Tracy’s LA Real Estate

Eagle Rock Brewery

This is the first microbrewery licensed in Los Angeles in 60 years! I had heard, maybe a year ago, that there was possibly an Eagle Rock Brewery planning to open in our corner of Los Angeles, but never knew exactly where it was or when it was really going to open. Eagle Rock Talk mentioned it a few months back, but nothing more. Maybe if I were truly a beer aficionado I would have tracked it down sooner, but I finally took action when some friends of ours told us that the opening was imminent a couple of weeks ago. The first public pouring of their brew happened at the Verdugo Bar in mid-December. 

So far, their licensing only allows them to sell beer in their onsite tasting area by reservation, so we made ours and adventured off to the industrial warehouse area between San Fernando Road and Irving Middle School. The tasting room has very clean, contemporary lines, high ceilings, a wall filled with shelves containing the Eagle Rock Brewery product line which includes glasses and T-shirts, and several other blank white walls perfect for hosting an art exhibit. A long bench along one end is filled with comfy brightly-colored pillows and there are tables and chairs to accommodate several parties of folks. Eagle Rock Brewery President Jeremy, or his father, Vice President Steve, are happy to give a guided tour of the facility. 

Eagle Rock Brewery Public Room

They are now brewing three different beers, each one highlighting one of the three main ingredients of beer. The Solidarity Black Mild accentuates the malt, the Manifesto is the whit type featuring the grain, and Revolution highlights the yeast. The names imply the idea of beer for the people by the people (my interpretation). Steve chatted with us about his hope that people would come to the public tasting room to have a beer, maybe bring in some food and share in some good conversation. We’ve done that a couple of times now, and are looking forward to many more fun times there.

I perused their website, www.EagleRockBrewery.com,  and found a very interesting history of what it takes to open a business in the City of Los Angeles these days. These folks had conceived the plan and begun the business legal structure back in 2006, spent the next couple of years really refining and researching and writing and deciding they seriously wanted to commit to their business plan. They rented their warehouse space back in June, 2008, and it took them over a year to navigate and successfully complete the process of permits and approvals from the City of Los Angeles! And if you read their blog or talk to them in person, you can tell that these are intelligent, knowledgeable people who had the sense to hire good professional help to expedite the process. 

The Eagle Rock Brewery

Anyway, that’s water under the bridge and now Eagle Rock Brewery is open and suddenly in an online controversy over why it’s located in Glassell Park and calling itself Eagle Rock Brewery. There’s a good answer for that, so go to their website and find out. And then, get over it and make your reservation to go have some yummy artisanal brew. They plan more varieties of beers soon.  

By the way, when you go there, you won’t see a sign on the building. You can park on the street or in the parking spaces in front of the building if there’s room.

Eagle Rock Brewery

3056 Roswell Street

Los Angeles, 90065

Call: (323) 257-7866 or email: Ting@eaglerockbrewery.com for reservations.

