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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

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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!

Magical Thinking and this Crazy Real Estate Market

Magical Thinking and this Crazy Real Estate Market

Homebuyers and home sellers's expectations often clash with harsh realities of the market when it comes to the nitty gritty ... selling price and offers.

Magical thinking and this crazy real estate market. What am I talking about? I have some examples.

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What is a Home Worth? An Update on the Local Real Estate Market

Foreclosure inventory is down nationwide (according to Corelogic’s National Foreclosure Report), and by almost 20% on a year-over-year basis.

What difference does this make to the value of your home, you ask? As the number of homes in distress goes down, the price of homes selling in your neighborhood is more likely to go up. This is one important piece of the housing recovery puzzle.

At the same time, buyers today are very well educated about the local real estate market. Did you know that you can find out what properties are in some stage of the foreclosure process on Zillow.com for free? As with many facts today, this raw information can lead people to some flawed conclusions.

If you look at Eagle Rock, 90041, on Zillow, you see a number of homes in some form of distress -- 82, in fact. These homes are what is called Shadow Inventory (properties that are in some stage of mortgage default.) Since there are only 17 properties currently for sale in 90041, this would seem to indicate that the Shadow Inventory is 4 times the current inventory. Doomsayers might say this means that if all or most of the shadow inventory came onto the market at the same time, it would have the effect of flooding the market with distress sales and would bring prices down. Therefore, they conclude, prices are depressed in Eagle Rock.

That’s kind of like saying if everyone who came to a traffic light suddenly decided to run the red light, we would have a whole lot of accidents and insurance rates would go up. Probably true, ifthat happened, but the idea of everyone losing their minds at the same moment is unlikely. The likelihood of all or even 10 of the 82 distressed properties coming on the market at the same time is also practically non-existent.

But some people like to look at the worst possible outcome. Many buyers are hoping that the housing market will continue to be distressed so that they can still jump in and get “a deal.” Many of these same buyers have been looking for a home off and on for several years and have passed up many “deals.” I have talked to a few of these people and many of their friends who have discussed how Joe Smith should have bought that cute little house on XYZ street last year when he had the chance because now he is going to have to settle for a much smaller house for the same money.

It is very difficult to know how much a home is “worth,” especially when you are a buyer in a multiple offer situation. It’s almost as difficult when you are the only buyer about to make an offer on a house. But ponder this: what would you be thinking about the deal you made on a house if you bought it 2 or 3 years ago?

Too much information can be a bad thing. If you are expecting all this Shadow Inventory to give you the opportunity to get a great deal on a house, you're going to be waiting awhile. The reality of today's real estate market, at least in Eagle Rock, Highland Park, and the surrounding neighborhoods, is that there is low inventory available to buy, there are multiple offers on most homes, and sales prices are typically going over the asking price. Yes, even that house that you think needs a new kitchen is getting multiple offers - because there are buyers who realize that they want to buy a house now, and the longer they wait, the less house they can buy.

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Why Do We Buy Homes?

Everyone has been so concerned with the real estate market’s ups and downs, gain or loss in value, future prospects, that we have lost sight of the point of it all: Home.
Why do people buy homes? Here is a list of all the reasons I could think of quickly. How many apply to you?
  • To have one to live in, for the most part.
  • To define a space that is an expression of ourselves, our creativity, our artistic vision.
  • To be safe.
  • To be comfortable.
  • To provide shelter for ourselves and our families.
  • To be a personal retreat from a hectic world.
  • To be a meeting place for friends and family.
  • To be a symbol of our success.
  • To represent a stake in the community.
  • To be a tax write-off.
  • To be an investment.
  • To be a do-it-yourself project all our own.
Today, mortgage interest rates are at a 60-year low (!), prices are the lowest they’ve been in 5 to 10 years, and we are now seeing real (though tiny) signs that we are inching into recovery. The smart people are stepping forward and getting some great deals, not only on distress sales, but good regular houses.
Here’s my thought: even the properties that seem to be selling at a premium are deals today. If you look at what happened in the 90s and what people paid for homes in, say, 1995, today they look like incredible bargains. Even what people paid in 2000 was dirt cheap compared to now.Sometimes things don’t work out the way we want or expect them to. We move before we think we will because of work or divorce or some other necessity. But even if you have to move before your home becomes a profit center, you will have had the enjoyment of your own space. If you take a long view of owning homes and you focus on what you have put into living in them, the good times you have spent, the lessons you have learned, you may find that the returns have been much more than monetary. After all, do you only do the things in life that make you money? Do you only assess your success in life by the profits you have made? Or do love, comfort, joy and beauty enter into it?
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What is Happening in the Real Estate Market?

