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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!

NELA Real Estate Market: An Affordable Issue with a Special Twist

NELA Real Estate Market: An Affordable Issue with a Special Twist

What we're seeing in the Eagle Rock, Highland Park and Mt. Washington housing market is happening all  around the state.

Interesting things are afoot in the Northeast LA real estate market. Anyone keeping their eye on prices of homes in Glassell Park and Mt. Washington have noticed that prices up from where they were just a year ago. Those watching homes in Highland Park and Eagle Rock are noticing homes staying on the market longer. What does it all mean?

Good question! Here’s the latest news from the top. Leslie Appleton-Young is California Realtors’ Chief Economist and we are lucky to have her help us make sense of a very big subject: the real estate market.


The bottom line is we have been facing a big affordability issue here in our little corner of the Los Angeles real estate market. And it has gone viral state-wide. The average change in California’s year-over-year number of sales has decreased 5.5%. And the average sales price has increased 5.5%. Statewide!

Many of you readers might be muttering “I don’t really care about state-wide, I want to know about here, in good old NELA!" (That’s zip codes 90041, 90042, 90065.)

So here you go, Dear Reader: These are year-over-year, September to September 2017 to 2018 percentages for NELA and they are startling. Number of active listings is a whopping 56.7% more in 2018, while the number of sold is down 13.6% and the number pending is down 5%. Here is the interesting news—the average asking price is 10.2% higher in 2018 and the average sales price is 18.5% higher. So fewer homes are selling, but they sell for more.

What does this mean to you? It seems like this is an affordability issue, but with a special twist. Especially with the uptick in mortgage interest rates on top of still rising prices, who can afford to pay an average sales price of $972,000? And in Eagle Rock alone (90041 zip code) the average sales price was $1,133,000 in September 2018! Average! So what’s the twist? The prices are continuing to rise, that’s what. Ordinarily, too-high prices start coming down when the inventory increases and number of sales drop.

It seems like many Buyers (or think they wanna be buyers) want to just have a crash take us back to 2009 bottom of the Great Recession prices and stay there long enough for them to close escrow on their dream home at a bargain price 40-to-60% below today’s prices. And then spring back to today’s crazy high prices so they can feel like they got the deal they missed back in 2009-2012. But their dream homes wouldn't come on the market in such a case because their owners aren't going to lose all the equity they’ve gained in the last few years. Why not? Because they are not in distress! Homeowners will just sit tight and wait it out because they don’t have crazy loans that are going to adjust to an impossible payment like they did in 2008. And those homes that sold in 2009 were not your dream homes either. People who own dream homes don’t generally have to put them on the market at the bottom of a sales cycle. No one does that unless they have no other alternative.

So what about the increasing inventory? A lot of homeowners are still trying to cash in on the high prices and they are comparing their homes with cream of the crop “done” homes or super well-located homes with a lot of potential. But times have changed, folks—you can’t put a cluttered, dirty home on the market with a few bad cell phone photographs and expect to sell for a top price. You should expect to put in a lot of effort and possibly money to present your home in its best light, hire the best experienced Realtor you can find and do what they say. This thought that all Realtors are alike and do the same thing so you just need to hire the cheapest one and he will sell your house for a lot of money is as mistaken as thinking the diamond earrings you buy at the big box discount store are just like the ones you could buy at Tiffany’s for five times as much. Anyway, those sellers are the ones driving up the inventory numbers and when they expire, the numbers will go back down and only a few buyers will have the money to buy the good homes that are left. We just put two properties into escrow for over $200,000 above their list prices because they are special, well-prepared and well-marketed homes.

It’s not a logical situation, potential buyers aren’t squeezed out of this market because interest rates have ticked up, they are squeezed out by not being able buy the home of their choice at the price they can or want to pay and they can’t or won’t find an acceptable alternative. The only houses that sell quickly in a changing market like this one are super great prepared homes or super well-priced ones, just like always.

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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.


The Home Sellers’ Magical Thinking

PREMISE: The house next door to mine sold last year for $1.1 million. It was smaller and there was only one house on the property. We have two houses and more square footage, therefore we should list ours for $1.2 million and get at least as much as that one.

FACTS: The house next door was small, but every detail was well designed and evoked a very emotional response. The landscaping was lush and serene, like a Zen retreat, a special relaxing haven in the midst of a harsh city.