Every now and then in this hilly, older part of Los Angeles, we see a property that has settling to the point of obvious house/land movement. Several homes were red- or yellow-tagged after the 100-Year Rains of 2004/2005. A couple of them are still for sale as foreclosures with their asking prices continuing to drop as the houses edge closer to the abyss over the Arroyo. About 30 years ago and a couple of miles away, there were a few houses that did slip down a hill and were eventually torn down. A few here and there didn’t survive the 1987 or the 1994 earthquakes.
These are dramatic, expensive issues when the problem is obvious. But what if it’s not so obvious? What if it’s a little slippage, but nothing major? How do you decide what to disclose? What to do?
First rule: if the question “Should I disclose this?” occurs to you regarding a property you plan to sell, the answer is “Yes.”
Now we see before us a sea of gray. Ok, so you say the floor isn’t level. What does that mean? Almost any house experiences a little settling over the years. How much is normal? How much is acceptable?
“If I disclose that the floor isn’t level, will that scare buyers away?” It can. It’s a red flag. So what are you going to do about it? And, would you rather have this deter timid buyers before or after you accept an offer and take it off the market?
Some people at this point firmly decide that they don’t want to know anything they would have to disclose and would rather do nothing. This is certainly a fair choice. I have known attorneys who decided this about their own homes. Everyone has a different tolerance for each consequence. Most foreclosures and probates are sold with no pre-sale inspections as well. With a fixer, this path can lead to the property falling out of escrow a time or two or more, and it can lead to a much lower eventual sales price.
Second rule: You can have 5 different professionals give you an honest assessment of what they think should be done and you will get 5 different opinions costing 5 different amounts.
I once had 7 different floor guys give me 7 different estimates that went all the way from $1000 to refinish my hardwood floors to $15,000 to replace them. I had 5 different estimates to install copper plumbing that ranged from $1500 to $9,000 and they each specified exactly the same work!
So do you get the work done? Can you afford to? Do you want to? Here is how I would structure my decision-making process if I had this problem in my house and I was thinking of selling it:
1. Assume I’m going to live here for the rest of my life: what would I do about it? Would I feel safe and comfortable if I did nothing? How would I feel if I did the cheapest fix—or the most expensive one?
2. Assume I’m going to sell in the next couple of years:
a. What will it do to my property’s value if I do nothing and hope for the best?
b. What if I were buying this property? What would I expect the seller to disclose to me?
c. What if I bought this property and found out that there was a big problem afterwards, how would I feel? Would I call my attorney?
d. Who can I talk to about what to do next?
One comment I have heard countless times during inspections over the years is that drainage and water management can have a huge effect on foundations and on hillsides. One of the least expensive repairs can simply include installing gutters and diverting water away from the house. So don’t immediately expect you have a very expensive repair in front of you. Get the facts.

Here are some options that seem reasonable to me:
1. Have a physical inspection done and see what a generalist thinks of what they see. And go a step further, tell them what you know so they know what to look for.
2. Depending on what you hear, you might want to consult various professionals including:
a. A geological inspector
b. A foundation inspector
c. A drainage expert
d. A landscape designer
3. After you have inspections, see where they point you and get some estimates.
a. If the general consensus is to repair, you can choose to fix it or leave it alone. Depending on the size of the expense and your pocketbook, you can make the best decision for your particular situation.
b. Remember, you have to disclose the issue whether you fix it or not.
c. If you decide not to fix it, make your information known to the buyer and price the house accordingly.
d. If you fix it, disclose to the buyer what you did.
If you haven’t been involved in a real estate transaction for many years, the laws and paperwork regarding the seller’s obligations to disclose have changed a lot. Every year we have a new form to complete, new questions to answer. Did you know that you are supposed to provide every report that you have on the property since you bought it? If you’ve owned a place for 20 years, that can be a lot of paperwork.
Oh, that’s overwhelming! Upsetting! Unfair! I’m selling “as-is! “ Fine, it’s already in the contract that all transactions are sold in their current condition subject to the buyer’s inspection rights. And “as-is” does not mean you can choose not to make disclosures. And no, a buyer can’t expect perfection in a 50-year old house. But again, put yourself in the buyer’s shoes. What’s fair now? Which leads us to:
Rule Number 3: Price cures all problems.
So maybe the eventual price is not what you want, but every house will sell at some price. Will you make back all the cost of your repairs? Maybe, maybe not. But here’s the final rule for today:
Rule Number 4: The houses that sell for the most money are the ones that offer the best condition, location, amenities and style for the price in the current marketplace.
It doesn’t matter what you paid, it doesn’t matter what you want to net, what matters is the perceived value in the eyes of the buyer. Which would be worth more in your eyes: a house that has a serious slant in the floor, maybe some signs of water intrusion or cracks around the foundation–or a house that doesn’t?

