Long Beach/Southern California Real Estate

Some Increased Loan Costs Starting in 2012

2012-01-18T16:16:00.000-08:00

There was a time just a few years ago when PMI (mortgage insurance premium), that cost for putting less than 20% down towards a mortgage, was not tax deductible. Then, with the upswing in the housing market, came the good news in 2006 that it was deductible, so there seemed at least some return on what seemed like an extra cost because you couldn't afford the higher cost (the 20% down payment).

But, unfortunately for people who need every break possible now, that deduction has expired at the end of December. This will affect potentially millions of homeowners, who probably don't even realize its disappearance at this point. It could mean a difference of several hundred dollars a year, at a minimum, for the first-time and mid-income buyer. Congress failed to renew this, as well as many other benefits in the Tax Code.

In addition, there are new mortgage fee hikes for Fannie and Freddie Mac loans, fees which will undoubtedly get passed along to the consumer, and may mean about 1/8% of a 1 point increase in interest rates. Why?

"Unlike standard guarantee fees, which are used by Fannie and Freddie to defray loan-default expenses, the new funds will be sent directly to the Treasury to help pay for the $36-billion cost of the temporary payroll tax cut. FHA loans also will be hit with a fee increase by the payroll bill, raising the annual premiums the FHA charges new borrowers by one-tenth of a point."

More information on these costs from Ken Harney.

Residential Sales in Long Beach CA -- Very Busy in 2011!

2012-01-16T10:14:00.000-08:00

Just a quick look at this chart for pending sales of single family homes in Long Beach shows the trend:
more properties in escrow with almost every passing month in 2011--December was the highest month of pendings since June of 2010. (This data includes both standard equity sales and all types of distressed and special condition properties, at all price ranges.)

One of the busiest months was June, when the average days on market time was under 60 days, the highest number of new listings came on the market, the number of houses sold was second highest for the year, and the median price was the highest for the year, at over $370,000. August and December, however, were the two highest months in number of houses sold (202 each) for the year. The median sold price for 2011 did not reach the median high of $380,000 of 2010.

Overall, the number of houses sold from December 2010 is 9% higher in December 2011, while the number of properties for sale is down 24%. In fact, the months' supply of inventory (how much time it would take to sell all the existing inventory at the current rate of sale) shows a definite downward trend for single family homes for the entire year and is at the lowest level since December 2009.

Interest rates are projected to stay lower throughout 2012, making a great time to take advantage of Long Beach market activity, especially in the under-$400,000 market, where standard sales are moving quickly.

NOVEMBER - 2011 Newsletter by Julia Huntsman

2011-11-30T12:17:00.000-08:00

Welcome to the most current Housing Trends eNewsletter. This eNewsletter is specially designed for you, with national and local housing information that you may find useful whether you’re in the market for a home, thinking about selling your home, or just interested in homeowner issues in general.

Please click on this link to view the Housing Trends NOVEMBER - 2011 Newsletter http://yoursocal.housingtrendsenewsletter.com/

The Housing Trends eNewsletter contains the latest information from the National Association of REALTORS®, the U.S. Census Bureau, Realtor.org reports and other sources.

Housing Trends eNewsletter is filled with local and national real estate sales and price activity provided by MLSs and the National Association of Realtors, U.S. Census Bureau key market indicators, consumer videos, blogs, real estate glossary, mortgage rates and calculators, consumer articles, and REALTOR.com local community reports.

If you are interested in determining the value of your home, click the “Home Evaluator” link for a free evaluation report:
http://www.juliahuntsman.com/Home-worth.html

Sound decisions can only be made with accurate and reliable information, and I am happy to be a trusted resource for you. Thank you for the opportunity to provide you with this monthly eNewsletter, and I look forward to answering any questions you may have and to the opportunity to be your REALTOR® in the future.

Sincerely yours,

Julia Huntsman

Huntsman Properties

Area REALTOR Long Beach CA 90803
562-896-2609
julia@juliahuntsman.com

You are receiving this email because you have signed up for and activated your personalized Housing Trends eNewsletter. If you no longer wish to receive emails about the latest issues of your newsletter, Email at julia@juliahuntsman.com to unsubscribe.

Keeping Up With Capital Gains for 2012

2011-11-21T17:38:00.000-08:00

It's that time of year when not only are the seasonal holidays of Thanksgiving and Christmas are on people's minds, but so are certain real estate issues, such as capital gains taxes.

The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 extends the Bush era tax cuts until the end of 2012. In 2013, the capital gain rates are set to return to the old 20% and 10%, per Asset Preservation, a 1031 exchange company.

1031 exchanges may not be conducted with an owner occupied principal residences, but they do apply to a taxpayer's investment property which he/she wishes to exchange, rather than sell outright. If your tax bracket is over 25%, you will be paying at the 2003 15% capital gains rate. Beginning in 2013, this rate will increase to 20%.

So for now, you have another year to accomplish an exchange, but time moves on quickly. Depending on the market value and the time it takes to find the qualified buyer for your current property, find the new property including its selling conditions, the year can melt away.

To find a comparison for your selling situation, see this exchange vs. sale scenario or see general 1031 exchange information.

Long Beach--and Nearby Cities-- Residential Market Prices and Sales October 2011

2011-11-21T16:30:00.000-08:00

Long Beach Harbor view

While prices are dropping overall in the area based on annual figures, condos in zip code 90802 showed a price increase from the prior year of 32.5%; 90803, an increase of 57.9%--and dropped in other reported zip codes (from prior year), per the Los Angeles Times zip code chart for October, 2011.

Single family home prices in Long Beach dropped by varying percentages from 2.1% (90806) to 24.6% (90804), and based on one house sale in 90802, an increase of over 40% in price from last year. These prices also vary according to the number of short sales and bank-owned properties in the mix.
Even though decreases are reported here, these are year-to-year, and 2011 month-to-month comparisons may actually show some increases.

