Archives for posts with tag: Real Estate

Thank you to everyone that came out to enjoy the free pumpkins, refreshments and photos at our pumpkin patch this past Sunday. We had such a wonderful time meeting some of our neighbors here in the Santa Monica area and were glad to see everyone enjoying themselves.

We hope to see many of you soon at one of our events. Please bring the kids and grandkids to the Montana Ave. Halloween walk from 4-7pm on Halloween afternoon. WSA will be hosting a costume contest, so make sure the kids are dressed to impress!

 

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Over the summer WSA had the distinct pleasure of participating in Santa Monica’s annual Walk to Africa. Proceeds from the walk go to Lighthouse Medical Missions to help fund medical missions to other countries. This year they are organizing a trip to Kyrgyzstan with the funds from the walk. 

Our team looks forward to working with Dr. Bob and his team again next year to continue making the event a success. 

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If you have an event in Santa Monica or another local Los Angeles area that you would like to share with WSA, please feel free to contact us at 310.899.3510

With the summer quickly coming to an end, the weather and the real estate market remain hot. 

The first half of the year has shown positive activity here on the Westside. Well priced homes and condos are quickly being sold in multiple offers over the asking price and inventory remains low, making this a great time to consider putting your house up for sale. 

Currently the partners at WSA have been working closing with their sellers, many of which are closing escrows on properties that were sold very quickly after being put on the market. 

If you are interested in specifics on your neighborhood or more on what WSA can help you do to prepare and list your home for sale, please contact us. 

 

Great news, I just heard from a fellow agent that an open house he held last weekend in Westwood was attended by 140 people and the house had not even hit the MLS yet.  This is amazing news.  Open house activity has quadrupled.  Buyers are tired of waiting, and sellers are still at the sideline putting their properties on the market very slowing and cautiously.  Inventory is very, very low and buyers are frustrated that there is nothing to look at.  This is all a good sign for the market place.

I expect in the next several months that sellers will start putting their homes on the market and buyers will step up to the plate .  Buyers will start making realistic offers, recognizing that there is a lot of competition in the market.  There are a lot of multiple offers going on right now.  Even though I will not be so bold as to say that prices are going up, the market has definitely leveled and there is definitely more demand then there is available inventory.

By Alejandro LazoJanuary 20, 2012, 10:49 a.m.

Home sales rose nationally in December, marking the third consecutive month that the market has shown improvement.

Previously owned homes were sold at a seasonally adjusted annual rate of 4.61 million units, up 5.0% from November and 3.6% from December a year prior, according to the National Assn. of Realtors.

“The market for single-family homes picked up in the second half of 2011, after being stuck near the bottom for nearly three years,” Patrick Newport, an economist with IHS Global Insight, wrote in a note. “This pickup is real, but the road to recovery will be a slow one.”

About one in three homes sold last month was a so-called distressed sale, either a foreclosure or a short sale, the latter involving a bank allowing a home to be sold for less than the outstanding debt on the property. Roughly one in three homes was purchased in cash.

The nation’s housing inventory dropped 9.2% from the prior month, to 2.38 million homes available for sale. That represents a supply of six months and a little less than a week. Economists consider about six months of supply to be a stable market.

I have been waiting for more than five years to offer this advice. It is now time in most cities across the country to buy a new home or refinance your existing home with thirty-year fixed rate mortgage debt. And this from the author of The Coming Crash in the Housing Market published in 2003 and my 2006 book, Sell Now! The End of the Housing Bubble. Let me explain why.

Home Prices Relative to Peak Prices During Bubble
Home prices are off anywhere from 10% to more than 60% in cities across the country. There is no reason to believe that prices were “fair” during the bubble as we have seen they were largely caused by loose and aggressive lending by banks and non-banks. But, it is always better to buy at a discount rather than at a historical peak, and these seem like awfully big discounts. And by my calculations, in most cities across the country, real prices adjusted for inflation have just about come into line with where prices were in 1997, before all this crazy bank lending started, so there should be little additional downside risk by buying today. There are still some neighborhoods across the country that have not seen very dramatic declines in price, many of them very wealthy and expensive enclaves, but given the distribution of incomes lately heavily weighed toward the wealthy, these areas may never see a really large home price decline.

Home Prices Relative to Construction Costs or Replacement Costs
Homes in many cities across the country are now selling for as little as $60 to $70 a square foot. Depending on the quality of construction and the underlying land value, this represents a 50% to 65% discount to the costs you would incur if you tried to build a similar home today in these cities. While there is no guarantee that there will be a strong rental market in the short run, in the long run it just seems to make sense to buy if you can acquire assets at half or less of the cost of building them.

