Archives for posts with tag: Los Angeles Real Estate

Sales of U.S. previously owned homes rose in March as a mounting supply of properties in or near foreclosure lured investors.

Purchases increased 3.7 percent to a 5.1 million annual rate, exceeding the 5 million median forecast of economists surveyed by Bloomberg News, figures from the National Association of Realtors showed today in Washington. All-cash deals accounted for 35 percent of transactions, the most on record, the group said.

Unemployment, falling property values and stricter loan rules may push the number of households losing their homes to a record level this year, a sign the market will take time to recover. Even with last month’s gains, housing may remain a weak component in the economic recovery that began in June 2009.

“We continue to just tread water along the bottom,” said John Herrmann, a senior fixed-income strategist at State Street Global Markets LLC in Boston. “The housing market is fairly depressed. We think home prices will fall further.”

Stocks climbed as sales at companies from Intel Corp. to Yahoo! Inc. exceeded estimates and commodity producers gained. The Standard & Poor’s 500 Index rose 1.3 percent to 1,329.69 at 12:37 p.m. in New York.

Estimates for March existing home sales ranged from 4.59 million to 5.4 million, according to the median of 74 forecasts in the Bloomberg survey.

Paying Cash

The share of all-cash transactions is the highest since monthly tracking began in August 2008, Lawrence Yun, chief economist at the Realtors’ association, said at a news conference today in Washington. Yearly figures before 2008 showed the share at about 10 percent, Yun said.

Distressed properties, which include foreclosures and short sales, accounted for 40 percent of all deals last month, according to Yun. Purchases by investors climbed to 22 percent of transactions last month, up from 19 percent in February.

“This is part of the cleansing process that needs to occur,” Yun said, referring to distressed sales. “Home sales are strongest in the very-low price range” of less than $100,000, he said, reflecting the increase in demand by investors paying in cash.

Sales rose in three of four U.S. regions in March, led by an 8.2 percent gain in the South. The West fell 0.8 percent.

The median sales price fell 5.9 percent from March 2010 to $159,600 last month as less-expensive properties became a bigger share of the market. Sales of houses priced at $100,000 or less were up 9.6 percent from March 2010, compared with a 6.3 percent drop for the market as a whole, the report showed.

More Supply

The number of previously owned homes for sale climbed to 3.55 million. At the current sales pace, it would take 8.4 months to sell those houses compared with 8.5 at the end of the prior month. Supply in the eight months to nine months range is consistent with stable home prices, the group has said.

Federal Reserve officials, in a statement following their March 15 monetary policy meeting, said that while the “economic recovery is on a firmer footing,” residential real estate is still “depressed.” The central-bank committee is scheduled to next meet April 26-27 in Washington.

Home prices dropped in the 12 months to January by the most in more than a year, according to the S&P/Case-Shiller index of home values. In 20 cities, prices fell 3.1 percent, the biggest year-over-year decrease since December 2009, the group said March 29.

Foreclosures

Some underlying home values are less than the mortgages on the properties. CoreLogic Inc. last month estimated that about 1.8 million homes were delinquent or in foreclosure, a so-called “shadow inventory” set to add to the 3.5 million existing homes already on the market.

Cheaper homes and distressed properties are making homebuilders pessimistic. Builders overall are not optimistic. The National Association of Home Builders’ confidence fell to 16 this month, according to the group’s gauge released this week. A reading under 50 means a majority of builders view conditions as poor.

KB Home, the Los Angeles-based homebuilder that targets first-time buyers, this month reported a bigger-than-expected loss for the quarter ended Feb. 28 as orders plunged.

“We do not anticipate a net profit for 2011,” Chief Executive Officer Jeffrey Mezger said during a conference call with analysts on April 5. “The economy is continuing to improve. Even so, this recovery has yet to include significant job growth and has not spilled over into housing.” (Bloomberg)

To search for properties visit: www.wsarealestateinfo.com

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The home-improvement sector, already benefiting from spending on rehabilitating foreclosed properties, can be expected to get an even larger boost in the coming months from owners who have deferred maintenance during the recession and newly minted empty nesters who want to turn Buffy’s bedroom into a home office.

But the question is, how are you going to pay for that new roof you needed two years ago or that kitchen remodel you’ve been yearning for since the kids left the roost?