October 2011 sales volume in Long Beach:

Single family homes - 181 properties
Condos/townhomes, Co-ops, OYOs, Lofts - 79 properties
Units (2-4) -28 properties

September 2011 sales volume in Long Beach:

Single family homes - 188 properties
Condos/townhomes, Co-ops, OYOs, Lofts - 75 properties
Units (2-4) - 36 properties

August 2011 sales volume in Long Beach -

Single family homes - 207 properties
Condos/townhomes, Co-ops, OYOs, Lofts - 97 properties
Units (2-4) - 40 properties

Buyers should understand that there's a lot of opportunity in the area right now--take a look at the MLS inventory vs. the number that have sold:
Currently, there are 141 active listings in the MLS for 2-4 unit properties in Long Beach, ranging from $159,900 in North Long Beach, to $1,499,000 for 4 units in Alamitos Beach (90802).

There are 668 single family homes actively listed in Long Beach from just under $100,000 in North Long Beach to over $9 million in 90803 on Sea Isle in Naples (90803).

There are 444 condos/townhomes, OYOs, Co-ops and Lofts actively listed, the vast majority of which are condominiums, ranging from $47,000 in downtown Long Beach to $1,095,000 in Spinnaker Cove.

Take a look at the properties attached to the links--it's an easy to sift through the market!

Market Prices in Other Cities:

Cerritos has had only a 6.9% drop in single family prices from October, 2010; Diamond Bar has a 25% increase; two zip codes in Downey have an increase; Duarte, a 40% increase; San Gabriel, a 22% increase; Torrance, 3 zip codes show an increase; all zip codes in Whittier increased up to 26%; Los Alamitos, .8% increase; Garden Grove, two zip codes show increases of 2-3% range. (See the Los Angeles Times chart for more information.)

With interest rates not seen since the 1940s, it's a great time for low monthly payments!

Don't Underestimate the Value of a Good Appraiser

2011-11-18T10:31:00.000-08:00

Home appraisals are something like appraisals of other treasured possessions -- the owner would like the highest and best price for what the current market will bear.

But one of the questions is: what is the "market?"
There are "regular" standard sales, where the owner has a margin of equity or full equity, there are short sales, there are previously foreclosed properties now being sold as bank-owned, or "REO" properties. When it comes to an appraised value, the results depend so much on recent local area activity, and which properties are used for comparison to the home being appraised, and last but not least, the experience, knowledge/ability and professionalism of the appraiser, including his/her adherance to the Uniform Standards of Professional Appraisal Practice.

Both buyers and sellers should be aware of current basic issues about appraisals. A 2007 lawsuit initiated in New York brought about the Home Valuation Code of Conduct (HVCC) and the ultimately controversial use of Appraisal Management Companies , an intervening layer between the buyer's lender and the appraiser who does the report for that lender. Appraisers are supposed to be independant licensed real estate professionals who are trained to give an independant analysis (under various guidelines including FNMA's) of the value of a property. The New York lawsuit came about because of pressure exerted on appraisers there (in this case by Washington Mutual, now gone) to fraudulently inflate home values. So the HVCC was developed and mandated to be used nationwide by FNMA, meaning if you wanted a loan in this country, many of which are invested in by FNMA, you had to follow this new method of obtaining an appraisal. This was in 2007.
Today, despite some positive changes in the Code since 2007, the complaints about appraisers sent out through AMCs are still rampant. A 6-person panel which I attended at last weekend's National Association of Realtors convention in Anaheim expressed various points of view, including:

AMCs hire the cheapest and lowest quality appraisers (ouch!);
This lower paid AMC appraiser may be given a "number" to hit through the Automated Valuation Model (AVM) method performed by AMC staff (not qualified appraisers) before he/she ever goes to the property.
Many of the AMC appraisers are much more recently trained and hired--their license number is an indication of how long they've been in the business.
They may have little or no experience with the immediate area of the subject property. (My comment: I have not personally met someone who has flown down from San Francisco, but I did have experience the other day with an appraiser who met me in Old Lakewood City neighborhood and said that all neighborhoods in Lakewood were the same--he obviously hadn't been to Lakewood Country Club area, for example.)
They may be pressured to "hit a number" that their AMC has already arrived at. (Comment: Yep, I've had experience with this too--last year an AMC rep told me over the phone before the appraiser ever went to the property what the property value was of Long Beach condo. I had to put up a fight to get an actual appraiser to come to the property, and guess what? The valuation came in at the "Number" I was given over the phone.)
Because they make less money than a traditional appraiser, they take on more assignments in a given period of time; they have less time to complete the report, and therefore less time to research the property and comparables, evaluate it, and prepare the report.
Market value, if the property is an equity sale, may or may not include area distressed property comparables, depending on the nature of that market.
Short sale market value may be affected by comparables sales where the bank has given $3,000 or $25,000 to the seller vs. a short sale where there is no seller incentive. (Comment: HAFA short sales and Chase Bank are good examples.) Sometimes that information can only be found out by calling the listing or selling agent, as the MLS may not include that information. The AMC appraiser may not take the time for that kind of research.

What should both the buyer and seller understand about this situation? That the appraisal is acutely important to each of them, and even one which may have been done competently and professionally could still be called for "review" by the buyer's lender's underwriter. But there is less chance of that happening with an appraiser who knows his/her market as an appraiser.

