December 1, 2006
CLICK HERE FOR VIDEO
Remodeled home, 1 block east Beverly Glen, 1 block north Olympic. Granite kitchen with 6 burner viking stove, spacious master suite, opening out to backyard through french doors. Master bath with huge shower, mosaic tile and frosted glass. Junior suite with 3/4 bath has own deck. Formal living room with fireplace. Open formal dining/family room. Wood floors, Extra Storage, flagstone patio, new backyard landscaping.
$1,525,000
Contact Realtor Bruce D. Stuart
(310) 403 - 7439 ; (888) 777-7WEB
blindo@blindo.org
OR
Susan Payne
(310) 577 - 5300
November 29, 2006
$869,000
2111 S. Beverly Glen Blvd.
2 bedroom, 2.5 bath, Gourmet Kitchen with granite countertops. Patio and loft. 1859 sq. feet.
CLICK HERE FOR VIDEO TOUR
Contact Bruce Stuart, Realtor, for a live showing. (310) 403-7439, (888) 777-7WEB, blindo@blindo.org
November 20, 2006
The feeble U.S. housing market showed more frailty in October when home sales plummeted in 38 states, hitting Nevada, Arizona, Florida and California particularly hard, government data showed on Monday.
The once-booming real estate market’s persistent weakness over the past year has reined in expectations for economic growth but hasn’t been severe enough to offset a rising stock market, lower gas prices and improved consumer expectations.
The National Association of Realtors reported Monday that sales of existing homes fell in 38 states during the summer. Sales retreated to a seasonally adjusted annual rate of 6.27 million units nationwide, down by 12.7 percent from the same period a year ago. Nevada, Arizona, Florida and California led the declines.
November 17, 2006
Like many other California renters in early 2005, Nick Basile and his fiancée, Jackie Neuffer, felt the pressure of ballooning home prices.The couple, fresh out of college, decided to act. They snapped up a house last summer in the San Joaquin Valley town of Visalia where prices had already spiked 40 percent in the prior 12 months.
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“We figured we better buy before things really got out of control,” says Basile.
They focused on buying a new house and found a model near Fresno that they liked. The price though, at $305,000, was too high.
Fast forward a few weeks. They discovered the builder was developing a community in Visalia, 35 minutes south of Fresno, where they already worked as environmental consultants. There was a model home with a similar style to the Fresno house, but the going rate was even higher, at $310,000.
Meanwhile, the Fresno home had shot up to nearly $400,000. That kind of action can make even a strong home buyer’s knees buckle.
“We decided it was now or never,” says Basile.
The Visalia homes were being sold in a lottery process. “It was unreal,” says Basile. “There were 50 families packed into a model home. We were shaking.”
The last name drawn, theirs, gave them the right to buy a home. The remaining model wasn’t their first or second choice, and was priced a little higher than they wanted, but they got caught up in the home-buying fever. “Jackie was shouting, ‘Shut up! I can’t believe it,’” says Basile.
They felt lucky. Some of the other buyers had to attend four or five drawings before they were picked. As those unlucky bidders bided their time, the prices kept rising; Basile and Neuffer now have neighbors who bought a few months later and paid nearly $100,000 more.
The couple ended up spending $329,000, which they financed with an interest-only ARM with a home loan for the down payment. They knew their salaries would cover the monthly payments and they reasoned that if they ever got in trouble they could always sell - at a profit.
What they didn’t count on was that they soon began to miss their native East Coast. This past summer they decided to move back and they put the Visalia house on the market in August.
Slow out of the gate
At first they took the for-sale-by-owner route, paying a flat fee to list on the local multiple listing service and handling all the other aspects of the sale themselves. They first priced the house, a three-bed, two-bath 2,150 square foot contemporary, for $409,000.
That price drew nothing more than a few chuckles from prospective buyers. One of the main problems was their builder was still churning out these homes and, to move inventory, he was undercutting Basile and Neuffer’s (and every other seller’s) price.
“The builder can’t give away the houses,” says Basile. “He’s selling them for $324,000 with swimming pools, granite counter tops, spas, landscaping - all things we didn’t get.”
Basile and Neuffer are still betting that their house can command a higher price than the builder’s because their home is in a better part of town and a more-in-demand school district.
But they kept dropping the price in $10,000 increments as they only attracted showed two showings in three months. They held an open house and nobody attended the first day and three couples came the second.
Then, a couple of weeks ago, they both got confirmations of job offers back in Saratoga Springs, New York. That added some urgency in their quest. They hired a real estate broker and lowered the price to $364,900, which, even if they get, will probably still leave them with a net loss after commission and other closing costs.
Plus, they’ll be out a total of about $10,000 in prepayment penalties for paying off their mortgage and home equity loan early.