From our research department at Teles Properties:

The question is still- “What is Happening in the Market?”  This week, “Inside the Market” is highlighting a few articles that seem to address where we are and where things are going for the real estate market.  Topics include historically low mortgage rates, a housing market ready for a rebound, falling or rising home prices and the difficulty for some home buyers.  Take a look at all the articles below and share your thoughts!

December 12 – 16, 2011


Articles:

“Residential Housing Ready to Awaken?”

After half a decade of withering sales and slumping prices, there are strong and diverse signs that the single-family housing market is poised for a rebound.

CNBC



“Mortgage Rates Hold Near Record Low ”

Fixed mortgage rates in the U.S. again held near record lows over the past week, according to Freddie Mac’s weekly survey of mortgage rates.

Wall Street Journal

“Why Home Prices Are (and Aren’t) Stabilizing”

Home prices are falling again, but some analysts see a silver lining because the prices of homes that aren’t selling out of foreclosure have been holding steady.

Wall Street Journal



“Lower Credit Scores Slow Housing Recovery by Thwarting Sales”

Many Americans’ credit scores have fallen because of economic distress in the last few years. It’s probably affecting their ability to get a new mortgage or buy a house

Los Angeles Times

To download the articles from this segment, click on the following links:

Residential Housing Market Ready to Rebound

Mortgage Rates Hold Near Record Low

Why Home Prices Are (and Aren’t) Stabilizing

Lower Credit Scores Slow Housing Recovery by Thwarting Sales

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Will the Real Estate Market be Better in the Spring?

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:



Existing-Home Sales Rise Unexpectedly in October


Sales of previously owned homes got an unexpected boost last month while the number of homes on the market continued to decline, according to data released Monday by the National Association of Realtors. The trade group recorded a 1.4 percent month-over-month increase in existing-home sales in October.


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!

 

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If You're into Infinitesimal Changes...

The annual rate of change in home prices continues to show improvement, according to Standard & Poor’s. Data just released by the agency shows the 20-city composite reading of the S&P/Case-Shiller index for August came in below its year-ago level by 3.8 percent. The previous month, S&P reported a 4.1 percent annual decline. The closely watched gauge posted a 0.2 percent increase in August versus July, marking the fifth consecutive monthly gain.

Posted via email from Tracy's LA Real Estate

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Why Should I Buy Now?

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?

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Market Report: Eagle Rock

ERGraph081111 copy

Here’s my take on this report:

Median price means half the properties sold for more than this number and half sold for less than this number. Is it meaningful? Figure this out (all concerning the month of July only):

3 of the sales this year were for more than the highest sale last year

But what is truly noteworthy about this year over last year is:

The number of active listings is over 40% fewer
The number of properties pending sale is 150% more
The percent of properties under contract compared to what is on the market is over 330% more!

The market is much more active right now. Why? We can say it’s low interest rates and that there is a perception that we are truly at the bottom, but we had the same factors going last year. The economic news isn’t much better, in fact, a number of homeowners have decided to sell because the future holds no promise that the picture will improve in the next couple of years. I think the true meaning is that buyers are buying homes to live in because everyone has to live somewhere and many people do not want to rent, and sellers can sell in this market if their homes are priced right.

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Appraisal Is Art Not Science

I’ve been reflecting on appraisals lately, and I’m not alone— almost everyone who sells real estate is having appraisal issues. Why? Because appraisals are based on closed sales, appraisers are evaluating the present value based on the past value. If we’re in a declining market, appraisals will be close to the price that the buyer and seller agree on. It’s when we are in a fairly normal or increasing market that we have the issues that many of us face today. You might see this as good news since it could be an indication that the market is normalizing or increasing. From the appraiser’s view it just looks like available comparables can’t justify increasing sales prices.

