's across the street. There are great booze deals, too. This medium-sized market caters to a largely Armenian and hispanic clientele and is a sister market to Golden Farms in Glendale. It also has a full meat market and sells other food and groceries, too. Three bunches of radishes for $.99! Two pounds of bananas for $1.00! I ask you, does life in Burbank get much better?

Sunday reading -- from the L.A. Times and The New Yorker

The business section of today's L.A. Times contains two excellent consumer-oriented articles about foreclosure and loan modification. The first, Headed for Foreclosure? Here's What to Expect has definitions and a foreclosure timetable. The second, Common Loan Modifications Offered by Banks, delves into the types of loan modifications offered (warning: principal write-down is rare).

This week's The New Yorker offers one of the best articles on the mortgage meltdown crisis that I have read. It focuses on Florida, and is titled The Ponzi State, but the situations described are applicable to California and elsewhere. George Packer is the author. Unfortunately, you have to be a subscriber to read the article, but here's an abstract. The article is unique in that it profiles several different individuals that have been hurt by this downturn that haven't been much written about before, including folks that have never owned a home and state officials.

...And here's a status on my foreclosure escrow

I represent the buyers in their purchase of the house at right, 1101 N. Catalina in Burbank. It's a foreclosure, and here's how the escrow is going: fine, so far. My buyers had put in an offer when it was already under contract with other buyers. That first escrow fell apart at the last minute, and we had a signed deal three days later. That's pretty quick for a bank (Wells Fargo) to turn that around. Of course, it was a pretty clean offer and my buyers are pre-approved for a conventional loan. The only thing that was delayed was the assignment of an escrow company. That took 10 days when it usually happens upon acceptance. I'll continue to provide updates on this process.

And by the way, there has been no word since the 5th on my refinance. GRRRR!

Status on my Bank of America refinance

If you're a regular reader of this blog, you know that my husband and I are refinancing our home through BofA. We are not asking for any cash from our equity; we just wanted to take advantage of the great rates. We applied last month, got a great rate, and it seemed super simple. It was supposed to close tomorrow.

Well, no. Frustration has set in. Earlier this week, it appeared that all of our supporting documentation (tax returns, etc.) had been lost. It took six phone calls and about an hour and 20 minutes to straighten that out. I just received my "welcome" phone call -- a month after I applied -- and it was my second "welcome" phone call today. Apparently, the right hand does not know what the left hand is doing. Oh yes -- BofA will assign a processor this week. Since the late closing is their doing, they will mercifully extend our rate lock.

More news when there is some.

Zillow says values haven't declined as much as reported

From today's L.A. Times, here's a story from Zillow.com. Zillow says the median home values in Los Angeles and Orange counties may not have fallen quite as much as is often reported. Hmm, you don't say!

Burbank building permits are not good until the end of time

Much to the dismay of local developers, Burbank City Council recently voted to stop extending the expiration dates of building permits. This means that a project that was permitted, oh, say, during the Reagan administration, but was never built, will now have to go through the permitting review process again. Read the Burbank Leader story here. Most of the developers who are affected by the vote had approved plans from two to three years ago (the permits are good for at least a year) but could not get the necessary financing to begin construction.

I say, good. (And yes, I'm a NIMBY: I'm delighted that a planned huge apartment complex will now not be built behind my house.) I know of several previously-approved projects that would not have been in keeping with the neighborhood character, would have added additional traffic to the surrounding streets, and are of questionable need anyway. Times change and communities do, too -- and I think it's worthwhile to reexamine permitted, unbuilt projects to make sure they will be a good fit in the future.

Also, as my friend Ellen Dimler stated so succinctly in the Leader article: "The power of one council must not extend indefinitely.”

A new financing plan from Fannie Mae

Fannie Mae, the agency sponsored by the U.S. government to help make housing more affordable to all Americans, now offers HomePath, a special new home loan to finance the sale of its current real-estate owned (REO) properties across the country.

The benefits of a HomePath Mortgage Loan include:
-only 3% down required on a primary residence property
-no mortgage insurance required
-no property appraisal required
-only 10% down on 1-2 unit investment properties (this is huge)
-get up to 6% back in seller concessions

Only a very few lenders can do these loans, but Metrocities Mortgage is one of them.

