Archive for July, 2009

Home sales increased 20.1 percent in June in California compared with the same period a year ago, while the median price of an existing home declined 26.4 percent, the CALIFORNIA ASSOCIATION OF REALTORS (C.A.R.) this week.

“Many first-time buyers, especially those who were previously priced out of certain areas, are realizing that tax credits from both the state and federal governments, increased affordability, and low interest rates are creating a prime time to purchase a home,” said C.A.R. President James Liptak.  “June marked the 10th consecutive month of positive sales gains, and the fourth month of rising median home prices.

Quick Facts:

• Existing, single-family home sales increased 20.1 percent in June to a seasonally adjusted rate of 514,110 on an annualized basis.

• The statewide median price of an existing single-family home increased 4.2 percent in June to $274,740, compared with May 2009.

• C.A.R.’s Unsold Inventory Index fell to 4.1 months in June, compared with 7.6 months in June 2008.

“The statewide median price for existing condos increased for the third consecutive month in June, while sales climbed 27 percent compared with last year,” said Liptak.  “Both of these trends are indicative of increased interest in condos on the part of first-time and other buyers.”

Closed escrow sales of existing, single-family detached homes in California totaled 514,110 in June at a seasonally adjusted annualized rate, according to information collected by C.A.R. from more than 90 local REALTOR® associations statewide. Statewide home resale activity increased 20.1 percent from the revised 427,910 sales pace recorded in June 2008. Sales in June 2009 decreased 6 percent compared with the previous month.

The statewide sales figure represents what the total number of homes sold during 2009 would be if sales maintained the June pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

The median price of an existing, single-family detached home in California during June 2009 was $274,740, a 26.4 percent decrease from the revised $373,100 median for June 2008, C.A.R. reported. The June 2009 median price rose 4.2 percent compared with May’s $263,600 median price.

“Shrinking inventory in the lower end of the market is impacting prices, as many distressed properties are receiving multiple bids,” said C.A.R. Chief Economist Leslie Appleton-Young.  “The year-to-year price declines are diminishing, and are at the lowest level since March 2008.

“Although another surge of foreclosures is expected later this year, demand remains strong, so the market may be able to absorb more distressed properties without significantly impacting the median price,” said Appleton-Young.

Highlights of C.A.R.’s resale housing figures for June 2009:

• C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in June 2009 was 4.1 months, compared with 7.6 months (revised) for the same period a year ago. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.

• Thirty-year fixed-mortgage interest rates averaged 5.42 percent during June 2009, compared with 6.32 percent in June 2008, according to Freddie Mac. Adjustable-mortgage interest rates averaged 4.93 percent in June 2009, compared with 5.15 percent in June 2008.

• The median number of days it took to sell a single-family home was 44.3 days in June 2009, compared with 49 days (revised) for the same period a year ago.

• Statewide, the 10 cities with the highest median home prices in California during June 2009 were: Beverly Hills, $1,775,000; Manhattan Beach, $1,475,000; Burlingame, $1,475,000; Los Altos, $1,398,000; Saratoga, $1,375,000; Laguna Beach, $1,265,000; Palo Alto, $1,192,000; Santa Monica, $1,022,000; Cupertino, $1,020,000; Mill Valley, $1,009,000; and Los Gatos, $857,500.

• Statewide, the cities with the greatest median home price increases in June 2009 compared with the same period a year ago were:  Laguna Hills, 20.6 percent; Diamond Bar, 6.2 percent; Santa Monica, 5.9 percent; Upland, 5.7 percent; Thousand Oaks, 4.7 percent; Placentia, 2.9 percent; Big Bear Lake, 2.5 percent; Lake Forest, 2.4 percent; Walnut, 2.1 percent; and Dana Point, 1.4 percent.

There was an important piece of economic news last week that has HUGE significance for real estate and housing, but it got minimal coverage on TV and in print.

The Conference Board’s Index of Leading Economic Indicators, widely acknowledged as the most accurate predictor of future activity and output in the U.S. economy, rose by almost a point in June.

That was the third straight month of positive growth. But more importantly, it was the first time since 2004 that the index has increased for three consecutive months.

That’s crucial for real estate because housing sales, production and prices are closely tied to movements in the overall economy: jobs, manufacturing, exports, household incomes and the like.

There’s no way we’re going to see a sizable housing recovery until the economy pulls itself out of recession and starts to grow again.

The index of leading indicators is clearly telling us that that process is well underway — and that’s a very encouraging message.

