When hard times arise, so does crime.

The latest real estate scam strikes at people who are struggling to find a home they can afford in a nice neighborhood.  The fraudulent “owners” find a house for sale that appears to be vacant, look up the owner’s name, then advertise it on Craigslist or Hotpads or other free websites as being for rent for a really great price. The ad has an email/phone that goes to them, not the real owner. The “victim,” a.k.a. prospective tenant, is told to go look through the windows and see if they want to rent the property. Then they are advised that they can secure the property by sending a money order to a particular address.

If you think about it, this is almost as lame as the prince of some distant African kingdom needing your help to obtain his inheritance.  The prospective tenant goes to the property, sees the Realtor’s for sale sign, calls the Realtor and finds out that the deal is a scam, and does not send the money to the fraudulent owner.

One woman told us that she lead the scammer on for a little why and he told her to just peek in the windows of the house “since he is in Washington and his wife the “minister” is in Texas so they wouldn’t be able to meet her.  He told her he would send her the keys and rental documents via overnight mail if she wired him $2400 through Western Union.

Here’s the basic response that people get when they inquire on what looks like an amazing rental deal (click to view larger):

What can I do? I have reported the ad as a scam and the website has not removed the ad. I am not a detective or a law enforcement officer.  All I’ve thought of so far is to courteously tell every person who  calls me that it is for sale not for lease and to congratulate them that they are smart enough to check on a story that sounded too good to be true. And to write this blog to let you know what goes on out there.

The only thing that really can be done is to spread the word about these scams so people can recognize them when they happen.  Please forward this on!

November Home Sales Glassell Park/Mount Washington 90065

Here are all the single family home sales in Glassell Park/Mount Washington 90065 from November.  The high sales price was $740,000 (compared to $786,000 in October), the low sales price was $156,600 (down slightly from $177,000 in October), and the median sales price was $387,500 (down from $403,000 in October).

You can also see the November sales for Eagle Rock 90041 and Highland Park 90042.

November Home Sales Highland Park 90042

Here are all the single family home sales in Highland Park 90042 from this November.  The high sales price was $630,000 (compared to $680,000 in October), the low sales price was $210,000 (up from $175,000 in October), and there was a median sales price of $360,000 (down from $405,000 in October).

Also check out the November home sales for Eagle Rock and Glassell Park/Mount Washington.

You can see what Highland Park homes sold in October here.

November Home Sales Eagle Rock 90041

Here are the single family home that closed escrow in Eagle Rock 90041 this November.  We have two exciting home sales to report: 1205 Eagle Vista (a beautifully remodeled midcentury which sold for $1,155,000 and is now the highest home sale in Eagle Rock since 2007!), and 1260 Hill Drive (another great midcentury which sold for $725,000 and has a price per square foot of $489.20 – we’re working on getting Eagle Rock property values back up!).

Check out what sold last month in Highland Park and Glassell Park/Mount Washington.

You can see what sold in Eagle Rock in October here.

This is the hot question for Sellers as we head into the intense heavy holiday season post Halloween, pre-Valentine’s Day.  Common wisdom says that people aren’t interested in shopping for houses when they have toy firetrucks and the latest video game to buy for the kiddies and spouses.

But we here at the Tracy King Team at Teles Properties do not believe in the “common wisdom” theories of real estate sales because we are not common and neither are our sellers and buyers. We are exceptional! And we believe in doing business all twelve months of the year.

Two weeks before Thanksgiving week we brought a new La Canada listing on the market and sold it in 7 seven days. We also brought a Pasadena listing on the market the week before the holiday and had 100 people at the broker’s open house on Thursday and 50 people at the Sunday open house in the pouring rain! We also put an Eagle Rock listing back into a new escrow and finalized opening a new escrow in Highland Park.  Buyers are not halting their home shopping!

On the national front, DSNews.com, a distress property servicer news organization said:

Since our corner of the Los Angeles metro area is generally doing better than the national averages, this is especially positive news.

I know you’re still thinking to yourself, “But will the market be even better in the Spring?” – well, that is almost 4 months away and my crystal ball is currently in the shop.  The way we’re working, we could be listed, marketed, sold and closed escrow by then – and you could be onto the next part of your life!

So what are you waiting for?  Home buyers sure aren’t waiting!

Distress sales account for between 30-50% of the total housing sales both nationwide and in a number of local areas. In 2008 and 2009, there were a lot of foreclosures and now there are many more short sales. This has had a downward pressure on home prices in general. Also affecting prices has been the uncertain job market. If you are afraid you might lose your job, you don’t want to put your life savings into a down payment on a home you might not be able to afford in a few months. A number of homeowners have experienced job loss and this has resulted in many of the distress sales. You see the inter-woven relationship between the economy and the housing industry operating here.

But look at this graph of housing inventory for Eagle Rock 90041:

The number of homes on the market compared to the number of homes that go pending and sold has dropped significantly over the last couple of years. The monthly supply of inventory of homes available to sell was slightly over 2 months in September, 2011.

Typically, less than 4 months inventory indicates a seller’s market. So why are prices down? The common theory today is that “Shadow Inventory” (the number of potential foreclosures and short sales from people who are currently “upside down” on their loans) is causing prices to stay low. Why? Because if they all came on the market at once, prices would collapse. I have pooh-poohed this theory before because why would they all come on the market at the same time?