One drawback is that there are just not very many Fannie Mae REOs in northern Los Angeles or the San Fernando Valley. Search for Fannie Mae REO properties eligible for HomePath financing at www.research.fanniemae.com/reosearch.

How to turn Iceland around

This doesn't have much to do with real estate. You may know that Iceland's banking and government systems have collapsed. I have an idea about how they can get back on the beam and create revenue: legalize Bjork and Sigur Ros, and then tax them. Sorta like maybe we should do in this country, with marijuana.

New, noteworthy site

So much for privacy. I just discovered Blockshopper.com, courtesy of LALand. Yes, you can now easily search by block and learn what your neighbors paid for their homes. It appears that the site sources the L.A. County tax assessor's data, although some data for certain properties is missing -- like what we originally paid for our house, for some reason. It's a cool site, though, and fills in some Redfin/Zillow gaps.

Emerging neighborhoods by Los Angeles Magazine

Los Angeles Magazine interviewed me today for an upcoming real estate story about emerging neighborhoods in the area. Unfortunately, much of what I said won't be for attribution. However, here are some of the wheres and whys that we discussed:

• Magnolia Park in Burbank for good price points and excellent schools;


• Porter Ranch for brand new homes and decent prices;


• Shadow Hills for proximity to mountain trails and equestrian property;


• Studio City/Tujunga Village for great housing stock, Carpenter School and easy commutes;


• Arleta for decent housing stock at low prices;


• Adams Hill in Glendale for views; and


• South Pasadena and Linda Vista for all-around lovely neighborhoods.
  

Update on my refinance

Here's the latest on our home refinance, which we began on January 6: BofA asked for the last two years' tax returns. We turned those in last week. No news since then.

L.A. County home price reductions chart and wild -- or not -- prediction

Courtesy of the L.A. Times' LALand, here's a chart of average home price reduction percentages between 2007 and 2008 by neighborhood. This is the same L.A. Times that has been crowing about the 30%-50% price reductions we've seen in the area. Now, as you'll see from the chart, that's just not true in most of the San Fernando Valley and Hollywood Hills. Yes, prices have gone down. But Studio City, for example, is down just over 10% for SFRs and just over 9% for condos. Burbank's worst number is -21% for condos in 91506. Hollywood Hills, zip 90068, is down 15+%.

Just as I've been saying, all real estate markets are local. And I'll make another (safe) prediction: in the areas that I serve, for the remainder of the first and second quarters at least, we are at the bottom of the market for houses listed under $600,000. We may also be at the bottom in the $600,000 to $800,000 range. Lending has loosened up at the same time that inventory has shortened. I'm seeing multiple offers and over-bids again in that category.

Boots on the ground perspective: move-up buyers are getting the short end of the real estate stick

As we all know, lending conditions are currently favorable for buyers. Rates are low, and FHA loans are not nearly as restrictive as they've been in the past. While lenders favor buyers with large downpayments, FHA allows 3-1/2% down on a purchase, and there are 10% down loans and even some 5% down loans (hard to qualify for, but still).

Unless you're a move-up buyer, e.g., somebody who owns a home but would like to move to a larger house. Many move-ups need to sell their homes in order to buy a new one. Bridge loans are uncommon. And it's extremely difficult to pull equity of your existing home for a down payment, because so many people have suffered such equity erosion lately. Saving money and having a large nest egg for a down payment is a nice thing, but who do you know that has thousands and thousands of dollars sitting around for that?

To me, in my market, this is where the bottle-neck is. Lower-priced homes have been selling quickly to first-time buyers. It's the people who are trying to move up from their first-time purchase that are being stymied.

I think the solution will be for lenders to begin giving bridge loans again, if equity warrants it. Or even making 100% loans to buyers with excellent credit.

Fannie Mae will be charging certain extra fees

Fannie Mae has announced that it will charge certain extra fees as of Feb. 2. Here are the details in brief. Thanks to lender Dana Dukelow for bringing this to my attention.