The listing agent and selling agent may directly speak with the appraiser.
What is the appraiser's license level? Trainee vs. Licensed vs. Certified?
A good listing agent will qualify that appraiser on the phone before he/she is admitted to the property, and in fact, it is the listing agent's duty to the seller to find out about that geographic competence (they always tell you they know the area, so you have to ask more questions), the appraiser's skill/knowledge level, and to make sure that appraiser is given critical information about the property's features, discrepancies with tax record, conditions--things that can affect value--along with area comparables. (Comment: My Lakewood appraiser recently told me the number of bedrooms didn't make a difference on value after I pointed out to him a discrepancy with the tax records--but oh yes it does! If it didn't, people wouldn't be paying thousands of dollars more for a 3rd bedroom.) If the listing agent believes the appraiser does not have geographic competency, the listing agent may deny access to that appraiser, i.e., last time in area?, how many subject properties visited in area? "Local market knowledge is the primary qualification to hire a specific appraiser for an assignment."
The buyer/borrower is entitled to copies of ALL valuations of the property including Broker Price Opinions, Comparable Market Analysis, and AVMs, and 3 days prior to close of escrow, the borrower can request a copy of the appraisal, and all fees are required to be disclosed prior to close of escrow.

For local market information about your area, please contact me, or find active listings and real estate information at http://www.juliahuntsman.com/.

What Are the Best and Worst in Home Remodel Values for Long Beach/Los Angeles?

2011-11-08T09:18:00.000-08:00

The latest Cost vs Value report is out!

Buyers often want a 3 bedroom house or condo not because they need all the bedrooms for sleeping quarters, but because they need office space. Interestingly, according to this Report, the home office remodel could be the lowest in terms of recouping cost. One of the things to consider is a future buyer's need for an actual bedroom and the closet that was previously turned into office shelf or storage space.

The next two items with under 50% return on original cost are a sunroom addition and backup power generator--with the fourth on the list being a bathroom addition at 53.5% return.

The top best return remodels are a steel entry door replacement (100% return), garage door replacement, deck addition and minor kitchen remodel, alnd with siding replacement and vinyl window replacement--all over 70% cost recoup.
The only item in the 2011 report to increase in return on original cost was the garage door replacement, included for the first time in the report--new garage doors add curb appeal on a prospective buyer's first impression of a home, and are also one of the lowest actual cost projects to install for a homeowner. (Just think of the times you pulled up in front of a great house with a weathered garage door.) All other items in the report have decreased.

Master suite addition and family room additions are between 60-70% return.

Overall, exterior replacement projects under $25,000, rather than more expensive remodel projects, are leading the way in return on cost, since they are less expensive. The outdoor wood deck tied with the minor kitchen remodel.

Owners might want to consider utilizing existing space for conversions--they may be less expensive than a new addition, and they don't change the original floorplan or "footprint" of the home.

If an addition does not have a good flow for the overall floor plan of the home, especially considering the price of a home, a buyer may go elsewhere to find a more recently built home that was designed for such amenities.

See the 2010-2011 Cost vs. Value annual report by Remodel Magazine for the Los Angeles area,

To find properties in all Long Beach (and nearby cities) areas and types, please go to this property search.

1-Minute News on Long Beach Homes and Condos on Facebook.

2011-10-27T14:54:00.000-07:00

To see this fast update on market news every month, just click on "Like" button for my Facebook page in the right column, then go to "1-Minute News".

Bank of America's Short Sales Programs are Expanding and Improving

2011-10-26T14:18:00.000-07:00

Bank of America attended a webinar today with Bob Hora and the CDPE Distressed Property Institute revealing all about new processes in place: The Bank of America will be sending out a package, The Home Transition Guide, to the homeowner explaining owner's options, including a short sale.

2010--90,000 short sales completed by the Bank.
2011--over 100,000 short sales so far.

Their goal is to have a leaner short sale process in the future where the entire process is shorter by several weeks.
More people are hired to do short sales at the Bank, today there are over 3,000 staff members, including those at their call centers. A single point of contact at the Short Sale Department throughout the short sale will be established after the homeowner's initial contact with the Bank of America. Homeowners who go into customer assistance
SLAs (service level agreements) will agree to responses with certain periods of time, and Bank has established a Closing Center in Arizona to handle short sale closings.

The bank has over 500 investors and many MI (mortgage insurance) companies to work with, and get approval from. Depending on their relationship with these investors, the timeline may be faster or shorter, and it's important that the homeowner understand these relationship. The short sale specialist can explain who is delegated investor or non-delegated.

If a borrower is having a hard time getting a loan modification, they should turn to an Realtor quickly: A short sale file needs to be opened with an accepted offer from a buyer at the bank at least 45 days prior to the foreclosure sale date. So if you the borrower has a Notice of Default on your property now, your time is even more limited to market and find a buyer in time.

The Bank also is reviewing every transaction for arms length transactions--the short sale market place is not the venue for questionable "flips" or "deals" during the short sale process, and the Bank ( as well as other legal entities) are on the lookout for practices that do not conform to regular procedures.

The Bank prefers a short sale over a deed-in-lieu, and the bank doesn't consider the DIL the best transaction for the Bank or the investor.
For assistance with a home valuation if you're considering a short sale transaction, either call me or contact me through my website, where I have much information at "Help for Homeowners" at http://www.juliahuntsman.com/.

Just Sold: Wrigley Traditional for $360,000

2011-10-21T15:53:00.000-07:00

2247 Oregon Ave.

This is a vintage 1940 house with so much original charm. It had been in the same family for decades, and was sold by the heirs of the original owners who had it built. Later rear additions added a den and extra bath and enlarged the rear bedroom. The living room was spacious, had an original fireplace, entered through a small front entry way. And the kitchen featured a convenient dining area with attached wall bench. If you love 1940's and 1950's bathroom tile in very good condition, this house had the perfect display of it.

The rear yard had mature trees and a beautiful grassy area and a covered patio area. The permitted bonus room off the garage was just the extra space the buyer was looking for.
While a lot of people are looking for huge houses with great rooms and very few room partitions, this house was the perfect find for a buyer wanting a traditional floor plan with separated rooms. Three bedrooms, 1.5 baths. $360,000 selling price.