Federal Reserve Chairman Ben Bernanke, in testimony before Congress last week, pretty much said the same: A modest recovery is not far off, he said, though it will take a long time to get unemployment levels back down to pre-recession levels.

Meanwhile, residential real estate continues to put up impressive numbers on the tote board:

New single family housing starts in June rose by 14.4 percent — the fourth straight month of increasing activity by home builders, who’d previously shut down construction because they hadn’t sold off their inventories. And they were afraid consumers wouldn’t pay the prices they need to charge.

Those worries are over. Total starts in New England were up by 29 percent and in the Midwest by 33 percent. Builders report seeing much more traffic at their subdivision showrooms, far lower fallout on contracts, and rising sales.

Sales of existing homes were up in many areas for the month as well – rising by 3.6 percent nationwide in June, according to the National Association of Realtors. Lawrence Yun, chief economist for the association, commented that “we expect (this) gradual uptrend in sales to continue” thanks to the $8,000 home buyer credit, favorable mortgage rates and low prices.

New mortgage applications to buy houses continued to increase last week, according to the Mortgage Bankers Association, even though rates edged slightly higher. Thirty-year fixed rates averaged 5.3 percent and 15-year rates averaged 4.8 percent for the week, both up by two-tenths of a percentage point.

All in all, the numbers are looking better and better.

Published: July 28, 2009 from Realty Times

The Valerie Fitzgerald Group specializes in luxury residential real estate in Beverly Hills, Bel Air, Brentwood, Santa Monica and Malibu. Valerie Fitgerald has more than 20 years of real estate experience and is known for her solid reputation in the West Los Angeles brokerage community. She’s also the author of Heart and Sold: How to Survive and Build a Recession-Proof Business. Find it at Amazon.com.

Homebuyers across the Western U.S., many convinced home prices are close to the bottom, helped fuel a 15 percent annual increase in the region’s home sales in June, according to two reports released Thursday.

Fire-sale prices on foreclosures and other distressed properties lured many buyers, particularly in California, Nevada and Phoenix. Those sales also dragged down the median home sales price in the 13-state region. It tumbled nearly 25 percent from June of last year to $214,800, the National Association of Realtors said.

That was the biggest median price decline in any region and helped pull the national median down about 15 percent from year-ago levels to $181,800. Nationally, sales rose 4 percent, without adjusting for seasonal factors. But more importantly, sales posted their third monthly increase, indicating the housing market has turned the corner and is recovering.

Leonard Baron, a real estate professor at San Diego State University, said for homes in the lower end of the market at least, where many properties are getting multiple bids, ”we’ve hit a floor.” But the same is not true of homes above the median price.

”For higher-dollar properties, it’s harder to tell,” Baron said.

The turnaround in the West, has also been geographically uneven.

Las Vegas, Phoenix, Los Angeles, San Francisco, San Diego and Boise, Idaho, were the only major metros in the West to register an increase in home sales last month, according to The Associated Press-Re/Max Monthly Housing Report, released Thursday.

”Interest rates are very favorable, so I’ve had a lot of people looking and getting off the fence,” said Laura Zajdman, a ZipRealty agent in Los Angeles.

Elsewhere in the West, home sales fell last month in Anchorage, Alaska, Denver, Albuquerque, N.M., Billings, Mont., Honolulu, Portland, Ore., and Seattle, according to the report, which tallies all home sales in the metropolitan statistical area by all real estate agents, regardless of company affiliation.

The demand for bargain-priced properties has created a traffic jam of buyers for lenders trying to unload homes. Often, banks are fielding multiple offers for a single property and buyers are finding themselves forced to put in bids higher than asking price — a market dynamic not seen since the heady days of the housing boom.

”There’s an extreme amount of multiple offers on those (bank-owned) properties,” said Mike West, broker-owner of Century 21 MoneyWorld in Las Vegas. ”A decent property, within days on the market, could literally have 10 to 20 offers.”

Those bidding wars are correcting the oversupply of homes on the market. The inventory of homes for sale was down by 25 percent or more from year-ago levels in Las Vegas, Los Angeles, San Francisco, San Diego, Phoenix and Portland, Ore., according to the AP-Re/Max report.

Sellers who are not facing foreclosure are under pressure to lower prices to compete with the distressed homes on the market. Rather than do so, however, many are opting to rent out their home in hopes of waiting out the landslide in housing values.

”They realize they’re not going to be able to make a significant profit on the property” if they sell now, said Rick Cheever, broker-owner of Century 21 Performance in the Denver suburb of Castle Rock.

