Southern California Real Estate Blog - South Bay Area

Are the Holidays a Good Time to Sell?

2011-12-05T09:49:00.000-08:00

Sixty percent of real estate professionals advise their sellers to list a home during the holidays because it’s a good time to sell, according to a new survey conducted by Realtor.com.

Why are the holidays such a good time to sell? Seventy-nine percent of the agents surveyed said that more serious buyers come out during the holidays, and 61 percent say less competition from other properties make it a great time to sell. Plus, 17 percent of agents say the cold weather is actually a benefit, making homes feel more cozy.

But online listing photos become even more crucial during the holiday season, according to the survey. Slightly more than half of agents say that the photos are more important because sellers tend to offer less open houses around the holidays, and so the online photos help buyers decide the properties to see and which ones to possibly bypass.

The biggest hurdles sellers face during the holidays, however, are keeping a home ready to show (clean and staged) as well as winter weather conditions and buyers’ vacation schedules, the Realtor.com survey found.

Source: Realtor.com (Dec. 2, 2011)

Stronger Lure for Prospective Home Buyers

2011-11-28T08:26:00.000-08:00

Home prices and mortgage rates have fallen so far that the monthly cost of owning a home is more affordable than at any point in the past 15 years and is less expensive than renting in a growing number of cities...
WSJ
see more...

4.5 million foreclosed borrowers may be eligible for reviews

2011-11-01T13:55:00.000-07:00

Nearly 4.5 million current and former U.S. homeowners will soon get a chance to have their foreclosure cases reviewed for mistakes and potential restitution.

Next month, the U.S. government expects the first wave of homeowners to receive its letters in the mail, informing them of their right to ask for a foreclosure review, says Office of the Comptroller spokesman Bryan Hubbard.
Last month, independent consultants hired by lenders also began combing industry data to look for mistakes in foreclosure cases handled by 14 of the nation's largest mortgage servicers: Bank of America, Citibank, JPMorgan Chase, Wells Fargo, Ally Financial, Aurora Bank, EverBank Financial, HSBC, MetLife, OneWest, PNC, Sovereign Bank, SunTrust Banks and U.S. Bancorp.

Reviews will take months to complete. The first consumers could see cases resolved this spring, according to deadlines imposed on the servicers.

Remedies will vary based on the degree of injury, said John Walsh, acting Comptroller of the Currency, in a speech last month.

The reviews cover homeowners in any stage of the foreclosure process on a primary home in 2009 or 2010. Anyone who meets that requirement — and was a customer of one of the 14 servicers — will get a review if they ask. The servicers include Bank of America, Citibank, JPMorgan Chase and Wells Fargo.

The reviews were ordered as part of federal enforcement actions announced in April after a federal investigation last year found "significant weaknesses" in mortgage servicer practices.

The actions include requirements that servicers change some foreclosure practices, such as giving distressed borrowers a single point of contact. But the foreclosure reviews are the "most ambitious and complex" aspect of the action, Walsh said.

The OCC, along with the Federal Reserve, will oversee the reviews.

Whether homeowners were wronged will be decided by independent consultants hired by the servicers but approved by regulators.

The consultants will also decide remedies, which will be spot-checked by regulators. Regulators have also instructed the consultants what errors to seek.

No estimate of cost to servicers has been provided.

One company will process claims and provide one website and telephone number for consumers wanting reviews, the OCC says. The information will be in the consumer letters.

The OCC hasn't released the names of the independent consultants. That is under consideration, Hubbard says.

Consumer advocates say more information, including the names of the consultants doing the reviews and exactly how the reviews will be done, needs to be public to assure fairness and thoroughness.

"The process does seem ambitious," says Alys Cohen, attorney of the National Consumer Law Center. "But we have a lot of questions."

Restitution could be required for a broad range of issues, including if homeowners:

•Paid impermissible fees or penalties.

•Paid too much or had payments misapplied.

•Were wrongly denied loan modifications.

•Were wrongly foreclosed upon.
--USA Today

Luxurious Bathrooms Don’t Always Need a Fancy Tub

2011-10-12T09:46:00.000-07:00

Home owners may be starting to rethink what all makes up a luxurious, spa-like bathroom. Whirlpool tubs for several years have been on the wish-lists of many home buyers, but now some buyers are starting to show a change in preferences, swapping larger showers or extra storage space for that oversized bathtub or whirlpool, some designers say....

Goodbye Whirlpool Tub; Hello Luxury Shower.
REALTOR® Magazine

Open House today in Redondo Beach

2011-10-01T12:16:00.001-07:00

Come and see this beautiful new residential investment property (Duplex) open today and tomorrow from 1 - 4pm.
http://412AveF.com
Front unit is almost 3100sf with 5 BR and 3.75 BA. Rear unit is almost 1800sf with 4 BR and 3 BA. Will not last!

Duplex For Sale in South Redondo Beach, California

2011-08-24T12:55:00.000-07:00

Brand New Duplex located walking distance to the Riviera Village, Beach and Schools. The front unit is approx. 3078 SqFt with 5 Bedrooms, 4 Baths and the Rear unit is approx. 1782 SqFt. with 4 Bedrooms, 3 Baths. Spanish tile roof, Forced Air Heating, Air Conditioned, Tankless water heaters, Central Vacuum, Floors are tile and wood.

Housing Slump? Not in These Markets!

2011-08-24T12:41:00.001-07:00

Home prices may be sluggish in some areas of the country but not every city is seeing a sag in prices. California cities overwhelmingly dominated the list of priciest median home prices, based off CNNMoney’s “Best Places” list. Here are the top 10 cities that made the list, factoring in the highest median home prices from 2010.
1. Hillsborough, Calif.: $2,277,500
2. Los Altos Hills, Calif.: $2,273,250
3. Montecito, Calif.: $1,864,000
4. Beverly Hills, Calif.: $1,595,000
5. San Marino, Calif.: $1,560,000
6. Tiburon, Calif.: $1,425,000
7. Los Altos, Calif.: $1,422,500
8. Manhattan Beach, Calif.: $1,360,000
9. Saratoga, Calif.: $1,349,000
10. Palos Verdes Estates, Calif.: $1,339,927

Source: “Best Places to Live 2011: Top 25 Pricey Homes,” CNNMoney (August 2011)

Gen Y to Lead 'Massive Increase in Housing Demand

2011-07-20T09:31:00.000-07:00

Watch out for Generation Y: This large, diverse, well-educated generation will drive the housing market recovery over the next 10 years, according to the University of Southern California Lusk Center for Real Estate.

Source: “USC Lusk Center Says More Educated, Diverse Generation to Drive Real Estate Recovery,” The Hoyt Organization (July 19, 2011)

Housing Shortage Is Likely Coming, Report Says

2011-06-08T11:14:00.000-07:00

Within the next decade, 16 million new housing units will be needed to meet population growth and shifting demands, according to Harvard University’s Joint Center for Housing Studies in its latest annual "State of the Nation's Housing" report.

That means household growth, which has dropped drastically in recent years, will need to greatly reverse its trend to meet the forecasted spike in demand. From 2007-2010, household growth averaged about 500,000 per year--less than half the 1.2 million annual pace averaged prior from 2000-2007.

To absorb the current rate of foreclosed and distressed homes plaguing most markets, a more normal rate of household formation is critical, according to the report. However, household growth partially has stalled as young adults have delayed home ownership and immigration has slowed.

As such, in recent years, builders have drastically cut production of new homes.

"With inventories of new homes at historic lows, a turnaround in demand could quickly result in tighter markets," the report notes. "Over the longer term, the number of younger households is set to rise sharply, supporting growth in the population that fuels growth in both new renters and first-time buyers. The path of the economy and evolution of the mortgage market will determine when and if this increased demand materializes."

The report predicts a need for greater housing units for several reasons. For example, the report projects demand for 1 million new homes a year is needed to meet population growth in the coming decade. The report also predicts a surge in smaller homes, estimating that 3.8 million baby boomers will be looking to downsize their homes within the next decade. Also in adding to the increase in housing units needed, Immigration growth, the need to replace existing homes, and demand for second homes will contribute to rising demand, the report notes. Therefore, researchers conclude at least 16 million new housing units will be needed over the next decade.

Source: “Harvard: Real Estate Recovery Hinges on Return of Demand,” Inman News (June 6, 2011)

Bailing on Mortgage Not a Good Idea

2011-05-02T11:14:00.001-07:00

An estimated 11 million home owners owe more on their mortgage than their property is currently worth. That’s made more home owners consider walking away from their mortgage and home ownership, even those who can still comfortably afford to make their payments (known as “strategic default”).

Walking away from a mortgage usually results in either a short sale or foreclosure. So what are the consequences of walking away? There may be far more consequences than what most home owners ever considered.

The consequences include everything from badly affected credit to potential tax consequences and deficiency risks. There are even possible professional implications, Justin McHood with Academy Mortgage in Chandler, Ariz., warns in an article at Zillow.com.

Home owners' credit scores will be badly hit regardless of whether they attempt a short sale or have their property foreclosed on. (See How Missed Mortgage Payments Hurt Credit Scores)

There also could be the potential for deficiency risks when walking away from a home, which largely varies from state to state. (View anti-deficiency laws by state.) In some states, lenders may sue you for the difference between what you owe and what your short-sale or foreclosure proceeds are, McHood notes.

Home owners considering walking away also should weigh the potential difficulty they may face from moving too. For example, if moving into a rental property, they’ll have to convince a landlord to rent to them after they have the red flag of missed mortgage payments on their credit record. And paying for moving expenses — which many walkaways fail to consider — can quickly add up too.

Plus, home owners may find professional consequences from walking away from a mortgage, as the number of employers eyeing employees’ credit profiles continues to grow.

Source: “The Consequence of Walking Away,” Zillow.com (April 27, 2011)

Buyers Ready to Snatch Bargains This Spring

2011-03-22T12:33:00.001-07:00

Bargain prices on housing combined with low interest rates below 5 percent may bring the real estate market its busiest spring season in years, economists say.

Distressed sales continue to put downward pressure on home prices, which may lure more buyers off the fence and ready to snag a deal during the typical prime-time buying season.

Some builders are ramping up discounts on new homes as well as boosting commissions to brokers to try to spark more transactions.

Sellers of existing-homes also are getting more competitive in pricing their homes.

"After three years of the housing downturn, people are becoming much more realistic in terms of valuing their homes," says Lawrence Yun, chief economist at the National Association of REALTORS®.

An improved job market with better income potential may also motivate more people to buy, says David Berson of the PMI Group.

“Household formations are also very important," Berson says. "Kids may have moved back in with their parents, or two people may have moved in together, because of job concerns. Now they can move into their own place."

While interest rates are sitting comfortably below 5 percent for now (30-year fixed rates averaged 4.76 percent last week), economists warn the attractive low rates won’t last long.

"Few think mortgage rates are going lower," says Mark Zandi, Moody's Analytics chief economist. "It's more likely they will be 6 percent than 4 percent next spring. This lights a fire under buyers."

Source: “Discounts Expected in Spring Housing Market,” The Wall Street Journal (March 22, 2011)

Sellers Need to Get Practical About Price

2011-03-02T23:42:00.000-08:00

Sellers whose homes have lingered on the market for months--or years, in some cases--are banking on this spring to turn the tide.

Foreclosures and short sales are still flooding the market, which means many sellers are still up against big inventories and some big bargains that may pull away buyers.

As such, more real estate pros say it’s time to have tough conversations with sellers about slashing their sales price of their home, particularly if it hasn’t garnered any traffic in recent months or years. After all, spring usually brings out more buyers, as home shoppers look to buy and move before the next school year.

"We have had a problem with sellers who are nostalgic for the way it was," says Ron Phipps, a Warwick, R.I., real estate professional and the president of the National Association of REALTORS®. He says what home owners could fetch for their home during the housing boom is not practical today. "You have to be where the market is, not where it was," Phipps says.