For a market analysis of your property, please contact me at http://www.juliahuntsman.com/. If you're looking to buy in the Wrigley area, or elsewhere in Long Beach, please contact me for a list of properties in your price range.

It’s time to take another look at short sales

2011-10-10T13:47:00.000-07:00

As recently as a few months ago, if you would have told a real estate agent who specialized in short sales that they’d be raving about a lender’s stellar service and rapid approval times—not to mention significant cash incentives for financially strapped homeowners for pursuing a short sale—you’d have gotten some strange looks.

That’s all changed. And it’s changed faster and to a greater extent than most real estate professionals ever could have imagined.

With a glut of bank-owned properties dragging down the recovery of the real estate market, as well as the national economy, major lenders are more eager than ever before to avoid foreclosure. So they’ve sharpened their focus on short sales. Bank of America, for instance, says they have processed 500,000 loans for short sales this year through their online Equator system. It's not a perfect world--not all short sales close: there are many parameters, including lender and investor efficiency, to getting a short sale closed. California Association of Realtors states 3 out of 5 actually close. But for those sellers willing to do the work, and for buyers willing to qualify and hang in there, there are successful closings.

The biggest lenders in the country have staffed up to ensure rapid processing of short sale applications. They’ve come up with cash incentives, some in the thousands of dollars, at closing for homeowners who pursue a short sale. And they’re proactively reaching out to CDPE agents and putting them in touch with delinquent borrowers.

This is big news and the media has not really caught onto it yet. What’s important for you to know is that whatever you’ve read or heard in the past about long lag times and frustrations with short sales is probably no longer the case.

To find out more,I invite you to contact me and/or to visit my website at http://www.juliahuntsman.com/ to learn more and feel free to contact me any time at if you or anyone you know is struggling with an unmanageable mortgage.

Getting Charged Too Much for HOA Documents?

2011-09-30T09:04:00.000-07:00

One of the escrow expenses buyers usually pay when buying a property within a homeowner association are document fees for the CCRs, Rules and Regulations, and other documents they are entitled to. This sometimes amounts to several hundred dollars. Even though a law prevents homeowner associations charging more than the actual cost for such documents, a loophole allowed an HOA to delegate this task to outside vendors, who could charge whatever they wanted.

Good news. Earlier this month, California Gov. Brown signed AB 771, and the loophole closed, preventing home buyers in common interest developments such as condominiums or townhomes from being charged excess document fees.

Buyers used to only have to pay $150 at the most, but that cost may now go up to $400, payable up front by the buyer. But if a charge goes much beyond that, a buyer should be aware that they perhaps are being over-charged, and ask for an accounting of that cost by the HOA or its property manager. A fee of $1000 is probably excessive, and would be considered a financial burden by most condo buyers, and could be an indication that a buyer is being charged for documents that are "bundled" in, and not required.

Where is California Real Estate Going for 2012?

2011-09-23T11:57:00.000-07:00

Here are highlights from the September California Association of Realtors presentation on market predictions for California in 2012:

Sales volume between Aug 2010 and Aug 2011 of detached homes was up by over 8%.
Los Angeles County median price at $312,900 for detached homes down 7% from one year ago; Riverside County median price of $202,060 down 2.9% one year ago.
Calfornia homes: 2 in 5 sold were distressed properties.
California median home price of an equity sale was $431,000, for REO it was $240,000; a short sale was $287,000, for similar sized houses.
In 2011, sellers' median net from sale was $75,000, highest amount since 2009.
All-cash sales are over 25% of homes sold -- the highest percentage since 2000.
The predicted 2012 California overall median house price is $296,000, an increase of 1% from 2011.
Here is the entire California Housing Market 2012 Forecast presentation

“Forget stocks. Don't bet on gold. After four years of plunging home prices, the most attractive asset class in America is housing.” “Real estate: It’s time to buy again” Fortune Magazine’s 3/28/11 article written by Shawn Tully.

Prime Opportunity for Investing/Buying in the Southern California Residential Market

2011-09-20T13:27:00.000-07:00

In August, 2011, the California statewide median price for a single family home was approximately $297,000, an estimated 7% drop in price from 2010, BUT an 8% increase in sales volume from one year ago, per California Association of Realtors.

The lowest median single family home price in California in our current cycle was $274,000 in 2009; and $303,010 in 2010. Los Angeles County median price for a single family home in 2009 was $333,920 and for 2010, up to $346,840.

And yet, current distressed property sales continue to make up 40%-50%, and more, of local markets, with a recent huge increase in foreclosure properties within the last month. These trends show how opportunities will continue to bring more investors and more private money into the market. Traditional financing, i.e., FHA and FNMA, has introduced some types of requirements that discourage the present pool of buyers, that private investors with money to lend are entering the marketplace, because they believe that property values have hit the lowest point in most areas.

There is a need for the rehab and re-sale of distressed properties in disrepair, yet traditional financing doesn't offer that vehicle for those with the goal of "buy, fix and sell." Investors who don't fit the box for traditional financing avenues do have these private money alternatives that may work for them:

one-year loans for flip properties--no pre-payment penalties
stated income applications for flip properties
loan amount to be based on 60% of private lender's determined value of property
also available are constructions loans based on "repaired" value of property
on site appraisal and photos may not be required

Interest rates for these short term investor loans are higher than standard FNMA-type financing, however, they are also a vehicle which is more lenient on the borrower's prior financial events (i.e., short sale, foreclosure issues), and they are geared towards the eligibility of the property, and the case-by-case history of the borrower.
If you are looking for opportunity in the investor property market for 1-4 residential units, contact me for more help on finding the property and the financing!

What Will the Loan Amount Reduction to $625,500 Do to Local Markets?

