September 2008 home sales in our neighborhood!

 I was expecting home prices to fall since the Summer of 2005, what I was not expecting was the financial crises which hit our country in August of 2008. This financial crises has changed the playing field for home owners and investors. Since August, it has become very difficult to borrow money, even if you have a good credit and a decent down payment! A friend, who is trying to buy a second home in Studio City has been told by the lender that he needs to put down 55%. How many investors can come up with such a huge down payment? We are noticing that homes sale are up year over year, but the prices are down anywhere from 25% to 50%. Home owners who are pricing their homes ranging from 300K to 700K do not have any difficulty finding a buyer, however…. if your home is priced over 800K, the chances are that it might sit on the market for sometime before you can attract any interest. Latest numbers for the month of September indicate that year over year, the home values are down in Studio City 91604, by -34.4%, Valley Village 91607, -29.8%, Sherman Oaks 91403, -14.9%, and Beverly Hills 90210, -61.4%. Condo Prices are also down from 25% to 41% in the same neighborhoods. Well… this is old news, these numbers are already out, what about going forward? If history is any guidance, the decline and stabilization of home prices in Southern California should last about 5 years, which means the prices should start to rebound in 2010, however… could this time be any different? This time, home prices over shut to the upside like never before, and worldwide liquidity has dried up like never before, which brings me to this conclusion….. This time the 5 year downturn may extend a few more years and the prices may have to fall even more. I am going out on a limb and predict that home values may not bounce until 2012, and they may drop 17% to 25% more nationwide. Where does that leave you? Should you wait until 2012 before you buy your home? Should you wait until 2012 before you sell your home? Of course NOT, It’s always a good time to buy or sell Real Estate. Whether you should sit on your hands or not, has to do with your motivation and personal situation. After all, home values will always go up on the long term basis, and no one can catch the top or the bottom of the market. Before you decide whether you should buy, sell or sit on your hands, consult a qualified Real Estate professional. This is your biggest investment, choose your agent carefully.        


Top 10 Worst Things Buyers and Sellers say to their Realtor!


Top 5 Worst Things Sellers Say to their Realtor


1. “We don’t have to sell” – Really? If you are just testing the market, then why would I spend thousands of dollars on marketing and advertising your home? It’s a big decision, so think about it long and hard before listing.

2. “Our house is the nicest in the tract and worth more than the comps” – How do you know this? Have you actually gone to every, or even most, houses in the area? Chances are very high that your Realtor has seen more homes in your tract than you have, even if you’ve lived there for years. Even if this is not the case, your Realtor has oodles of pricing resources at hand. Keep in mind that you, as the seller, are biased. Of course you love your home, but that makes it harder to look at it objectively. This is one of the reasons you hire a Realtor!

3. “We have kids, how are we supposed to get rid of the clutter?” – Nothing destroys property value more than dirt and clutter. It could literally be worth thousands of dollars to spend some time and be temporarily inconvenienced to do the clean-up and decluttering.

4. “It’s just the first offer, let’s wait for more” – When I hear this I want to shout out “NOOOOOO!!” The biggest mistake you can make is ignoring your first buyer while you wait for another one. Your first offer tends to be the best offer. It takes a lot of guts to write up an offer right away…don’t punish that brave buyer by making them wait.

5. “Let’s start with a high price, we can always come down.” This. Makes. Me. Cringe. Overpricing is the root of all evil. Realtors and buyers are savvy and know when a house is overpriced. They will wait for you to languish on the market for a while, reduce the price a few times and then POUNCE with a low ball offer. Over pricing is the surest way to attract “low ballers.” They are just waiting for you to mess up!

Top 5 Worst Things Buyers Say to their Realtor!

1. “I am not in a hurry to buy anything” – This gives the Realtor the impression that you are not serious. And if you aren’t serious, your Realtor won’t take you seriously and will not make you top priority.

2. “I will get pre-approved when I find a house I want to buy.” – People, it’s PRE-approval for a reason. It’s the first thing you need to do. You never know if your finances will fit into the neat package that the bank needs in order to lend you money! What happens when you find your dream house that you think you can get a loan for – but then you can’t when the time comes.

3. “I am looking for a deal” – Yeah, well, who isn’t? But if that is ALL you are looking for then, again, you are not a serious buyer.