There is general acceptance of the notion (believed by many appraisers) that appraisal is a science, not an art (even though you’ll get as many different valuations as you have appraisers on the same property.) Many buyers believe this as well. But consider this scenario:

There is a 2-bedroom, 1.5-bath house in good condition in a nice neighborhood in a small community within Los Angeles. It has a guest house for which no permit can be found, nor can a permit be found for the half bath. So for appraisal purposes, this is a 2-bedroom, 1-bath house. Because very few properties like this sell in any 3-month period, the only sales comparables that fit this size house are distress sales in poor condition that sold in the range of $350,000 to $450,000. Six months ago, there were a few comparables that sold for $480,000 to $520,000. An appraiser brought in a value of $440,000. Why? Because the “good” comps were too old and the more recent comps were all low, so to his mind that meant that the current value was lower.

Here are some questions for you:
Had this appraiser seen all the properties that he used for his research? No, because in the current appraisal business these appraisers are working all over Southern California. The likelihood that they have ever been inside the comparables they use is slim.

Did he talk to the Realtors who actually did see the properties? Very few appraisers bother to do that.
Did he listen to the listing agent who met him at the property with comparables? No, because he thinks that appraisers know more than Realtors who are just trying to make a sale. He pretty much said that.

Why all of a sudden did we have such low comparables? Did the values drop? Again, very few properties of a given size sell in this zip code. By chance, the only three of that size and configuration that sold in the previous 90 days were short sales and foreclosures. The consequence is that regular sellers who own 2-bedroom 1-bath houses are reluctant to sell because the only comparables that appraisers are willing to use are so low. It’s a vicious cycle. One almost feels that that is what some of these appraisers and lenders want to see happen, because it is less risky for prices to be low.

When prices drop, regular sellers either don’t need or want to sell or can’t because they now owe more than the property is worth. They can’t refinance into a lower interest rate for the same reason. In 2005-2007, if you lost your job you might be able to use your equity line of credit to get by for a month or two. Or you could sell for a profit, move to a less expensive home and rent for awhile until you got on your feet. Today more people are stuck with too much debt and nowhere to turn. For many of these people, it is the same debt they were totally fine with in 2006, but their circumstances have changed. Now their only option is either foreclosure or short sale. And there you have more lower prices.

But let’s go back to the pure appraisal question. How do you evaluate a property? Wikipedia says: Real estate appraisal, property valuation or land valuation is the practice of developing an opinion of the value of real property, usually its Market Value The need for appraisals arises from the heterogeneous nature of property as an investment class: no two properties are identical, and all properties differ from each other in their location - which is one of the most important determinants of their value.

In residential real estate, market value is usually defined as the price that a willing buyer and a willing seller agree upon subject to appraisal if a loan is necessary. If everyone paid cash for property, the situation in real estate today would be much different. We wouldn’t have had the bubble and the resulting crash, for one thing, since they were both caused by unsafe and unsound lending practices.

Market value is a concept distinct from market price, which is “the price at which one can transact”, while market value is “the true underlying value” according to theoretical standards. The concept is most commonly invoked in inefficient markets or disequilibrium situations where prevailing market prices are not reflective of true underlying market value.
This is the crux of the matter: the prevailing market prices are not reflective of true underlying market value.
In San Marino, prices have not dropped. Why? Because most homes there are owned outright. The same is true in parts of Arcadia. Distress sales drive prices down. If no one is in distress, the price doesn’t go down. Why not, when the entire country has been in a housing depression? Because if you aren’t in distress and you can’t get the price you want, you just don’t sell.

What I am seeing with all the HVCC (Home Valuation Code of Conduct) and other strange rules pretending to establish reasonable rules for evaluating properties is that appraisers are all looking at market prices and defining them as value. If a buyer believes that a house is worth, say, $500,000, because it has all the amenities he feels he should find in a house at that price, why should an appraiser be able to declare that the actual value is only $350,000 because that is what a house of similar size sold for down the street?