2011-09-09T17:47:00.000-07:00

Today I was contacted by a Los Angeles Times housing market reporter covering the market on new loan amounts coming into effect soon. It's really hard to say exactly what the outcome will be, but one thing is certain: California really doesn't need any more uncertainty or instability in its housing market. Legislators elsewhere really do not seem to be very concerned, probably because the vast majority of them do not have a home to sell in California.

Single family homes in the high end market of 90803 and 90814 may feel the cut in loan amounts to $625,000. Currently there are 145 active listings, 113 of which are over $625,500 (the new loan amount starting October 1st). Between June 1 and August 31, 26 homes sold over $729,750 (the current limit on conforming loans), and 24 sold under $625,500, while 16 sold between the two loan amounts. That represented 25% of the total 66 homes sold in that time period.

Currently, of the 145 active listings, 113 are listed over $625,500 (just using the loan amounts as the dividing line for the sake of discussion), 95 are listed over $729,750--meaning 18 are in the critical area in between. Currently, 26 homes are in escrow, all over $625,500--but would the 8 in the critical area under $729,750 be buying in the future at a higher interest rate? The homes in escrow (26) of the 145 active listings shows that the seller in this area currently has about an 18% chance of selling in the current loan market.
Now, along with an already competitive situation in the high-end market, what will the future bring with a jump up in interest rate for the new jumbo loan amount?
See more at http://longbeachrealestate.blogspot.com/2011/07/change-may-be-coming-in-loan-amounts.html

But, there is more, not to be discussed here: the QRM, or qualified residential mortgage which basically could turn the conventional loan market at all levels into a one-size-fits-all 20% down payment.

Buyers of Long Beach Condominiums Are Using More Conventional Loans--or All Cash

2011-09-09T16:40:00.000-07:00

In Long Beach, condominiums tend to be concentrated in several specific areas, and two of these are in the downtown and shoreline area zip codes. Condominiums are a wonderful homeowner opportunity, also attractive to many segments of the buying population for investment/rental reasons as well.

A total of 105 condominiums sold in 90802 zip code (downtown Long Beach, Alamitos Beach and Ocean Blvd.) between June 1 and August 31 in prices ranging from $60,199 to $775,000:

As reported in the MLS, all-cash buyers represented 28 (or 27%) of these sales, most for units under $200,000; 30 units were listed as REO (bank-owned) properties; 35 units were listed as subject to short pay approval; 35 units were listed as standard or equity sales (33%). Per the MLS, 58% were financed: only 12 were reported as purchased with FHA financing, 2 with VA loans, while 47 units were purchased with conventional financing.

A total of 29 condominiums sold in 90802 zip code (Marina Pacifica, Bluff Park, Belmont Heights, Naples, Belmont Shore) in the same time period, from $134,000 to $665,000.

As reported in the MLS, all-cash represented 7 sales(or 24%); only 1 FHA financing, 19 conventional loans (69%); 16 units were standard equity sales (50%); while 8 were closed as short sale properties and 4 were listed as REO properties.

FHA financing, which used to be the great introduction to the first time buyer's purchase is increasingly a very limited vehicle for financing a condo. Why? Because homeowner associations are not renewing their FHA project approvals, without which there is no FHA financing in that association. In a check of the HUD project approval list for Long Beach, the associations are dropping off the active list at an alarming rate. For some, it's a problem of having too many delinquent dues--but surprisingly, some HOAs may not even know they have expired as the old Board members have long since left the scene. For others, they do not know that since 2008 FHA no longer does "spot" approvals, as they once did financing on a unit-by-unit basis, so they are not aware that they are limiting the ability to attract new homeowners. If you are a current condo owner, you should investigate what your association can do to obtain FHA approval--if only to enhance the prospect of obtaining a reverse mortgage if you are in the over-62 age bracket. Reverse mortgages are generally FHA loans, but if your project isn't approved, you will not be able to obtain one.

Both buyers and sellers need to be actively aware of these condo financing issues and investigate in advance their loan options with both FHA and conventional loans. While FHA is 3.5% down, it also has some other expenses rolled into the loan which a conventional loan does not. There are some sources for 5% down conventional financing, which is more likely to be a better fit. If FHA is your only option because of your overall loan qualification circumstances, be prepared for a very diligent and patient search for the right homeowner association that is FHA approved before you make the offer. And as we see above, all-cash buyers make up about one-quarter to one-third of the condo buying market in these areas.

Please contact me or visit my website for more information.

Cut Your Electric Bills with Solar Energy -- Is It For You?

2011-08-31T12:04:00.000-07:00

Solar energy panels may warm your water, which can lower your water heating costs, or cut your overall cost of electricity. Solar panels collect solar radiation from the sun and convert that energy to electricity. At first blush, the panels sound great, but look further--buying them outright would be a pretty big investment for most homeowners, and then there's the leasing option, which cuts upfront costs but has other features.

the City of Los Angeles is starting up its rebate program again tomorrow, which will cover about 30% of the total cost, down from the earlier 50% coverage. Per a recent Los Angeles Times article, a 5-kilowatt system costs about $35,000--with a 30% rebate, the owner will recoup the cost in 13-15 years.

Leasing agreements account for about half of the California market, and California accounts for about half of the country solar installations. The lowered rebates, however, have also caused upfront costs for leases to increase to $4000 and $5000, so it's not so attractive for many potential customers. To reduce that upfront cost, leasing companies would have to increase their leasing fees, which will have the total effect of a monthly increase in montly electric bills, not a decrease. Solar panel leasing companies have a less exciting outlook in some cases.

Over time more companies in the business in California selling more panels will eventually make costs lower--already the panels are less expensive than in 2010, but labor costs have not come down from 2010.

Another option are thin-film solar panels which generate half the electricity and cost abouty 10% more than the standard flat panels, but have the advantage of being lighter and being more flexible in shape.