Condos - rates will be .5% higher than for single family homes
Duplexes - rates will be .75% higher than for single family homes
Cash-out refinances - rates will be .5% higher than for rate-and-term-only refinances.

While this is not necessarily good for buyers, rates are still low. It indicates a policy that favors purchasers who want to live in neighborhood family homes over investors.

Short sale buyer beware

If you're a buyer out there who's looking to purchase a short sale, here's a little story for you. And it's not a pleasant one.

Some clients contacted me last Friday about seeing short sale property that had just come on the market. The house is at 401 N. Brighton, Burbank, and the mls is S559692. The house is a 3+2, 1446 square feet, and is in a nice neighborhood. I was a little suspicious because the house was only listed at $420,000 and is not a fixer. That's really low, even in this market, for a house that size. I can't see a lender ever approving anything that low -- the comps are much higher. And, as we all know, the lender has to sign off before a sale can be concluded. Was the agent courting a bidding war?

I spoke with the agent late Friday afternoon. She confirmed the house was available.

I went over on Saturday afternoon. The key was missing from the lockbox. Being the breaking-and-entering Realtor that I am, I entered through the side garage door. The house isn't bad. It needs decorating, but it's workable. There were several other Realtors trying to show the house to clients while I was there -- no surprise, with a price that (artificially) low. I called the Realtor, told her the key was missing, and asked if it could be replaced by Sunday at noon. She said she'd try.

I met my clients there on Sunday. Alas, now the entire lockbox was missing, and the house was shut up tight as a drum. The listing agent's voicemail was full.

This morning, the house appeared on the mls as pending. As in under contract, not taking back up offers, in escrow, la la la.

Uh-unh. Most lenders won't approve a short sale until the house has been on the market for thirty days. This has been on for five days. Most lenders will not approve a sale unless the price is at least somewhat in line with the comparables. And lenders don't work on legal holidays (today is Martin Luther King day), let alone weekends. It would be almost impossible to get a written approval that quickly. And no escrow companies are open today, either.

So what's up? How can a house that's impossible to show get sold this quickly? Does the agent not want it shown because she has her own offer? Are the sellers and agent in league with each other to try to sell it to somebody they know for that low price? Or does the listing broker just not know the short sale process? Am I jumping the gun here with these suppositions? I don't think so, and most banks are getting wise to these schemes. Personally, I'm irritated to have wasted my and my buyers' time on this.

Empty Big Box Store Count [Updated]

Let's list the empty big box stores in Burbank, shall we?

• Mervyns


• Shoe Pavillion


• Linens and Things


• Vons on San Fernando (although I hear that Jon's is going in there)


• Empty grocery on Verdugo/Sparks/Olive intersection [Update 1/22/2009: I'm told Fresh and Easy is going in here.]


• Circuit City (well, not quite empty yet)

And although it's not exactly a store, Black Angus has filed for bankruptcy. If it closes, a Mimi's would be nice in that space. What will be next to close? Great Indoors, perhaps?

Sales statistics for Burbank and Studio City

Here are the latest Burbank and Studio City real estate sales statistics from the Tempo/MLS system. Please note these are sold figures for the last six months.
Burbank home and condo sales, 7/1/08-1/15/09:
Average price for 2 bedroom home: $498,500
Average price for 3 bedroom home: $620,700
Average price for 4 bedroom home: $714,800
Average days on market: 79

Studio City home and condo sales, 7/1/08-1/15/09:
Average price for 2 bedroom home: $655,000
Average price for 3 bedroom home: $955,000
Average price for 4 bedroom home: $1,395,000
Average days on market: 61

Please contact me if you'd like me to run the numbers on any other local areas.

New look for my website

My website at www.JudyGraff.com has a new look. It's still under construction, but is mostly done. Please check it out and tell me what you think.

Big Box Rumors

First, the news I'm most excited about. Whole Foods may not be done with Burbank just yet. With all the big box retailers closing, there may be some "back channel" discussions going on regarding finally, finally opening a store here. You may recall that the Burbank City Council, and local residents, put the kaboosh on a Burbank Ranch-area store.