Homeowners, get the straight story on your property tax situation directly from the source: the Los Angeles County Assessor’s office. Here is the link to the Property Tax Portal: http://lacountypropertytax.com/portal/default.aspx . From this website, you can click onto all kinds of helpful information including:
• Property Tax Relief for Owners of Fire Damaged Properties.
• Information on Decline-in-Value Reassessments
• Has My Property Been Reviewed for a Decline-in-Value?
• Property Tax Postponement Program Suspension Statement
Your property automatically qualified for a 2009 decline-in-value review under either one of the following conditions:
The property is a single-family home or condominium purchased between July 01, 2003 (2000 in some areas based on economic conditions) and June 30, 2008.
The property is subject to annual review of a temporary decline-in-value reassessment granted for the prior assessment year (2008).
Owners of properties other than single-family or condominium (residential-income and commercial/industrial for example) may file a Decline-in-Value Reassessment Application on or before December 31, 2009.
If you need help (for free) finding sales to support your lower value, I’m happy to help. But there are a couple of dates you must be aware of:
1. You only have until December 31, 2009, to file for the 2008/2009 tax year. If you miss that deadline, you can file for a reassessment as of January 1, 2010. You cannot file for that date until after April 1, 2010, and the value will be based on sales between about January 1 and no later than March 31, 2010.
2. The value we are filing for now is based on the approximate value as of January 1, 2009. The Assessor’s office is looking at sales no later than March 31, 2009.
Timesaving Tip:  You can also file the Decline-in-Value application and not fill in the sales information. The Assessor’s office will still consider your application. Also, if you have been reassessed and you disagree with their number, you have missed the deadline to file. But you can file for the next tax year.
Thoroughly confused? Well, this is the government. The property tax system is intricate. The good news is that even if you miss the deadline, there is always next year. Hopefully, that will be the last of the price declines, but stay tuned.

Check out this blogpost by Sean O’Toole, CEO of Foreclosure Radar.

http://www.foreclosuretruth.com/blog/sean/time-for-troop-surge-on-the-front-lines-of-the-housing-crisis/ 

If you look at his website and his past blogposts, you see a thoughtful, intelligent person who has studied and understood more of this real estate market than most. I know that I have done what he suggests, talked to people who are in trouble with their mortgages, and I’ve tried to help them find solutions. Unfortunately, if they are in real trouble with no equity, I can’t help them effectively because they have to negotiate with their lender–and that, as Sean eloquently points out, is where the trouble lies.

More thoughts on my chosen profession:

As I reflect on my year in real estate, 2009 has certainly been a challenge. But last year at this time, it was even more frightening. Would I ever sell another house? My notes from December, 2008, show that was a real concern to me. To relate back to what Sean wrote, I did feel like the best thing I could do was to be as helpful as I could. I wrote about the government programs in my blog, I took flyers around the neighborhood, I met with people to discuss their options even though they couldn’t sell. But I felt powerless in most cases to effect positive help.

In hindsight, it looks like the real estate market in our area bottomed out in the first quarter of this year, so I was truly facing a very dark time ahead. But as I looked around at other people going through that dark time, I could see that I had a huge advantage—I am my own boss and no one can lay me off but myself.

Imagine how vulnerable employees feel, not knowing if they will have a job next week. Even public employees are feeling the pinch with unpaid furlough days, frozen wages, pay cuts. It may not be easy to go out and sell another house, but at least I have that possibility in my day.

I have a full-time assistant and I have a family and a household to support. This has been both a burden and an inspiration to me through these difficult times. As my income was drastically reduced, I had to make a number of budget adjustments, but I always felt it was very important to make sure I kept my employee. Imagine how tough it is on a person who relies on an individual person for their livelihood. I have seen many Realtors decide that they can’t afford their staff anymore. Is that a really wise economy? There is the saying, “If you don’t have an assistant, you are an assistant.” If you spend your time doing administrative jobs, when are you going to go out there and do your real job, which it to make deals? The temptation is really strong to spend a lot of time on administration since it feels like work. But it’s not our work. Not if we are really doing what we need to do.

When the market is so difficult, it’s really easy to decide any effort you make is useless and you might as well not try. But with an assistant to keep busy and a family to support, I went ahead and got out there and looked for deals. The key to success is to be there the moment the decision to buy or sell real estate happens. If you are back at the office filing your paperwork, how will you be there with the buyer or seller?

What if we were out in our neighborhoods helping people get to the truth about what they really could and couldn’t do with their homes and providing them with achievable options?

Altadena 91001 Nine Year Graph

Altadena 91001 Nine Year Table 2000-2009

Here is the similar story to what we’ve seen in the last several blogposts–over the last 9 years, prices went up a large amount, in general, more than doubling the median and average prices.