For now, research the sources offering solar panels and program costs. Going Green is good for the environment, but it does have costs attached.

Rebates - City of Long Beach for solar water heat
City of Los Angeles for solar panels
Southern California Edison also offers a program for its customers for home or business use.
For additional federal tax credits and additional savings, see the information at U.S. Department of Energy.

Saving Water is Saving Money, Also, Its Not Wasting Water

2011-08-09T14:02:00.000-07:00

Since we're watching TV ads about honest talk about what goes on in the bathroom, this seemed like another good conversation to have.

A typical household uses 185 to 300 gallons of water a day and the majority of it goes down the drain from the toilet and the shower. One person alone may use about 80-100 gallons per day. The toilet can consume about 26% of total daily water usage. Updating your commodes will serve as a conservation effort while also lowering your water bill.

If your toilet flushes 3.5 gallons per flush, one person may use as much as 19.5 gallons per day. But if your toilet flushes 1.6 gallons, that usage may be reduced to 10 gallons per day. Today's toilets use less water, prevent staining and resist clogging better than the older toilets--which saves on plumber's visits--and they are easy to install (although I recommend using a plumber to do it). Good replacements generally cost from $150 to $300.

Until recently, I was one of many households with pre-1992 appliances, but I have just completed a replacement of a 5 gallon-per-flush toilet with a 1.6 gpf, and a new reduced-flow water faucet, so I know I'll be saving water! Many older homes have older fixtures which, if replaced, will save a lot of water and reduce water bills. The early 1.6 gpf models were problematic in the 1990s, but those made today are much improved, and are easily found at the large home supply stores, you know the ones.
Toilets made in the 1950's used, on average, seven gallons per flush. Compare that with one that only uses 1.6 gallons per flush and it's a big saving. Multiply by the times a toilet is flushed in a year and the number of toilets in your home and it will save a lot of water. The chart shows how usage changes depending on type of commode. (1 gallon = 3.785 liters.)

Handling the Stress of an Unaffordable Mortgage Payment

2011-07-29T14:43:00.000-07:00

Whenever I research the latest foreclosure and distressed property statistics, the sheer number of Americans facing the stress of losing their homes amazes me. For the month of June per the MLS, 148 single family homes and condos sold as an REO or short sale property in Long Beach, out of a total of 316 sales for the month.

It is my goal to help as many homeowners I can either stay in their homes or relieve the burden of their mortgages. Knowing that there are so many that need my help is a driving force for me to continue doing what I do.

In fact, I just released another report that I’ve made available on my website today. It explains the CDPE designation and lists 10 options that homeowners can take advantage of to relieve the stress that comes with owing their mortgage lenders more money than they can afford to pay.

The report also draws a contrast between short sales and foreclosures. Unfortunately, there’s a growing trend of “strategic defaulters” who think it’s smart to let their home go into foreclosure. As any one who follows this blog knows, there is nothing strategic about foreclosure; it’s one of the most long-lasting, negative financial challenges you can go through. A short sale seller who can legitimately show a hardship will avoid the post-foreclosure consequences. Just recently signed into law in California was SB 458 which took effect immediately and which "extends the protections of SB 931 (2010), to ensure that any lender that agrees to a short sale must accept the agreed upon short sale payment as payment in full of the outstanding balance of all loans," so that no first mortgages (signed into law earlier) and now no junior liens can be pursued later if the lender agreed to the short sale. This makes it even more worth it to examine the possibility of pursuing a short sale.
I’m excited about acting as a resource for more homeowners who have questions about what they should do. As always, if you know homeowners who may need my help, have them contact me immediately! Together, we can put them back on the path to financial stability.

Good News for Short Sale Sellers and Junior Mortgages (and How Jerry Brown Used to Look)

2011-07-20T10:37:00.000-07:00

Finally, short sale sellers in California and the Long Beach/Los Angeles County area have more protection against deficieincy judgments. Senate Bill 458 was signed into law on July 15th by Gov. Jerry Brown, effective immediately. This was previously turned down by former Governor Schwarzeneggar, but is now made part of the protections of SB 931 which was passed into law as of 1/1/2011.

This means that if you have a second loan on your principal residence and the holder of the junior lien agrees to a short sale, there is no "deficiency judgment to be requested or rendered for senior or junior liens after a short sale of one-to-four residential units", per the California Association of Realtors. Additionally, this law does not appy in situations of fraud or waste (deliberate damage), it applies to residences, and does not apply to corporate owners, LLCs, and a few other exceptions. Previously, the protection was against first mortgages only, but is now extended to the seconds and other junior mortgages.

It is certainly intended for the owners of homes who are upside down in market value, but does not seem to specifically include investment property as long as it is within the 1-4 unit category.

Also, "although a lender cannot require a borrower to pay any additional compensation in exchange for a short sale approval, the new law does not prohibit a borrower from voluntarily offering a monetary contribution to a lender in hopes of obtaining a short sale. A lender is also permitted under the new law to negotiate for a contribution from someone other than the borrower, such as other lenders, agents, relatives, and the like", per the California Association of Realtors.

So, this bill may require investors on short sale loans to decide more quickly if they are going to allow a short sale or not, depending on whether or not there they have a chance of obtaining an outside contribution (will we see an increase in those incidences?), or just head straight for foreclosure. They now have to get whatever funds they can get PRIOR to the final short sale approval, because they will not longer have the ability to agree to the short sale and close escrow, and then pursue a judgment later to recoup on their losses.

Do You Remember When?

The good part is that once a sale is approved for a mortgage which falls under SB931 and SB458, the California owner is assured that no deficiency can be obtained--but how the negotiations will proceed before that time is unknown. Short sale sellers should always carefully document their hardship situation when applying to their lender for a short sale.

