No change...so far

As we all know, the bailout didn't pass. I keep waiting for the sky to fall, but so far, lenders are still making purchase money loans for real estate. BofA is still giving equity lines of credit. The phones are quiet, and that's about it.

The names have been changed to protect the equity

A 3 bedroom, 1 bath, character home recently listed in Burbank. I'm very familiar with this house. I met with the owners back in December when they asked me to prepare a comparative market analysis and determine a sales price for them. They contacted me because I had sold the house next door to them a few weeks before.

The owners/sellers were originally from the East coast. She was a stay-at-home mom, and he was a top executive at a prominent local institution. They didn't really like Burbank and were thinking of returning to the East coast. They had owned the home for about two years and had done some nice upgrades to it. I told them that I thought I could get about a maximum of $700,000 for the house. They were unhappy with that price and believed the house should sell for much more.

The house is now on the market with another Realtor, nine months later, for $499,000. It is a preforeclosure short sale. The neighbors tell me that it has been vacant for a couple of months.

It appears that these folks just walked away from their home and mortgage. Knowing what I know about the sellers, I don't believe there was significant financial hardship; they just didn't want the house anymore and couldn't sell it for what they paid for it. So, they're sticking the bank with the tab, and lowering their neighbors' value/equity in the process.

This price is significantly low for the excellent neighborhood. The house may draw multiple offers and go for over the $499k; I hope so for their neighbors' home value sake.

Search the MLS BY MAP from my site

I've just added a map search feature to my real estate site at http://www.judygraff.com/. This offers many of the same features as mega-sites Trulia, Property Shark, Redfin and Zillow. To access:

• Visit the home page of my site at http://www.judygraff.com/. Click on the "select page" box at the top right-hand corner for a drop-down menu.


• Scroll down to MLS Map Search and click. You'll be taken to a new page.


• Click on the link and have fun searching.

Of course, you can still conduct a standard property search from my site, as well. Just click on the "mls search" button at the left on the home page.

Can't buy without selling

For many years now, if you owned a home and wanted to buy another one, the banks said fine.

Not anymore. Now, most borrower/buyers will not qualify for any loan if they own their current residence and it has not been sold yet. Why? Because their debt-to-income ratios are likely going to be too high for the banks' taste. So if you own a home and are thinking about moving up, or moving down, or whatever, put your current house on the market now and make any sale "subject to sellers finding home of choice and successful close of escrow of same."

Lending guidelines are changing by the day, so this may change as well.

The Mortgages of the Future

Yesterday, Robert J. Shiller's editorial titled The Mortgages of the Future appeared in the NY Times' Business section. He calls for re-thinking and possibly re-structuring the typical 30-year mortgage into "continuous workout mortgages." These would adjust the mortgage balance and payment, automatically and systematically, in order to help homeowners continue to pay their mortgages even during harsh economic times.

I'm no economist, but hasn't this been tried many times before? Specifically, with the "negative amortization" loans that were so popular for so many years? Most folk with "neg" loans wound up owing more several years down the line than they did at the beginning of the mortgage. I guess I'd have to see one of these "continuous workout mortgages" in action before believing that this could work.

What bad national financial news may mean to our local real estate market

By now, everybody knows about the latest national financial crisis and many people are worried. What does it mean for our local real estate community? Here's my entirely subjective opinion. I think many buyers, who just took tentative steps to get into the market, will retreat again and wait for awhile. I think sellers will not put their properties up for sale if they don't have to. That leaves a market that will be mostly foreclosures (L.A.Times says 50%) plus new condo and new townhouse units (tons of new buildings are just being or have just been completed). At this point, I would not expect interest rates to bounce up -- the banks and lending institutions need to make money by lending it after all. But this Fall should be, uh, interesting.

Never to early to celebrate Halloween here in Burbank

I'm sure nobody wants to be left behind in the mad rush to purchase Halloween gear. Here's Halloween Town, on Magnolia Boulevard in Burbank, for all of your paraphernalia needs. Several years ago, a nice casual dining establishment was planned for this spot. But the Burbank city council, in their infinite wisdom, determined that a year-round Halloween store would serve the community much better. That's right, HT is open all year, for all of your costuming and horror needs.