Phipps suggests encouraging sellers to check out the competition by visiting open houses or viewing online virtual tours of similar homes for sale to see how the seller’s house compares in price and appearance.

"You have to be very realistic about what is keeping your home from selling," Phipps says. "Sometimes it may actually be the person in the mirror, if your expectations are not realistic. Ultimately, there is a price at which all things sell."

Source: “Longtime Listings Try Again in Spring,” Associated Press (March 1, 2011)

Top 10 New Kitchen Trends in 2010

2011-02-25T09:53:00.000-08:00

More and more homeowners are remodeling and making the most of their space with these top 10 hot trends in the kitchen.

1. Kitchens are now featuring a “family room” feel with more seating and dining areas.

2. The most popular color choice for cabinets was white. It works well with almost any architectural style – traditional to contemporary.

3. Stainless steel appliances are still a big hit, especially the fingerprint-resistant steel finish.

4. More and more kitchens are featuring custom additions such as pizza-making stations, coffee bars and wine-tasting nooks.

5. Walk-in pantries are popular for families and allow for ample storage of surplus items and bulk purchase like paper towels and canned goods.

6. Tech-savvy kitchens are featuring more electronics, like wall-mounted televisions and built-in sound systems.

7.Eco-friendly kitchens boost water-conserving faucets, energy start appliances and eco-friend cabinetry.

8. Built-in appliances that look more like cabinets are popping up across the country.

9. Lighting can convert from well-lit workspace to dimly lit formal dinner with the flip of a switch. Recessed lighting combined with chandeliers will do the trick.

10. A save-and-splurge mentality helps keep remodelers on budget. Choose to splurge on appliances instead of countertops or a built-in wine rack instead of a porcelain sink.

Fed to Keep Buying Bonds

2011-01-27T17:53:00.000-08:00

Citing the slow pace of economic recovery and persistently high unemployment, the Federal Reserve on Jan. 26 unanimously decided to move forward with plans to purchase up to $600 billion in long-term Treasury bonds.

The central bank also reaffirmed its intent to keep short-term interests rates near zero for "an extended period." According to futures markets, investors believe the Fed will begin raising rates in the early part of next year.

Source: “Unanimous Fed Keeps Buying Bonds,” The Wall Street Journal, Sudeep Reddy (01/27/11)

'Secret' Way to Lower Mortgage Payments

2011-01-05T13:12:00.000-08:00

Home owners can trim their monthly payments by recasting or re-amortizing their loan without having to refinance... click link to learn more...

Welcoming in 2011 with advice...

2011-01-03T10:30:00.000-08:00

This will be an interesting year in Real Estate. If you plan on selling, I recommend you get your home on the market as soon as possible. I believe the banks will step up the forclosure process and many more listings will show up in February. The LA Times confirmed my feelings over the weekend. See it here

Also, interest rates are inching up. The higher they go the smaller the pool of buyer available and qualified. Call me to discuss in detail. Jack McSweeney / RE/MAX Execs 310 346-0391

New Listing with a unbelievable view!

2010-11-22T13:27:00.000-08:00

Beautiful custom home in Rancho Palos Verdes for sale. Built in 1992, this home is single level, 2421 sq.ft, 3 bedroom and 2 full baths. It has a very open floor plan. Call me to arrange an appointment to see in person.
Not on the (waiver) MLS. Call Jack at RE/MAX Palos Verdes.

South Bay trends / For sale-SOLD-Pending

2010-10-23T15:27:00.000-07:00

July Existing-Home Sales Fall, But Prices Rise

2010-08-24T13:14:00.000-07:00

Existing-home sales were sharply lower in July following expiration of the home buyer tax credit but home prices continued to gain, according to the National Association of REALTORS®.

Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums, and co-ops, dropped 27.2 percent to a seasonally adjusted annual rate of 3.83 million units in July from a downwardly revised 5.26 million in June, and are 25.5 percent below the 5.14 million-unit level in July 2009. Sales are at the lowest level since the total existing-home sales series launched in 1999, and single family sales – accounting for the bulk of transactions – are at the lowest level since May of 1995.

Lawrence Yun, NAR chief economist, said a soft sales pace likely will continue for a few additional months. “Consumers rationally jumped into the market before the deadline for the home buyer tax credit expired. Since May, after the deadline, contract signings have been notably lower and a pause period for home sales is likely to last through September,” he said. “However, given the rock-bottom mortgage interest rates and historically high housing affordability conditions, the pace of a sales recovery could pick up quickly, provided the economy consistently adds jobs.

“Even with sales pausing for a few months, annual sales are expected to reach 5 million in 2010 because of healthy activity in the first half of the year. To place in perspective, annual sales averaged 4.9 million in the past 20 years, and 4.4 million over the past 30 years,” Yun added.

Mortgage Rates Dip
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 4.56 percent in July from 4.74 percent in June; the rate was 5.22 percent in July 2009. Last week, Freddie Mac reported the 30-year fixed was down to 4.42 percent.

The national median existing-home price for all housing types was $182,600 in July, up 0.7 percent from a year ago. Distressed home sales are unchanged from June, accounting for 32 percent of transactions in July; they were 31 percent in July 2009.

“Thanks to the home buyer tax credit, home values have been stable for the past 18 months despite heavy job losses,” Yun said. “Over the short term, high supply in relation to demand clearly favors buyers. However, given that home values are back in line relative to income, and from very low new-home construction, there is not likely to be any measurable change in home prices going forward.”

Inventory Rises
Total housing inventory at the end of July increased 2.5 percent to 3.98 million existing homes available for sale, which represents a 12.5-month supply at the current sales pace, up from an 8.9-month supply in June. Raw unsold inventory is still 12.9 percent below the record of 4.58 million in July 2008.

NAR President Vicki Cox Golder said there are great opportunities now for buyers who weren’t able to take advantage of the tax credit. “Mortgage interest rates are at record lows, home prices have firmed and there is good selection of property in most areas, so buyers with good jobs and favorable credit ratings find themselves in a fortunate position,” she said.

A parallel NAR practitioner survey shows first-time buyers purchased 38 percent of homes in July, down from 43 percent in June. Investors accounted for 19 percent of sales in July, up from 13 percent in June; the balance were to repeat buyers. All-cash sales rose to 30 percent in July from 24 percent in June.

Breakdown of the Numbers
• Single-family home sales dropped 27.1 percent to a seasonally adjusted annual rate of 3.37 million in July from a pace of 4.62 million in June, and are 25.6 percent below the 4.53 million level in July 2009; they were the lowest since May 1995 when the sales rate was 3.34 million.
• The median existing single-family home price was $183,400 in July, which is 0.9 percent above a year ago.
• Single-family median existing-home prices were higher in 11 out of 19 metropolitan statistical areas reported in July in comparison with July 2009 (the price in one of 20 tracked markets was not available). However, existing single-family home sales fell in all 20 areas from a year ago.
• Existing condominium and co-op sales fell 28.1 percent to a seasonally adjusted annual rate of 460,000 in July from 640,000 in June, and are 24.0 percent below the 605,000-unit level in July 2009. The median existing condo price was $176,800 in July, down 1.7 percent from a year ago.

By Region
• Existing-home sales in the Northeast dropped 29.5 percent to an annual pace of 620,000 in July and are 30.3 percent lower than a year ago. The median price in the Northeast was $263,800, up 4.8 percent from July 2009.
• Existing-home sales in the Midwest fell 35.0 percent in July to a level of 800,000 and are 33.3 percent below July 2009. The median price in the Midwest was $151,600, down 2.8 percent from a year ago.
• In the South, existing-home sales dropped 22.6 percent to an annual pace of 1.54 million in July and are 19.8 percent below a year ago. The median price in the South was $156,300, down 3.3 percent from July 2009.
• Existing-home sales in the West fell 25.0 percent to an annual level of 870,000 in July and are 23.0 percent below a year ago. The median price in the West was $224,800, up 3.3 percent from July 2009.

Source: NAR

Three Reasons to Buy a Home Now

2010-08-19T14:17:00.000-07:00

Stocks are up 50 percent from the March 2009 bottom. Some commodities have risen dramatically. The only asset class left in the cellar is real estate, says Michael Murphy, editor of the New World Investor stock newsletter.

As a result, Murphy is advising investors to buy now for these three reasons:

• Desperate sellers: Both home owners and lenders are eager to unload a flood of foreclosed and underwater properties. Buyers with the patience to push through these complex deals can save a bundle.

• Little competition. Because most people don’t have what it takes to negotiate their way through short sales and REOs, patient investors are winners.

• Low rates. Mortgage rates are at their lowest level in 40 years. If you believe inflation is inevitable, lock in now.

Source: MarketWatch, Michael Murphy (08/19/2010)

Need an Experienced Agent??

2010-08-03T12:49:00.000-07:00

If you are looking to buy or sell real estate in Redondo Beach or anywhere in So. California, give me a call. I am with RE/MAX Palos Verdes Execs, the company with the most market share in the whole South Bay area from San Pedro to Beverly Hills! I have over 22 years of experience and can save you money. I have many references. Sellers: Please google my name: Jack McSweeney, and see the exposure I can get you on the internet. If you are a buyer, I hear about properties not on the MLS all the time or you can see properties on the MLS at http://SoBayCalMLS.com . Also see my main webpage at http://JackMcSweeney.com . I am here to help you. Call me now at 310 346-0391, if I don't answer, I will return your call within 15 minutes. EXPERIENCE... It works Everytime!

Senate Extends Tax Credit Closing Deadline

2010-06-17T12:12:00.000-07:00

The U.S. Senate voted Wednesday to extend the home buyer tax credit closing deadline to Sept. 30, giving an estimated 180,000 buyers who met the contract deadline of April 30 extra time to close the transaction.

The extension was added to a bill to pay for jobless benefits.

The NATIONAL ASSOCIATION OF REALTORS® estimates that one-third of qualified applicants have been notified that they will be unable to close by the deadline. The Mortgage Bankers Association says delays are caused largely by the volume of transactions.

The measure still must be approved by the House.

Source: Associated Press

Has your real estate market stabilized?

2010-05-21T11:28:00.000-07:00

No matter where you live, sign up and find out what things are selling for in your area! It will then email you once a month and keep you up on all sales and listings!

Governor Expected to Sign Homebuyer Tax Credit

2010-03-25T23:11:00.000-07:00

On Monday, the legislature passed AB 183 (Caballero & Ashburn) which would provide $200 million for homebuyer tax credits. The Governor is expected to sign AB 183 into law before the end of the week. C.A.R. supported this important legislation.

AB 183, formerly SB 4 of the sixth extraordinary session (Ashburn), is part of a package of four bills, passed at the request of the Governor, designed to help stimulate the economy and create jobs. The bill allocates $100 million for qualified first time home buyers of existing homes and $100 million for purchasers of new, or previously unoccupied, homes. The eligible taxpayer who closes escrow on a qualified principal residence between May 1, 2010 and December, 31, 2010, or who closes escrow on a qualified principal residence on and after December 31, 2010 and before August 1, 2011, pursuant to an enforceable contract executed on or before December 31, 2010, will be able to take the allowed tax credit. This credit is equal to the lesser of 5% of the purchase price or $10,000, taken in equal installments over three consecutive years. Under AB 183 purchasers will be required to live in the home as their principal residence for at least two years or forfeit the credit (i.e. repay it to the state).

For Sale: Classic Hollywood Riviera Spanish Home

2010-02-19T12:54:00.000-08:00

Your chance to own one of the original Spanish homes in the Hollywood Riviera section of Torrance. 4 BR, 2.5 baths (Jack and Jill) 2259 sf on a 6300 sf lot. $1.300,000
Open House Sunday, Feb. 21, 2010 1-4pm. Should sell quickly. Jack McSweeney / Agent REMAX Palos Verdes Realty 310 346-391

Don't wait to buy if you like low interest rates...

