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  • Address: 2120 Colorado Blvd., Suite #1, Eagle Rock, CA 90041
  • Office Phone: 323-274-2148

Tracy King Blog - Eagle Rock Real Estate - Northeast Los Angeles Realtor


LA Digs - Northeast LA Real Estate Blog

Welcome to LA Digs, the real estate and Northeast Los Angeles community blog written by Realtors Tracy King and Keely Myres.

Here, we share tips, market updates, and local news bits to keep you informed on what's happening in Northeast Los Angeles and the surrounding neighborhoods. Read on to learn about the latest in your neighborhood!

It’s Up, It’s Down, It’s Up--It’s the Highland Park Market Update!

How is 90042 doing this year over last year at this time?

What looks like bad news is that the number of listings is up while the number of pending and closed sales is down:

But wait! Look at the average price per square foot!

And look at the average sales price vs. list price!

What is a buyer or seller to do?

If you listen to the news, you will be so confused. One day it’s a good market and housing is a good buy, the next day there is more trouble to come.

Right now, interest rates are back under the 5% range, sellers who are realistic and motivated are eager to sell, and buyers who have the courage to take advantage of this market can find good quality homes to buy.  So all of you, call me!  If you are motivated, I can help you realize your real estate goals.
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More good economic news...

Real estate sales rebound in 2011, prices nearly flat

NAR forecast anticipates quicker recovery for new homes

By Inman News, Thursday, January 27, 2011.

Inman News™

In its latest real estate and economic forecast, the National Association of Realtors anticipates that sales of existing homes, after falling 4.8 percent in 2010, will rise 7.9 percent this year, to 5.3 million, and another 4.5 percent in 2012, to 5.53 million.

The median price of existing homes, meanwhile, rose 0.3 percent in 2010 after a 12.9 percent drop in 2009, and is expected to rise 0.5 percent this year, to $173,800, and another 2.4 percent in 2012, to $177,900.

Sales of new single-family homes are expected to rebound faster, rising 17.7 percent this year, to 374,000 sales, after a 15.5 percent drop in 2010, and then rising 51.1 percent in 2012, to 565,000 sales. In an earlier forecast, released last month, NAR anticipated that sales of new single-family homes would climb 20.8 percent in 2011 and 30.9 percent in 2012.

The new-home median price rose 2.2 percent in 2010 and is expected to climb 1.8 percent this year, to $224,700, and 1.9 percent in 2012, to $229,000.

NAR expects that 30-year-fixed mortgage rates will average 5.1 percent this year, up from 4.7 percent in 2010, and rise to 5.9 percent in 2012.

The group also forecasts the U.S. unemployment rate to fall from 9.7 percent in 2010 to 9.4 percent this year and 8.7 percent in 2012, while U.S. real gross domestic product is expected to dip from 2.8 percent in 2010 to 2.6 percent this year, rising to 3.2 percent in 2012.

Also today, NAR reported a 2 percent month-to-month rise in December for its index tracking pending sales of existing homes, though the index was down -4.2 percent compared to December 2009.

The Pending Home Sales Index tracks homes for which a sales contract has been signed but the transaction has not yet closed. Typically, a sale is finalized within one to two months of signing, so the index is considered a leading indicator.

Regionally, the index fell 10.7 percent in the West, 5.3 percent in the Northeast and 5.1 percent in the Midwest while rising 1.7 percent in the South in December 2010 compared to December 2009.

And the index dropped 13.2 percent in the West while rising 11.5 percent in the South, 8 percent in the Midwest, and 1.8 percent in the Northeast from November 2010 to December 2010, NAR reported.

Lawrence Yun, NAR's chief economist, said in a statement, "Modest gains in the labor market and the improving economy are creating a more favorable backdrop for buyers, allowing them to take advantage of excellent housing affordability conditions. Mortgage rates should rise only modestly in the months ahead, so we'll continue to see a favorable environment for buyers with good credit."

NAR reported last week that the sales rate for existing homes rose about 12.3 percent from November 2010 to December 2010, but fell 2.9 percent compared to December 2009. The median price of existing homes dropped about 1 percent year-over-year in December, to $168,800.