Should You Pre-Pay Your Mortgage

2011-07-18T08:33:00.000-07:00

Have you recently considered taking action involving one of the following mortgage issues?

An increasing number of homeowners are opting for higher monthly mortgage payments on shorter loans, but with interest rates at record lows and property values still in flux, that may not always be the best decision. In other words, investigate the difference, for you, between a 15-year mortgage vs. a 30-year mortgage, or a 5-year fixed option if you plan to stay no more than 5-years.
Choosing to pay down a mortgage ahead of schedule by paying extra money at a refinancing or by choosing a shorter-term loan may not be enough to offset what the money could have earned if invested in the markets, according to financial advisers.
Paying off a mortgage early, at the expense of other, more liquid savings and investments, could also stifle cash flow, especially in retirement. Once a house is paid off, in order to access its value, the owner would have to sell, get a line of credit, or take out a reverse mortgage to access the equity.
Financial advisers recommend that home owners only consider pre-paying their mortgages if they already have an emergency fund of at least six months to a year in cash, have other retirement savings, and plan to stay in the house for at least five to 10 years.

Home Improvement Trends In Energy Efficiency and Exteriors

2011-07-14T16:06:00.000-07:00

7 Hot Home Improvement Trends that Make Your Home Work for You
Home improvement trends embrace energy efficiency, low maintenance exteriors, and double-duty space. Read

Visit houselogic.com for more articles like this.

Is Your HOA FHA-Approved?

2011-07-12T13:09:00.000-07:00

Many homeowner associations in Orange County and Los Angeles County are experiencing certain problems, and these problems could lead to more difficult-to-sell units in an already-soft condo market. For example, some loans are not getting approved for conventional Fannie Mae financing at the close of escrow due to too many owners being delinquent on monthly dues. As times become tough, and owners have to short sell, or go into foreclosure, the associations are not able to collect the scheduled income, and lowered reserves are a concern to lenders.

While associations are not required to have special approval for conventional loans, HUD now requires complete project approval before an FHA loan may be given. And the advantage is that sellers have more potential buyers with this approval, many more. FHA loans have made up 50% of the market in some areas, because they fit the 1st-time buyer's budget with 3.5% down payment, and 1st-time buyers are the majority of buyers in some markets, including condominiums.

If your association is up for renewal for FHA loans, or your association would like to be FHA approved, the following factors are essential for project completion:

1. Owner occupancy must be 50%.
2. No more than 15% of the units can be dues-delinquent over 30 days.
3. No one entity or person may own more than 10%--this is a problem in a 12-unit complex where 1 person owns 2 units, and this is not uncommon in areas such as Long Beach and San Pedro.

4. No more than 50% of the units may be FHA insured.

5. No pending litigation which adversely affects the entire association (collection and foreclosure litigation does not make the HOA ineligible).

HOAs must provide the condominium documents, along with certain information, and if eligible, the process may take about 60 days or more. This approval can help out owners who wish to refinance as well. You don't have to be selling in order to start the approval process, in fact, it's far better if the association obtains it before units go on the market, or an owners attempts a re-finance.

To be approved will usually cost about $1500 to $2000. For more information on documents HOAs provide, and help with finding a source, please contact me to find out where to get started. Some lenders will provide the approval if they are the source of your loan.

Will Lower Loan Amounts Hurt Some California Sellers?

2011-07-11T17:11:00.000-07:00

July 1 was the cutoff date for loan limits that exceed the permanent loan limits. In case you've forgotten, the upper limit of $729,750 for conventional and FHA in California was a temporary accommodation. The permanent loan limit is $625,500 as of October 1, 2011.

This change is projected to have the biggest impact on the highest-end counties, i.e., Marin and Contra Costa Counties, but also Riverside and San Diego Counties are not far behind, where 11 and 12 percent of the (non-FHA) home sales would be rendered ineligible. In Los Angeles County, about 2.3% loans would be rendered ineligible, but Los Angeles County also represents 25% of the state's households. The lower limits for FHA loan in Los Angeles County would impact about 5.4% of the loans.

All told, the changes could affect 30,000 California families. If liquidity in the high end market becomes slower than it already is, where do the move-up buyers move to if their eligibility is tougher, and where do the condo-to-house buyers move to in the lower range when fewer properties are put on the market?

One loan limit for the entire country cannot be right--the West Coast market rose above the national level years ago, and the current loan limits recognize that. We need to keep the high-end market moving, so the rest of the housing market does also.

Issues raised to Ben Bernanke, Federal Reserve Chairman, in a House Committee hearing July 13:

Ackerman then asked Bernanke how Congress should reconcile the possibility that many homeowners will not buy homes in this higher bracket when they would otherwise be qualified to do so. "I don't have an answer other than to say that we have to get our housing finance system back into working order," Bernanke said.

Researchers from George Washington University have said the FHA already exceeds the market share needed to serve its targeted demographic of low- to middle-income homebuyers. And, a separate report from the National Association of Home Builders suggests more than 17 million homes across the country will become ineligible for cheaper federal funding – at a time when the housing market continues to struggle.

The truth is, they're really not sure what works and what is needed, and getting the finance system back in order sounds good.

Missing Mortgage Payments? It's Not Too Late

2011-07-07T17:10:00.000-07:00

Wondering what a homeowner should expect when payments are missed? The most important thing to know is that no matter what stage of default a homeowner is in, there is almost always a way to avoid foreclosure. That being said, the quicker a homeowner does something about the situation, the less challenging it will be to resolve.

First, here’s what a distressed homeowner should expect to happen when payments are missed:

30 Days Late: The lender will attempt phone contact or send a notice in the mail.

60 Days Late: The lender will attempt to make contact by phone and follow up with another letter in the mail.

90 Days Late: The lender will send a letter demanding all past due amounts within 30 days and start the foreclosure process.