2010-02-08T10:50:00.000-08:00

We have had low interest rates for a long time. It looks like that is about to change so don't wait! It is time to buy now.

Click the link to see the full "Inman" article.

Highest apartment vacancy rate in 23-years

2009-10-15T14:45:00.000-07:00

Not only has the current economy affected homeowners who can no longer afford their mortgages, in California it has also been a huge issue for Landlords and tenants. This week it was reported that apartment vacancies rose to the highest point in 23-years. This comes as a surprise to many professionals because a lot of landlords have been lowering rent, to make it more affordable for tenants to stay in their current units or to get new ones into the vacant units. Many of the vacancies sit for rent, for weeks, even months until a potential renter comes in to even consider it. The increase of vacancies has slowly been happening since about 2007.

It’s a chain reaction in this industry. Tenants are becoming unemployed, because employers can no longer afford to keep them, in turn having to forfeit their leases or negotiate less of a rent each month. When a landlord loses a tenant, the lose money. When a vacant unit just sits, that’s money out the door everyday, that they can be using toward the mortgage on the building. For investors (landlords) who hold income property, when they are able to occupy the vacant units, the landlords are most likely taking a lot less than market value or holding certain move-in specials, in some cases giving these units away for free, just to get them occupied.

Experts have said that vacancy rates have risen for the past 3 quarters since 2007 and are expected to raise to 8 percent by the fourth quarter of this year, not good news for landlords. It could be good news for the tenants who cannot afford high rental costs though. A lot of the experts have said that this could have been prevented, if landlords would have done their homework and lowered rents before the downfall occurred.

The fact that landlords are being forced to lower rent, is causing a lot of these buildings to go into default, then causing more financial trouble for the landlord. In most cases, these buildings and the income that comes from them, is the owners livelihood.

One bedroom and single apartments are being said to be sitting for the longest. Because of the increase in job loss, people can no longer afford to live alone and are being forced to get a roommate or move in with family. When speaking with a local On-Site manager, she mentioned that 2 one-bedroom apartments, that share common wall, had been sitting for months. Prospects were interested, but couldn’t rent the units because of the limit that is put on how many tenants can live in a one-bedroom, turning the prospective tenant away to find something else, that suits their needs. She had even suggested to the landlord to knock the wall out making it a two-bedroom, in turn making it more appealing and easier to rent in today’s market.

Experts have also said that until the current unemployment rate goes down drastically, that the vacancy rate will continue to be on the rise. Most do not see that happening in the near future. Without steady income, one cannot afford to rent.

Gov. Arnold Schwarzenegger approved seven new mortgage laws

2009-10-14T00:13:00.000-07:00

AB 260 by Assemblyman Ted Lieu (D-Torrance). The measure, which takes effect Jan. 1, tightens restrictions on mortgage brokers so they cannot steer borrowers to riskier, higher-interest loans when they qualify for less-expensive ones.
* SB 36, by Sen. Ron Calderon (D-Montebello), sets licensing requirements for all residential loan originators.
* SB 239, by Sen. Fran Pavley (D-Agoura Hills), makes it a felony to commit fraud on a mortgage loan application.
* AB 329, by Assemblyman Mike Feuer (D-Los Angeles), requires lenders to give more and clearer information to those interested in reverse mortgages, which let seniors borrow against their homes' equity.
* SB 237, by Calderon, creates a registration program for appraisal management firms.* AB 957, by Assemblywoman Cathleen Galgiani (D-Stockton), allows buyers of foreclosed homes to choose local escrow officers, rather than being forced to use the escrow company chosen by the seller.
* AB 1160, by Assemblyman Paul Fong (D-Cupertino), requires that mortgage loan documents be written in the same language the verbal negotiations were conducted in.

NEW LISTING in South Redondo Beach, CA., 90277

2009-10-13T12:31:00.000-07:00

For Sale: 805 N Juanita Ave. #B, Redondo Beach, CA 90277

$849,000

3 Br, 2.5 Baths, 2226 sf, Rear Unit

Large Kitchen, private back yard.

Call me: Jack McSweeney / 310 346-0391

DRE# 01027223

New Townhome listing coming...

2009-09-23T11:49:00.000-07:00

Located in South Redondo Beach. It will go on the MLS on Monday, September 28th. Very nice two on a lot, rear unit.

Fed Holds Rates

2009-09-23T11:47:00.000-07:00

The Federal Open Market Committee voted 10-0 to maintain the target federal-funds rate for interbank lending at a record-low range of zero to 0.25%. "Economic activity has picked up following its severe downturn," the Fed said in the upbeat policy statement it released at the conclusion of its two-day policy meeting.
(WSJ)

Tax Credit - You need to act now!

2009-08-17T13:28:00.000-07:00

Real estate professionals report that first-time home buyers are flooding the sale market, pressed to finalize a deal before the federal government's $8,000 tax credit offer expires on Nov. 30.
Because mortgage approvals, residential inspections, and other steps in the buying process typically take about two months, buyers hoping to take advantage of the incentive will need to have a contract by the end of September.
The new flurry of activity now as house-hunters try to meet the deadline is triggering bidding wars and energizing the property market, which historically is slow at the end of summer. As a result, more homes are getting their full asking price.
-realtor.org

WSJ - Fed Suggests Economy Is Stabilizing

2009-08-12T14:52:00.000-07:00

U.S. Federal Reserve officials on Wednesday left official interest rates near zero but suggested the economy is on more stable ground, more confirmation that the severe recession is either already over or will be very soon.

Palos Verdes Estates Luxury Ocean View home

2009-07-16T08:56:00.000-07:00

1484 Via Coronel

Palos Verdes Estates, CA. 90274
This Ocean View home has been extensively remodeled.

5 Bedrooms + Office, 4.5 bath
4883 Sq.Ft, 15,000 Sq,Ft Lot
4 Par Garage, Black Bottom Pool
Formal Living Room, 2 Family Rooms

$2,900,000

Jack McSweeney
DRE#01027223
310 346-0391

Click the link for virtual tour and more pictures.

Great New Listing In North Redondo Beach

2009-05-06T13:52:00.000-07:00

2506 Clark Lane, Redondo Beach, CA., 90278

FOR SALE:

Fabulous, Big, 2931 Sq.Ft Townhouse. It has 3 Bedrooms (the 4th was converted to the closet you deserve, off the Master) Loft and 3.5 Baths. All for $725,000

SOLD in 3 days!

The Flippers are coming back

2009-04-17T17:38:00.000-07:00

It was only a matter of time. This week I got 3 separate calls from people looking for houses and when I asked what they wanted in their new homes, they all said "Oh, it's not for me personally, I want a real deal, put a few bucks into fixing and putting it right back on the market". The last time I heard that was in 2001. They're Back!
To me, this is a good indication that the real estate bottom is near. Interest rates are low. Investors are returning. There are real bargains to be had and the stock market is still too scary for most people. Where do they turn? REAL ESTATE.
The best barometer of all... My phone is ringing. http://sobaycalmls.com/

Buy or REFI now.

2009-03-18T13:17:00.000-07:00

"The Fed said it will buy up to $300 billion in longer-term Treasurys and buy hundreds of billions of dollars more in mortgage-backed securities in an effort to aid the ailing economy. Coming into Wednesday many analysts argued that the Fed was unlikely to take such a bold step. The move thus shocked markets, causing an immediate rally in stocks and pushing bonds up dramatically within minutes of the announcement of the Fed's move."
"By buying Treasurys, the central bank is increasing the amount of money in the system in a similar fashion to reducing interest rates. The move could lead to lower mortgage rates and more favorable spreads for banks."
-WSJ

This could be the opportunity you have been waiting for because it looks like interest rates will be coming down even more very soon. You could see the conforming loan interest rate fall to 4% - 4.25% range from its current 4.75% - 5% range now. If you are thinking about buying or Refinancing your home, now is the time. Just my humble opinion.

New Listing in Torrance

2009-03-16T11:06:00.001-07:00

WONDERFUL CURB APPEAL!
This beautiful single family / one level home is located at 22617 Greenwood Ave, Torrance, 90505.
It has 3 Bedrooms, 1 3/4 Baths and almost 1400 s.f..
It is in Move in condition and will not last long at $685,000

PROPERTY TAX REDUCTION SCAM ALERT

2009-02-04T19:12:00.001-08:00

The Los Angeles County Assessor's office is alerting homeowners that various private companies are sending mailings to property owners offering their services to pursue a reduction in the owner's property taxes. The companies may charge hundreds of dollars to file for a reduction in value on behalf of the property owner. Some companies also are imposing late fees if the application is received after an arbitrary deadline. Solicitations from private companies offering to pursue a reduction in property taxes must clearly indicate that they are NOT a government agency and that their services are NOT approved or endorsed by any government agency. Failure to provide such notice is a violation of California law.In 1978, California voters passed Proposition 8, a constitutional amendment that allows a temporary reduction in assessed value when a property suffers a "decline-in-value." A decline-in-value occurs when the current market value of your property is less than the assessed value as of January 1. The assessed value is the value shown on a property owner's most recent property tax bill. Typically, an application from the property owner is required to initiate a review of the property's value by the Assessor.

The FIXER you have been waiting for!

2009-01-29T21:37:00.000-08:00

Fabulous Ocean, Catalina and Trump Golf Club Views from this Rancho Palos Verdes Fixer. The price is $849,000 (not a misprint) for a quick sale. Heirs are not up to the work needed to bring this home up to date. This is the bargain you are looking for!

3924 Exultant Drive, Rancho Palos Verdes. Call for an appointment to see today. This will not last long.

SOLD IN 10 DAY'S!

Let's look at some Stats

2009-01-07T09:48:00.000-08:00

As you can see on the graph, the number of unsold listings is coming down in the South Bay area of Los Angles. In July there was 957 listings vs 705 at the end of November. It will be interesting to see the December figures which will come out in Mid-January. What has happened? Interest rates have come down to historic lows and people who don't have to sell aren't selling. Then there are those that just want to get through the holidays. I would be interested in your comments. Happy New Year!

4.5% mortgage rates ?

2008-12-11T21:50:00.000-08:00

Proposal could drop mortgage rates to 4.5 percent
The U.S. Treasury Dept. is considering a plan proposed by the Financial Services Roundtable, an industry trade group, to purchase mortgage-backed securities from Fannie Mae and Freddie Mac in an attempt to restore confidence in mortgage-backed securities and encourage banks to make additional loans.

Under the plan, the Treasury Dept. would purchase 30-year, fixed-rate mortgages, which should restore confidence in mortgage-backed securities and encourage banks to make more loans. As a result, banks could lower the rates on mortgage-backed securities, which could lower mortgage rates for consumers.

South Bay area news

2008-11-17T11:13:00.000-08:00

-We were very lucky here in the beach area to have avoided the fires that have been raging all around us. This weekend we got a lot of ash falling on us but other than that, only a small fire near Rancho Palos Verdes Citu Hall that was contained quickly. We pray for all Californians who where displaced by the fires.

-An ice skating rink will open tomorrow at the Redondo Beach Seaside Lagoon. See more about it at their website: http://seasideice.com

-Unseasonable warm weather is here in the south bay. It is supposed to be 85 degrees today and stay in the upper 70's for the rest of the week. "Pass the tanning oil with the Turkey".

-See all available homes for sale in the South Bay at http://SoBayCalMLS.com . Arranged by city with newest listings always first.