Sales of new single-family homes were up an estimated 17.5 percent from November 2010 to December 2010 and fell about 7.6 percent year-over-year in December, the U.S. Census Bureau and Housing and Urban Development Department reported Wednesday. The median price rose about 8.5 percent year-over-year in December, to $241,500.

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Last week the sky was falling, this week...?

The big real estate news in the last few days has been the Case-Schiller report which says that home prices have slid! Let’s look at this rationally:

This report is for October-November 2010 sales. When interest rates ticked up in December, the buyers came running for homes to buy before they were priced out of the good deals.

This “big slide” in prices totaled a whopping 1% in Los Angeles County. Come on, folks. Is Chicken Little back in town?

Nationwide, as President Obama says, “…after the worst recession in decades, we see an economy growing again.” Oh, but the news says different about the housing market:

U.S. Home Prices Keep Weakening as Nine Cities Reach New Lows According to the S&P/Case-Shiller Home Price Indices. November 2010
U.S. Home Prices Weaken Further as Six Cities Make New Lows According to the S&P/Case-Shiller Home Price Indices. Data through October 2010,
Broad-based Declines in Home Prices in the 3rd Quarter of 2010 According to the S&P/Case-Shiller Home Price Indices. Data through September 2010.

April, 2006 was the highest index for Los Angeles County: 273.10
November, 2010, was 171.86.
The lowest index was 160.34 in May 2009.

So what is this NEW LOW? The index was all of .22 lower than the previous month’s report, and although it was the lowest of 2010, we are still talking about a total spread over the whole year of less than 5 points, which is over 10 points higher than the low of May 2009. All this in comparison to the truly big drop of over 110 points from the peak of April 2006, to the trough of May 2009. OMG! But let’s not all leave our homes in despair quite yet. (And where would we go? Under the nearest bridge?)

Let’s look at more local data.  Just so you don’t think I’m a Pollyanna insisting that everything is wonderful, the table below shows the “peak to trough” numbers for several zip codes in Northeast LA, Altadena, South Pasadena, Northeast and Southwest Pasadena: You can see that we had drops of 41 to 77% from the highest quarter to the lowest. But that doesn’t mean that if you live in Southwest Pasadena that your particular house lost 77% of its value and is now worth less than half of what it was in August of 2008. That zip code actually lost less value over the last 4 years than the others. These numbers reflect what houses sold for in the last few years, not what your house is worth today. And although lenders hire appraisers who look at the past sales to indicate current value, we don’t have very many housing tracts of identical houses in Northeast Los Angeles. What your neighbor’s house sold for is not necessarily what your house will sell for.

Confused yet? Think about the poor buyers in the market right now. Last week it was all about how prices are sliding. Today the December numbers showed much stronger improvement than “the experts” thought. We who own homes think we are above any of this value talk. My house is worth $800,000 because I say so, doggone it! What is a buyer to do? We can only look at what is available versus what similar (?) properties have sold for, versus what a lender will agree to lend on it. Unless we can pay cash. I wish we could. Then we wouldn’t have to put up with all this loan craziness. Unfortunately, most home sales involve a lender and the lender wants to make sure their investment is secure. Tiresome, but understandable. Especially if you own stock in a mortgage company or a bank (you don’t want these banks just lending money on anything do you?)

This is the dynamic of the housing market: recent sales influence the value of the current sale. In custom-built, diverse, eclectic neighborhoods like ours in the Northeast LA and Pasadena areas, pricing is an art not a science. Average price per square foot is a Zestimate, and we all know what we think of Zillow’s numbers. I don’t care what some appraiser says, there is a huge subjective aspect to valuing a home. Sometimes the appraiser, buyer, lender, seller and agents all agree, and many times we don’t.
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Foreclosure and Short Sale Update for Eagle Rock, 90041

How did Eagle Rock do with distressed property sales this year? It’s interesting. In 2009, there were 118 sales of which 17 were short sales (15%) and 45 were foreclosures (38%); so a total of 53% of all sales were distressed. The average sales price was $446,000.

