11438 Moorpark Street. Unit 3
Studio City, CA
Was : N/A Now: $479,500
-1441 Sq.ft
-3 Bedrooms/ 3 bathrooms
MLS# B2101952 (Cut and Paste the MLS # into the Redfin search box)
4216 Ethel Ave, Unit 9
Studio City, CA
Was: N/A Now: $529,000
-1174 Sq.Ft
-2 Bedrooms / 1.5 Baths
-Very up-graded
MLS# F1750127 (Cut and Paste the MLS # into the Redfin search box)
It is being discussed that when The President makes his State of The Union address next week, he will ask Congress to vote on increasing the maximum level on conforming loans. The current level is right now, $417,000. According to this news story I am supplying, it might be raised to $625,000. This will mean that a borrower will be able to borrow money for a home loan at a $625,000 amount or lower, and pay the current favorable rates we now are seeing on fixed rates. In my opinion, this is huge. This could change the housing industry here in California by making home loans more affordable to borrowers and significantly reduce the foreclosure rate. Here is the news story for you to read:
WASHINGTON, D.C. - The National Association of Realtors® urged President George W. Bush and Congress to help homeowners and the national economy by loosening constraints on Fannie Mae and Freddie Mac as an integral part of a federal stimulus package.
“We believe that any stimulus package must address housing issues and increasing the conforming loan limits for these two government-sponsored enterprises,” said NAR President Dick Gaylor, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif. “The increase in loan limits would not only improve liquidity in the mortgage marketplace, but also boost homebuyers’ confidence levels, resulting in increased sales and economic activity.”
NAR has been calling on Congress and the administration to increase the loan limits for Fannie Mae and Freddie Mac from the current ceiling of $417,000 to $625,000. “This change will permit more families to enter the housing market by making more mortgages available with lower interest rates. Increased home sales will lower inventories and immediately start stabilizing the housing market and the economy,” Gaylord said.
In addition, NAR has been actively advocating for quick passage of the Federal Housing Administration Reform bill. A reformed, modernized FHA program would offer a safe and affordable alternative to subprime mortgages, which are widely blamed for the current high rate of foreclosures and credit crunch. “FHA reform would not only ensure we don’t find ourselves in this very unfortunate situation again, but also it can help many families currently facing foreclosure,” said Gaylord.
In a letter to congressional leaders, NAR estimated that lifting the GSE loan limit to $625,000 would lower interest payments for consumers who get new “GSE jumbo” loans, reduce the supply of homes on the market by one to one-and-one-half months, strengthen home prices by two to three percentage points, and increase economic activity by $42 billion. An additional NAR report shows that increasing conforming loan limits could help reduce foreclosures by 140,000 to 210,000 and result in an additional 348,000 home sales.
“This is the quickest way to help the hurting housing market,” said Gaylord. “As the potential for an economic recession increases and the fragile housing market continues to teeter, raising loan limits and reforming FHA would immediately impact the marketplace without the need for any new, complex federal programs or tax dollars. We strongly urge Congress to take these actions, in any stimulus plan, to stabilize the housing market and protect homeowners.”
Found this news story online and felt the need to share it with my readers. I know it will generate a lot of comments. It’s by David Stretifeld of The New York Times.
Marty Ummel feels she paid too much for her house. So do millions of other people who bought at the peak of the housing boom. What makes Ummel different is that she is suing her agent, saying it was all his fault.
Ummel claims that the agent hid information that similar homes in the neighborhood were selling for less because he feared she would back out and he would lose his $30,000 commission.
Real estate lawyers and brokers say the case, which goes to trial in North County Superior Court on Monday, is likely to be the first of many in which regretful buyers seek redress from agents.
“When your house appreciates $100,000 in the first six months, you’re not quite as concerned that maybe the valuation was $25,000 or $50,000 off,” said Clifford Horner of the law firm Horner & Singer. “But when your house goes down, you ask: ‘Who might have led me astray here?’ ”
Agents representing buyers rarely had the opportunity to make mistakes during the last real estate boom, in the late 1980s, because the job hardly existed then. For decades, residential transactions almost always involved brokers who legally represented the seller.
The long boom that began in the late 1990s put an end to that one-sided world. As prices spiked, buyer’s agents and brokers became popular. The National Association of Realtors estimates they are now involved in two-thirds of all residential purchases.