The subject property lacked curb appeal and the landscaping was non-existent. Being a 2-unit income property, it is valued very differently and income properties are supposed to be valued on a formula based on its income. Historically low rents in a rent-controlled area do adversely affect the property’s value. That’s why vacant properties usually sell more quickly and at a higher price than ones that have been occupied by long-term tenants in a rent controlled area.

PREMISE: Why are these offers so low? I saw that a house sold just down this very street for over a hundred thousand more!

FACTS: There hasn’t been a sale this high on this street in over two years, and that one was a 5-bedroom, 3-bath redone Craftsman. This is a 2-bedroom, 1-bath home with a lot of view but no yard.

What am I saying? We don’t value our own property anything like a buyer or an appraiser will.

But sellers aren’t the only ones subject to magical thinking. In fact, homebuyers can really try to bend reality to suit their own agendas.

Homebuyers' Magical Thinking

PREMISE: Today, we have a Sellers' market that has actually been going strong for a good 6 years. Buyers are convinced that now is the time for what has gone up to come down, and down hard. We all remember the Great Recession, don’t we? In Northeast Los Angeles, we lost 40 to 50% of our average sales price in just 15 months. But buyers today have an even better fantasy: prices will fall to 2009 levels just long enough that they will be able to buy their dream home for a bargain price, then right after they close escrow, prices will rally back up to 2018 levels.

FACTS: Many facts belie this fantasy. Do those of you who were actually in the market in 2009 remember what the houses for sale were like? Many were distress sales, so forget about beautifully prepared homes, forget about pre-inspections, and forget about decent loans with low interest rates and 21-day closes. The loan process was so draconian only those who could prove they didn’t really need a loan could get one. Plus, even more properties were selling for cash than are today and most sellers rightly preferred cash sales over the obstacle course that was the loan process then. Owners who didn’t have to sell (such as owners who were not in trouble, owners who had pride of ownership and didn't have to deal with penny-pinching buyers who acted like their lovely home was just a piece of trash) just waited it out. What happens then? Low inventory and higher prices. This is known as unintended consequences.

There is a whiff of desperation in the air today ... 

Sellers want to time the market for the highest possible sales price, and buyers worry that if they buy now, they will close escrow the day before the market crashes and they will be left owning an overpriced turkey. What happened to owning a home as a place to enjoy your life, raise your family, and do whatever you want without a landlord telling you that you can’t? Even if you buy your home at the height of the market, if you hold onto it long enough, it will increase in value. And if you look at the prices over time, a correction almost never takes prices down to previous lows. Even the overblown prices of 2006-2007 are not seen today:

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So if you want to buy a nice house in a great neighborhood for a bargain price, you will most likely be leaving LA.

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What's Going On With This Market?

What's Going On With This Market?

Regardless of how confusing interpreting the market may be, one thing is clear: Buyers and sellers need an agent who understands the fine points of buying and selling.

After a long, steady period of seeing homes for sale in Highland Park and Eagle Rock selling fast and high, and homes in Glassell Park and Mt. Washington being snatched up with record multiple offers, there are signs that trend is changing.

Everyone is talking about it—the market seems to be slowing down! I’ve talked to Realtors, potential sellers, buyers, and the man on the street—they all feel the same. So are they right? Well, let’s see. Looking at the Trends analysis for Eagle Rock since May of 2012 we see this:

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The 2017 Million Dollar Story Exceeds Expectations (Well, Mine Anyway)

The 2017 Million Dollar Story Exceeds Expectations (Well, Mine Anyway)

An investment in homeownership in NELA isn't just a sound investment in the good life. It's a good investment period. The numbers tell the story and they don't lie.

It's official. Owners of single family homes in Highland Park, Eagle Rock, Mt. Washington and even Glassell Park homes are asking - and getting - a million dollars or more. Let's face it: There's never been a better time to be a homeowner in Northeast Los Angeles. The numbers are in!

As of December 29, 2017 (the last day of the year that sales could be recorded by the County), zip code 90041 had 51 single family homes sell for over $1 million each, including the highest sale ever recorded here. And now in January, 2018, an even higher highest sale ever closed escrow! Yes, after 7 years of trying with various agents, the almost 3-acre historic Bekins estate at last sold to a comedian and his heiress wife for $5,250,000!