OPEN HOUSE Sunday November 16th, 2008

2008-11-16T12:19:00.000-08:00

Come and see the best Value in the Hollywood Riviera for a big 2300+ Sq.Ft., 2 level, single family home adjacent to El Retiro Park. The price was just reduced to $975,000 ($420 per sq.ft).
140 Vista del Parque, Redondo Beach, CA., 90277

See all Active listings in the South Bay

2008-10-07T14:52:00.000-07:00

If you are interested in buying or selling South Bay Area real estate then you must go to the best site on the web. See all South Bay ACTIVE real estate listings: http://sobaycalmls.com/ and then contact me, Jack McSweeney. I am the expert you need in crazy times like these. Call me, you will bevery happy you did!

2008-09-06T00:09:00.000-07:00

Beautiful 2 BR, 2 Bath Condo. This one SOLD!

Back on the Market - Hollywood Riviera Listing

2008-07-16T22:41:00.000-07:00

This home is agressively priced! 3 br, 1.75 Bath home adjacent to El Retiro Park. Home has been tastefully remodeled and is ready for you now. $975,000 Back on the market!
http://140vistadelparque.com/

Excellent Torrance Schools. Walk to the ocean.

New Hollywood Riviera Listing coming soon.

2008-06-25T11:46:00.000-07:00

I have a new listing coming on Sunday, June 29th, 2008 in the lower Riviera that backs up to El Retiro Park. No pictures yet, but I can tell you that it is remodeled and ready to move in now. Walk to the village too! Under a Million. Co-Listed withy Shar. Call me if interested at 310 346-0391.
See all Hollywood Riviera Listings at http://HollywoodRivieraRealEstate.com .

FED keeps rates the same

2008-06-25T11:41:00.000-07:00

The FED decided to keep the FED FUNDS rate unchanged today at 2%. The inflation rate is a major concern, but to raise rates now would not be a good idea with the economy so weak and consumer confidance so low because of rising gasoline and food prices.

Interest Rate Update - FED

2008-04-30T11:39:00.000-07:00

The Federal Reserve lowered its key interest rate by one-quarter percentage point but also signaled the seven-month easing cycle may be coming to an end. That brings the federal funds rate down to 2 percent and the discount rate down to 2.25 percent.

This could be the end to the declining interest rate cycle, if only because the FED now has to worry about our declining dollar, which is not helped by lowering rates. Inflation is now also a concern. We will see how all this plays out in the coming months.

The graph says it all...

2008-04-23T12:53:00.000-07:00

Back in March of 2007, there were 1189 active listings, 353 homes in escrow and 464 sold... Now, fast forward to March of this year - 2008. There were 1558 active listings, 214 in escrow and 213 closed sales. In other words there were twice as many sales this time last year!

If you are looking to buy a home, now is the time. There is a lot to choose from on the market and deals to be made. Interest rates are very low historically and probable readt to start up soon. Call me for expert help, whether you are buying or selling.

Luxury Townhome in So. Redondo Beach FOR SALE

2008-03-17T09:11:00.000-07:00

FOR SALE:

1206 S. Catalina Ave, Redondo Beach, CA., 90277

$1,195,000

This is a beautifully maintained Townhome walking distance to the Ocean, Riviera Village and Pier. It has two bedrooms on the street level and the master is on the 2nd level on the Living area. Up one more set of stairs is the mezzinine office area with access to one of the 3 balconies. This is a must see if your goal is to live near the water.

Call me for a private showing.

New Listing in El Segundo

2008-03-17T08:40:00.000-07:00

For Sale: A beautiful Condominium located at

815 Main Street #302, El Segundo, CA., 90245

$509,000.

2 BR, 1 3/4 Bath in 1145 Sq. Ft.. Decorator perfect with remodeled kitchen with black granite counter. Master has walk in closet. Smooth ceilings throughout. This property is very open and bright with skylights in the 2 bathrooms. Elevator, Pool, and Spa. 2 parking spaces and generous storage in the gated subteranean parking. A must see!

Call me for a private showing.

FOMC Cuts Fed-Funds Rate by 1/2 Point

2008-01-30T12:02:00.000-08:00

At about 11:15 pacific this news came out:
"The Federal Reserve lowered its key federal-funds rate by one-half percentage point, to 3%, capping an unprecedented eight-day period in which officials slashed rates massively to ward off recession risks. Officials signaled they're willing to ease still further in coming weeks. But they also suggested that the recent cuts may be enough to keep the economy on track. The vote was 9-1; Dallas Fed President Richard Fisher dissented, preferring no rate change."
WSJ.com

If congress also approves raising the conforming loan limits that could really help the housing industry in 2008, by refinancing to low rate 'fixed' loans.

New Listing in So. Torrance at 22420 Warmside Ave, 90505

2008-01-25T08:35:00.000-08:00

SOLD in 5 days

South Torrance, area 129, has it all. This newly listed remodeled home is one of the nicest properties in the area. It will be open both days this weekend, Jan. 26th & 27th from 1 - 4pm. It has 3 Bedrooms, 1 bath and a 6500 sf view lot. Walk to beach. Excellent Torrance Schools. $809,000. call for info... 310 346-0391

Recession...

2008-01-12T13:01:00.000-08:00

Everywhere we turn lately everyone is worried that we are headed into a recession. Here is the problem, by the time the government economists admit to it, we are already on the mend! The main problem with predicting a recession is that it all comes as a result of 'lagging indicators'. You know as well as I do, the government puts out statistics every month that immediately makes the stock market react and then a month later changes the previous months numbers to reflect something they forgot. How can we ever trust anything we read anymore?

I am going to cut to the chase! WE ARE ALREADY IN A RECESSION. Unemployment is going up, real inflation is up (just look at the price of gas, which is not included in the inflation stats) , consumer buying is down, car sales are down, and housing has slowed dramatically. Anybody agree with me?

Does a recession mean hard times? Not necessarily. Thankfully, the Fed has finally realized that they over did the interest rate hikes during the last two years and have to lower them even faster now. (Again, they raised rates based on "lagging inflation indicators'. I hope they learn their lesson this time.) We can look for rates to go down another full point during the next 6 month. Look for FED FUNDS rate to fall to about 3%.

Remember the old saying: " A recession is when a friend loses his job... A depression is when you lose your job"!

Nationwide Existing Home sales figures

2007-12-31T10:01:00.000-08:00

"Existing-home sales managed a 0.4% gain during November, the first increase in nine months, but prices tumbled. Home resales rose to a 5.00 million annual rate, up from October's revised 4.98 million annual pace, the National Association of Realtors said. The median price of a previously owned home was $210,200 in November, down 3.3% from $217,300 in November 2006. Inventories of homes fell 3.6% at the end of November to 4.27 million available for sale, which represented a 10.3-month supply at the current sales pace." (WSJ)

Mortgage Forgiveness Act of 2007

2007-12-21T16:44:00.000-08:00

Mortgage Forgiveness Act Signed into Law Yesterday, President Bush signed H.R. 3648, The Mortgage Forgiveness Act of 2007, into law, sparing homeowners the tax burden associated with canceled mortgage debt.

Prior to this action, forgiven mortgage debt due to foreclosure, short sale, or deed in lieu of foreclosure, was considered taxable income. The new law, however, temporarily waives these taxes for debts forgiven (as high as 35%) from the beginning of 2007 to the end of 2009. The bill also extends the tax deduction for mortgage insurance premiums through 2014.

"This is going to make a happy holiday for many homeowners," President Bush said yesterday before signing the bill in to law. During the press conference he added the following:
"When you're worried about making your payments, higher taxes are the last thing you need to worry about. So this bill will create a three-year window for homeowners to refinance their mortgage and pay no taxes on any debt forgiveness that they receive. And it's a really good piece of legislation.
The provision will increase the incentive for borrowers and lenders to work together to refinance loans – and it will allow American families to secure lower mortgage payments without facing higher taxes."

"There's more work to be done," Bush added, saying that Congress needs to pass legislation to strengthen Freddie Mac and Fannie Mae, to modernize FHA, and to allow the government to issue tax-exempt bonds for refinancing existing home loans.

The Fed.. Here we go again!

2007-12-18T06:14:00.000-08:00

Most people you ask have no idea what the Federal reserve does. Sure, we know they meet once a month or so and raise or lower interest rates but couldn't we just let the market determine that? Why so much big government, always looking out for us, suposedly?
Now they want to impose rules on lenders to safeguard us some more. They are proposing: 1) Barring or restricting lenders from penalizing subprime borrowers — those with tarnished credit or low incomes — who pay their loans off early. 2) Forcing lenders to make sure borrowers set aside money to pay for taxes and insurance. 3) Barring or limiting loans that do not require proof of borrower's income. 4) Setting new standards for how lenders determine a borrower's ability to repay a home loan. All of this seems like common sense to me.
I am a firm believer in the free market. I don't think the Fed making new rules solves anything. I think borrowers have to make their own decisions and Lenders have to qualify people for loans they can afford. Easy credit is a good thing for qualified borrowers, and a bad thing for the non-qualified.
What do you think?

Fed lowers rats again

2007-12-11T13:50:00.000-08:00

The Federal Reserve lowered the Fed funds rate (what banks charge each other) by .25 today. That will bring it down to 4.25%. In response, many of the major banks dropped the prime rate to 7.25% which will make homeowners who have HELOC (Home Equity Loans) a little happier.
The Discount rate (what the Fed charges banks for loans) was also lowered, this time by .25% to 4.75%.
It is my opinion that the Fed will have to continue to lower rates for the forseeable future in order to keep our economy moving. Our dollar should start to get stronger in the second quarter of 2008.

Rancho Palos Verdes REO for sale

2007-12-11T13:39:00.000-08:00

Welcome to your new home! This home is in the process of being painted inside and out and will be ready for showing soon. It is located at 30170 Avenida Esplendida, Rancho Palos Verdes, CA. 90275 and is on a 12,388 square foot lot with a pool. The house itself has 4 bedrooms, 3.5 baths, Formal Living room, Family room, private master suite and is walking distance to los Verdes Country Club.

The home is about 3300 square feet and has a 3 car garage. It is priced to sell at $1,429,000. It is also in the Palos Verdes School district. Hurry.

Hollywood Riviera Listing

2007-12-11T13:29:00.000-08:00

This is a fantastic listing for someone to get into a "Queens Necklace" oceac and city view property in the Hollywood Riviera Section of Torrance.

The home is located at 431 Calle de Castellana, Redondo Beach, CA. 90277 and is almost 2300 square feet. It has 4 bedrooms and 2.5 baths and is situated on a 6600 square foot lot on a very family oriented street. It was built in 1962 and awaits your 'touches' to make it your own. It is priced at $1,185,000.

Fed Cuts rates - but not enough...

2007-10-31T12:38:00.000-07:00

The Federal Reserve cut both the Fed funds and Discount rate by 1/4 of a per cent today. That puts the federal funds rate at 4.5% and the discount rate at 5% for the time being. The major banks followed with a cut in the prime rate to 7.5% (This will help anyone who has a HELOC loan immediately that is hooked to the prime).

I believe that the Federal reserve should have cut interest rates at least1/2 point today and really gave a boost to the economy, so personally I was disappointed knowing that the worst of the sub-prime problems have yet to be devulged. But... we all know that the fed tends to be much more conservative with their "cuts" than they are with their increases.. So, we will all be watching 'consumer' numbers as we approach the holiday season to see if consumers keep spending... any blip in consumer numbers will almost guarantee another cut in December.

Buy your home in the South Bay NOW

2007-10-02T19:29:00.000-07:00

The idea of "saving my money until home prices come down" has probably become a contradiction in terms -- at least for the foreseeable future. Yes, housing is cyclical but it usually does not go backward for very long, if at all. The additional money you save now probably will not offset the potential appreciation or the fatter monthly payment that could result if interest rates rise.

For example, if a $500,000 home appreciated 5 percent in the next year, could you sock away an extra $25,000 in after-tax savings to counter that gain? This also does not take into account additional tax savings from the mortgage-interest deduction. Or, if the market remains flat and mortgage interest rates rise, will you still even be able to qualify for the home of your choice?
Inman news...