Good news on interest rates

...Most interest rates are at or slightly under 6% again. This probably won't last, but it's a good sign.

However, there seem to be very few new listings during the past couple of weeks. Inventory is getting shorter, which is partly seasonal, but not a good sign for buyers.

Lenders are easing up on 2nd appraisals

For awhile this summer, just about every home in escrow underwent an "appraisal review" or even second appraisal. The banks didn't trust their own first appraisals in a declining market. This was problematic in that it added extra time to the escrow process, and of course, many homes were deemed over-priced that hadn't been considered so before.

Now, lenders are easing up. Yes, there are still lots of appraisal reviews, but that's happening as a final condition before loan funding, and usually don't involve an actual second appraisal. This is great news as it removes yet another stumbling block from the process. Oh, more great news: interest rates are back below 6%. I don't know how long they'll stay that way, though.

Burbank's commitment to environmental sustainability

Burbank Public Works has just sent out a terrific, 8-page brochure on recycling and environmental sustainability projects in Burbank. The brochure includes a profile of the recycle center, info on what's recyclable in Burbank, tips for "greening up" summer parties, the last laws, refund values of bottles and cans, info on city green workshops (call the Burbank Recycle Center for details at 818-238-3900), info on the Sustainability Action Plan, ideas for natural landscaping and more. If you'd like a copy, please phone 818-238-3900. Way to go, Burbank!

Foreclosures snapped up by...bobcats

Apparently, a family of bobcats have moved into some luxury foreclosed digs in Lake Elsinore. This is from a front page story on today's LAT, but unfortunately the on-line LAT didn't supply me with a link. Sorry. Anyway, there are at least two adults and three bobcat kittens living in the house. Wildlife experts say the cats gravitate to food and water, and this particular house has a koi pond in the back yard. The experts also say the cats will move on when the kittens are big enough to travel. According to the article, the neighbors don't seem to mind the new tenants, either. Personally, I think these animals are there because the got tired of trying to time the bottom of the r.e. market and know a good Inland Empire deal when they see one.

Lancaster to refurbish foreclosed homes

Sorry that I haven't posted for a few days -- I've been wrapped up in our national political circus. Anyway, the L.A. Times reports here that the city of Lancaster is going to buy foreclosed homes, fix them up, and sell them to low income people. As we all know, Lancaster has pretty much been ground zero for L.A. County foreclosures. In the main, I think this is a very good thing. Philosophically, I think this is how a small municipality should be handling this problem.

Of course, the devil is in the details. The program has $4.1 million in funds and hopes to fix/resell up to 41 homes. So, that's about $100k per home, which includes the purchase price. If the purchase price is $80k to $100k, that's, uh, not a lot left over for more than a cosmetic fix. But this program is a step in the right direction. And many people will be happy that the money is coming strictly from the City, not from the state, county or federal government. Let's stay tuned and see how it goes.

More on sober living - the Burbank City Council weighs in

If you've read this post before, you know about the controversy over sober-living facilities in Burbank. You also know where I stand on this.

According to the Burbank Leader, the Burbank City Council has asked its staff to look into ways to monitor and potentially impose stricter regulations on local group homes. State and federal laws prohibit cities from restricting members of a "family" from living together. Apparently, that family can't have more than 7 people living together without a conditional use permit.

One of the principal planners quoted in the article indicates that Burbank may tighten the definition of what "family" is.

Am I the only person who thinks this is a slippery slope and the City is vastly overreaching? Am I the only person who thinks that a municipality has no business in defining what a "family" is?

If these sober-living facilities are a hazard to the surrounding community, then this is a law enforcement issue. The solution is to put more cops on the street.

Sunday morning reading

Okay, so it's almost afternoon. Here's a great article from today's NYT Business section about the housing bust in Merced. Three-quarters of the current sales there are foreclosures. My question to the developers of these empty REOs is: Merced? What were you thinking?

For your amusement, I bring you an LAT Opinion section cartoon by Mimi Pond. It's about grocery shopping in our very own Glendale!