The following table shows the number of $million homes sold over the last 6 years in Eagle Rock (zipcode 90041), Highland Park (90042), Glassell Park (including Mt. Washington--90065) and for some contrast, South Pasadena (91030).

Million $ Single Family Homes

  Zip Code 90041
Eagle Rock
90042
Highland Park
90065
Glassell Park
Mt. Washington
91030
South Pasadena
 
  2012 0 1 2 30  
  2013 0 1 4 63  
  2014 10 3 5 76  
  2015 20 7 18 95  
  2016 34 10 27 97  
  2017 51 19 50 95  

What is going on? Are we in a bubble? This is the question so many people are asking now. Respected real estate experts (and it seems like everyone else) have been asking this question since 2012. These very same experts have been absolutely certain that these price increases are unsustainable. And yet they continue. Why? Partly because we continue to experience low interest rates and low inventory. Also, Northeast Los Angeles is still cheaper than most communities to the west of us like Los Feliz, Silverlake, even Echo Park. We are considered the closest “decent” neighborhoods to downtown according to many buyers. Others are beginning to look at other neighborhoods like El Sereno and Lincoln Heights who are seeing prices go up accordingly.

Let’s face it, prices go up and some people can no longer afford to buy where they want to. This is not a new story, but it’s painful if it’s your story.

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First Time Homebuyers: Feel Like You Have a Tiger by the Tail?

First Time Homebuyers: Feel Like You Have a Tiger by the Tail?

If today's homebuyers want to score big in the hot and active Northeast LA real estate market, it behooves them to think like a seasoned investor.

Many first time buyers in the crazy Northeast Los Angeles real estate market do feel like they have a tiger by the proverbial tail. From their point of view, they looked at dozens of homes for sale in Highland Park or Eagle Rock, dutifully attending open houses. They have competed time after time, pouring their hearts out in charming "I love your house and we are the cute couple you should pick to buy it" letters, scraping together every dime they can, revealing all their financial secrets to people they've never met and probably never will. And then, the 13th or 23rd time they go through this, they win!

They get to buy a house! Now what?


Now they do inspections and, oh my! This house needs work! It costs more than anyone they are related to — anyone they've ever known — has ever paid and it's not perfect! Not only that, this crazy market has been going up way too long and they just know that the minute they close escrow, the crash will happen and they will be stuck with an overpriced turkey that still needs work. Yikes! They have listened to their friends and reluctantly to Uncle Joe the accountant who bought his last house in 1982, and they are beginning to think the family and friends might be right—they are being chumps and they'd better get out while they can.

But they have a buyers' agent who reassures them that even though the house was sold as-is, even though the homeowners provided a general inspection and even a chimney and sewer inspection that revealed these issues, they can still ask for credits and repairs and negotiate the price down.

What the seller may choose to do about the requests is anyone's guess — but often they say no, or maybe they'll negotiate a little bit. Now the ball is back in the buyer's court. What next?

General thoughts: you can say yes, no, or negotiate somewhere between. But if this was a multiple offer situation, there is a good chance the seller has a backup offer, maybe even higher than yours, just waiting for you to back out. Or if you just give up and back out, often the property ends up selling for even more than you were willing to pay. We had that happen a few times in the last year, and sometimes it was a very significant amount of money.

Ask yourself if what you are feeling about this house is really your fear talking. After all, this is a big financial step for you—it might be the biggest step you've ever taken and you don't want to make a mistake. If you are asking all your friends and family what you should do, remember that the best advice they can give you from their perspective is to not take the step— because that is the "safe" choice. But in a couple of years when you still are renting an apartment and prices have continued to go up, will it really have been the safest path?

Some background: this crazy market has been recovering from the Great Recession for a good 5 to 8 years depending on where you are and what you define as "The Bottom." The majority of buyers have only been aware of it for about 4 years, when the number of homes on the market around my 'hood in Northeast Los Angeles dropped to almost nothing and prices started spiking up. For about the last 3 years, some people (many of them smart savvy Realtors) have said that this market is unsustainable and prices will soon level off—possibly even go down!

Suggestion #1: Look at what investors are doing. The beginning of the Renaissance of Highland Park began in 2009 when it truly was the bottom and investors came in and bought crummy thrashed foreclosures for cash, fixed them up with some style so that the people who could get a loan (if only from the Bank of Mom & Dad) would be attracted by the good looks and affordable prices and buy them—and the investor made a good profit. When the great deals got scooped up after a few years, eventually most investors moved on to higher priced neighborhoods where the profit margins were even higher again. Look at what's going on now, though—the investors have come back! Now NELA is where they can make a profit.