So what does a good appraiser do?
What does a good Realtor do?
What is the relationship like between a good appraiser and a good Realtor?
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Never Say Never

The headlines from the Los Angeles Business Journal read:

Will L.A. home prices ever head up? Yes, but foreclosures, demographics will make it a slow march.

The article continued:

After a wrenching 6-year decline, the good news is that Los Angeles house prices are no longer in a tailspin.

“People always ask me, ‘When will I see my house worth what it was in 1989?’ I tell them, ‘It’s going to be awhile,’” said Fred Sands, president of Fred Sands Realtors.

In L.A. County overall, home prices have fallen around 30% since 1990.

Yes, folks, this was published in 1996, over 15 years ago. Did prices ever go back up to what they were in 1989? They were at a median price of $215,000 then for Los Angeles County. According to the Los Angeles Almanac, the median returned to the $215,000 number in 2000, so it took eleven years to complete that cycle.

What are they now? According to Dataquick, the comprehensive real estate database, the median price in March, 2011 was $320,000, a 43% drop from the highest median price in Los Angeles County history in 2006 when it reached $584,800. When will we complete this cycle? No one knows, but please, never say never.
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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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A Special Thank You from Tracy

These last three years have been some of the most economically challenging we’ve experienced not only in real estate, but in this country and even in the world. It’s commonly said that our economy is the worst since the Great Depression. The continued high unemployment figures have been holding back a housing recovery since unemployed people don’t commonly buy houses. Doom and gloom seem to fill the headlines. Short sales and foreclosures are common occurrences, even in the best of neighborhoods.

Every Realtor I talk to agrees that every transaction is harder to do than it used to be. Not only are we dealing with buyers fearful of overpaying and sellers unhappy with how prices have come down, we have extremely challenging lender and appraisal situations with an unending stream of new rules and regulations to implement. Real estate is a team effort, every transaction involves so many more people than you might think.

So I would like to take this opportunity to thank all the people I’ve worked with this year. From the sellers and buyers to the escrow officers, title officers, representatives, other Realtors, the staff at all the many kinds of companies, the termite inspectors and workers, the stagers, the marketing support from floor plan drawings to office supplies--I thank you for your business and for helping me do mine. I thank all the people who have visited my broker’s and public open houses and I want you to know you are always welcome to stop in when you see my open house sign out front whether you want to buy or sell a house or not. It’s good to have your presence and your response to our efforts.

They say that a home purchase results in at least $60,000 additional spent in the community as well, so when the real estate market is good, the economy is better. And talk about supporting your local businesses--what could be more local than the house for sale in your neighborhood? So thank you, all of you, for being such good citizens and helping to keep this economy going. May you have a wonderful holiday time and may we  all prosper in 2011!

Warm Regards,

Tracy
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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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Market Update for Eagle Rock and Highland Park October, 2010

As everyone knows, the last three years have been a roller coaster ride for real estate prices all over the country. In Eagle Rock (zip 90041) and in Highland Park (90042), the average price of single family homes that sold went down over 50% between the peak of the market in January, 2008, and the depths of the recession in March of 2009. Wow. Keep in mind that this doesn’t mean that the value of your individual home necessarily went down 50%, but if you bought your home in January of 2008, you probably would not be able to sell your home for what you paid for it either in 2009 or today. 

Since the so-called “bottom” of the market in March, 2009, we have seen an overall beginning recovery of prices so that as of August of this year, the average sale price in Eagle Rock was up over 27% and in Highland Park over 15%, even accounting for the slowdown that happened after the first-time buyer tax credit expired at the end of April. It felt kind of like home buyers all decided to take a long summer vacation, but about half the current pending sales have opened escrow since September 1, probably due to the most breathtakingly low interest rates we have seen in our lifetime (at least since 1955). Sales prices in 90042 so far this year have averaged both for list and sales price about $337,000. In 90041 Eagle Rock, the averages have been $454,000 list price and $457,000 sale price. Since the 90042 zip code is much larger than 90041, more than twice as many homes have sold there.