But here is another way to look at it:

With the inventory so low, this inventory of distress sales does take on a significant importance. Meaning, if over half the properties that sell are distress sales, those distressed prices affect the regular market. The common discount that a short or foreclosed property sells at has been computed as around 27%. But if you look at this year’s Eagle Rock prices, you only see a 5% discount. Why? Partly because with so many distressed sales, they have pulled the prices of “normal” sales down to a lower level in general.

Another aspect of the market is the “retail show ready” property vs. the “fixer poorly presented” property.  Look at 2030 Estes Rd, a midcentury home, almost entirely remodeled, staged and gorgeous – and compare it to 4842 Algoma, a short sale, not available to be shown, in need of a lot of repair. Guess which one sold for $925,000 (23% over the original list price) in multiple offers in 21 days (start to close of escrow) and which one sold for $470,000 (15% under list price) in 48 days? That is a huge difference in price for houses that were very similar in size. And they both sold for cash!

This is an extreme example of a distress property selling at over 50% less than the regular sale, but the condition, location and amenities of the properties were quite different as well. In other words, if these two properties were in the exact same condition and presented equally, Estes still would have sold for more because of its location, style and amenities. But how much more? That’s why pricing a home for sale and determining value with an appraisal is an art, not a science.

The real estate market has hit the Pause button in the last few days. Why? Who knows? Waiting for another shoe to drop (such as even worse economic news?) It doesn’t make a lot of sense, really. Mortgage interest rates have dropped to the lowest in over 50 years. Lots of people have rushed to refinance their homes, but many have discovered that the rules are too tough for them to qualify now. Appraisals are extremely conservative, which means that if you refinanced back in the boom times a few years ago, you might owe too much to qualify for the required 20 to 30% equity that lenders want you to have now.

People who ask me about the real estate market assume that no one is buying because no one can qualify for a loan these days. Surprisingly, this is not true. Lots of people can qualify and are walking around today with pre-approval letters hanging out of their pockets. They even have 20% down payments sitting in their bank accounts ready to go to purchase that new home. Why don’t they make a move?

We’ve talked before about fear and how that has been holding the market back for quite awhile now. Fears such as: what if the prices drop more? What if I lose my job? What if a better buy pops up next week? What if my friends/relatives think I’m stupid for buying now?

Another obstacle is information overload. Every day we hear more economic news about things we really don’t understand, like, say, the Case-Shiller index or Standard and Poor’s credit rating of companies or countries. We hear about Europe’s economic woes, we see the stock market rocket up and down. What does it all really mean? How can we make a good decision in the face of all this information (so much of it bad news)?

How about trying this: turn off your radio, throw the newspaper in the recycling bin, and think about what you really want. Do you want a home to live in for several years? One that you can make your own with your unique designer touches? One that your kids can grow up in with a sense that they are loved and provided for? Want to try your hand at urban gardening? Raising a litter of puppies? What does any of that have to do with the Euro?

For most of us, not much.

The percentage of people in the United States who own their homes has varied between 65% and 70% over the last several years. “Experts” are saying that we probably won’t see 70% home ownership again. So what? So what if it is 65% forever more? Isn’t that still a large majority of the people in this country? Can we agree on this: most of the people in this country live in homes that they own?

Let’s go back to the basics for ourselves. A home is a big investment and the decision to purchase should be taken seriously, but life goes on day by day by day. Things do change, such as interest rates and loan guidelines. If you qualify for a good mortgage today, do you want to risk that you don’t qualify under some new guideline tomorrow? Do you want to wake up one day and see that your opportunity has passed you by?

Now I understand why some foreclosure agents (who typically deal with a lot of offers) are so difficult to get a response from when I submit an offer to them. I have a listing that we “event priced,” that is, we listed it at such a good deal for the neighborhood it’s in that lots of people made offers. We had initial offers that went 25% over asking, so we countered everyone back at that. A number of people dropped out with the attitude of “Was that a typo?” “How do you think you are going to get that?” and the like.  But we did get a few that were up at that price, and the highest one was quite a bit over.

So why did it take us almost a month to get this home in escrow?

The highest offer was VA financing, which means no down payment, seller to pay 3% of the buyer’s closing costs. The real issue is that, because the house needs work, a VA appraiser could require a lot of repairs and the seller would have to fix them before the loan could be finally approved. The seller isn’t in a position to do repairs (a major reason why we priced it the way we did.) So this is kind of a “teaser” offer. When I asked the lender what could happen with the appraisal, he said it was 50/50 that they would require a lot of repairs.  How much of a gambler is the seller?

The next highest offer was for cash. They accepted our terms, but didn’t read the offer well enough to see that they were supposed to counter us back with their best and final offer. We couldn’t reach them for several days and when we did, we were told that we should have emailed them. So why give us phone numbers? Why didn’t they tell us that? Then they said yes to our “best offer over” price verbally, but then they countered in writing at $15,000 less.

The next offer was the most reliable deal: cash, a good agent, a savvy buyer. But at this point it’s the third highest.

Which one would you take? Or would you keep waiting?