Many buyers today say that investors have scooped up all the "deals" and they cannot afford to buy the $million-plus flips that they produce. My question is, why didn't you buy the fixer when it was affordable and fix it up yourself? I have often heard buyers say that that is what they would like to do, but the investor went in and scooped up the property for themselves. In many cases, that is just not so. Here are the facts: in the 90041 Eagle Rock zip code, there were 34 $million + sales in 2016. Of them, 19 were flips. Of them, 12 were listed in the MLS, they were on the market an average of 69 days, and they sold for an average price of $645,000, which was slightly under the average asking price. And they sold fixed up for an average of $1,184,000 in 20 days on the market. That's about a $500,000 gross profit. Figuring in maybe $350,000 in renovation and sales costs, you have a net profit of $150,000. I'm guessing on costs, by the way.

But let's assume you never wanted to buy a fixer. The other interesting lesson to learn from where the investors are buying is that they think Northeast Los Angeles can sustain their investment/profit formula. Remember, they have a lot of risk—they generally pay cash (often with expensive hard-money loans), often self-fund the renovation, and generally take several months to complete the project. They do not want to risk so much money and time and then see the market go away, so if they have faith in the future market, that's a good sign.

Suggestion #2: Don't be confused about what you are really buying. Fix-it items on a house are just that, fixes. What is really important is the location, the lifestyle it offers you, the amenities nearby. I know my friends in the Midwest think our market is crazy—and they thought so 34 years ago when we bought our first house in Eagle Rock for $95,000. That particular house is probably worth $750,000 today, while the same house in Springfield, Missouri might be worth $125,000 today, maybe not that much. If the price of the home is that important or necessary to you, by all means, move to a less expensive area.

Keep in mind that real estate is primarily a long-term investment. If you are planning to move on in 2 years, maybe you should rent. But if you have the money and it seems like the right next step in your life, don't let your fears hold you back.

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In a Foreclosure Agent's Shoes

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?

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This one is freeway close!

Only $175k in Highland Park.
Photo

Sent from my iPhone

Posted via email from Tracy's LA Real Estate



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1129 Isabel Street, Mount Washington

1129 Isabel Street is an adorable fixed-up traditional-style home. We saw it today on caravan and it looks great inside, plus it has updated plumbing and electric, a tankless water heater, a new roof, and a soon-to-be-fixed-up art studio out back. Two bedrooms, two baths on a 5,600 sq. ft. lot with a covered patio, new landscaping and several fruit trees. Listed for $399,000!

1129 Isabel Street

1129 Isabel Street

Kitchen

Kitchen

Dining area, plus laundry room

Dining area, plus laundry room

Bath

Bath

If you would like to see this super cute house, give me a call at 626.827.9795.

Listing courtesy of Courtney Smith, Nourmand and Associates

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Linoleum, a misunderstood flooring option

Recently, I recommended linoleum as a good choice for a kitchen floor and the homeowner laughed at me! She had a tile floor that she had installed in recent years and thought it was much superior. Well. Everyone is entitled to their opinion about design choices, but here is my case for linoleum.

First, it’s linoleum I‘m talking about, not vinyl.   Real linoleum is made from natural ingredients including linseed oil, cork dust, wood flour, tree resins, ground limestone, and pigments, pressed into a jute backing--a product originally patented by Frederick Walton in 1863.  Cheaper vinyl flooring came along in 1947, is made from hydrocarbon products like natural gas or petroleum, came in lots of bright colors and patterns and linoleum appeared drab in comparison. Besides being made from non-renewable resources, vinyl offgasses volatile organic compounds (VOCs) which make many people ill.

But today, real linoleum is back as an eco-friendly flooring. Armstrong, the main U.S. manufacturer of vinyl flooring,  bought the world’s second largest linoleum producer, Deutsche Linoleum Werke, and we can now buy green and buy American. Linoleum is also back as an interesting design element as it now comes in a number of fun colors. Some artistic types have created wonderful patterns and designs with the flooring and have added real excitement to the fairly boring world of flooring decisions.