Next. Macy's announced store closings. So far, the Burbank, Glendale, and Sherman Oaks stores are safe. Yah!

And finally, Jon's grocery store is going into where the Von's on San Fernando used to be.

I just re-fi'd my own house for 4.375% plus points

Update: Well, maybe it wasn't so easy after all. I received a call on 1/9 saying that our re-finance is not yet approved. No telling if/when it will be. I'll keep you posted.

I walked into my Bank of America branch today to ask about re-financing our home. Twenty minutes later, I walked out with a loan lock. The application was taken via computer. Not to sing BofA's praises, but it couldn't have been easier. And my rate is 4.375% plus 2-1/2 points. Total closing costs, including points, are running at 4%. Okay, that's high. But I'm only re-financing $91,000 (we bought a long time ago), and I'm wrapping the closing costs into the loan. It will add an additional $11 to my loan payment every month.

I was surprised to get a commitment without offering any documentation. This was all done with our credit scores. I'll report more as this processes and closes.

Toluca Lake celebrity sighting

I spotted Jerry Ferrara at a Toluca Lake Starbucks this past weekend. For those that may not know, he plays Turtle on HBO's Entourage. He has very nice skin, for what it's worth. No, he was not with Jamie Lynn Sigler.

Boots on the ground report from Glendale open house

Yesterday, I held an open house at 1321 Virginia in Glendale. I had twelve to fifteen groups come through and all appeared to be serious buyers. Not at the list price of $809,000, mind you; most were looking for better bargains. But this is a lot of open house traffic -- about the same amount as there would be for an open house in the boom years. Are buyers getting off the sidelines?

Happy New Year! And prediction for 2009.

I hope 2009 is a great year for everybody! Here's my residential real estate prediction for the Los Angeles area: Move-up buyers (people who would like to move to larger homes) are going to be hurt by the current real estate climate. First, they will likely need to sell their existing homes in order to qualify for a loan for a new property. That's going to be hard, unless they've owned their current homes for over four years as their equity has diminished and they may even be upside-down. Second, there isn't a great supply of homes to move up to -- the existing supply of homes for sale are condos and other first-time buyer-type homes.

Waiting for a $300k house in the Burbank area? You might have to wait awhile.

If you're waiting to buy a Burbank home that's selling for 40% less than last year's median price, you might have a long wait. There was a flurry of sales activity in the area over the last few weeks, and just about all of the decent stuff is gone. Examples:

The top left home is 1910 Bonita. It's a 3+2, 1950 sf., 6136 sf lot, remodeled with guest house. It listed at $569,000 and went into escrow a few days later after having multiple offers.

The center home is 530 Cambridge. It's a 2136 sf., 5+2, 7400 sf lot home in the Jefferson school district. It listed at $679,000 and went into escrow a few days later after having multiple offers.

The bottom home is 1024 E. Orange Grove. It's a 3+2, 1153 sf, 7750 sf lot home that listed for $579,000 and yes, it went into escrow a few days after listing with multiple offers.

Those aren't the only ones that sold really quickly in December, but I got tired of cutting and pasting. Are there also single family homes for $300,000 that I'm not including? Not that I know of -- it seems like the $450k-$650k is the going price for a local homes below 2000 sf. Has the area reached it's "price discovery?" Are increased sales due to a dearth of listings? Have the lower interest rates made a difference? Will we continue to see prices decline? What do you think?

Happy Holidays!

There will be no posts here for a few days. I hope you and yours have a merry and happy.

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?

Moritorium on evictions following foreclosures

The L.A. City Council just approved a new law that puts a one-year moritorium on banks evicting tenants when they foreclose apartment buildings and houses used as rental properties. The law was proposed after Countrywide pressured tenants in foreclosed apartments to leave their units in violation of L.A.'s tenant protection rules (which, yes, are labyrinth, but generally give tenants 60 days to vacate. Most people, including L.A. landlords, agree this is fair). Apparently, the law was proposed after the banks complained that they did not understand that tenant protections applied to them. Well, of course the poor banks didn't understand. Why, oh why, should normal laws EVER apply to the banks?