Finally, last week, the agent showed the house four times, telling the couple that two of the buyers expressed interest. They’re keeping their fingers crossed because they can’t afford to keep up two households and don’t want to be long-distance landlords.
Even if they rented the place, the numbers wouldn’t add up. “Our payment is about $1,700 and we could only get about $1,500 for it,” says Basile.
That doesn’t even take into account property management fees, taxes, lawn service and other expenses. They’d be awash in red ink every month.
Now, if their agent doesn’t come through, they’re considering trying to find a friend to rent it on a short-term basis and then put it back on the market during the spring selling season.
In the meantime they’ll head to Saratoga Springs, which has not experienced the big price swings California markets have gone through and where the housing dollar stretches a bit further.
The ordeal may have made them a little more real estate savvy - and gun shy -but they seem remarkably serene. Basile is not exactly kicking himself.
We all know where residential real estate is now. Huge percentages of buyers begin their home searches online and sign up to receive automatic e-mails when a house matching their criteria comes to market. The big offices spend megabucks on their sites and reap hundreds of customer leads each day. There probably is not a single agent in the country without an email address and those without their own URL are few and far between. Zillow has married the web to satellite technology and Redfin is striving to make agents on the ground a relic as they pioneer what amounts to phoning in home showings and remote control offers.
Still, it is a people-to-people business and many of the top producers have resisted technology and survived quite nicely thank you. Now among the recent innovations is one that marries the personal with the technical, real estate blogs. This should come as no surprise as there are now, according to Technorati some 55 million blogs world wide and the mainstream media is beginning to treat them as a legitimate information source. The National Association of Realtors® devoted part of the program at its 2006 conference and Expo last week to the subject, inviting a panel of leading proponents of real estate blogs to speak to the subject.
Blogs, in the unlikely event you don’t know, are interactive websites where the owner suggests a topic and invites readers to comment. Blogs tend to center around a special interest - politics, pets, knitting, and thousands of other topics. Sociologists are billing them as a way to build communities and that is, in part, the direction that real estate blogs are taking.
As a marketing tactic the first priority of a blog should be to build brand identity. An agent or an office should attempt to project a personality through the blog and building community is one path to that end. An agent who is an avid golfer or one who represents golf centered developments could blend features on new golf products, tournaments or up and coming local talent with information on his real estate listings, using information to draw in the reader who will then become acquainted with the agent and perhaps add to the conversation with information or opinions of his own. That reader will then hopefully talk about the blog and the sponsoring agent in the locker room of the local club, even if only to encourage his friends read his own contribution to the site.
An agent might build a blog completely around his readers’ interest in real estate, i.e., “Talk among yourself, I will give you a topic: ‘Has the bubble burst in Des Moines?’” Everyone loves to give an opinion; to see it in print is a real plus, and blogs can be almost destructively addictive. Once a comment is posted, the author is compelled to return again and again to read any responses. All of this amounts to a lot of traffic to an agent’s web site and probably a lot of buzz from bloggers to their friends.
November 16, 2006
Some housing bubble news from Wall Street and Washington. Origination News, “Subprime lender ECC Capital Corp., Irvine, Calif., posted a stunning $54 million loss in the third quarter, citing loan buybacks and early payment defaults. Through the first nine months of the year, the publicly traded nondepository lost almost $80 million.”
“ECC said it is continuing to “experience higher levels of repurchase claims generally relating to early payment defaults.”
“Williams-Sonoma Inc. on Thursday posted lower third-quarter profit and cut its outlook for the fourth quarter due to weak demand for home goods.”
“‘We are increasingly concerned about the ‘home-related’ macro-economic environment, as well as the competitive landscape,’ CEO Howard Lester said.”
From CNN Money. “Economists think it’s looking more and more likely that the Federal Reserve will hold interest rates steady for quite a while, maybe through all of next year. So investors hoping for a rate cut in 2007 may need to kiss that wish goodbye.”
“‘There’s no reason to assume that inflation pressures will come down quickly so it’s very unlikely the Fed will ease anytime soon,’ economist Chris Probyn said.”
From Bloomberg. “Central bankers and finance ministers from the world’s 20 largest economies may say inflation risks have increased amid the fastest global economic expansion in decades, raising the specter of higher interest rates.”
“‘They’re more concerned about inflation than growth,’ said Jean-Michel Six, chief European economist at Standard & Poor’s. ‘There will be more hikes from the European Central Bank and the Bank of Japan. The Federal Reserve will pause, but it won’t cut rates until the second half’ of 2007.”
From Reuters. “The conforming loan limit for mortgage finance giants Fannie Mae and Freddie Mac will be frozen for a year if national home prices decline in 2006, the Office of Federal Housing Enterprise Oversight said.”
Sales slow, prices up.The housing news was a familiar refrain Tuesday as DataQuick Information Services released its housing numbers for October in Southern California.