Another feature is that linoleum is as appropriate for historic homes from the Victorian and Craftsman eras as it is for modern homes today. There is a  book called Linoleum by Jane Powell which has great photos of interesting vintage and newer lino designs. You can look at some pages and also order a copy from Amazon.com.  Check out the Wikipedia entry for linoleum and see one of the fun styles from the 50s.

True linoleum (also called Marmoleum, which is a brand name by Forbo) is not only made from renewable resources, but it is anti-static which makes it easy to clean. It is also antibacterial, hypoallergenic, and recyclable. It offgasses as well, but it is from the linseed oil, which is not pleasant to some, but many other people enjoy the fragrance.

But why linoleum instead of tile? It’s true that linoleum is not as impervious to water as tile is, so if you’re the type to leave standing water, or if you want to be able to power wash your floor down at night like in a commercial kitchen, lino is not for you. But if you are a serious home cook, you will enjoy the cushioning effect of linoleum which will be better for your feet, legs and back, and much less likely to destroy your china should you drop it on the floor.

Another advantage of linoleum is that it is easier to install or remove, and it is less expensive than quality ceramic tile. Linoleum costs about $7 to $10 per square foot installed, while ceramic tile can cost from $6 to $30 per square foot installed, and stone, granite and marble can cost even more. These costs vary wildly for custom designs, special preparation or underlayments of the sub floor. And the variety of styles and quality of tile varies hugely. Linoleum is only manufactured by a few companies, and they   all produce  the same high quality.

In my opinion, while some people might prefer ceramic tile over linoleum, linoleum is a more affordable, more neutral flooring. And if you are careful to pick a linoleum style and color that is consistent with the period and color scheme of your home, you will have a floor that will look stylish far longer than the ceramic tile that is currently in vogue.
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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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Did you know? The deal on paint law

By now, we all know that lead is not-so-good for our general health.  Unfortunately, the U.S. did not ban the use of lead-based paint until 1978.  This means that hundreds of thousands of homes still contain lead paint, and when these older homes need remodeling, the lead can be released into the air, soil, and water it contacts.

Finally, on April 22, Earth Day, of 2008, the Environmental Protection Agency issued a rule that requires lead safe practices by contractors who perform any renovation or repair projects that disturb lead-based paint in home, child-care facilities, and schools built before 1978.  No longer can a contractor just go in to a home and start demo work, or even just sanding, without being certified and following specific work practices to prevent lead contamination.

A little background on lead -- did you know that some scientists believe that the lead used in some ceramic glazes and in the water pipes helped destroy the Roman Empire? Yes, the long term effects of lead poisoning leads to decreased bone and muscle growth, damage to the nervous system, kidneys, hearing, seizures and unconsciousness in children. In adults, effects can include everything from fatigue to infertility, anemia, high blood pressure, and dyspepsia. In general, lead poisoning makes humans sickly and weak, and therefore easily conquered.

If every one of us were all-knowing and filled purely with concern for humanity, we wouldn’t need government intervention. But consider the banning of the use of lead in paints. Did you know that some nations in Europe banned lead-based paint in the 1920’s to protect painters? Meanwhile, the U.S. government endorsed the use of lead in paint because it helped make paint more washable, thereby allowing homes to be cleaner and reduce the incidence of infectious disease. There is a lot written about how in the 1950s scientists found lead in paint to be the cause of lead poisoning among children who lived in poorly maintained homes (with peeling paint).

So, while even more regulations on how you can work on your own home can be annoying,  one of the most important jobs a government can do is to protect you from things that you can’t see.

For the complete information on the rule and the certification and regulation of professionals, go to www.epa.gov/lead/pubs/renovation.htm.
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September Newsletter Now Available!

For those who haven't gotten my monthly newsletter via email or snail mail (email me at tracy [at] tracyking [d0t] com if you'd like to be on the list!), here's the link to the September issue:

TracyTalk September 2010


In this month's issue, you'll get the lowdown on:

- Foreclosures that didn't have to happen
- Fannie Mae HomePath explained
- Joys of Home Ownership: Termite Edition
- What is Strategic Default?
- Eagle Rock Music Festival
- My Fundraiser for the Animals Re-Cap

Please feel free print it out or to forward it to any one whom you think might be interested.
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The Joys of Home Ownership: Termite Edition

We try to be responsible home owners, but we lead busy lives and all of a sudden, ten years have passed since we bought our current home and had it fumigated for termites. When our painter said she couldn't paint the trim on a window because the wood was too termite-damaged, we realized we had to deal with it, and now. An inspection from my trusty termite expert revealed the worst: a complete fumigation for house and carport was required.