Santa comes to mortgage holders

You've probably heard this more in the past few days than The Little Drummer Boy: it might be time to buy or refinance, because mortgage interest rates are going D-O-W-N. There are predictions that the rates will go to 4.5%, and lender Dana actually had a rate last Friday below 5%.

For both buyers and re-fi'ers, you'll need to qualify and the loan can't be over $625,000. For re-fi'ers, you'll need equity in your home.

Here are the questions to contemplate if you're contemplating refinancing: First, how much will it cost me to refinance? Many banks and most lenders will charge closing costs. Second question: how much will I save by doing this? Obviously, if you already have a 5.125% 30-year fixed interest rate, you'll definitely want to hold off on refinancing until rates go to 4.5%. However, if you're paying over 6%, it might be worthwhile to start the process now.

I will be attempting to refinance my own mortgage later this week with Bank of America; I'll blog about how it goes.

Board-ups in Burbank

Rumor has it that the Von's on San Fernando in Burbank will be closing soon. It was kind of crummy, but now the only grocery store for the area will be the kind-of-crummy Ralph's across the street. No word on what might go into the space. So, at least for awhile, there will be more parking for Zankou Chicken.

And while Kohl's has made a deal to take over a lot of empty Mervyn's, the Burbank Mall Mervyn's isn't one of them. So, soon, Burbank is going to be awash in giant, empty retail spaces. Do you think the Burbank City Fathers and Mothers could persuade Whole Foods to give Burbank another try? Or should these spaces just all lease out to Korean and Armenian churches? I'm kind of worried that all of these board-ups will lead to blight.

Answer to condo/loft glut: lease 'em, don't buy 'em

Here's an article in today's LAT that says many of the recently rehabbed condo/loft building developers are now leasing their units because they have been unable to sell them in the current market. You don't say. The article says it is happening in downtown L.A. and to a lesser extent, Hollywood and the SFV. Wow. What a surprise. I have been wondering for a long time when this trend was going to end -- this is not a city like NY or San Fran where mixed-use happened because there was no other kind of use -- people have tended to live where they worked in those cities because, well, for many decades there was no other viable place to live or way to get to other housing. They didn't move downtown from the suburbs because for many decades, there were no suburbs. Our current move-into-an-urban-area-from-the-burbs trend is the reverse of what has occurred in the past.

While I think urban living is a fabulous idea for many, I also think the market for buyers has been more limited here due to there being no schools and few essential services (grocery stores) available anywhere close to the condo/loft communities.

And this trend also tells me that developers, inspite of whatever research they may do, are as susceptible to fads as anybody else.

But hey, if I was 25 and had lots of money, I bet a downtown loft would be a really cool place to live!

CSI: Real estate and private mortgage insurance

For many years, buyers who put less than 20% down on a home have had to pay private mortgage insurance. This is a percentage fee, tacked on to a monthly mortgage, that protects the lender against default on the loan. The loans are insured. And "pmi" isn't inexpensive for the borrower.

I'm sure this has occurred to many of you before this, but: if there was so much insurance on mortgage loans, why are lenders in such trouble from all the defaults? Where did this insurance money go? Who collected it? Where is it now? Why hasn't it helped stabilize the real estate market? Does anybody know?

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.

Open Saturday, 12/6, 1-4 pm: 1321 Virginia, Glendale

I'll be holding 1321 Virginia in Glendale open this Saturday, December 6, from 1 to 4 pm. Yes, it is this gorgeous. You can see more pictures on the "Featured Listings" page of my website at www.judygraff.com. Here are the details: 3 beds, 2 baths, guest house with 3/4 bath, pool, spa, 1825 sf house, 14616 sf. lot (yes!), a/c, gorgeous hardwood floors, big kitchen, fireplace and more.

Here's the mls description: Gorgeous Spanish home in Northwest Glendale! This home has it all - 3 large bedrooms with crown molding, remodeled bath with dual vanity, distressed hardwood floor and recessed lighting, open living room with dramatic fireplace and coved ceiling, formal dining room with stain-glass window and coffered ceiling, lovely tiled floors in kitchen and breakfast room. Other amenities include a guest house, pool and spa, awesome covered patio overlooking the grounds, and the list goes on and on. Due to the sellers circumstances, this is a short sale listing and all terms and conditions are subject to lender approval.