That makes this the first housing collapse in which large numbers of buyers had a real estate professional explicitly looking after their interests. The Ummel case poses the question: In a relationship built on trust, where promises are rarely written down and where — as in this case — there is no signed contract, what are the exact obligations of these representatives?
The defendant in the Ummel case is Mike Little, a veteran agent with ReMax Associates. He will argue that Marty Ummel, who brought the case with her husband, Vernon, is trying to shift the blame for the couple’s own failures of research and due diligence.
“They simply didn’t do what is expected of a knowledgeable, sophisticated buyer, and are now looking for someone other than themselves to take responsibility,” Roger Holtsclaw, an agent who was hired by Little as an expert witness, said in a deposition.
Because Short Pays/Sort Sales and Foreclosures seems to be the only homes selling right now in this market, here are some listings for you to check out during this long weekend.
These are all Single Family Homes and in the Sherman Oaks area…
4738 Tobias,
Sherman Oaks.
Previous List Price: $970,000 Now $825,000
-1913 Sq.ft
-7800 Sq.ft lot size
-3 Bed/ 3Bath
MLS# S498304 (Cut and Paste the MLS # into the Redfin search box)
4707 Katherine Ave
Sherman Oaks.
Previous List Price: $899,000 Now $799,000
-2210 Sq.ft
-12,750 Sq.ft lot size
-3 Bed/ 4 Bath
MLS# F1734243 (Cut and Paste the MLS # into the Redfin search box)
14004 Chandler Blvd
Sherman Oaks.
Previous List Price: N/A Now $749,000
-2233 Sq.ft
-6377 Sq.ft lot size
-4 Bed / 3 Bath
MLS # F1747283 (Cut and Paste the MLS # into the Redfin search box)
Happy House Hunting….
I was reading an article today on AOL news about the impact the ARM (The Adjustable Rate Mortgage) has had on today’s real estate market:
“10 U.S. states had the highest share of outstanding adjustable-rate mortgages in the third quarter of 2007. The share of adjustable-rate mortgages in the 2007 third quarter was provided by the Mortgage Bankers Association. The foreclosure rate for November 2007, was supplied by RealtyTrac. The average credit scores for November, 2007, came from NationalScoreIndex.com operated by Experian Consumer Direct. The average credit score for the U.S. is 693. Any score at or below 620 is considered subprime.”
Of course California was up there due to escalating home prices where many home buyers had to look to the ARM to find a mortgage that gave them an affordable monthly payment. Many adjustable mortgages started off with a teaser rate or was locked into a fixed rate for short period of time. Then once that time expired, the adjustable rate started to climb.
Areas of great speculation (investor driven), is where the highest rate of short sales and foreclosures are noted. Everyone was depending on the market to keep climbing to generate equity for those doing a 100% financing.
The ARM has it’s place and works well for some people. But too many used it just to get into a house.
Many of you know who live in the Los Angeles area, it’s made up of several neighborhoods or un-official cities, such as Studio City, Sherman Oaks, North Hollywood; All of these places are part of the greater city of Los Angeles. One of the un-official cities that I want to spend some time on is Van Nuys. In February 2007, what was known as West Van Nuys (the area west of the 405 freeway), became part of the growing area of Lake Balboa. So I thought I would do a Comparative Market Analysis to see if there is any indicator of property value difference between East Van Nuys and West Van Nuys (now Lake Balboa).
The parameters I used were single-family homes, with a gross living area range of 1300-1600sq.ft, three bedrooms, for the past year.
East Van Nuys (the area east of the 405 freeway) shows to have 29 active listings with an average list price of $533,000. According to my CMA data report, there have been 39 single family homes sold over the past year with an average selling price of $549,000
Then I looked at West Van Nuys combined with Lake Balboa for the past year. There are currently 38 active listings with an average listing price of $485,000. There were 46 sales over the past year showing an average selling price of $536,000.
According to this data, East Van Nuys is selling for more than West Van Nuys/ Lake Balboa. The reason why many West Van Nuys homeowners wanted to re-name their neighborhood (to Lake Balboa) was to increase property values. It will be interesting to see, now that the west section of Van Nuys is a part of Lake Balboa, if property values will start to grow past East Van Nuys.
I ran a CMA on the MLS for attached condos in Northridge, for the past year, 1200-1500 sq/ft , and with 3 bedrooms.