Rule #1:  have a termite inspection at least once every 2 years.  Most fumigations come with a 2-year guarantee—just do it. No fumigation will prevent a re-infestation. Be vigilant.

If time slips by and you have to fumigate, here are a few things we have learned that might save you some trouble.

Rule #2: don't be a pack rat, especially about food. Any food or drink that is still factory packed or sealed is ok, but think about all your spices, condiments, flours and sugars. You will have to either remove them or double bag them in special plastic bags the termite company will give you. Everything in your freezer and refrigerator that has been opened has to be bagged also. All your pet food. As my husband was clearing out our pantry, he held up one plastic bag filled with old boxes of tea. Who knew all that was in there?

Then there are medications and vitamins. I think we could open a health food store with what we found.

Basically, anything you ingest needs to be sealed, bagged, or removed.

All plants must be removed from inside. All vegetation near the house must be cut back or removed. If not, water it really well and hope for the best. Most established plants will come back even after turning brown.

All animals, including fish and birds, must be removed. Do you have a fishpond nearby? If the tent is going over it, you'll have to remove the fish or they will die. That was fun to do at 8 o'clock the morning before the fumigation.

Which brings us to Rule #3: Make sure you talk to the termite company in detail about what you need to do to prepare. Ask if you need to meet with the fumigator—because most termite companies subcontract the actual fumigation. My termite guy (whom I’ve worked with for many years, remember) said he told the fumigator to check out the property and to let him/us know what was needed since we have a hillside house and it probably needed extra staff and tenting.

According to all the literature, Vikane (sulfuryl fluoride, the poison used to kill the termites) leaves no toxic residue and once the gas is gone, the house is safe to re-enter. I spoke with a client who wondered if the teargas (chloropicrin) they mix with the Vikane has a damaging effect on anything. I haven't found any literature on that yet. He removed all his computers and other electronics when he was fumigated. I decided to take my chances with that.

Back home after 3 days. As we expected, a few plants were browned. The fish were okay, even the one that eluded our efforts to remove it from the pond. All the electronics were fine. Much as we would have wished differently, the ants were unaffected as well.

Is this the only way to get rid of termites? No. However, the only other method recognized by the California Department of Consumer Affairs for a complete fumigation is the heat method, where your home is heated to about 150 degrees, so the wood core will reach 130 degrees. According to a paper published in 2002 by the University of California Integrated Pest Management Program, the only negative side effect of the heat system is the possibility of damage to the roof when walked upon, and to some heat-sensitive furnishings.  What might those be? This could be big—plastics, cable wiring, computers and CDs, obviously candles and chocolate. Also, consider antique furniture with old fragile glue or varnish. The plusses are that you don’t have to move out or bag your food, and the process takes one day instead of 3. And there are no poisonous gasses.

When we first bought this house, we had the place tented with the heat method. We had it redone within the first year under their guarantee. I didn’t like the company we used and they were the only ones who did the work in Southern California at the time, so I conveniently forgot about keeping up on the termite inspections. Also, it seemed like it would be about the same amount of trouble to remove all the meltable items as it would be to bag the food. And I started hearing more about the things that could melt at temperatures of 150 degrees.

Another method is the orange oil treatment. Check out the details at Eco LA Termite. Bottom line, the orange oil treatment people themselves say that they are best for local treatment.

Another good source for good information about termite is at Los Angeles County Agricultural Commissioner's website.
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Ask Tracy: What is Fannie Mae HomePath?

Dear Tracy,

Every now and then when perusing the homes for sale in the area I’d like to live in, I see a description that states it is a Fannie Mae HomePath property.

What exactly does this mean?  Does it make the buying process any different?

Thanks,

Home buyer

When a property is a HomePath property it means that it is (a) a bank-owned home owned by Fannie Mae, and, (b) the buyer of the property is eligible for the Fannie Mae HomePath mortgage program.

As you may know, Fannie Mae is the largest lender in the United States.  Fannie Mae currently has thousands and thousands of homes on their books due to the large number of recent foreclosures.  In an effort to help banks liquidate their Fannie Mae REO inventory, Fannie Mae came up with the HomePath program.