Yes, it's a short sale. No, the family isn't buying it back (see below). It is listed at $879,000. Please stop by and see me!

Toluca Lake Holiday Open House

This year's Toluca Lake Holiday Open House takes place Friday, December 5, from 5:00 p.m. to 9:00 p.m. All of the Riverside Drive merchants will be open and spreading lots of holiday cheer. If you haven't been to this event before, it's a blast, it's free and it's fun for the whole family.



I will be at Tamara Dahill's Salon along with husband Steve Fisher, who will be signing copies of his book, The World is Your Litter Box. Please stop by and say hello if you're in the neighborhood.

Short sale scam

Maybe I'm naive, but I just heard about this short-sale scam yesterday. Apparently, here's how it works. A seller lists his home for a short sale price. The buyer is a relative with a different last name -- so as far as the bank knows, it is certainly an arms-length transaction. The seller goes on living in the property after close of escrow, making much lower payments, through the relative on title, on the same house. The lender is none the wiser.

There is also subtle discouragement of other buyers and showings in order to further the scam. For example, the property is listed on the wrong mls, it is never available for showings, a potential buyer is told that there are so many offers in that the seller and bank will not look at any more, etc.

The vast majority of short sales are legit. But if a buyer you know encounters a difficult-to-see-buy short sale home, this kind of scam may be going on.

No wonder so many lenders are just not responding to short sales and just going ahead and foreclosing.

"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%!.

Sunday morning reading: a contrarian view from Ben

Here's Ben Stein's column from today's New York Times. Now, I have to say that I love love love love love Barack Obama. And I love Ben Stein, too, but not in the same way. Ben questions Obama's choices for his economic team and also asks about how effective public works projects are in bringing the economy around. Hmmm. Interesting food for thought.

Bring on the recession

It's "Black Friday" morning. AP is already reporting that a Walmart worker was trampled to death at dawn today by unruly shoppers looking for deals. Jeez, people, how much crap do you have to acquire? At what price? Is a good shopping deal worth somebody's life? Should Walmart change its slogan from "Save money. Live better" to "Save money. Live"? Sorry, but if you ask me, the recession/depression can't happen fast enough if people are killing each other over big screen tvs.

A great article about eviction from The New Yorker

Remember Addie Polk? She's the 90-year-old Akron lady who shot herself just as the sheriff was coming to evict her after her house was foreclosed. Here's the story from the Nov. 24, 2008 issue of The New Yorker. The article also explores preditory lending. Cut to the end: Addie survived, but it is unknown at present where she'll live.

Another reason to be thankful -- low interest rates.

Interest rates just took a dive. A conforming 30 year fixed rate (up to $417,000) can be had today for 5.375%. It's 5.5% for loans up to $625,000.

I hope you find many things to be thankful for this Thanksgiving!

My visit to Palmdale

I spent the afternoon yesterday in Palmdale, the foreclosure capital of L.A. County. No, I was not showing property. Shameless plug: My husband, Steve, and his cat have a book out titled The World is Your Litter Box. It's a how-to manual for cats and is very funny. Anyway, I go along with Steve to all the So. Cal. Barnes & Noble signings.

I haven't been to Palmdale in years. From the press it has received lately, here's what I expected: broken-down cars by the side of the road. Lots of homeless people. Board-ups all over the city. Signs on telephone poles re name-your-price homes for sale. In short, a community in a deep, deep recession/depression.

That's not what I saw. At all. The major shopping area had tons of traffic, busy franchises, and no board-ups. Lots and lots of people out and about, and none of them looked particularly troubled. In short, I saw a thriving community. (And yes, the Barnes & Noble was busy all afternoon and we sold out the stock.) Now, I'm not saying that area is not ground zero for foreclosures. I'm just saying. Perhaps I need to wait a year for the blight to set in?

Why aren't more troubled homeowners seeking assistance?

