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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!

Major Changes in Financing!

Starting October 1, 2011, "Conforming" (think Fannie and Freddie) and FHA loan limits are set to be lowered nationwide as the federal government looks to lessen its footprint in the business.  This means the current loan limit of $729,750 in Los Angeles that we've gotten used to the past several years will be reduced to $625,000 this fall.

So why does this matter to you? Since most buyers rely on the low rates, smaller down payment requirements and the easier underwriting guidelines offered by these government backed loans, the market is going to lose a tremendous amount of its purchasing power.

When purchasing power decreases it puts downward pressure on sales prices. For sellers in certain price ranges, this means fewer qualified buyers this fall.  For buyers, this will put many properties out of reach.

For example: with the conforming loan limit at the current $729,000 the average buyer with 20% down payment can buy at $910,000 house.  When the conforming loan limit decreases back to $625,000, the average buyer with 20% down payment can afford a $780,000 house.  Today an FHA buyer with the minimum 3.5% down payment has the power to buy a $755,000 property.  After October that max purchase price drops to $646,000. 

Of course there is, and will continue to be financing far above these loan limits.  However, these "non-conforming," or jumbo, loans may have higher interest rates, are more difficult to qualify for, require a larger down paymnet, and require more post-closing cash reserves by the borrower.  It's also important to know that these higher loans are not backed by the government, so in turn the jumbo loan product varies significantly from one bank to the next, and one lender to another.  It is not "one size fits all" when it comes to jumbo loans. 

For more information on jumbo loans, or conforming loan limits, you can contact Lyndi Mallory, our Teles Financial mortgage consultant - 323.877.4028, This email address is being protected from spambots. You need JavaScript enabled to view it..
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First Half of 2011 Market Update for Eagle Rock, 90041

Here is a table that illustrates the number of sales and percentage of distress sales over the last 3 years in Eagle Rock 90041. The question is, what does it mean? There’s a flipflop from a greater number of foreclosures in 2009 to more shortsales in 2011. Distress sales as a whole dropped in 2010 and have increased again so far in 2011.

ergraph



My guess, and it’s educated but still a guess, is that the lenders were very resistant to doing shortsales early on and have finally bowed to the inevitable. As more distressed homeowners are able to sell short, there are fewer foreclosures. The more positive numbers in 2010 I attribute to the peak of the “double dip.” Or you might look at the whole thing as our thudding along the bottom.

There is a lot of talk about “Shadow Inventory,” which is distressed properties that might come on the market. This includes properties that have notices of default filed (the homeowner has stopped making mortgage payments), have notices of trustee sale filed (they haven’t brought the loan payments current and are scheduled to go to foreclosure sale), REO or bank-owned or 3rd party owned (sold at trustee sale). It also includes properties that are “upside-down” which means the property is worth less than what is owed. This can be a huge number and there is no way to track what it is. The fear of “Shadow Inventory” is what if a lot of these distress sales come on the market at once? What will that do to the rest of the market

Personally, I think that is a big “if.” If it hasn’t happened yet, why would it happen now? One reason could be if we had a major economic setback. But believe it or not, we have actually been out of the recession and experiencing a slow (excruciatingly slow) recovery for the last 2 years, according to the National Bureau of Economic Research. Another reason could be a drastic change in mortgage lending in terms of either interest rates or underwriting guidelines.
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Updated Restaurant Guide!

Hi Everyone!  My restaurant guide has been updated with some great local spots - check it out!

July 2011 Restaurant Guide

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New listing! 1145 Oak Grove Drive, Eagle Rock

Tracy King | Teles Properties | (626) 827-9795
1145 Oak Grove Drive, Eagle Rock, CA
New listing! OPEN SATURDAY 7/9 1-3PM; SUNDAY 7/10 2-5PM; TUESDAY 7/12 10-2PM; and THURSDAY 7/14 10-2PM.
3BR/2BA Single Family House
offered at $539,000
Year Built 1950
Sq Footage 1,540
Bedrooms 3
Bathrooms 2 full, 0 partial
Floors 2
Parking 2 Car garage
Lot Size 7,160 sqft
HOA/Maint $0 per month
DESCRIPTION

Move right in to this midcentury traditional with upgraded systems from central air & heat to electrical and plumbing. Originally a duplex, the main floor has 3 bedrooms, 1 bath while the downstairs could be a master suite or the entertainment room/home office to die for. A sliding glass door opens to the spacious deck that overlooks the backyard. There is even an outdoor kitchen for all your alfresco dining fantasies. The 2-car garage has a finished interior.
see additional photos below
PROPERTY FEATURES

- Central A/C - Fireplace - Hardwood floor
- Family room - Living room - Bonus/Rec room
- Office/Den - Laundry area - inside - Balcony, Deck, or Patio
- Yard
ADDITIONAL PHOTOS

Front
Kitchen
Living Room
Den
Family Room
Outdoor Kitchen
Contact info:
Tracy King
Teles Properties
DRE Lic#01048877
(626) 827-9795
For sale by agent/broker
Equal Opportunity Housing
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Posted: Jul 8, 2011, 2:16pm PDT
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Gracious 1950 Ranch

Open today till 1, Thursday 10-2. Cookies!

Photo

Sent from my iPhone

Posted via email from Tracy's LA Real Estate

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