Here’s what I found.
The average listing price is: $400,000
The average sold price is: $435,000
This data is showing a $35,000 drop in values (list to sold). Usually listings are priced higher than selling prices.
I ran a CMA on the MLS for attached condos in Burbank, for the past year, 1200-1500 sq/ft , and with 3 bedrooms.
Here’s what I found.
The average listing price is: $545,000
The average sold price is: $570,000
This data is showing a $25,000 drop in values (list to sold). Usually listings are priced higher than selling prices.
One of my customers recently asked me if there is a significant value difference for a condo with 2 bedrooms vs. a condo with 3 bedrooms in Valencia.
His condo is a significant size, almost 1600 sq.ft, but has 2 bedrooms. Here’s the data I pulled from the MLS over the past year:
There were 22 condo sales in the Valencia area with similar characteristics as the subject. The average selling price was $436,000.
When I pulled the data using the same parameters, except searching for 3 bedrooms only, there were 32 condos sold with the average selling price at $500,000.
Now I am not saying that the value of an extra bedroom is $64,000, but the marketability of a 3 bedroom is greater than a 2 bedroom. The value will differ from neighborhood to neighborhood.
To figure out the true value of a 3rd bedroom, appraisers use a similar process called match pair analysis. We would look at what a 2 bedroom recently sold in the subject’s complex and see what a 3 bedroom sold for; Subtract the difference. Then look at competing tracts/ other condo complexes and arrive at a good estimate for the value to use in the report.
I was reading a MLS web news letter and found this article that I do agree with. It is written by real estate agent Paul Pastore. I thought I would share it with you:
1. Selection, selection, selection. Regardless of the price range a buyer desires, there are plenty of houses from which to choose. Just a few years ago the resale inventory dropped below 5,000 units. A buyer was forced to make compromises if they were going to locate the home of their dreams. There is a great selection of attached homes, condos, and townhouses. You can find large lots, small lots, and a lot that will accommodate your boat or RV. There are lots of options in this market.
2. No Bidding Wars. In 2005 we had one client that made an offer on ten homes. They lost the first nine to the ‘feeding frenzy’ that existed. Other buyers bid the properties up substantially from the original listing price. There were escalation clauses where buyers authorized their agents to outbid other offers by thousands of dollars. There is no competitive bidding in this buyer’s market.
3. You can make an offer. A few years ago when you made an offer, the only question was how high above the list price could the buyer reach in hopes of being the best offer on the table. Today the sell price list vs. price ration is about 96%. A seller will not be insulted if you ‘make them an offer they can’t refuse’.
4. Patience is tolerated. In the hot seller’s market that existed everything was rushed. Find a house before other buyers did. Hurry up and make the offer. Today a buyer can take their time. Look at several homes and think about your decision for a few hours.
5. Due diligence is welcomed. In this market a buyer is encouraged to obtain a home inspection, termite inspection, and appraisal. In 2005 many buyers waived these contingencies in order gain an advantage with multiple offers.
6. There are plenty of specs. In the not too distant past buyer had to ‘play games’ if they wanted a new home. There were lotteries and waiting lists in order to obtain new construction. Some buyers slept in their cars in order to get to the head of the lines. R.L. Brown estimates that builders have thousands of specs ready for immediate occupancy.
7. Repair requests are welcomed. After a buyer completes a home inspection, they are allowed to submit a repair request to the seller. In the past a seller might insist the home was sold ‘as is’. Many times, there were back-up buyers waiting for a primary buyer to upset the seller whose home was increasing in value almost daily.
8. Few, if any investors. It is estimated that one third of all sales in 2005 were to investors. These non-owner occupied buyer caused the market to inflate and affordability to decline. Mortgage fraud became commonplace. It’s a great time to buy without having to compete with hundreds of prospective landlords.
9. Location, location, location. Today’s buyers can find homes closer to work. In the past buyers flocked to the “exurbs” in order to find affordable homes. In this market, reasonably priced homes are within biking or walking distance to schools, rapid transit lines, and relatives.
10. Real Financing is available. The ‘wink, wink’ zero down, no doc, adjustable, sub-prime loans are gone. Fixed rates are back. FHA financing, first time homeowner bond programs, special loans for teachers, and police officers are back in business. It’s a great time to buy real estate!
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