Commercial Office Building for sale in San Pedro

2007-09-27T12:31:00.000-07:00

This office building is located at 336 N. Gaffey, San Pedro, CA 90731.

It is available for $2,200,000.

Two story Office Building built in 1990. It has ground parking for 14 cars and security gated subterranean parking for 15 cars. Level 1 approximately 5420 Sq.ft., Level 2 approximately 2215 Sq.ft.. Central Air / Heat with separate meters. Newer roof in 2006. Level 2 currently leased, downstairs to be vacated by Sept. 30th. 12.7 X gross / current cap rate 6.12

Call Jack at 310 346-0391 to find out more.

Fed Half-Point Rate Cut

2007-09-19T10:00:00.000-07:00

The Federal Reserve Tuesday sliced one-half a percentage point off the federal funds rate, cutting it to 4.75 percent from 5.25 percent.
It also cut its discount rate by the same amount, also bringing it to 5.25 percent.
The cuts could be a mixed blessing for homebuyers, pushing fixed-rate mortgages higher if inflation worries grow, economists say.
But relief could come in other ways. Consumers should start feeling the impact quickly in the form of reduced payments on home-equity lines of credit, credit cards and some car loans.
There is likely to be little immediate relief for borrowers with many adjustable-rate mortgages because the rates on roughly half of these loans are tied to the London interbank offered rate (LIBOR). Libor recently jumped sharply above the Fed funds rate because of the continuing credit crunch in the markets.
"If Libor doesn't come down, there is no relief" for many mortgage borrowers, says James Bianco, president of Bianco Research LLC, a market-research firm in Chicago.
Source: The Wall Street Journal, Jane J. Kim and Ruth Simon

Conforming loan limits

2007-09-06T09:18:00.000-07:00

California Association of Realtors is pushing for swift passage of a bill in the Senate calling for increases in loan limits to match median home prices in California and other high-cost areas and the creation of a new regulator to oversee Government Sponsored Enterprises (GSEs), such as Fannie Mae and Freddie Mac.
Vigorous support helped push the measure, HR 1427, through the House in May, but it has since stalled in the Senate. The bill would raise the current maximum size of a conforming mortgage loan from $417,000 to a capped amount at 150 percent of the national limit or $625,500, allowing low- and moderate-income home buyers in high-cost areas better access to low-cost, low-rate fixed mortgages.C.A.R.
President Colleen Badagliacco was recently quoted in a "San Jose Mercury News" story on the issue, saying that a loan of $417,000 "may buy a mansion in Des Moines but it doesn't buy anything in San Jose."

From The Wall Street Journal

2007-08-10T06:49:00.000-07:00

The Federal Reserve, in a statement that underscores the deepening severity of developments in credit markets, said it is "providing liquidity to facilitate the orderly functioning of financial markets," and will pump enough money into credit markets to keep the Fed's target for the federal funds interest rate at 5.25%. U.S. federal-funds futures early Friday priced in about a 100% chance that the Federal Reserve will reduce its key lending rate by a half-percentage point to 4.75% by the next policy meeting on Sept. 18.

April '06 to July '07 graph

2007-08-02T07:30:00.000-07:00

Here is a chart from Trend Graphics. It shows inventory of homes for sale expanding. Sales are also trending higher.

NEW SURVEY SHOWS ONLY SMALL PERCENTAGE OF LOAN ORIGINATIONS ARE SUBPRIME

2007-08-01T19:58:00.000-07:00

A new survey by the National Association of Mortgage Brokers (NAMB) says subprime loans continue to account for only a small percentage of loans originated this year, despite their alleged role as the leading factor in the current housing slump.
A recent survey of more than 200 brokers across the country shows that although prime loan activity in April fell to 56 percent compared to 61 percent in March, only 11 percent of the loans originated in April were subprime.
In 2006, only 13 percent of all loans originated were subprime or non-traditional loans created for home buyers with credit scores lower than 620, NAMB says."This data shows that brokers are anticipating and meeting the changing needs of their customers," said NAMB President George Hanzimanolis. "The shift in the market toward more traditional loan products is yet another reason we have cautioned Congress not to overreact to existing concerns and allow the market to adjust."

New Listing in Hollywood Riviera (Torrance)

2007-07-09T09:13:00.000-07:00

This is a fantastic, cozy home that has been remodeled and is ready for you. It is located in Hollywood Riviera on one of the nicest streets.

It has 3 bedrooms, 1.75 baths, beautiful hardwood floors, a deck with a pergola, 2 car garage and a good size backyard with a view.

You have to see this one in person. See it on the web first at http://rivieraway.com/

See all South bay ACTIVE listings

2007-06-27T22:13:00.000-07:00

See all South bay ACTIVE listings without having to sign your life away! Just go to http://sobaycalmls.com/ and see listings in El Segundo, Manhattan Beach, Hermosa Beach, Redondo Beach, Torrance, Lomita, Palos Verdes Estates, Rancho Palos Verdes, Rolling Hills Estates and San Pedro. If you just want Hollywood Riviera, go to http://hollywoodrivierarealestate.com/ then call me to see in person.

My Latest listing sold in 8 days!

2007-06-27T22:08:00.000-07:00

My Latest listing at 23407 Shadycroft, Torrance, CA., 90505, sold in 8 days! It was a beautiful, move-in ready family home in the Hollywood Riviera. The list price was $959,000. Call me, I will sell your's too.

South Bay Stats to May 2007

2007-06-27T22:06:00.000-07:00

California Home Sales decrease 25% in May, median price of a home in California at $591,180, up 4.8 percent from year ago.

2007-06-27T22:01:00.000-07:00

The median price of an existing single-family home in California increased 4.8 percent in May and sales decreased 25 percent compared with the same period a year ago, C.A.R. reported this week. "The decline in sales continues to be driven by both tighter underwriting standards since the start of the year and the adverse psychological impact of news regarding foreclosures and the subprime situation," said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. "In particular, the lower end of the market â€" which is the part of the market that is most affected by the subprime situation â€" has seen greater declines in sales and weaker prices than the higher end of the market. This will likely be a recurring theme in the coming months."

According to the report, the median price of an existing, single-family detached home in California during May was $591,180, a 4.8 percent increase over the revised $563,860 median for May 2006. Also last month, closed escrow sales of existing, single-family detached homes in California totaled 366,370 at a seasonally adjusted annualized rate, down 25 percent compared with the sales pace recorded one year earlier and down 1.9 percent from home resale activity in April 2007.

Federal Reserve Minutes of May 9th

2007-05-30T12:10:00.000-07:00

May 30, 2007
According to the Wall Street Journal:
Federal Reserve officials have become slightly more upbeat about U.S. economic prospects despite a more pronounced drag from housing, according to the minutes of the Fed's most recent policy-setting meeting. Core inflation, meanwhile, remained "uncomfortably high," according to the May 9 minutes, further indicating that the Fed isn't inclined to lower rates in the near future.

30-Year Mortgage Rate Jumps

2007-05-25T09:53:00.000-07:00

Freddie Mac reports an increase in the 30-year fixed mortgage rate to 6.37 percent from 6.21 percent over the past week, marking a seven-month high. Experts attribute the jump — the second in two weeks — to the belief that the Federal Reserve will not slash interest rates in the short term due to concerns about inflation.

South Bay real estate inventory graph

2007-05-17T14:06:00.000-07:00

Fed holds interest rates steady

2007-05-09T14:05:00.000-07:00

Policy-makers only tweak policy statement

WASHINGTON (MarketWatch) -- The Federal Reserve decided Wednesday to hold short-term interest rates steady and said nothing that indicates it is prepared to move interest rates anytime soon.
Following a one-day meeting of the Fed's policy-making Open Market Committee, the central bank indicated that its target for the key federal-funds interest rates, at which banks lend each other money overnight, remains 5.25%.
The vote to hold rates steady was 10-0.
In its policy statement, the Fed repeated the key statement that it could choose to move rates in either direction depending on the data even though inflation risks remain the paramount concern.
The Fed made only a few changes from its March 21 statement.
In a nod to the weak first quarter growth rate, the Fed said growth had slowed, and adjustments in housing were ongoing. The last statement had said recent indicators were "mixed."
But the Fed repeated that its outlook for a second half pickup remains on track.
"Nevertheless, the economy seems likely to expand at a moderate pace over coming quarters," the statement said.
The Fed made no changes to its inflation outlook, saying that core inflation remains "somewhat elevated" and "although inflation pressures seem likely to moderate over time, the high level of resource utilization has the potential to sustain those pressures."
"It is kind of a yawner," said Dan Seto, economist with Sumitomo Bank. "There were minimal changes [to the statement] and none are significant," he said.
Wall Street had concluded that the Fed wouldn't make a move Wednesday and there was not much reaction in the stock market. Read Market Snapshot.
"No one is really surprised," said Jay Suskind, director of trading at Ryan Beck & Co. "The market whisper was that they would show more concern about inflation."
"The market rallied back up because the flipside is that this means the economy is doing well enough and earnings will stay strong," Suskind said.
As usual, economists disagreed about what the statement's details reveal.
Some analysts had expected the Fed to tip its hat to the recent good news on inflation, so the fact that the Fed stuck to language that inflation was "elevated" was seen as hawkish.
Others said the Fed was dovish and the language saying growth has slowed was a baby-step toward an eventual ease.
Mike Moran, chief U.S. economist at Daiwa Securities, said the Fed did not intend to make any policy hints with the changes to the statement. He said the central bank simply recognized the slower growth.
"My view the Fed will be on hold steady through the rest of the year," Moran said.
The Fed hasn't made a move since last August, when it completed an unprecedented series of seventeen straight one-fourth-of-a-percentage-point rate hikes. See MarketWatch's complete Fed coverage.
Many Fed watchers on Wall Street expect rates to remain unchanged at least through midyear and maybe much longer.

The central bank expects the economy to pick up on its own during the second half of the year, with a gradual ebbing of core inflation, and is likely to be patient to see if that forecast is correct.
"They think the economy will gradually recover. There is no reason to rush and do something" [with rates], said Jim Glassman, economist at JP Morgan Chase.
Fed chairman Ben Bernanke said that the risks have grown on both sides of its forecast, meaning that growth could be lower and inflation higher.
The big question is whether the recent slowdown in the economy is the "pause that refreshes" or the start of a worrisome downward trend.
Real GDP grew only 1.3% at an annual rate in the first quarter and the outlook for consumer spending has worsened. See full story.
In addition, the April nonfarm payroll report was uniformly weak, with job growth at the slowest pace in nearly four years. See full story.
Added to the existing concern about the housing sector, the recent spike in gasoline prices has also complicated the outlook for spending.
Since January, U.S. pump gasoline prices, averaging all grades, have soared by 36% to $3 a gallon, according to Richard Berner, economist at Morgan Stanley.
One camp believes that this weakness may continue for a few more months, pushing the Fed off the sidelines with a rate cut.
Ian Shepherdson, chief U.S. economist at High Frequency Economics, forecasts that the data between now and the next FOMC meeting on June 28 will be "substantially weaker on all fronts."
"If we're right, it would be reasonable to expect a serious shift in the Fed's stance at that meeting, followed by the first ease in August," Shepherdson said.
But some economists believe growth is not as weak, nor inflation as benign, as recent data suggest. They believe the next move by the central bank will be a rate hike.
John Ryding, chief U.S. economist at Bear Stearns, said his indicators of future inflation "point to a pickup in price pressures."
"In addition, there is evidence that the weather was a factor in the below-trend payroll reading for April," Ryding said.
Greg Robb / MarketWatch.com

Loan Pre-qualification

2007-05-03T08:22:00.000-07:00

Get Pre-qualified!
Before we can find the perfect home and negotiate the best price and terms, we have to tackle the most difficult part of the transaction - finding out how much house you can afford and the perfect loan for that house. To present the offer on the home you want successfully, you must have a solid loan pre-qualification letter.
Every homebuyer should do comparison shopping among lenders. I can refer you to several reputable lending institutions or mortgage brokers as well. Once you've made a choice, the loan officer will take your application and have you sign all the necessary papers to authorize credit and employment verifications.
Request periodic progress reports to make sure that all of the details are taken care of. These reports will help to ensure that any potential problems are discovered and addressed before they can threaten the timeliness of the transaction.
You will find the home buying process much less stressful when you know you can afford that special property. Loan pre-qualification puts you in the driver's seat!