4. “We can always re-negotiate after the inspection” – pay the price you want to pay for the house. Do not count on the inspection to get thousands of dollars back. Not only is it tacky, but it can back fire on you when that “fixer-upper” you bid on is actually in terrific shape.

5. “Will you share your commission with me if I let you represent me?” – With this sentence you have ensured that you will work with only the most desperate realtors out there. You are paying the commission in exchange for your Realtors expertise, research, resources, negotiating advice and ability and much more. Can you imagine asking a doctor to share their pay with you? “If I let you do this surgery, will you split your insurance payment with me”—it’s the same.

Biggest Defaulters on Mortgages Are the Rich

The housing bust that began among the working class in remote subdivisions and quickly progressed to the suburban middle class is striking the upper class in privileged enclaves like this one in Silicon Valley.

Whether it is their residence, a second home or a house bought as an investment, the rich have stopped paying the mortgage at a rate that greatly exceeds the rest of the population.

More than one in seven homeowners with loans in excess of a million dollars are seriously delinquent, according to data compiled for The New York Times by the real estate analytics firm CoreLogic.

By contrast, homeowners with less lavish housing are much more likely to keep writing checks to their lender. About one in 12 mortgages below the million-dollar mark is delinquent.

Though it is hard to prove, the CoreLogic data suggest that many of the well-to-do are purposely dumping their financially draining properties, just as they would any sour investment.

“The rich are different: they are more ruthless,” said Sam Khater, CoreLogic’s senior economist.

Five properties in Los Altos were scheduled for foreclosure auctions in a recent issue of The Los Altos Town Crier, the weekly newspaper where local legal notices are posted. Four have unpaid mortgage debt of more than $1 million, with the highest amount $2.8 million.

Not so long ago, said Chris Redden, the paper’s advertising services director, “it was a surprise if we had one foreclosure a month.”

The sheriff in Cook County, Ill., is increasingly in demand to evict foreclosed owners in the upscale suburbs to the north and west of Chicago — like Wilmette, La Grange and Glencoe. The occupants are always gone by the time a deputy gets there, a spokesman said, but just barely.

In Las Vegas, Ken Lowman, a longtime agent for luxury properties, said four of the 11 sales he brokered in June were distressed properties.

“I’ve never seen the wealthy hit like this before,” Mr. Lowman said. “They made their plans based on the best of all possible scenarios — that their incomes would continue to grow, that real estate would never drop. Not many had a plan B.”

The defaulting owners, he said, often remain as long as they can. “They’re in denial,” he said.

Here in Los Altos, where the median home price of $1.5 million makes it one of the most exclusive towns in the country, several houses scheduled for auction were still occupied this week. The people who answered the door were reluctant to explain their circumstances in any detail.

At one house, where the lender was owed $1.3 million, there was a couch out front wrapped in plastic. A woman said she and her husband had lost their jobs and were moving in with relatives. At another house, the family said they were renters. A third family, whose mortgage is $1.6 million, said they would be moving this weekend.

At a vacant house with a pool, where the lender was seeking $1.27 million, a raft and a water gun lay abandoned on the entryway floor.

Lenders are fearful that many of the 11 million or so homeowners who owe more than their house is worth will walk away from them, especially if the real estate market begins to weaken again. The so-called strategic defaults have become a matter of intense debate in recent months.

Fannie Mae and Freddie Mac, the two quasi-governmental mortgage finance companies that own most of the mortgages in America with a value of less than $500,000, are alternately pleading with distressed homeowners not to be bad citizens and brandishing a stick at them.

In a recent column on Freddie Mac’s Web site, the company’s executive vice president, Don Bisenius, acknowledged that walking away “might well be a good decision for certain borrowers” but argues that those who do it are trashing their communities.

The CoreLogic data suggest that the rich do not seem to have concerns about the civic good uppermost in their mind, especially when it comes to investment and second homes. Nor do they appear to be particularly worried about being sued by their lender or frozen out of future loans by Fannie Mae, possible consequences of default.

The delinquency rate on investment homes where the original mortgage was more than $1 million is now 23 percent. For cheaper investment homes, it is about 10 percent.

With second homes, the delinquency rate for both types of owners was rising in concert until the stock market crashed in September 2008. That sent the percentage of troubled million-dollar loans spiraling up much faster than the smaller loans.