The HomePath program gives lenders and buyers less stringent finance requirements, which is great because more buyers can actually qualify for a loan.  Another great thing – you can get a HomePath mortgage for owner-occupied OR investment properties.  Fannie Mae also has a HomePath renovation financing program for those distressed properties that need a little help before they’re ready to be lived in.

Going the HomePath route makes the home buying process different for a few reasons:

  1. No appraisal is required.

  2. You can make a down payment of as little as 3% of the purchase price.

  3. No mortgage insurance is required (therefore, less up-front cash from buyers and lower monthly payments).

  4. Credit score requirements are more flexible.


So, the million dollar question – why would a lender agree to such a loan?

Well, Fannie Mae is offering a couple of incentives to lenders who process these loans.  First, loans can be sold back to Fannie Mae, so lenders aren’t holding the loans in their own portfolios.  Second, the more loans a lender makes, the more fees it generates for originating and servicing the loans.

I know what your next question will be – with all the cash investors snatching up distressed properties in the area, is it even possible to get one of these properties with a HomePath loan?

I’m not going to tell you that it will be easy, a lot of the time if a bank can get cash, they’ll take it.  But!  We are actually in escrow on a HomePath property and, except for a delay in opening escrow because it has to go through the Fannie Mae channels, everything is going smoothly so far (knock on wood).

My big advice for going into escrow on HomePath properties is to fully exercise your due diligence – get that property inspected thoroughly!  These banks don’t know a lot of the details on the condition of the property, and they rarely will do repairs before the close of escrow.  So do your homework and really understand what you’re getting into.

For more information and a database of HomePath eligible homes, visit www.homepath.com.
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Start thinking about what to do this weekend

It's always hard to get back into work mode after a 3 day weekend, so if you're wishing it was the weekend again, jot this down on your calendar for Saturday, July 10. It's NELA's Second Saturday Artwalk, of course!

From Amy Inouye:
Future Studio Gallery
5558 N. Figueroa St., Los Angeles 90042
323 254-4565

Second Saturday and Opening Reception for An Exhibition of Quilts by Ruby Nishio

Ruby Nishio grew up in Los Angeles and was interned at Heart Mountain relocation camp during WWII. After returning to Los Angeles she began working at Cahill in Beverly Hills, sewing and designing wedding gowns. She was very talented and adept at doing patterns and creating wonderful gowns and custom clothing. For the past 18 years she has used her talents in creating beautiful quilts. Ruby Nishio is an amazing quilt artist and has won many awards for her work. This is her first one- person show.

Nishio has been sewing for over 70 years. She has done all types of handwork, from custom dressmaking, knitting, tatting, crocheting, and embroidery. In 1992, she transitioned into making quilts. The imagery she uses is taken from her personal interests. She loves gardening and many of the patterns she uses are of flowers and nature. She stitches fabric pieces together to form repetitive patterns that are then hand quilted. One quilt in the exhibition, Trip Around the World (1998), includes 2193(!) two-inch squares of flowered fabric where the stitched edges of each piece loses its sharpness and blends with the piece next to it, forming an impressionist patterned garden. In New York, New York (2005), echoes of the Statue of Liberty are depicted in the patterns, while the colors and fabrics are reminiscent of Broadway by way of the Ginza. Expressing her love of gardening and traveling, Nishio has created wonderful pieces that are truly works of art.
The exhibition will run till July 31 (on view by appointment).

Join us for a special Artist's Tea: Sunday, July 25 from noon - 4 p.m.

Also, don't forget to pick up July's trading cards (Chicken Boy trading card #9 and a Ruby card)--they'll be waiting for you in a bin inside the front door.

PS: Chicken Boy Shop will be open Second Saturday. We've gotten a few new items in to check out... like Tyvek pop art wallets and some magnetic jewelry...

* * * * *
On deck at Future Studio Gallery:
August: Manuel Gonzalez
September: Liz Mamorsky returns!
October: Fig Knit-On* (a Yarn-Bombing exhibit curated by Heather Hoggan)

November: Arroyo Arts Collective Discovery Tour
December: an exhibit of artists' stuffed toys* curated by Edith Abeyta

*if you'd like to participate or get more info, sign up at the gallery Second Saturday

* * * * *
BOOK BOOTH HIGHLAND PARK is located next to the entrance of La Arca de Noe restaurant, 5570 N. Figueroa Street, LA 90042.