Turns out there are still options available. There just aren’t as many of them, and with the exception of one tried-and-true alternative — a government-insured rehabilitation loan — the terms are somewhat more onerous than they were during the housing boom.

Of course, you can always rob your savings to pay for your home improvement. But that assumes you have enough cash socked away to cover the cost and still have some left over to pay for at least six months’ worth of living expenses in case you find yourself out of work or hit with a major illness.

If your credit is good enough and you have a strong, long-term relationship with your bank, you might want to consider a personal loan. Your signature, not the property, secures such loans, and the fees tend to be lower than other loan choices. But the rates are high, and the interest you pay is not tax deductible.

If you still have some equity in your place, you can borrow against that, either as a straight loan or as a line of credit that you can tap as the need arises. But even if you own your home free and clear without any encumbrances whatsoever or have a low-balance mortgage, you might be surprised how much less your home is worth than you realize.

According to the Federal Housing Finance Agency, owners lost more than half their equity from 2006, when the housing market began its free fall, to 2009. That’s when the economic recession ended, but not the housing recession. And according to some estimates, the bleeding hasn’t stopped yet, especially in markets where foreclosures and short sales still dominate.

Even if you have enough equity to borrow against, it’s going to be difficult to find a lender. It’s not as hard as it was, say, 12 months ago, but the home-equity business is far different from what it was during the go-go years when lenders often were glad to lend more than 100% of a home’s value.

One viable option, however, is the FHA 203(k) rehab mortgage.

This is the Federal Housing Administration’s rehabilitation mortgage. It has been a hot ticket for investors who are picking up distressed properties because it allows them to roll both the price of the house and the cost to make it habitable or marketable into a single loan. And some foreclosures are in woefully bad shape.

But regular buyers also can use the 203(k), especially if they want to do some work before moving in. And more important, current owners can use it as a refinancing tool to incorporate the cost of their home improvements into a brand-new first mortgage.

The FHA doesn’t make 203(k) loans directly. Rather, it insures loans made by primary lenders against the possibility that the borrower will not make his payments as promised. So you’ll have to search for a lender in your neck of the woods who is familiar with the product. But once you find one, you’ll discover that the guidelines are extremely liberal.

For example, there is no limit on how much you can spend on your improvements. As long as the total loan amount does not exceed the FHA maximum, you are good to go. The current FHA ceiling ranges from $271,050 to as much as $729,750 in the country’s high-cost areas. (For the maximum loan amount in your area, go to http://www.fha.gov.)

On Oct. 1, though, the ceiling in expensive markets such as California and Massachusetts is scheduled to revert to the old maximum of $625,500. And the Obama administration has signaled that the high-cost ceiling may be whittled down even further. In addition, the FHA’s annual insurance premium will be increased with the start of the next fiscal year.

As long as the “as improved” appraised value of your property — that is, the value of the house plus the value of the improvements — does not exceed the maximum loan amount, almost anything goes. Only luxury items are verboten, says Jim Ragan, who manages the 203(k) program for Bank of America Home Loans.

“You can’t build Bobby Flay’s outdoor kitchen or a swimming pool,” Ragan says. “But other than that, practically anything else is permitted.”

Actually, the extent of the project can range from something relatively modest to a virtual reconstruction. The cost must exceed $5,000. But as long as the existing foundation remains in place, you can tear down the house and rebuild it if you so choose. Even such “soft” costs as inspection fees, architectural fees, closing costs and permits can be included.

The formula for how much you can borrow is fairly straightforward. The maximum loan amount (subject to the aforementioned ceilings) is 97.75% of the improved value of the property.

If the appraiser says your project will add $125,000 in value to your $300,000 home, then you can borrow $415,438.

Better yet, there is no requirement for a reappraisal once the work is finished. Only a single up-front valuation is necessary.

(Los Angeles Times)

To search for properties visit www.wsarealestateinfo.com

Even as home seizures stall nationally with big banks facing a potential overhaul of the foreclosure system, California’s real estate agents want to see an alternative to foreclosure made simpler.

The short sale, in which a lender allows a borrower to sell their property for less than what is owed, remains doggedly difficult to do, the California Assn. of Realtors contends in an open letter published Thursday in seven major California newspapers, including the Los Angeles Times.

The real estate group is pushing for banks to approve more short sales and for regulators to streamline the process. The real estate agents argue that short sales are better for consumers and banks.