“Those with high net worth have other resources to lean on if they get in trouble,” said Mr. Khater, the analyst. “If they’re going delinquent faster than anyone else, that tells me they are doing so willingly.”

Willingly, but not necessarily publicly. The rapper Chamillionaire is a plain-talking exception. He recently walked away from a $2 million house he bought in Houston in 2006.

“I just decided to let it go, give it back to the bank,” he told the celebrity gossip TV show “TMZ.” “I just didn’t feel like it was a good investment.”

The rich and successful often come naturally to this sort of attitude, said Brent T. White, a law professor at the University of Arizona who has studied strategic defaults.

“They may be less susceptible to the shame and fear-mongering used by the government and the mortgage banking industry to keep underwater homeowners from acting in their financial best interest,” Mr. White said.

The CoreLogic data measures serious delinquencies, which means the borrower has missed at least three payments in a row. At that point, lenders traditionally file a notice of default and the house enters the official foreclosure process.

In the current environment, however, notices of default are down for all types of loans as lenders work with owners in various modification programs. Even so, owners in some of the more expensive neighborhoods in and around San Francisco are beginning to head for the exit, according to data compiled by MDA DataQuick.

In Los Altos, Los Altos Hills and the most expensive neighborhood in adjoining Mountain View, defaults in the first five months of this year edged up to 16, from 15 in the same period in 2009 and four in 2008.

The East Bay suburb of Orinda had eight notices of default for million-dollar properties, up from five in the same period last year. On Nob Hill in San Francisco, there were four, up from one. The Marina neighborhood had four, up from two.

The vast majority of owners in these upscale communities are still paying the mortgage, of course. But they appear to be cutting back in other ways. The once-thriving Los Altos downtown is pocked with more than a dozen empty storefronts in a six-block stretch.

I do not know if this reality would spread in other wealthy neighborhoods throughout California, but it seems like our housing market will not have a V shape recovery.

Studio City remains the hottest spot in the Valley!

As sales of lower-cost foreclosure properties have waned over the past year, activity has picked up from very low levels in many high-end areas. Last month sales of homes priced at $500,000 or more made up 19.4 percent of all Southland transactions, compared with 18.5 percent in February and 14.9 percent in March 2009. Over the past five years, $500,000-plus deals averaged 35 percent of monthly sales, while over the past 10 years they averaged 26 percent of all transactions.

Higher-end sales are still hampered by the troubled jumbo loan market, which has improved only modestly over the past year. Jumbo loans, mortgages above the old conforming limit of $417,000, accounted for 15.7 percent of last month’s purchase lending, up from 14.8 percent in February and from 10.5 percent in March 2009. However, before the credit crisis in the fall of 2007, jumbos accounted for 40 percent of the market.

Adjustable-rate mortgages (ARMs) haven’t come close to recovering from the credit crunch, either. While 44.6 percent of all Southland purchase mortgages since 2000 have been ARMs, last month they represented just 4.8 percent, up from 4.0 percent in February and 2.1 percent in March last year(2009).

Year over year, the latest data for the month of February, indicates that the average price per square foot in Studio City is up 12.4%. There are currently 105 active listings in our neighborhood and this number is down by 50%, which is very bullish for the Sellers. Number of homes that are pending sale have also increased to 57, up 50% from a year ago, which is another bullish sign for our housing market. Going forward this trend may not last, as we hear that the lenders are ready to unload their inventory of foreclosed homes on the market. I believe that our market won’t be affected by the foreclosed homes, however the story in 2010 will be all about short-sales, short-sales and more short-sales. The lenders have realized that it is less costly to approve a short sale, and consumers know that there will be less damage to their credit if they choose to short-sale their property. Number of short-sales listing should increase for the next 12 months, and that might put a damper on property values. 

So your home is still on the market? You are not alone.

Since the economy has taken a dive, some very big celebrities are realizing their lavish estates just aren’t worth as much as they used to be. In fact, now might be the best time in history to buy the extravagant former home of one of your favorite stars. Here are some of the celebrity palaces that have recently been put on the real estate clearance rack: 

Eddie Murphy’s 32-room manor in Englewood, New Jersey, which he calls Bubble Hill, has been on the market for $30 million for five years without a sale, so last month Murphy slashed the price of the property, which boasts a bowling alley, indoor pool, elevator, full-size racquetball court, theater, and recording studio, in half, to $15 million. So far, no buyers, though — maybe because the annual taxes alone total $197,723!