HUD Secretary Says Programs Are Ineffective
Two government programs intended to help hundreds of thousands of borrowers avoid foreclosure are having negligible effects, a top Bush administration official acknowledged Wednesday. One program will be revamped immediately, and the other possibly in the near future.
“The response has not kept up with the need,” Steven C. Preston, Secretary of Housing and Urban Development, said to the National Press Club. “Many Americans who should be getting help are not getting help.”

The FHASecure program announced in August 2007 has helped only about 4,000 delinquent borrowers, Mr. Preston said. The other, Hope for Homeowners, has received just 111 applications from distressed homeowners since it was introduced on Oct. 1. He outlined changes intended to encourage more participation in the Hope for Homeowners program.

Under the new rules, lenders would be allowed to take a smaller loss. New loans can be made for 96.5 percent of the home’s current value, rather than the previous 90 percent. Even with the changes, borrowers would still have to pay back half of any appreciation to the government if they sell the house or refinance."

Bizarre. Thanks, Dana Dukelow, for this article. Why aren't more distressed homeowners seeking assistance?

Burbank smells like death?! Wha???

Curbed L.A. asks why a particular portion of Burbank smells like death. Huh? As always, the responses are very amusing. I think it's due to all the condo and loft developers who have starved to death in the last few months.

Are local home prices down 21%? Or 41%?

Here are some new statistics on our local housing market from today’s L.A. Times. Be careful when reading this article: It appears that while sales prices in the region (not sure how “region” is defined) are down 41%, L.A. County’s drop is 29%, and its median sales price is now $355,000. And, homes in the top third of the market have fallen 21%. Quite a wide swing in stats, I would say. Here are the relevant quotes from Peter Hong, the article’s author:

"Los Angeles County's median home sales price was $355,000, down 29% from a year ago.”

"Low prices did drive sales up 56% from a year ago. But a market bottom remains elusive, and a rebound in prices is not on the horizon." (Yes, I know this is not good news.)

"Last month's Case-Shiller Home Price Index, which tracks home sales by price tiers, showed that Los Angeles-area homes priced in the bottom third of the market had fallen 42% from their peak prices by late last summer -- but those in the top third had dropped 21%."

Mr. Hong also points out that foreclosed homes have dragged down the average price. Here’s how that works. If the majority of homes on the market are foreclosures with their lower prices, the majority of sales will be foreclosed homes with their lower prices as well.

Now, more real estate news from today’s Burbank Leader. The news is good for sellers as the average home sales price in Burbank inched up to $544,166 in October. For Glendale, it went up to $673,365 – close to double the county average.

Jeremy Oberstein, the article’s author, also cites a market index for both cities. It is based on a month-to-month ratio of new listings, active listings and days a house is listed as available on the market. Burbank’s market index for October is 0.41, and Glendale’s is 0.32. An index higher than 1.20 indicates a healthier market for home sellers, while a figure less than 0.80 reflects a more advantageous market for home buyers. I have emailed Mr. Oberstein and asked about the source of the index data.

Here are the relevant quotes from the Burbank Leader article:

"In Burbank, the average sale price for a home inched up to $544,166 in October, slightly higher than September’s figure and 11.3% less than the same point in 2007."

New Conforming Loan Limits

Starting soon, conforming loan limits will drop to $625,500 from $729,000 for L.A. County. Still pretty good, in my opinion. And interest rates are good this week and still in the band between 5.5% and 6.75%, depending on the size of the loan.

I'll list the new FHA guidelines once they're set.

As always, thanks to lender Dana Dukelow for this info!

The fires hit home

One of my favorite escrow officers is Margie Dansby at Intervalley Escrow. Margie has been a wonderfully calming prescence during otherwise difficult situations, and has been a very creative problem solver.

Margie lost her home in the Sylmar fire this weekend. I can't imagine how terribly she must feel. My thoughts and all good wishes are with her.

Sunday reading from L.A. Times

This article by Matthew DeBord appeared in today's L.A. Times Opinion Section. The title and subtitle just about say it all: "The Gang's All Here - The dream of owning a house turns into reality shock when the neighborhood is home to drug turf wars and bikers." Mr. DeBord and his family purchased a home in Glassel Park last year and were "following a particular gentification script." They had some expectations that this marginal neighborhood was slowly improving -- yes, they did due diligence and checked it out before they bought -- but they found that the Avenues gang is still firmly entrenched there. And it probably will be for years to come.