Bessemer just closed

My Valley Glen listing at 13523 Bessemer closed today at $630,000, just about where the sellers and I thought it would. It was listed at $659,000, and is a 2050 sf 3+2 with a gorgeous, redone kitchen, air, hardwoods, redone baths and more. It has been listed since June 17th.

This sale provides an opposing view, I think, to all of the otherwise-bad real estate news out there. I had encouraged the sellers to wait until after the summer to list the house. I had thought, wrongly, that with "such a bad market" the house would be sitting for several months during the slowest part of the year (late summer). Thankfully, the sellers didn't listen to me. We had a contract five weeks after it listed. Also, considering the news about rampant price declines in local real estate, I encouraged the sellers to lower the price after four weeks. I was also nervous about two foreclosures one street over and what those houses might do to value. Once again, they smartly declined to do so, and we shortly thereafter received the good offer that resulted in a sale. I'm not saying the market isn't bad, mind you; but perhaps all is not as dire here in the SFV as the media would have you believe.

L.A. schools, real estate, and Sandra Tsing Loh

If you've read this blog before, you know that I have harped and harped on how much value good public schools can add to a neighborhood's real estate. It's one of the reasons that Burbank real estate continues to be desireable -- the schools are great. Along these lines, my favorite L.A. humorist, Sandra Tsing Loh, has just released a book entitled "Mother on Fire" about her experiences with L.A.'s public schools. While I haven't yet read the book (can't wait!), I know that Loh has been a long-time advocate and source of info about the LAUSD magnet, charter, and plain old public school programs, and Loh's own daughters go to a magnet school in Van Nuys. Loh's website also contains several local school links that you might want to check out, as well.

No Surprise about the Burbank Collection

I posted here several months ago about the new downtown Burbank loft development, The Burbank Collection. It's right across from the AMC theaters and above Ben&Jerry's, the new Barney's Beanery, etc. The complex features almost 200 units ranging from 1 bedrooms to 2-story penthouses and the prices used to be $400,000 to $700,000+. No more.

A BC representative came to our meeting today to talk about the big price reductions the project has just announced -- about 20% across the board. I understood that this due to two reasons. First, the existing units in escrow did not appraise for their sales prices. The buyer of one unit actually received a $200,000 write-down from her original purchase price offer! Second, according to the rep, the lender on the project is breathing down the neck of the developer. No surprise there.

Further, the rep says that the code words for buyers and their offers are "yes," and "Whatever it takes." That's what we like to hear!

Other news from this rep: the development is almost 50% sold. No units can "go" FHA until the 50% mark is reached. And, I asked about a competing development, the lovely and talented Americana. Apparently, Big A is not giving out sales figures. To anybody. Period. No surprise there, either.

Outta town for a few...

There may be no posts here for a few days as I'm out of town.

Just goes to show...

...That if a nice home, in a nice neighborhood, with a nice price comes on the market, it will be snapped up quickly, even in this market. I'm talking about 1806 N. Richard in Burbank, pictured here. This house has 3 bedrooms, 2 baths, 1749 sf., a pool, and a music studio above the garage (about 400 additional feet). It has been well maintained and the kitchen and baths have been remodeled. But not with the highest-end finishes. It's in Jefferson school district. It listed on Tuesday for $695,000. The listing agent, who works in my office, tells me there are four offers in on it already, and at least one is over full price. She also tells me that all the would-be buyers are financially well-qualified. Dang. And I was going to show it to some motivated buyers this weekend, too.

Update 8/11/08: Here's another example of things going fast. 1535 Keystone went pending after 6 days on the market. I showed it when it had been on for 4 days and they already had two offers. It is 3 beds, 2 baths, 1354 square feet, with a fountain/grotto that you'd only see in Burbank that practically covered the entire yard. It was listed at $499k, which seems a little low, but a lot of the re-do was of questionable quality.

New restaurant news

I just learned that Barney's Beanery is coming to Burbank!

It will open in the new Loft Collection downtown. For those of you that might not know, Barney's is a legendary Hollywood bar and burger joint. Famous for its rowdy atmosphere in the 70's and 80's, it served lots of imported beers and great hamburgers. Unfortunately, in those days it also had matchbooks printed with the message, "Faggots Stay Out." Those are long gone, thankfully. It will be interesting to see how this works out here.