Altadena 91001 Two-Year Graph

And over the last couple of years, we have seen average prices drop by about one-third. Keep in mind that Altadena had a large area of more or less starter-type homes that were very hard hit by the subprime lending debacle and saw prices plummet a shocking amount–even higher than the 32% noted here. But Altadena also has a very large area of custom homes in lovely neighborhoods where there have been very few sales since homeowners who didn’t have a compelling reason to sell have not gone on the market.

One issue these numbers don’t show is the unrealistic appraisals buyers and sellers have been battling as this market has begun to recover. Even back in the spring, deals fell apart because buyers were willing to pay more than recent sales would support. When you had nothing but trashed foreclosures to compare to and the house for sale was a regular sale in decent condition, it was not realistic to think the homeowner should sell at the low appraisal price.  But obtaining a loan for any more than that was almost impossible. This is part of a huge problem that shows no signs of a solution as the lending industry continues to adopt badly conceived regulations like the HVCC (Home Valuation Code of Conduct). Now we have asset managers for foreclosure properties selling at lower prices to investors who pay cash or waive loan and appraisal contingencies so they won’t have appraisal problems.

90042 2-Year Table

Let me emphasize how we need to look at these graphs and charts in terms of your own property: if you bought a house in Highland Park 2 years ago, just because the average price went down 44% doesn’t necessarily mean that your own house went down that much. These Trendgraphix tables and charts are just that, trends. The most accurate sense we can take from this information is that in the last couple of years, prices took a steep downward trend because of the large number of properties that were sold as distressed sales. If you didn’t have a really good reason to sell your property in the last 2 years, you didn’t do it, so the averages and median prices are skewed downward where the bulk of the sales actually happened. Therefore, good houses that were not distressed sales tended to sell much higher than the general trends would lead you to believe, though still for less than they might have sold for at the peak.

The 9-year trend information shows that over time, real estate prices have tended to go up, evening out the longest run-up in prices we’ve seen with the worst economic downturn we’ve had since the Great Depression.

So if you are a buyer in today’s market, what do these numbers mean to you? If you are thinking about buying a home today, you are going to get a really good deal if you put it into the context of the past peak in prices and the potential of appreciation over time. It’s that simple.

90042 - 9-Year Graph

90042 9-Year Table

South Pasadena has proven to be similar to Eagle Rock, having about doubled in value over our 9-year time span.

91030 South Pasadena 9 Year Graph

South Pasadena 9 Year Table

As you can see, the prices are higher in South Pasadena, but the curve has been similar to Eagle Rock.
In the last 2 years:

91030 South Pasadena 2 Year Graph

South Pasadena 2 Year Table 2007-2009

We see that prices didn’t fall quite as dramatically, but losing a quarter of a home’s value is no small number. It looks like prices have stabilized somewhat in South Pasadena, but we’re not seeing any healthy price increases at this time. Remember, in Eagle Rock we are seeing an actual trending up right now, but South Pasadena didn’t really have the big drop earlier that Eagle Rock did.

Why is that? Perhaps because South Pasadena isn’t as much of a first-time buyer market as Eagle Rock is?
Now let’s look at a zip code that is really not an entry-level marketplace, 91108, which includes San Marino:

San Marino 9 Year Graph

San Marino 9 Year Table

The general trend from 2000-2006 is generally up exactly like every other zip code around here, but over the 9 years, this zip code appreciated 82%, around 20% less than South Pasadena and Eagle Rock. But now, look at the spike in the asking price versus the sold price. I guess we’re thinking we’re the Beverly Hills of the San Gabriel Valley, aren’t we? But look at the table for the average sold prices in the last 2 years here:

San Marino Real Estate 2 Year Table

You can ask whatever you want for your property, but the fact is that people are going to pay what they (and the bank, if there’s a loan) think it’s worth. Look at March, 2009—one property sold! In January, only 3 sold. These are really small numbers to try to make any sense out of. This tells me that very few of these homeowners were either willing to sell in the worst part of the market, or that they absolutely had to. Voila! Upon scrutinizing the details on the March 2009 sale, I find that this was a corporate relocation sale. Most of the time, you won’t know from the public data what crisis might have forced a sale unless everything went over the edge to a short sale or a foreclosure.
Here’s the graph of the last 2 years for San Marino:

San Marino 2 Year Graph

It looks like San Marino was just as hard hit by the downturn as everyone else, as far as sold prices goes. And although the asking prices are going up, the sold prices are not. How long can this go on?