”There’s a glut of rental property on the market right now because so many sellers have opted to consider renting the process rather than selling them,” he added.

Cheever said his homebuyer traffic rose in June but has begun to ease this month as interest rates have crept higher.

Home sales in Denver tumbled 18 percent last month from June 2008, according to the AP/Re-Max report.

Real estate agents also are seeing more buyers pay cash or make down payments in the 30 percent range.

And not all are professional investors.

Many are people who are seeking alternatives to the stock market or retirement plans for their money. In some cities, rental income, after expenses and taxes, can provide a better return than a savings account.

That kind of thinking prompted Mira Kubiak, 57, to pay cash for the three-bedroom, two and a half-bath town house she bought a few weeks ago in northern San Diego County.

The former mechanical engineer opted not to finance the $280,000 purchase because it made no sense to her to get a mortgage and leave the rest in a risky investment or a savings account offering a paltry return.

”I thought the prices had bottomed out or they were close to the bottom,” Kubiak said.

From the New York Times

The Valerie Fitzgerald Group specializes in luxury residential real estate in Beverly Hills, Bel Air, Brentwood, Santa Monica and Malibu. Valerie Fitgerald has more than 20 years of real estate experience and is known for her solid reputation in the West Los Angeles brokerage community. She’s also the author of Heart and Sold: How to Survive and Build a Recession-Proof Business. Find it at Amazon.com.

The 30 year fixed mortgage rate is hanging tough at 5% and in some cases being advertised below that.

New data released in the past 24 hours suggests that the nation’s housing market is stabilizing. This wasn’t supposed to happen so fast. The median US  home price increased slightly in May for the first time in over 10 months.

Southern California in particular is showing promising signs of life. In June the median home price in LA, Orange, and San Diego Counties, some of the hardest hit by foreclosure rose significantly. Orange County’s median home price was up to $320,000 in June from $300,000 in May. Less than half of  all Los Angeles home sales were on foreclosed properties. Keep in mind a large percentage of the nation’s foreclosures are right here in California.

What does this great news mean for mortgage lending? Mortgage rates?

Many people forget the basics when it comes to the housing market and mortgage lending. What takes most of the risk out of mortgage debt is the fact the debt is backed by a home. When the home isn’t a stable collateral for the loan it only makes sense it’s harder to get approved and higher interest rates are dealt to cover the higher risk.

With a stabilization, or if you’re skeptical a slowdown in home price declines mortgage lending can finally stabilize as well. Credit will begin to flow more freely as the risk involved reduces. If good news in housing continues look for even lower mortgage rates especially lower jumbo mortgage rates and a loosening in the credit markets as it’s only natural as loans become much safer investments for banks.

Don’t expect any of this to happen right away. Most are skeptical with reason that a new wave of foreclosure could put out the fire in the housing market. Either way, these signs of housing stabilization are great for mortgage rates, lending, housing, and the economy as a whole. Today the DOW broke 9,000 for the first time since January.

From Examiner.com

The Valerie Fitzgerald Group specializes in luxury residential real estate in Beverly Hills, Bel Air, Brentwood, Santa Monica and Malibu. Valerie Fitgerald has more than 20 years of real estate experience and is known for her solid reputation in the West Los Angeles brokerage community. She’s also the author of Heart and Sold: How to Survive and Build a Recession-Proof Business. Find it at Amazon.com.

New buildings in Los Angeles will be required to have low-flow faucets, toilets, urinals, shower heads and other plumbing devices under a law passed today by the City Council.

Every drop counts. Be water wise.

Officials with the Department of Water and Power said the water conservation ordinance, which is part of the city’s Green Building program, would reduce water consumption in new buildings by 20%. The measure would help building owners save money as well, said Council President Eric Garcetti.

“A waterless urinal gives you a return on your investment in the same year that it is purchased,” he said.

Water-efficient devices also will be required when property owners upgrade their plumbing fixtures, city officials said. As more fixtures are installed, “water conservation will become a way of life without people even having to think about it,” said DWP General Manager H. David Nahai.

The ordinance passed by a 13-0 vote.

From LA Times: — David Zahniser at L.A. City Hall

The Valerie Fitzgerald Group specializes in luxury residential real estate in Beverly Hills, Bel Air, Brentwood, Santa Monica and Malibu. Valerie Fitgerald has more than 20 years of real estate experience and is known for her solid reputation in the West Los Angeles brokerage community. She’s also the author of Heart and Sold: How to Survive and Build a Recession-Proof Business. Find it at Amazon.com.