Home Prices Relative to Incomes and Rents
During the peak years of the housing bubble, entire cities like San Diego were seeing their homes priced on average at 11 times the area’s median family income. Such prices financed primarily with debt are by definition unsustainable. Now, because banks have pulled back on their lending formulas, homes in many cities are changing hands at three to four times average family incomes. Similarly, at the peak, houses traded at such large multiples of possible rents that it made the projects uneconomic from the start. Now, with homes trading at more reasonable multiples of rents, houses and condos can be purchased that are immediately cash flow positive in year one and enjoy all the upside of any appreciation that will occur as inflation returns.

Home Prices in Real Terms, Not US Dollar Terms
We still talk about home prices in dollar terms, which is silly because the dollar has lost 98% of its purchasing power relative to a more stable asset like gold over the last fifty years. If instead of pricing houses in dollars, we look and see what a home would cost in ounces of gold, we see that houses today are a real bargain. As a matter of fact, this graph shows that average homes, measured in the number of gold ounces it would take to buy them are now trading at forty year historical lows.

You might argue that this is because gold is priced highly today. I would argue that gold’s purchasing power has changed very little over time, it is the dollar that is depreciating and thus giving the appearance that the price of gold is rising. Actually, gold is quite stable relative to other assets and commodities and it is the dollar that is highly volatile and declining in value due to the US funding its deficits by printing dollars.

The Real Bubble – US Treasuries and Future Inflation
The real bubble out there is longer US Treasuries and 30-year fixed rate mortgages for homebuyers. With US debt equal to its GDP and equal to more than four times our government’s total tax revenues and with annual deficits of $1.3 trillion and growing, it is amazing to me that people will lend to the US for thirty years for less than 3.0% a year. Even more amazing is that individual homeowners can borrow at 4.0% (around 3% after tax) for thirty years on a fixed rate basis, some 300 basis points better than Italy which has a lot more people and makes much better shoes. Homes may not appreciate greatly in real terms over the next twenty years, but they don’t have to if inflation comes back, which is the only way the US and Europe are going to get out from under the huge debts on their countries and their banks. You may not make a lot in real terms on the house, but if inflation returns, you could make a killing on your investment as your thirty year debt becomes worth less and less in real terms. Run the numbers, but if inflation and interest rates go back to say, 7% to 8%, you could easily make eight to ten times your equity investment on the house because you locked in your borrowing costs and home appreciations historically have always correlated well with unanticipated inflation.

So, run, do not walk to your neighborhood banker and either finance a new home purchase or take out the maximum amount of money he or she will lend you on a home equity loan and buy hard assets, not financial securities, with the money. When inflation comes roaring back the only perfect hedge is to be a borrower, not a lender or investor. Shakespeare said “Neither a borrower nor a lender be,” but they didn’t have huge government deficits and the risk of future inflation back in the Bard’s time.
John R. Talbott, previously a Goldman Sachs investment banker, is a best selling author and economic consultant to families. You can read more about his books, the accuracy of his predictions and his family consulting activities at www.stopthelying.com.

Ron Wynn and WSA

Wow, what a difference.

Just in the last week and a half, there is a tremendous difference in activity and inquiries on our listings.  Open house last week was a mob.  Activity was at least 3 times the activity for any week in November and December.  Buyers are energetic, enthusiastic and ready to look at new listings.

The biggest complaint among Buyers is the lack of inventory.  Buyers are complaining that there are no new listings to look at and are very eager to look at anything new on the market.  Sellers are coming on the market slowly and properties that come on the market are selling quickly with multiple offers.  I have heard of at least 4 multiple offer situations just in the last week, all selling at full price or above.  I had a new listing in Westwood this week and we had multiple offers after three days.

We don’t know where the market is going to go over the next 12 months, but recent newspaper articles have lead the public to believe that the market has bottomed out and that prices are not going to decline any more.  Everyone knows that there is no such thing as “the bottom”, but Buyers are convinced that this is a good time to jump in.

Interest rates are still amazingly affordable and there is no guarantee that they will stay at this rate.  Financing is available and buying conditions are outstanding.  Again, the biggest complaint is lack of inventory.  We expect to see a continued strong demand from Buyers at open houses over the next few weeks and it would not surprise us at all to continue to see full price sales and multiple offers.

Although no one knows where this is going and what the long range outcome will be, overall, Buyers are tired of waiting around at the sidelines.  They are very eager to get into a home of their own.  As people say, life moves on and we can’t wait forever.  Buyers are satisfied with current day values and Sellers, who have motivation, are comfortable knowing that the market is currently stable.  We look forward to 2012 being a very good year for both Buyers and Sellers.  This really is a great time to buy and a great time to sell.  We are encouraging Buyers and Sellers to participate in this market and take advantage of the opportunity.