In 2010, we had 22% short sales (28) and only 12% (16) foreclosures of the 130 sales recorded (according to the itech Multiple Listing Service).  So 34% of all sales were distressed properties. The average sales price was $468,000. It’s good to see an improvement, but we certainly haven’t “bounced back” as many hoped that we would.

A big difference is that there were a lot more foreclosure sales in 2009 than in 2010. I credit the increase in short sales and resultant decrease in foreclosure sales to the change in lenders policies toward short sales. They became much more amenable to granting short sales.  I closed more short sales this year (3) than the year before (0), all of them listings.

It looks like we are doing a bit better in 2010 with somewhat more sales and higher average sales prices as well as fewer distressed properties sold overall. Another way to say it is that 66% of sales in 2010 were “regular” sales as opposed to 47% in 2009. It’s interesting to note, however, that the highest sales price in 2009 was over $200,000 higher than the highest in 2010. In my opinion, the reason there were more distressed sales in 2009 than regular sales was more because “regular” sellers wanted to wait out the downturn and sell later when the market recovered.  This year, some of those people either couldn’t or decided not to wait any longer to sell. Price is of key importance, as well as the perceived desirability of the property for sale.  Buyers are not as reluctant to make offers much lower than the asking price today, which is helpful when they are sincere offers that can be negotiated up. One of my sales this year started off with a $165,000 difference in offer vs. list price, and we eventually ended up at $65,000 less than asking.  With no predictions or indications of a quick return to prosperity in 2011, it will be interesting to see how sellers and buyers deal with that. I have noticed that the uptick in interest rates has encouraged an end-of-the-year flurry of business.
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Market Update: End of 2010

It has been a volatile year in the real estate business in our little corner of Los Angeles—and the world. The good news is, every community from Glassell Park to Pasadena has had a net gain in average sales price from January to November, 2010. From as little as 1.3% in Eagle Rock to as much as 32.9% in Altadena, this is ok news.

Let’s be clear: this doesn’t mean that the value of your home has gone up by your respective community’s rate of increase. All these figures do is show that some progress has been made in the last year in terms of value. Let’s look at this in the darker terms of that fateful 15 months between the peak around the beginning of 2008 to the trough of March 2009 where several of our fair communities experienced over a 50% drop in average sales price. No! you say. My house didn’t lose half its value in 15 months! Correct.

But, looking at the graphs for these communities, there was a general peak in average sales price in May, 2010, right after the first time buyer tax credit expired, with a fair depression after that, and then a slight upturn recently. Check out my blog at www.LADigs.com for all the graphs and tables.

At last, the 50-year low in mortgage interest rates stimulated a little upturn in November. And now, December 8, interest rates have ticked up about ½ point. Thanks a lot, mortgage industry!

Over this year short sales started to be a bit easier to get through. We saw the number of foreclosures decline as the government tried to help homeowners work out their financial problems due to loss of jobs, loss of home value, loss of options. So, short sales happened more often amidst a lot of talk of loan modifications. I still only know one person who has accomplished a permanent loan modification and she doesn’t live in Southern California!

Here is my personal opinion based on a lot of subjective evidence: there is a lot of confusion about what the problem is and how to solve it because this problem is so complex, it’s like 10 blind men interpreting their touch of an elephant. Everyone feels a true part and it adds up to being wrong.

This problem is too complex to understand easily, and it’s too big to solve easily. I talk to homeowners who want to know my professional opinion of what the market will be for their home in the spring or next summer. No true professional can tell you what your home will be worth even next week! Remember the definition of market value: what a willing buyer and a willing seller agree upon, subject to a lender’s appraisal if a loan is involved. And buyers today are very nervous, they don’t want to overpay.

Our real estate values are closely related to the economic picture as a whole, and who do you know who can explain that? Just remember that if a person doesn’t have a job, they aren’t likely to be able to buy a house. The better the job outlook, the better the real estate market.
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Tracy King, Realtor
DRE# 01048877
Phone: 323-274-2148 | This email address is being protected from spambots. You need JavaScript enabled to view it.
COMPASS DRE# 01991628

Keely Myres, Realtor
DRE# 01834633
Phone: 323-274-2148 | This email address is being protected from spambots. You need JavaScript enabled to view it.
COMPASS DRE# 01991628