If you’re in the market for something a little more reasonable, Whitney Houston has also cut the price of her NJ estate, where she married Bobby Brown, in half, from $5.6 million to $2.5 million. For the famous 12,561-square-foot gated property, that’s practically a steal!

Most recently, blockbuster star Nicolas Cage has found himself in “catastrophic” financial circumstances, which the actor attributes to a shady money manager, whom he is suing. Cage has already sold off his castle in Bavaria, but you can still own his houses — worth approximately $3.5 million each — in New Orleans, where they both go up for auction on November 12. Cage is also selling off properties in Las Vegas and Los Angeles.

Hopefully, these celebrities won’t face the same embarrassing fate as some stars did last summer, when a spate of big names like Victoria Gotti, Jose Canseco, and Damon Dash had their residences foreclosed upon by banks.

Well…. maybe these guys didnt hire the right Realtor. When it comes to hiring a Realtor, be choosy and pick the best.

Decline in housing market? Well… when does it end?

For those of you who have been my friends or clients…. this is not new, but for those who don’t know me…… Here we go…. I called the housing bubble back in 2003 and I did send an email to the Federal Reserve, warning them about the lax lending and the consequences, I never thought they would even read my email, after all.. I am just an average Joe, sending and average email, to a not so very average Federal Reserve…. next thing you know, I get an email back from the Feds, which reads… “our job is not to target Bubbles”. SAY WHAT? I was shocked, they do not target Bubbles? but when diddly hits the fan, they keep pointing fingers at one another and the result is the bail out by the taxpayer????…. 

On July of 2005 I called the top in our real estate market, not because I could read the future, but when some guest showed up on CNBC television and said that “There is no way the real estate prices would fall”…. SAY WHAT?… I thought ..oh boyyyy…When you hear “Never”, you just know its time to sell and hit the back door, which I recommended to my clients…….

I was taking out one my clients about 2 weeks ago to show her some Condos in North Hollywood area. She was talking about how the price of oil will be going to $150, and there is noooo way the oil prices would go down…… SAY WHAT? I told her, “that day was the top in oil prices” and since then the price of oil has dropped over $20 dollars per barrel….. and I think the next stop is under $100……. Well, I have been trading options and stocks for the past 20 years, so I know a thing or 2 about herd mentality, what and how people think and react….which brings me to my next prediction…… and has to do with this website, after all, I eat real estate, I drink real estate and I breath real estate… Next few months will be the bottom in USA housing market. We won’t be out of the woods by any means, It will take another 3 to 5 years for this market to stabilize, but the prices should not go down any more……. In lower income neighborhoods, the prices are already down from 20% to 50%, but the the next few months we will see the higher priced homes hitting the fan!!!… Remember, this is just a prediction and Pleeeassseaseeee consult a professional regarding your decision in buying or selling an investment property, or a home.

I also wanted to thank all of you who left an offer for the 2 bank Owned properties on 4319 Irvine Ave, which is in Studio City, Colfax Meadow, Carpenter School Dist and the least expensive home in the neighborhood, also my favorite brand new house 4182 Kraft Ave. which is about 4,000 square feet, built in 2007 and the price was $1,250,000(oh my god, I could not believe that price, it was an absolute bargain). I will be posting the latest home prices in Studio City on month to month basis, starting August 1st. If you need to get the latest home prices in any city or county in California, just drop me an email.…………Cheerrrrrrrssssssssss

Looks like home prices are stablizing in studio City or are they?

It has been a rough ride for the Sellers during the past 12 months, however if you priced it right, you had no trouble selling it. The first few months of 2008, we witnessed a 20% decline in home prices and that includes properties within Carpenter School District. Studio City Home prices are holding up fairly well, compare to the rest of Los Angeles and there might be a good reason…….Location, Location, Location.

There has been a dozen forclosures in Studio City, but the one I really liked and I thought that it was a great deal, was 4339 Vantage Ave. Priced at $599,900, with 7,000 Sq.Ft Lot Size, you just couldn’t go wrong. I emailed this listing to all my friends and clients. It was listed 3 days ago, and now there are 12 offers on that property. If you would like to get my email alerts for such bargains, drop me an email or call my Cell.