If you are new to Eagle Rock and Highland Park, you will love the eclectic mix of older character homes dating from the Arts and Crafts era of the early 1900s to the interesting midcentury moderns that often look out over stunning views of the Verdugo Mountains to the north and downtown Los Angeles to the south. There are traditional, Spanish-style and newer homes scattered through the mix as well. Truly something for everyone. You can purchase a small foreclosure for as little as $300,000, even less in some places, but expect to compete with investors who can pay cash. The highest sales prices so far this year in 90042 for a single-family home was $801,000 in Highland Park for an architect-designed contemporary with 275 degree views and $888,000 for an unusual Zen-influenced home with guest house on a wonderful private garden lot in Mt. Washington. In Eagle Rock, it was $876,000 for a remodeled older home-turned contemporary that also boasted amazing panoramic views. 

The people of Eagle Rock and Highland Park are as diverse and interesting as the housing is. From long-time residents who were born and went to school here to the recent migration of renters from Silverlake, Echo Park and Los Feliz to purchase their first homes in our residential neighborhoods, everyone gets along pretty well and is generally devoted to this vibrant community. You will find a huge number of artists alongside many professionals who work downtown and love the relatively short commute. You will also find a growing number of family-owned places to eat and drink and shop that cater to just about every taste. The recession was a setback, but the positive spirit of our community is irrepressible. Welcome to Northeast Los Angeles!
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Positive views of the real estate world

There must be something positive going on! But what?

Well, there are a few things.

  1. Interest rates are the lowest since 1971, according to Freddie Mac. There is a lot of variation depending on whether you are purchasing or refinancing a property, have a conforming or a jumbo loan, have a 30-year fixed or an adjustable, have good credit or excellent—but some people report obtaining less than 4.5% for a conforming ($417,000 or less) loan.

  2. More sellers have more reasonable expectations now.

  3. The number of days on market for homes that sell has dropped slightly in Los Angeles (according to www.happyrenews.com).

  4. Although everyone was disappointed to hear that closed sales of homes dropped 27% in July, those that went "pending" (real estate language for removing all contingencies in escrow) actually increased by 5% over the previous month. http://articles.latimes.com/2010/sep/02/business/la-fi-pending-home-sales-20100903 .


Still the question I am asked most often is “When do you think prices will go up?” Come on, guys! If I knew the answer to that I’d have also known the answer to the question “When will the bubble burst?” and “What’s the secret to making $1 million in a year?” My answer to you is if you are contemplating making a real estate move, don’t try to time the market. You will never know where a bottom or a peak is until it’s past.  In my experience, people who are clear about why they need to make a move generally have a better  experience than people who can’t make up their minds or want to get the very last penny they can when they sell or the very best deal when they buy.

We don’t know right now if we will have a “double dip” recession, if prices will go up or down in the next few years. If you make your plans to buy or sell based on what you guess the market will do, you are avoiding the real issue. People generally move for more personal reasons like changes in their employment, family, health, and lifestyle – and if you  keep this in mind while you contemplate your real estate decisions you will most likely end up in a better situation to suit your needs.
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Foreclosures that didn't have to happen

I was looking at the properties on Foreclosure Radar that are in default, checking on some properties that have been recently listed as short sales. I recognized an address I had visited several years ago to discuss selling it. At that time, the owner could have sold it easily and made a bit of money, but it wasn’t enough for her to do what she thought she wanted. We have talked about once every couple of years since then, but the last time I spoke with her, I had to tell her she wouldn’t make enough to pay off what she owes. Today, I saw that the property is in preforeclosure, scheduled for a possible sale at the end of the year. She may be able to drag the process out for several more months, maybe even years, but it doesn’t look like she’s going to be able to sell it “when the market recovers,” because she will owe too much in back payments, penalties and interest.

Once you fall behind, it can be very difficult to catch up. I can tell you several sad stories from the past few years. Each time, the owner could have sold it for enough to pay off the loans with a little bit left over to move and rent a place. But they “had” to have more. They “had” to be able to buy another house, or pay off all their debts, or something. But things didn’t go as planned, they slipped further and further behind, and lost it all—with the added bonus of having trashed their credit and made their lives even more difficult.