Fix it, don't gimmick it

2007-04-28T12:32:00.000-07:00

Some sellers get sidetracked in their effort to attract buyers, especially in a market that no longer decidedly favors sellers. For instance, some sellers think the best way to attract buyers to their home is to offer an incentive to the buyer's real estate agent, such as a trip somewhere at closing. Although, an agent perk might result in a showing or two, it's unlikely to affect a buyer's decision to buy.
It would make more sense to provide an incentive to buyers. That is, if incentives work. However, the promise of a free trip stands little chance of convincing today's value-conscious buyers that they should buy your home. When builders have trouble moving a new product, they offer meaningful incentives, such as upgraded finishes or landscaping, which actually add value to the property.
Don't offer gimmicks; instead, correct defects -- cosmetic and structural -- and price the property right. The biggest incentive you can give a buyer is a well-prepared home that's listed for a realistic price. The listings that are selling in today's market are priced right for the market, they look good and there's no doubt in anyone's mind that the property is available.
Selecting a listing agent who understands how to sell homes like yours in this market is one of the keys to distinguishing your listing from the others. A good agent will speak candidly with you about the probable selling price of your home. An experienced agent will also be able to advise you about what work is worthwhile to do to your home prior to marketing.
Before you even begin preparing your home for sale, it's a good idea to consult with your agent to make sure that the improvements you have in mind are worthwhile. Good agents are in tune with home-buyer preferences such as paint colors, lighting fixtures and floor coverings. Your agent can put you in touch with home stagers and designers who can help you select the right colors and floors.
Good merchandising is critical to a successful home sale, particularly when there are many listings on the market. Before you sign a listing, make sure that your agent will provide you a marketing campaign that will attract as many buyers as possible to your home.
Exposure is essential. You want an agent who will provide your home with extensive exposure to the local and broader markets, and who will also pay close attention to the quality of exposure your home receives.
HOME SELLER TIP: Internet advertising has revolutionized the way the residential real estate is sold. So, it's important that your agent's marketing plan include broad internet exposure. At a minimum, your home should be listed, with photos, on www.realtor.com, the largest residential real estate Web site.
Recent studies show that 80 percent of home buyers use the Internet during the course of their home purchase. Studies also show that buyers reject a listing if it doesn't have photos because they think there must be something wrong with it.
Not only do you need photos of your home on the Internet, but they need to be good photos. Home buyers who have limited time screen the inventory of homes for sale online and eliminate listings based on the photos. Make sure that your agent provides good-quality photos of your property.
Avoid the temptation to oversell your property. A buyer who was recently looking for a luxury home complained that the photos of many listings she'd seen were so good that she was often disappointed when she saw the properties in person.
- Dian Hymer
- from my monthly Newsletter - Jack McSweeney

CPI update

2007-04-23T08:20:00.000-07:00

Fueled by surging energy prices, the closely watched Consumer Price Index (CPI) shot up 0.6% in March, the biggest increase since a similar rise in April 2006. However, core inflation -- which excludes volatile energy and food prices -- rose 0.1% in March, the smallest increase in three months, and better than the 0.2% rise Wall Street had expected. Inflation for the first quarter of 2007 was 4.7%, far above the 2.5% increase for all of 2006.

The Conference Board said its Index of Leading Economic Indicators climbed a tepid 0.1% to 137.4 in March, as analysts had expected. The latest reading reverses two straight months of declines. The index is designed to forecast economic activity over the next three to six months.
Retail sales rose 0.7% in March, up from a 0.5% gain in February. It was the best showing since a 1.1% rise in December, the Commerce Department reported April 16. Analysts had predicted a 0.8% increase.

Construction of new homes edged up 0.8% in March, the second straight monthly rise, the Commerce Department reported April 17. Applications for new building permits also rose by 0.8% in March, the first advance in three months, providing a glimmer of hope that the worst of the housing downturn might be over.

For the week ending April 19, interest rates on 30-year and 15-year fixed-rate mortgages declined, remaining well below year-ago levels, Freddie Mac said April 19.

How is the South Bay Housing Market?

2007-03-23T10:40:00.000-07:00

Stable Rates MAY Turn the Market Around

2007-03-08T20:13:00.000-08:00

Mortgage interest rates are expected to remain relatively low throughout 2007, but whether that is enough to spark a full-fledged rebound of the real estate market this year is a subject of vigorous debate.

Low interest rates typically spell good news for home buyers and sellers since they lead to low mortgage payments and allow consumers to buy more house for the buck. But analysts are mixed about whether that stability will trigger increased sales.

Short-term rates are going to stay fairly steady," says Mike Fratantoni, senior economist with the Mortgage Bankers Association. "We also see the 30-year fixed mortgage rate creeping up -- about 6.2 percent today to about 6.5 percent by the end of the year -- and then basically holding steady from there.

The Mortgage Bankers Association isn't alone in its assessment of a fairly stable interest rate environment. In its January 2007 Economic Outlook, Freddie Mac predicted the interest rates for 30-year fixed mortgages will remain below 6.5 percent in 2007. The National Association of Realtors in its February 2007 forecast predicted that the interest rates for 30-year-fixed mortgages will rise to 6.7 percent by the second half of the year. But rates will rise in such a gradual manner that, potential buyers will have some time to weigh purchase decisions," NAR Chief Economist David Lereah said when the report was released.

So what's fueling this interest rate environment? Some say globalization. "Foreign investors are now extremely active in buying U.S. debt securities," Fratantoni says. "That adds another set of buyers to the market and helps keep rates down and fairly stable.

Could the interest rate environment change? "If, for some reason, foreign investors decided to stop investing in U.S. securities, we would see a spike in interest rates," Fratantoni says. "There is a risk there, but I don't think it's a likely outcome."

The rate effect
Nobody denies that low interest rates can spark the market.

"Just look at how a person's monthly payment changes on their home when the interest rate changes by 1 percentage point," says Chris Porter, senior consultant with Irvine, Calif.-based John Burns Real Estate Consulting. "It has a significant impact on their monthly payment." A $300,000 home, for example, would cost a buyer $1,610.46 per month with a 5 percent interest rate and $1,798.65 with a 6 percent interest rate -- nearly a $200-per-month difference. -Posted March 8, 2007 By Tamara E Holmes. Bankrate.com

Poole sees moderate growth, falling inflation in '07

2007-02-09T09:17:00.000-08:00

Feb 9, 2007

WASHINGTON (MarketWatch) -- The U.S. economy should grow at a sustainable pace while inflation should continue to decline, said William Poole, the president of the St. Louis Fed bank, in a speech presenting his outlook on Friday.
"As I step back and survey the economic landscape, I see an economy that appears to be transitioning quite nicely from last year's slow patch, to more sustainable growth," Poole said in a speech prepared for delivery to the AAIM Management Association in St. Louis.
Poole, a voting FOMC member this year, is one of three top Fed officials discussing the economic outlook on Friday. Next week, Fed chief Ben Bernanke will deliver the Fed's formal economic forecast to Congress when he testifies on Fed monetary policy.
Financial markets pay close attention to speeches by the St. Louis Fed president. A recent study of market impact of Fed speakers listed Poole as the second most market-moving Fed official after Bernanke.
In his speech, Poole was upbeat on growth and inflation. He said the economy was fundamentally sound and that past Fed actions had kept inflation largely in check.
In common with speeches recently from other top Fed policy makers, Poole said there were tentative signs that the housing market was stabilizing, but he was very cautious not to declare victory. Housing was a significant drag on GDP growth in 2006.
"While recent data seem to point in a favorable direction, we must recognize that the housing market is not out of the woods yet," Poole said.
Most importantly, there is no evidence that home prices have stabilized after pervasive weakness last year, he said.
Poole said inflation was headed in the right direction and should fall into a "reasonable range" this year.
But Poole said he would fight for higher rates if core inflation "seems to be settling at a rate above 2%.
Poole said he detected a "firmer tone" in the most recent economic data.
Poole also said more rate hikes may be needed if growth in 2007 comes in stronger than expected.
Poole presented his personal inflation target, saying he would "do what I can to promote policy adjustments that will yield an inflation outcome, on average over a period of several years, centered on 1.5% on the core PCE price index."
Greg Robb is a senior reporter for MarketWatch in Washington.

The Conference Board Consumer Confidence Index Improves Slightly, But Expectations Soften

2007-01-31T19:00:00.000-08:00

January 30, 2007

The Conference Board Consumer Confidence Index, which had improved in December, edged up slightly in January. The Index now stands at 110.3 (1985=100), up from 110.0 in December. The Present Situation Index increased to 133.9 from 130.5. The Expectations Index, however, declined to 94.5 from 96.3 last month.
The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for The Conference Board by TNS. TNS is the world's largest custom research company. The cutoff date for January's preliminary results was January 23rd.
"This month's slight increase in confidence was solely the result of an improvement in the Present Situation Index, fueled primarily by a more favorable job market," says Lynn Franco, Director of The Conference Board Consumer Research Center. "Looking ahead, however, consumers are not as optimistic as they were in December. All in all, the Index suggests a moderate improvement in the pace of growth in early 2007."
Consumers' overall assessment of current-day conditions was more upbeat than in December. Those claiming conditions are "good" increased to 28.1 percent from 27.4 percent. Those saying conditions are "bad," however, rose to 16.5 percent from 14.9 percent. Labor market conditions also improved from last month. Consumers saying jobs are "hard to get" declined to 19.7 percent from 21.3 percent. Those claiming jobs are "plentiful" increased to 29.9 percent from 27.6 percent in December.
Consumers' outlook for the next six months was less optimistic than in December. Those anticipating business conditions to worsen edged up to 8.0 percent from 7.8 percent. Those expecting business conditions to get better decreased slightly to 16.2 percent from 16.7 percent.
The outlook for the labor market was mixed. Consumers expecting more jobs to become available in the coming months edged up to 14.0 percent from 13.9 percent, while those anticipating fewer jobs edged up to 15.7 percent from 15.5 percent. The proportion of consumers expecting their incomes to increase in the months ahead declined to 19.8 percent from 21.4 percent in December.
The next release is scheduled for February 27, Tuesday at 10 A.M. ET.

Annual Percentage Rate / What is the Real Cost of Financing?