“We’re focusing the spotlight on short sales and calling on regulators, elected officials, nonprofits, business organizations, companies and individuals with a stake in California’s economic future to resolve this issue and others that get in the way of a recovery,” Beth L. Peerce, president of the Realtors group, wrote in the letter.

For a deeper look at some of the issues dogging short sales, take a look at this Times article on the subject published last year.

RELATED LINKS:

Mortgage rates changed little this week

Top Senate Republican blasts proposed foreclosure settlement

(LA Times)

Wynn, Sawaii and Aston

From Beverly Hills to Malibu and beyond, Ron Wynn, Steve Sawaii and Fiora Aston have individually built a reputation for real estate excellence. Their names are well known throughout the areas they serve and among the brokerage community, their market knowledge is unparalleled, and each has earned the coveted status of top producer many times over. Through the years, their paths have frequently crossed as they’ve sat on opposite sides of transactions and collaborated to successfully overcome challenging obstacles.

Earlier this year, when the opportunity presented itself to take over a former Coldwell Banker team space, these three power players immediately rose to the occasion to join forces with the vision of what their combined efforts could ultimately create for themselves and the clients they represent.

Though each was successful in their own right despite the challenging market, they believed this was a chance to offer their clients something more. That ‘something more’ is summed up in their new message: Solutions by Collaboration.

For Ron, Steve and Fiora, that’s what this new venture boils down to – the whole is greater than the sum of its parts. “Great outcomes are the product of collaboration,” says Ron. Endorsing the element of team work through the implementation of technology, social networking, and talent specialization, these three mavericks are continually focused on achieving their clients’ goals.

Together, their combined mindset, their drive, and their forward thinking propels them to solve problems in the best, most effective way possible, often finding opportunity that others fail to notice.

For these three, it is all about what is best for the client. As a result, they are very attentive to their clients’ needs. “If the sale or purchase does not make sense for them, we give them good, sound advice,” Steve explains. It is this practice that truly separates them from typical real estate agents, not to mention their contagious energy, genuine enthusiasm, and dynamic passion for the business.

Setting themselves apart long ago, these three have earned the designation of “trusted advisors,” as clients look respectfully to them for guidance and professional advice. And, as Ron points out, though their counsel may not always be beneficial to the team’s bottom line, it is always in the best interest of their client.

“Real estate is really a people business,” says Ron, who bonded with the first couple he met at his first open house, opening an escrow four days later. “Although we share a love of houses, we put our love for people first.” For these partners, who share 91 years in the business and over $1 billion in closed real estate transactions, this sentiment extends beyond their careers as they each make a concerted effort to show humility and express thanks. From giving to the American Cancer Society, the homeless, and returning war veterans, to holding book drives and buying computers for area schools, to participating in triathlons for the Leukemia & Lymphoma Society, these partners are not only motivated to succeed in business but also to become involved in their
surrounding community as a whole.

Although they like to remain modest about their accomplishments, Ron, Steve, and Fiora are in the top one percent of agents worldwide, and in the first six weeks of their new partnership, they completed 17 transactions. Amazingly, this happened eight weeks before Christmas, when agents across the nation were claiming that the market was dead and deals had come to a halt.

There are many threads that run similar between Ron, Steve and Fiora, themost common ofwhich is their ability to be creative. They each have a war chest of unique stories illustrating how they created opportunity where none existed and others had long before given up. For instance, Ron fondly remembers one holiday weekend when everyone else had left town. With his young sons in tow, he registered at a resort near an ocean-front home he had just listed. He created a descriptive, color flyer describing the home, which he placed under the doors of over 90 rooms at the hotel. Sure enough, a buyer showed up the following day for the open house, and ultimately purchased the $2million-plus home. The seller was blown away by the classic idea, comparing Ron’s innovative
techniques to the previous two agents who had failed to produce a single offer within a period of nearly a year.

Steve and Fiora also have many similar examples of how they created unique solutions for their clients through unconventional methods. By collaborating with each other and bringing the experience gained from their encounters to the table, there is no limit to the positive outcomes these partners will create for their clients as a team.

Ron, Steve and Fiora’s goal is not to focus on the number of transactions they conclude or to outsell their competition, but rather to ensure that every client they represent feels as though they are their only client, receiving their personal attention and dedication, exceeding their expectations, and knowing their reputation is supported by their strong commitment to trust, confidentiality, and respect.