It is hard to face the reality of a bad financial situation. And the minute you fall behind in your payments, every scheme suddenly seems realistic. It’s a trick your mind can play on you, and it is made worse by every grifter who sees a chance to make some money off of your troubles. It is difficult to know who to trust. Since the notice of default is a public record, unsavory characters have an easy time finding people in trouble. Here is the advice you should heed: don’t ever pay anyone a fee upfront before they deliver on their promise of a loan modification or a short sale. It’s actually against the law for someone to accept such a fee.

But I also have some success stories to tell you. I helped several homeowners sell and move on before they fell behind in their payments, and a couple whom we managed to help right before the auction gavel came down. They didn’t get as much as they wanted to get. Some of them barely managed to pay off all their loans. But they are done and moved on. They may have regrets over what might have been or what they should have done earlier, but they don’t have that big “foreclosed” sign stamped in their memory to seal in the misery. And certainly, if they fell behind in their payments their credit suffered, but not nearly like it would have if they had lost their house in foreclosure.

If you find yourself in a situation where you need to change your real estate position, don’t let your emotions get in the way of what you know in your brain you need to do.
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Properties seen on Realtors' Caravan, January 14, 2010

Lots of cool properties were to be seen on caravan the other day. Considering the prices ranged from $699,000 to $2 million, the fact that these homes were staged to the max makes sense. Notice the cup of tea on the desk? Staging! I love it!

 


Can you believe this kitchen is in a townhome that's listed for $1,600,000? One of 12 limited edition residences at 633 South Lake Avenue.

 

 

The home above is also a townhome on South Lake, listed for $899,000. Looks substantially like a house, doesn't it?

 

 

This midcentury at 2174 Midlothian Dr is in Altadena and is listed for $1,099,000. The lot is almost 30,000 square feet and the 4-bedroom house is 3200 square feet.

 

 

1610 Poppy Peak, $974,900. A 70's property with a bathroom so stylish for the time that it's almost retro.

 

 These last two photos are from 309 Grand, South Pasadena. This very special Spanish estate is on a half acre and is listed for $1,995,000.

 

Disclosure: These homes are all listed with various other Realtors, not my listings. For more information, you can consult the MLS or your Realtor, or you can call me.

 

Posted via email from tracyslarealestate's posterous

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Buyers Market. No, Sellers Market!

But in Northeast Los Angeles and the foothills of the San Gabriel Valley, we see the active listing inventory declining and lots of properties selling in multiple offers. What is this?

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Buyers In Today's Market

Buyers in today's market are seeing some of the most confusing contradictions we've had in the market in my 18 years selling real estate. On the one hand, there is more inventory including more foreclosures and short sales than we've had in over 12 years, and we often see price reductions of over $100,000 on some even modestly priced homes. On the other hand, we see multiple offers with prices going over asking. It doesn't seem to make any sense.

Especially in these confusing times, pricing it right is the key to success. The hard part for a buyer to figure out is whether the price is right or can they offer less? Sellers are wondering whether the right price is too low and can they try just a bit higher? If the price is good enough to draw multiple offers, is it crazy to be in a bidding war when all the news says we're in a down market?

Here's the really hard part: you need to rely on the advice that moves you toward what you really want. This is true of any subject, from housing to your career. That means that your mother or nephew or friend at the office is not who you should rely on because they are rarely the ones who tell you to do something adventurous. They usually see their role in your life as the cautionary voice of what can go bad. This way, they are never wrong. If you ignore their advice and do something and it doesn't turn out, they told you so. If you don't do it, they were right and can never be proven wrong. And if you do it anyway and it turns out great, well, maybe you forget that they told you not to do it. The only advice that people seem to take from friends all the time which is risky is buying stocks. And that turns out badly so often, it's amazing.

What to do? Buy because you need a place to live. Buy because you want your own home in a neighborhood so you can be a grownup and a citizen and participate in the American Dream. Buy because you're tired of your landlord raising your rent and telling you you can't smoke in your own home, or own a dog, or paint your bedroom purple. Buy because you are tired of seeing all that rent money go to helping your landlord buy your house with you not getting any ownership of it.

Buying a house as purely an investment strategy is not a bad thing, but you cannot expect to see your stock share go predictably up like the accumulated interest on a CD. Over time, say 5 to 10 years, you are pretty sure to see your initial investment increase significantly. But don't make that the only reason to own a home.
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Compass 179x55

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

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