2007-01-04T09:42:00.000-08:00

Annual Percentage Rate (APR) is a tool that consumers can use as a starting point to compare loan programs. However, it's important to keep in mind that APR is not a perfect system, and not all lenders calculate APR in the same way. While the Federal Truth-in-Lending Act does require any mortgage broker or lender to disclose APR to the consumer, there is no rule written in stone for calculating this number that each and every lender agrees upon.
The point of calculating APR is to let the consumer know what the actual cost of their financing is in the form of a yearly rate. APR factors in certain closing costs and fees associated with the loan, and spreads this total over the life of the loan along with the actual note rate. The objective is to give the consumer a clearer picture of what their actual costs are, and this inhibits lenders from hiding fees or upfront costs behind low interest rates in their advertising.
Fees that are generally included in the APR calculation are points, pre-paid interest, loan processing fees, underwriting fees, document preparation fees, and private mortgage insurance. On occasion, lenders will include a loan application fee and/or credit life insurance. Fees that are normally not included in the APR calculation are fees from Title, Escrow, attorney, notary, document preparation, home inspection, recording, transfer taxes, credit report and appraisal.
Remember, all lenders do not perform the calculation the same way. Moreover, APR does not consider the possibility of making pre-payments, moving or refinancing. Unless the interest rate is tied to a fixed instrument, APR is even more confusing. Calculating APRs on adjustable rate and balloon mortgages is more complex because we really have no way of knowing what future rates will be.
If all lenders calculated APR the same way, we could make easy comparisons when deciding on what loan program to go with. Since they don't, the consumer should know that APR is simply a starting point for comparison. They should rely on the skills of a well-versed loan professional to assist them in obtaining the loan that meets their specific needs. The more important things to consider are how long the loan is needed. What are the long-term goals of the borrower? If the homebuyer only expects to stay in the home for five years, there's not a lot of sense in looking exclusively at 30-Year Fixed rates because the APR seems more reasonable. If a young couple is buying a home, knowing they will refinance in eight years to pay for their son's college education, then once again, APR is not a realistic factor to take into consideration.
The Loan Executive should be prepared to answer questions about APR once the lender provides the Truth-in-Lending Disclosure Statement (Reg Z), such as why the “amount financed” listed in Box C is not the same as the actual loan amount, and why the APR is higher than the interest rate on the loan in most cases. The consumer will get a clear definition about the fees associated with their loan in the good-faith estimate, but the Truth-in-Lending Disclosure is often an area that is confusing to the borrower.

Fed may have to cut rates...

2007-01-02T09:21:00.000-08:00

The dollar sagged against major rivals on Tuesday (1/2/07), as investors fretted that the Federal Reserve may have to cut interest rates if the U.S. economy shows signs of slowing further.

An Inverted Yield Curve

2006-12-04T09:24:00.000-08:00

The U.S. economy, interest rates, and the housing market are frequent topics on the nightly news. Viewers are told about leading economic indicators, how the stock market has performed, and whether the Federal Reserve is planning on changing interest rates. What isn't explained is how these items are interrelated and how they may impact which home loan is best for you.

The Federal Reserve attempts to keep the U.S. economy healthy through its use of monetary policy. As fears of inflation increase, the Fed will raise certain short-term interest rates such as the federal funds rate, which is the interest rate banks pay each other for overnight loans. Such an increase causes a ripple effect, with banks raising their prime lending rate. This, in turn, causes an increase in Adjustable Rate Mortgage (ARM) rates and the indices they're tied to, such as the 12-Month Treasury Average (MTA), the 11th District Cost of Funds Index (COFI), and the 1-Month London Inter Bank Offering Rates (LIBOR).

Under normal circumstances, long-term interest rates would also increase even though they are determined by market trading of bonds and mortgage-backed securities rather than monetary policy. However, in certain instances, the market responds in an unexpected manner.

Long-term interest rates are driven by a desire to place money in a steady vehicle that will provide a decent rate of return. When the stock market is underperforming, many corporate and individual investors will sell stocks, and invest their money in bonds. Typically, the longer the holding period of a bond, the higher the yield it will offer. This makes sense because the longer an investor's money is tied up in that investment, the more they should receive for it. However, when there is an increased demand for bonds, the law of supply and demand comes into play. As the demand for bonds increases, the need to attract investors decreases, so the yield offered on those bonds declines.

When the Federal Reserve pursues an aggressive policy and raises short-term interest rates repeatedly over an extended period, and the bond and mortgage-backed securities markets are booming so their yields are lower, an unusual situation arises. Short-term interest rates are high while long-term interest rates remain lower. This leads to a shift in the usual yield-versus-term paradigm, known as an inverted yield curve.

Conforming Loan Limit to Stay the Same in 2007

2006-11-29T09:53:00.000-08:00

The maximum conforming loan limit will remain $417,000 for most homes that sell in 2007 because the average home price in October 2006 was lower than the average price in 2005, the Office of Federal Housing Enterprise Oversight says.
OFHEO sets this limit annually, capping the amount that government-chartered secondary mortgage market companies Fannie Mae and Freddie Mac can buy or guarantee. Generally, conforming rates are lower than “jumbo” loan rates that exceed the limit.
Alaska, Hawaii, Guam, and the U.S. Virgin Islands are recognized by OFHEO as ‘high-cost’ areas and the limits in parts of those states are higher.

Negative Media?

2006-11-07T12:02:00.000-08:00

The National Association of Home Builders has begun to offer a new PR kit for members to help pump up sales. The need for such an effort is obvious. As NAHB explains, the kit "provides a starting point for public relations campaigns to galvanize prospective home buyers who have been discouraged by negative reports in the media to go out and see for themselves the range of opportunities that have opened up in today's slower marketplace."

Yes folks, the reason more buyers are not snapping up homes is because of those negative, gloomy news reports. Real wages don't count, affordability is not important and reduced speculation is not a factor. It's the damned media.

Right.

It seems to me that the past few years have been pretty good for real estate. Existing home prices rose from $139,000 in 2000 to $220,000 this September, according to the National Association of Realtors. If it's true that negative news reports are causing the downturn of 2006, is it not equally true that "positive" news reports must have been the sole and only cause of the booming real estate market seen during the past five years? If yes, shouldn't reporters and columnists get free houses or something for their good work? Where are the keys to my new home from a grateful constituency?

Let's say home sales slowed and that reporters and columnists did their part and hid such trends from the public. Does anyone believe the public would not notice that homes in many areas are on the market longer or that prices are stagnating? Can it be the public follows in sheep-like fashion whatever it is that appears in the media? Judging from my email, there are lots of smart readers ready to discuss and debate just about any topic, often with great insight, wit and knowledge.

There are any number of reasons why the real estate market has slowed, none of them having to do with the musing of a few real estate writers.

"A faster-than-anticipated decline in housing following its unsustainable boom during the past three years has become a major drag on U.S. economic growth," said David Seiders, NAHB's chief economist, "and it is likely to subtract about a full percentage point from the Gross Domestic Product during the second half of this year and half that amount during the opening quarter of 2007."

Imagine that! The boom has been unsustainable according to NAHB's own chief economist. Now this is a piece of news that should be kept from the public.
Here's another one: "Recent declines in mortgage interest rates and energy prices have buoyed consumer attitudes and home buyer demand," Seiders said a few days ago. "Surveys of consumer sentiment show that increasing numbers of households view this as a good time to buy homes."

Is the evil media to blame for the growing number of households who believe this is a good time to buy homes? How did such buy-now attitudes evolve in the face of ongoing negative press reports?

Could it be that the public simply wants a better deal from new home builders? What would happen if home prices were cut? Here's what:
"More than three out of four builders are offering substantial sales incentives to move their product and limit cancellations, and this aggressive strategy is working -- making this an opportune time for home buyers to enter the market," said NAHB President David Pressly, a home builder from Statesville, N.C. "The market correction appears to be approaching the bottom in terms of sales volume, and we expect the supply-demand balance to improve considerably before long."

Is it fair to report that when builders lower prices -- whoops -- when builders offer "substantial sales incentives" -- that buyer interest goes up? Doesn't this seem like a fairly-obvious example of cause and effect, supply and demand?

Alternatively, some could believe there IS a cabal of evil real estate reporters and columnists. If so, it might work like this:
A bunch of journalists meet at my place about once every two weeks to set mortgage rates and then decide whether home sales nationwide should rise or fall. We cause such marketplace changes by deciding to produce positive or negative media coverage.
We can also levitate. We each have Swiss bank accounts and we're all members of an ancient cult. We know who will win football championships and horse races months in advance and bet accordingly -- that's how we finance operations, get money for political contributions and control the government.

Perhaps I've said too much ... . No doubt every paranoid blogger will soon be quoting the two paragraphs above as if they were something other than a joke.
Instead of mooing about "negative reports in the media" homebuilders ought to read their own news releases and data. Too many new homes are priced beyond what people are now willing to pay. The result is that unit volume will fall unless prices are reduced, regardless of what scribes and scriveners might write.

If you don't believe it, come to the next meeting. Party with the press. Learn how to levitate ... .
by Peter G. Miller

Pending-home sales rise 4.3% in August- Market may be stabilizing

2006-10-02T08:45:00.000-07:00

Market may be stabilizing, realtors group says...

WASHINGTON (MarketWatch) -- Pending sales of U.S. existing homes rose by 4.3% in August, indicating the housing market may be stabilizing, the National Association of Realtors said

Monday. Pending-home sales are down 14.1% in the past year, the real estate industry group said.
"Our sense is that home sales may have reached a low in August," said David Lereah, chief economist for the NAR in a statement.

"With fewer new listings coming on the market, we should be able to draw down the inventory supply early next year to the point where home prices will rise, but at a slower pace than historic norms," Lereah said.

The pending-sales index rose 9.2% in the West, 4% in the South and 3.6% in the Northeast. The index was flat in the Midwest.

Sales are recorded as "pending" when a sales contract is signed; they are recorded as "sold" when the sale closes, usually one or two months later.

Existing-home sales fell 0.5% in August to a seasonally adjusted annual rate of 6.30 million, the lowest since January 2004. Meanwhile, median sales prices fell 1.7% on a year-on-year basis, the first decline in 11 years. The inventory of unsold homes rose to a 7.5-month supply, the most in 13 years.

In other reports released Monday, the Institute for Supply Management said its manufacturing sentiment index fell to 52.9% in September, the lowest since May 2005, signaling slower growth in the factory sector.

The Commerce Department said construction spending rose 0.3% in August despite a 1.5% drop in spending on housing.
By Rex Nutting, MarketWatch

Appraisals Get Tricky in a Cooling Market

2006-09-15T10:08:00.000-07:00

The housing slowdown is making it increasingly difficult for appraisers to use comparable sales data in calculating a home's worth.
Gary Crabtree of Bakersfield, Calif.-based Affiliated Appraisers says he now takes into account pending sales, current list prices, supply and demand, time on the market, price fluctuations, defaults and trustee's sales, incentives, and the market perceptions of real estate agents.

Crabtree says valuations become complicated when real estate practitioners engage in "the re-list game," in which a home that has sat unsold for a long period of time is removed from the multiple listing service and re-listed with a new price and MLS code to make it look like a new listing.

"Just looking at historical data can be perilous," says Appraisal Institute spokesman John Bredemeyer, who explains, "You've got to answer the question: 'Where are we in this cycle?' And you've got to factor that into your valuation."
Source: Baltimore Sun, Ken Harney (09/15/06)

Prevent Foreclosure From Cashing You Out Of Home Ownership

2006-09-15T05:10:00.000-07:00

While a growing number of consumers are looking to cash in on the changing real estate market, another group is trying to figure out how to keep from cashing out.

The 115,292 homes nationwide entering some stage of foreclosure in August remains historically low, but the rate of increase in the number is becoming alarming. August foreclosures represented a 24 percent increase from July -- the second highest this year -- foreclosures are up 38 percent for the year so far and 53 percent compared to where they were this time last year.

Blame it on those nasty mortgage IEDs (Improvised Equity Devices) -- high leverage, high risk loans that are easy to come by, but financially explosive as time goes by.
Mortgage IEDs are typically ARMs, in a host of varieties, that typically start off with low rates, but, in this market, continually adjust upward. Along with the higher interest rate, so goes your monthly mortgage payment.

When the loans come with interest-only payment terms, if you only pay the interest and your home value shrinks, your mortgage could become larger than your home's value giving you no room to bail out without coming up with the cash to cover the difference.
"With home price appreciation continuing to decelerate and billions of dollars in adjustable rate mortgages projected to reset in the next few months, this month's increase could be the beginning of an upward shift in the foreclosures market," said James J. Saccacio, chief executive officer of RealtyTrac.

In August, states with both greater statistically significant numbers of homes entering foreclosure and high rates of increases in those numbers, included Colorado, Nevada and Florida.