Of course, “slow” wasn’t as slow as it had been a month earlier, and “up” wasn’t true in every one of the Southland’s counties.
It’s all part of what analysts and economists are calling a transitional housing market.
“There’s nothing all that surprising here,” said regional economist Jack Kyser. “It’s just a continuation of the trends we have been seeing ever since the market peaked.”
The median price of a home in Southern California was $484,000 in October, the same as in September and up just 2.3 percent over a year ago.
Home prices in Southland counties in October and their percentage change from a year ago: Los Angeles — $514,000 — up 4.5
Orange — $625,000 — up 3.1
San Diego — $485,000 — dn 5.5
Riverside — $410,000 — up 4.9
San Bernardino — $362,000 — up 2.3
Ventura — $582,000 — dn 2.3
That made October the seventh consecutive month in which year-over-year increases were in single digits.
Home sales were down
Opening a home-equity line of credit is no longer a slam dunk for three reasons.
It’s not cheap money Even though rates may drop in 2007, in recent years they’ve been going up, up, up. At today’s average rate of 8.7%, the interest-only monthly payment on a $100,000 HELOC is $725 vs. $387 when rates hit their lows nearly three years ago.
You could owe more than you own Lenders have made it possible to borrow 100% of your home’s value. During the housing boom, for instance, many buyers who were stretching to afford a home financed the down payment with a HELOC. Do that today and if prices fall, your home loans could add up to more than your house is worth. If you have to sell (and pay a realtor 6% or so), the difference will come from your wallet.
The market may not bail you out Throughout the boom, homeowners financed lavish upgrades with HELOCs, confident that the run-up in their home value would outstrip the cost of construction. Without that tailwind, you can’t be sure you’ll recoup everything you put into your home. You’re paying nearly 9% to make an investment that’s no sure thing.
What to do
Despite all of this, you may still want to tap your equity - it’s easy, and interest on as much as $100,000 in debt is typically tax deductible. Just be careful.
Make it the right reason That includes doing wise renovations, especially if you plan to stay put indefinitely, but not such extensive ones that you own the biggest house on the block.
November 15, 2006
An economist and mortgage banker are predicting a continued creep up in housing prices, despite another tough month in the real estate industry.
Data from Metropolitan Regional Information Systems Inc. show the average home sales price in the Baltimore region — Anne Arundel and Baltimore counties, Baltimore City, Carroll, Harford and Howard counties — posted an overall gain of 3.15 percent in October from October 2005, though the number of houses sold in the region fell 22.29 percent.
“Only Carroll and Howard counties showed a downturn,” said John McClain, an economist at George Mason University. That downward movement, he said, is “most likely due to the fact that those areas feature higher-priced homes.”
“High-priced homes are taking longer to sell, as buyers proceed cautiously in light of the softening market nationwide,” McClain said.
In the region, the number of days a house stayed on the market climbed to 70, a 79.49 percent jump from the same month in 2005, according to MRIS data. In Anne Arundel County, it’s 81 days, up 97.56 percent.
In Baltimore City, it’s 69 days, a 56.82 percent jump over last year; 61 days in Baltimore County, up 74.29 percent; 72 days in Carroll County, up 67.44 percent; 74 days in Harford County, up 85 percent; and 69 days in Howard County, up 122.58 percent.
In the popular Baltimore City neighborhood of Federal Hill, the numbers are staggering. The average sale price of a home fell 3.11 percent in October, to $246,261 from $254,163 the same month a year ago.
The total number of homes sold during the month — 71 — was down 26.04 percent from October 2005. And the average number of days on the market skyrocketed 238.24 percent to 115 days. A year ago, a home in the historic neighborhood sold in 34 days.
The housing downturn is now firmly established in retailing, too. Retailer Home Depot (HD) and homebuilder D.R. Horton (DHI) reported weak results for the third quarter on Nov.14, as the fortunes of the latter company sank on cooler activity in the sector, leading to lower income for the retail giant.
Home Depot is also predicting a chilly fourth quarter, with per-share profits falling 12% to 16% from a year ago. “I know there are a lot of points of view out there, but I still think we have deeper to go than we have seen,” Chief Executive Bob Nardelli said on a conference call with analysts. “I do not think we have seen bottom yet. I do not see anything that says it’s going to get significantly better in ‘07,” he added.
For the three months ended Oct. 29, Home Depot’s net earnings sank 3.1% compared to the same quarter of 2005. The company’s sales in stores open more than a year dropped 5.1% during the quarter, as the housing market slowed and fewer customers looked for ways to upgrade or settle into new homes. Net income fell to $1.49 billion, or 73 cents per diluted share, from $1.54 billion, or 72 cents a share, in the same period last year. The mean analyst estimate had been for 75 cents per share, according to the San Francisco research firm StarMine. Home Depot’s total sales grew 11.3% year over year, to $23.1 billion during the third quarter of 2006.