BOOK BOOTH is a free community art/literature project. The books and magazines found at BOOK BOOTH are all donated by your neighbors and are looking for new homes, so if you see something that interests you, please take it. If you have family-friendly books and magazines that you would like to pass along—just leave them at BOOK BOOTH. Please help keep BOOK BOOTH neat and trash-free.




*Some of the books at BOOK BOOTH are registered with bookcrossing.com, a free online book tracking service. If you find a label inside a book, there will be a an ID number that you can enter at the site and make a journal entry about the book and its ongoing journey.




A big gushy thank you to everyone who has been supporting BOOK BOOTH HIGHLAND PARK!

It empties out almost as soon as it fills up (we can't figure out exactly what's going on but we aren't seeing the streets littered with pages, so we're hoping it's all good). We've pulled out The Tipping Point, Stephen Colbert's I Am America (and So Can You), and Susan Sontag's The Volcano Lover. (They'll all go back to the booth as soon as we're done reading them.) So, please keep bringing books and magazines (even CDs and DVDs) and taking stuff too. If it's all filled up, drop them off at the gallery (ring the semi-hidden bell). You can drop them off Second Saturday also.

We plan on identifying other vacated phone booths so others can make their own Book Booth. Watch this space for the latest.

* * * * *
futurestudio.com
nelaart.org

chickenboy.com
http://www.chickenboysouvenirstand.com
FutureStew Vintage at etsy

lavatransforms.com

* * * * *

FYI: My Taco (6300 York Blvd.) has late night tacos (starting at 11 pm) on Saturday nights for your after art-ing snacking pleasure.

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Then and Now Trends for Highland Park, 90042

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.

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Market Update for Eagle Rock, CA November 18, 2008

November 18, 2008 Today's Eagle Rock Market

Inventory in Eagle Rock hasn't varied much in terms of number of active listings this whole year. Today there are 45 homes on the active market, 14 of them short sales, 4 REOs, and 33 regular sales including trust or probate sales that don't require court confirmation. Since November 1, 4 have gone into escrow including 2 short sales, 1 REO and 1 regular sale while 4 more have closed escrow including 1 short sale, 2 REOs, and 1 regular sale. Prices are interesting: what is closing escrow is much lower in average price ($411,500) than actives ($568,500) or pendings ($565,725), but the actives and pendings are close in average price. I have to say that the most surprising sale to me is the short sale that actually closed escrow on Townsend, since most short sales have not ever closed. Let's see with the 2 that just went pending if they ever actually close. Perhaps banks are actually beginning to work with people to negotiate these, we'll see. This sample is too small to really tell. But really noteworthy is the fact that 3 of the 4 closed sales sold for more than their list prices. Hello, this is a pricing strategy that works!

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Real Estate Market Update

Slight downward movement in mortgage interest rates was reported yesterday, Sept. 4, 2008:

Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 6.40 percent with an average 0.6 point for the week ending August 21, 2008, down from last week when it averaged 6.47 percent. Last year at this time, the 30-year FRM averaged 6.67 percent.

The article also reported increased home buyer interest and activity.
For the complete report, click here.

According to Itech MLS, in Eagle Rock (zip code 90041), active listings today hover at 44, with 10 of them short sales and only 1 a foreclosure. So 25% of the active listings in Eagle Rock are "distress sales," of which maybe 2 or 3 will actually ever close escrow in the next 6 to 12 months. That's a pretty low inventory of properties truly for sale, folks. All of the short sales are listed for under $580,000, which means that 45% of the properties below the median price of $584,000, are not really viable listings. It makes the real numbers point to a more normal market than a buyer's market in terms of how many months it would take to sell everything currently on the market.

Sellers, don't think this means that the market is back to 2006 price levels. No. Many properties are really more at 2004 levels today. If you have the equity to price your home there, now you're looking at some excitement from the buying community. Call me.

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Here is Tracy's new and improved blog at last!

It's great to be back posting after a several month hiatus. Bear with me while I work out the bugs.

My focus is on life in Northeast Los Angeles and the San Gabriel Valley, with a particular emphasis on housing since that is what I do--connect interesting homes with interesting people. I define interesting in a lot of different ways, so don't worry about whether what you want is interesting enough for me, let me be the judge of that, ok?
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1432 Hits