The article is touching and true. It puts the lie to the idea that if a locality's homes obtain "correct price discovery" then wonderful people will flock to buy homes there and magically turn the area into a dream neighborhood. No, they won't, necessarily -- some neighborhoods will still be degraded, regardless of attractive home prices. Gangs, crime and blight move in and become impossible to get out. And the community stays a less desirable place to live, no matter what the average home price is. Hats off to DeBord and his family for having the heart, guts and sense of humor to stick this out.

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.

Fire in the Valley

We're watching the news and a large portion of the north SFV is burning. If you are being affected by the fires, and if I can help you in any way today, please don't hesitate to phone me.

It's not just us.

I just returned from a week in Paris. Yes, I know; I'm a lucky, lucky person and we had a great time. Anyway, when I was last there eight years ago, I saw maybe one real estate office the entire time I was there. And now, there's a real estate office on every block. With beautiful pictures of apartments and flats for sale in the window. And they're not cheap -- studios in nice neighborhoods seem to be listing for $450,000 and up. I read that real estate has increased in price in Paris by 79% since 2005! I also understand that the Paris real estate market has slowed quite a bit (I have no knowledge of lending, title or mortgage issues there). So we're not the only country/state/city that had a real estate run-up and is now having problems, it seems.

Gorgeous Spanish in Adams Hill

My colleagues, Daina and Stacy, just listed a gorgeous Spanish in the Adams Hill neighborhood on the border of Glendale and L.A. The home has 4 bedrooms, 2 baths, 2365 square feet, a back yard, a view, and has been completely remodeled. The address is 3291 Romulus, L.A. 90065 and the listing price is $844,500. You can visit my website for more pics and info: http://www.judygraff.com/, and then visit the featured listings link. Please contact me if you'd like to arrange to see this beauty.

A Realtor-take on the election

This is my third presidential election as a Realtor. How do these elections effect the market? Like everything else, hope is good and uncertainty is bad, and not just for home prices. No, I don't believe that prices will begin to turn around after tomorrow. But if the general zeitgeist is positive, buyers feel better about purchasing. For this reason and many others, I support Barack Obama. I don't expect his election will bring us rainbows, unicorns, and a Dow at 20,000; the economy is still going to be tough for the foreseeable future. But I think there's no doubt that his message has been one of hope and positive change. And I expect him to continue to deliver that message if he is elected.

Sunday reading plus comments. Yes, from the NYT Business Section.

Here are two great articles from today's New York Times' Business section. Gretchen Morgenson wrote the first, titled Was There a Loan It Didn't Like? about a senior mortgage underwriter's experiences at WaMu. As you might expect from the title, the underwriter, Ms. Cooper, was pressured by higher-ups to approve any and all loans, regardless of what the loan applications and packages looked like.

I take issue, though, with a couple of statements in the article. First, mid-way through the article and Ms. Cooper's story: "Although Ms. Cooper couldn't see it, the wheels were already coming off the subprime bus." C'mon. Everybody who thought about this process at all figured out in advance that many people would eventually not be able to pay back their huge debts. This is why usury laws have existed throughout history. Also, "Hidden fees meant brokers could easily make between $20,000 and $40,000 on a $500,000 loan." Huh? How hidden could fees be when they're thoroughly itemized at closing? And all states require complete itemization as part of their consumer protections. And $20k to $40k? The standard origination fee is 1%, and that would be $5,000. Yes, there are garbage fees like processing, document fees, etc., but I've never, ever heard of them amounting to more than 2% of the loan. But whatever; it's a great article anyway.

The second article is by my new favorite economic columnist next to Ben Stein, Robert J. Shiller. Titled Challenging the Crowd in Whispers, Not Shouts, and it's about the group-think that led the Fed, prominent economists and other major financing institutions to ignore the mortgage market meltdown until it was too late. The article's tag says, "A taxi driver seemed to sense what economists didn't." Uh, yeah.