FHA raises Buyer Requirements

This just in: according to an article on www.Inman.com , Congress  and HUD (the US Department of Housing and Urban Development) is looking at raising down payment and credit score requirements and lowering seller maximum concession limits for FHA borrowers. This won’t add anything to FHA reserves, but it will significantly limit options for first-time buyers. Check out the full story at http://www.inman.com/news/2009/12/3/fha-will-tighten-in-2010.

This is the first of my end-of-year reflections on where we are and where we’ve been and why do we do this anyway?
I have lots of caveats about the following statistics. Note that the source is called Trend Graphics. These are generalizations, trends, an overview of what the market has done over a period of time. Just because the average price of homes in the Eagle Rock 90041 zip code has gone up 104% in the last 9 years, doesn’t mean that if you bought your home in October 2000, that it is worth 104% more today. But it does mean that generally speaking, homes in Eagle Rock are worth about double what they were in 2000. Some might be more, some less, but it’s a good benchmark.

90041 9-year Table

I think that speaks well for real estate as a long-term investment. Especially when you see that the values in the last 2 years plummeted 35%. One reason our inventory is so low is we all remember what we might have gotten in 2007 or 2008 and we just can’t bear to hear what we need to accept now. I’ve heard this argument many times so far this year. Cheer up, take the long view. Even after all the ups and the downs, if you have owned your home for a long time, you’ve done ok. If you have a good reason to move now, don’t let what might have been 2 years ago stop you. Imagine how much less you would have gotten at the beginning of 2009, now that was a lousy time to sell!

90041 2-Year Graph

90041 2-year Table

But what if you had sold your house at the bottom of the market in the beginning of this year and bought another, also at the bottom of the market? Hmmm.

This is a reprint of an email from the LA Conservancy. I’m posting it because we have many modern historical properties here in Los Angeles that are vulnerable to development. The LA Conservancy is the premier organization that stewards the preservation movement in Los Angeles, and it needs and deserves your support. Please pledge your support and send this on to everyone you know.

Yamasaki Associates

Happy Birthday, Minoru Yamasaki!
Today would be the ninety-seventh birthday of Minoru Yamasaki (1912 – 1986), the acclaimed architect of the Century Plaza Hotel. The Seattle-born Yamasaki produced distinctive designs in a career that spanned five decades.
In addition to the Century Plaza, he was responsible for buildings including the 1956 Lambert-St. Louis Airport Terminal, the 1962 U.S. Science Pavilion at the Seattle World’s Fair, the 1961 Dhahran Air Terminal in Saudi Arabia, Century Plaza’s Twin Towers (1975), and most notably, New York’s late World Trade Center Twin Towers, completed in 1973.
Yamasaki created a complex body of work that is just now beginning to be fully understood and appreciated.
Today we celebrate one of America’s great architects and his contributions to the field. Yamasaki’s Century Plaza is one of Los Angeles’ most beloved and iconic hotels, and we thank him for it.
Yamasaki profile on the National Trust for Historic Preservation website, with links to other articles: http://www.preservationnation.org/issues/diversity/asian-pacific-american-heritage/profiles/minoru-yamasaki.html
More about the Century Plaza Hotel: http://laconservancy.org/centuryplaza/

Help Spread the Word
Thank you for pledging your support for preserving the Century Plaza Hotel. We have more than 1,350 pledges to date and would like to get to 1,500 before the end of the year. Please help us create an even stronger coalition to save this beautiful hotel!
Forward this message to a friend
If this was forwarded to you, pledge your support!
If you have any questions, please contact us at savecenturyplaza@laconservancy.org or (213) 623-2489.
Thanks for your support!

Photo: Minoru Yamasaki on the cover of TIME Magazine (Reprinted through the courtesy of the Editors of TIME Magazine © 2009 Time Inc.)

Minoru Yamasaki