Colorado foreclosure activity spiked nearly 60 percent in August from the previous month and the state documented the nation's highest state foreclosure rate for the sixth month in a row, with one new foreclosure filing for every 301 households. The state reported 6,079 properties entering some stage of foreclosure during the month, more than twice the number reported in August 2005 and the seventh highest number reported by any state.

With one new foreclosure filing for every 430 households, Nevada posted the nation's second highest state foreclosure rate for the third straight month, due largely to bad bets on housing made in and around Las Vegas. The state reported 2,016 properties entering some stage of foreclosure, a 24 percent increase from the previous month and more than three times the number reported in August 2005.

Once crawling with speculators who are now abandoning the Sunshine State, Florida saw foreclosure activity jump to its highest level of the year so far, with 16,533 properties entering some stage of foreclosure in August -- the most of any state and an increase of more than 50 percent from the previous month. The state's foreclosure rate of one new foreclosure filing for every 442 households ranked as the nation's third highest state foreclosure rate.
Five states, Florida, Texas, California, Ohio and Illinois accounted for 50 percent of the nation's foreclosure activity in August.

What should you do if you face the possibility of a late mortgage payment for the first time and want to avoid foreclosure?
Swallow your pride.

A head-in-the-sand approach will leave what's likely your No. 1 asset exposed to foreclosure. Contact the lender and discuss what you can do. Your goal should be to stop any lender action that could damage your credit and ultimately cost you your home and prevent you from owning another one in the immediate future.

A Freddie Mac/Roper survey found that 75 percent of delinquent borrowers recall being contacted by their mortgage servicer -- the company (the lender or the lender's agent) that collects mortgage payments, but 68 percent of them never call back.
Given most lenders take months before moving to foreclose, you have ample time to seek some kind of work out.

Once you make contact with your lender or servicer in a return call or a call you initiated, stay in touch with that contact until you are current. Document your contacts in writing so you and the lender have a documented record of your efforts.

If possible, consider restructuring or refinancing your loan -- but not to borrow more money. If you are saddled with two mortgages, do the math to determine if consolidating them will help. Likewise consolidate non-mortgage debts. Also consider extending a 15 year mortgage to 30 years or a 30 year mortgage to 40 years or longer. Examine how any restructured debt will play out if your situation worsens or improves. In each case, determine if restructuring is your best move, preferably before you miss a payment and damage your chances of landing a new loan.
Watch out for scams. When you are down on your dollars you are most vulnerable to debt-removal come-ons. You likely didn't get in over your head over night. Don't expect a quick fix.
Get financial counseling. Certified (by state and federal agencies and recognized trade groups) consumer credit counseling services are often free or offered for only a nominal fee. They will teach you your rights and work with you and your creditors, say, to temporarily reduce payments or otherwise work out a payment plan that will keep you housed and your credit relatively intact.

Know your rights. If you are in the military, you have special relief under the Soldiers and Sailors Civil Relief Act to stop the foreclosure and you may be eligible for a reduction in the interest rate. Similar relief is available to those affected by hurricanes, earthquakes and other natural disasters.

Procedural errors in the lender's foreclosure effort or lender errors when you acquired the loan could permit you to file a lawsuit to enjoin or stop the procedure.

If all else fails, bankruptcy is an option that can stop foreclosure, at least temporarily, and give you some leverage to resolve the foreclosure. Today's bankruptcy law also forces you into counseling. That's a good thing.

Selling the property is another end-game option. Consider selling the property out right as quickly as possible or deeding it to the lender in exchange for ending the foreclosure and minimizing the negative comments on your credit report.
Published: September 15, 2006

Realtors expect home prices to fall

2006-09-07T09:47:00.000-07:00

WASHINGTON (MarketWatch) - U.S. home prices will probably fall temporarily as the housing market corrects, the National Association of Realtors said Thursday.

Prices should bounce higher in a few months, said David Lereah, chief economist for the real estate group "as the market works through a build in housing inventory."

Median existing-home sales prices should rise about 2.8% this year and 2.2% next year, the realtors said in their monthly economic outlook. Median new-home prices are expected to rise 0.2% in 2006 and 2.4% in 2007.

Existing-home prices have risen at an average of 9.6% annually in the past four years. New-home prices rose 13.3% in 2004 and 9% in 2005.

"This year sales are slowing, homes are plentiful and sellers are negotiating," Lereah said. "Under these conditions, we'll probably see prices dip temporarily below year-ago levels as the market works through a build up in housing inventory."

Lereah said home prices typically appreciate at the rate of inflation, plus one or two percentage points. Buyers who plan to stay in their homes should see those gains, but "people who purchased last year with the intent of flipping are likely to get burned," he said.
Consumer prices excluding shelter costs have risen 4.4% in the past year.

The group is forecasting existing home sales to fall 7.6% in 2006 and a further 1.7% next year. New homes sales are expected to fall 16.1% in 2006 and 7.1% in 2007. Housing starts are projected to fall 9.6% this year and 9.8% next.

The forecasts are slightly below the group's projections from a month ago.

Compared with the group's forecasts at the beginning of the year, the expected declines in existing-home sales and housing starts for 2006 are about twice what was expected, and the expected drop in new-home sales for 2006 is about three times as severe. Rex Nutting is Washington bureau chief of MarketWatch.

Realtors expect home prices to fall

2006-09-07T09:45:00.000-07:00

WASHINGTON (MarketWatch) - U.S. home prices will probably fall temporarily as the housing market corrects, the National Association of Realtors said Thursday.

Prices should bounce higher in a few months, said David Lereah, chief economist for the real estate group "as the market works through a build in housing inventory."

Median existing-home sales prices should rise about 2.8% this year and 2.2% next year, the realtors said in their monthly economic outlook. Median new-home prices are expected to rise 0.2% in 2006 and 2.4% in 2007.

Existing-home prices have risen at an average of 9.6% annually in the past four years. New-home prices rose 13.3% in 2004 and 9% in 2005.

"This year sales are slowing, homes are plentiful and sellers are negotiating," Lereah said. "Under these conditions, we'll probably see prices dip temporarily below year-ago levels as the market works through a build up in housing inventory."

Lereah said home prices typically appreciate at the rate of inflation, plus one or two percentage points. Buyers who plan to stay in their homes should see those gains, but "people who purchased last year with the intent of flipping are likely to get burned," he said.

Consumer prices excluding shelter costs have risen 4.4% in the past year.

The group is forecasting existing home sales to fall 7.6% in 2006 and a further 1.7% next year. New homes sales are expected to fall 16.1% in 2006 and 7.1% in 2007. Housing starts are projected to fall 9.6% this year and 9.8% next.

The forecasts are slightly below the group's projections from a month ago.

Compared with the group's forecasts at the beginning of the year, the expected declines in existing-home sales and housing starts for 2006 are about twice what was expected, and the expected drop in new-home sales for 2006 is about three times as severe.

Rex Nutting is Washington bureau chief of MarketWatch.

Mortgage Rates Continue String of Declines

2006-08-18T10:17:00.000-07:00

Freddie Mac reports a drop in the 30-year fixed mortgage rate to 6.52 percent during the week ended Aug. 17, marking the fourth-straight decline.

Rates are still 72 basis points higher than a year ago. A basis point is 0.01 of a percent.

Five-year hybrid adjustable-rate mortgages, which carry fixed rates for the first 5 years and then float, fell 3 basis points to 6.18 percent. One-year ARMs declined 4 basis points to 5.65 percent.

The 10-year Treasury yield, the benchmark for mortgage rates, has fallen as well due to data that shows moderate inflation and weakness in the economy.

Source: Investor's Business Daily (08/18/06)

Prediction: The Fed is done raising rates

2006-07-28T18:18:00.000-07:00

The Fed is done raising rates.
Interest rates appear to have peaked. The 10-yr Treasury closed below the 5% barrier today (July 28th). The Fed funds futures contract is now predicting a pause at the August 8 FOMC meeting.

Federal Real Estate and Mortgage Tax Incentives

2006-07-17T08:56:00.000-07:00

What's the mortgage interest deduction worth to the typical homeowner who claims it at tax time? Nearly $10,000 on average, according to a provocative new analysis of federal incentives for homeowners nationwide.

But there are many parts of the country where the "typical" tax deduction for mortgage interest is far bigger, and plenty of others where it is considerably smaller. Take, for example, California's 14th congressional district in and around high-cost Silicon Valley. The average taxpayer there took a whopping $35,000 in mortgage interest deductions during the year covered by the research -- more than six times the average mortgage interest writeoff taken during the same period by residents of Oklahoma ($5,710).

The homeowners of the 14th district took an aggregate $3.2 billion worth of mortgage interest deductions and that total was about the same as all the mortgage interest writeoffs claimed by all the homeowners in seven states -- Alaska, Montana, North and South Dakota, Vermont, West Virginia and Wyoming -- combined.

The new research study by the National Association of Home Builders used the latest available IRS tax data -- tax year 2003 -- and broke deductions down by the state and congressional districts of the taxpayers. The report was prepared in part to demonstrate the size and economic importance of the mortgage interest and real property tax writeoffs to individual congressional representatives.

To illustrate: Confronted with the $3.2 billion writeoffs taken by 14th district constituents in a single year, any savvy congressman would be loath to cut back on the deduction, even to reduce the federal deficit.

In tax year 2006, according to estimates by Congress's joint committee on taxation, homeowners will claim a total of $81 billion in mortgage interest deductions. By 2009, the writeoffs are expected to hit $100 billion a year. The deduction is available on all qualifying principal residences where the mortgage amount does not exceed $1 million and home equity debt does not exceed $100,000. As a practical matter, homeowners can write off interest annually on home mortgage debt totaling $1.1 million.

They can also write off local real property taxes paid on a principal residence during the tax year without limit. In 2006, according to congressional estimates, $15 billion in "local real" will be deducted by homeowners.

The highest property tax deductions, not surprisingly, go to homeowners in high tax areas, especially in the northeastern states. For example, the residents of New York's 3rd congressional district on Long Island, took an average $11,884 in property tax writeoffs during 2003, a total of $1.25 billion for the district. That aggregate writeoff was more than all the property tax deductions taken in 2003 by homeowners in eight states combined -- Wyoming, West Virginia, Hawaii, the District of Columbia, Delaware, South and North Dakota and Arkansas. (For federal tax purposes, the study treated D.C. as the equivalent of a state.)
The NAHB research found that the highest states for property tax writeoffs were New Jersey (an average $6,005 per homeowner), New York ($5,187), New Hampshire ($4,830), Illinois ($4,129) and Vermont ($3,845). The highest states for mortgage interest writeoffs on average were California (($14,217), Hawaii ($12,766), the District of Columbia ($11,759), Nevada ($11,522) and Washington ($11,223).

The lowest states for mortgage interest deductions were Oklahoma ($5,710), Iowa ($6,754), North Carolina ($6,808) and Maine ($6,888).
Jerry Howard, executive vice president and CEO of NAHB, said "The report shows that millions of working families around the nation use and depend upon these important tax incentives to help them maintain their current standard of living. Because the mortgage interest and real estate deductions significantly reduce federal tax liabilities for homeowners, they are important tools for promoting homeownership."

The not-so-subtle message to Congress from NAHB: Don't mess with these writeoffs. They're too important to the people who elected you … and can throw you out of office if you cut their deductions.

by Kenneth R. Harney / Realty Times

Housing's $457 billion tax savings

2006-06-30T11:49:00.000-07:00

Average U.S. household deducts $9,650 in mortgage interest

Thirty-five million taxpayers used the home-mortgage deduction in 2003, deducting a total of $338 billion, or an average of $9,650 per household, according to an analysis released on Thursday by the National Association of Home Builders. About 39 million deducted real estate taxes that year, totaling $119 billion in deductions nationwide, or an average of $3,000 per tax filer.