120 Days or More Late: The lender’s attorneys will take over and the homeowner will be responsible for their fees in addition to missed mortgage payments and the loan amount due.

Not late yet, but about to be?

Homeowners who are not yet late but foresee missing payments should communicate this to their lenders as soon as possible. In the past, many banks wouldn’t work with homeowners unless they were one or more payments behind. In light of the mortgage crisis, most lenders would now rather take a proactive stance and decrease their loan losses. They are more willing than ever to work with homeowners to avoid being late.

If you are visiting my website at http://www.juliahuntsman.com/distressed-property-resources-short-sales.html and you or someone you care about may miss mortgage payments in the near future, please contact me. I can help navigate the process and put you back on a path to financial stability. Contact me today and alleviate the stress that comes with unaffordable mortgage payments. Find out what your options are.

Looking for a Home Plus Guest Quarters Under $350,000? It's Here!

2011-06-27T12:27:00.000-07:00

This upgraded and remodeled single family home the Circle Area of Long Beach has a lot of advantages for a new homebuyer because there's so little work to do!

Who wouldn't want the upgraded bathroom, and the new kitchen with granite counters and recessed lighting, complete with the cooktop range with downdraft feature? Hardwood floors, dual-paned windows and a roof (2005) in geat condition help a new buyer get settled quickly.

Verizon FiOS is already installed for state-of-the-art connections.

The nicely landscaped yard is completely enclosed, and patio areas are paved with Saltillo tiles. The side yard is good for play area or a dog run. And, though it's not permitted, there are additional guest quarters of approximately 175 sq. ft. with bathroom which makes a great office space or a third bedroom also!

Two-car garage with laundry hookups. For current listing price for 3100 Spaulding St., See listing here..

Please call me for more info!

Lower Loan Limits and a Higher 20% Minimum Down Payment?

2011-06-18T10:31:00.000-07:00

Without an extension or permanent change enacted by Congress, loan limits will decrease from $729,750 to $625,500. Couple that with new demands for a minimum 20% down payment for conventional loans and strict debt-to-income ratios, and there could be a very sad situation.

In many states these changes may not change too many people's lives. But in California where the market has for years been higher than other areas of the country, those changes could be critical, decreasing ability of buyers and sellers to purchase and sell, and hurting the recovery of our market. There are 27 California members of Congress who have spoken out against these changes. Everyone should know how their homebuying or homeselling future could be impacted by these changes, and possibly be shut out of the market.

And to make matters more confusing, there have been alternate proposals, and different ideas of what defines a Qualified Residential Mortgage, meaning those mortgages that could be exempt from the new rules. While it may have started with good intentions, these new rules, if passed into law, could have unintended, unknown effects.

Know Your Local, Local Market: A Call to Confidence, for Buyers AND Sellers

2011-06-17T16:33:00.000-07:00

Don't short change yourself.

Sometimes people act as if they are just looking for a reason to feel bad, and any attempts to correct, or just gently push away, negative assumptions are met with even stronger resistance. Twice in four days, the negativity virus has struck people I'm talking to. (The open house rate can be much higher.) One person believed he has the worst looking house possible and that it will never sell, when in fact, a few immediate corrections, including some paint, costing $1000-$1500 would probably put the home on its path to a motivated buyer in at least his house price median. Unfortunately, this owner has fallen prey, over and over, to the repetitious negative media message about "the bad market", all the while knowing nothing about his neighborhood statistics. He couldn't believe he actually had an opportunity somebody out there is looking for: a solid little house with a large back yard in a nice neighborhood under $350,000. Instead, he was looking backwards at perceived complications and difficulties, not forward into the light of a sold property. Maybe he's just not ready, but just in case he's reading this, the light of a sold property can be a very happy light.

This is the real job of a real estate agent: educating the client, which in turn would fire them up with more enthusiasm and motivation about taking action. It's a shame to see a person get into a real funk, a downward spiral of mopiness, when I'm hearing there are buyers looking and looking for certain opportunities. Repetition of the message is where it's at. The media knows this, and feeds on the human tendancy to embrace fear. So Realtors have to know it also: We have to be prepared over and over, to show, act and tell wherever and whenever, the postive truths about a client's local market, and show them what solutions could work best for them, over and over. You can't convince someone of something they really don't want to be convinced of, however, repeating things over and over is the key to all learning. Yes, it's a challenge.

I tried to explain to my prospective seller that the first time buyers are out there in great numbers, in fact, in Los Angeles County, about 60% of first time home buyers can afford a median-priced home (at the height of the market it was about 10%). At the end of 2010, the LA County median priced single family home was $323,000 (per CAR), and for April 2011, it was $333,000 (per tax data). And then I tried to explain that investors with all or 50% cash have been very strong in the market also, composing 30-50% of all sales in some markets, actually making it tough for the first time buyers who get outbid. So Mr. Seller, for the right property in the right area, there's competition out there. Our unsold inventory in Long Beach is recently at 2-3 months (that used to be called a seller's market), the housing affordability index is now where it was in 1999 and 2000. The trickle up effect is that the higher end homes are selling more--those over $750,000 in Los Angeles County have decreased in supply of inventory compared to one year ago.

Just give peace a chance.

Single Family Sales--Market Snapshot for May & Past 12 Months in Long Beach

2011-06-03T08:58:00.000-07:00

Date: Avg price Dec 2010 to May 2011
'Single Family Residence'
'Long Beach'

The most sales of single family homes in Long Beach within in past 2 years is in the $200,000-$300,000 price range: a total of 1,347. The top selling area in that price range in the last 12 months was in North Long Beach, with 821 closed sales in the last 12 months, and continues to have the highest sales volumes for May, at 71 sales, in the same price category!

Based on a group of 60 listings, Bixby Knolls/California Heights area averaged $562,025 in May with 25 sales, with the Plaza and Los Altos areas at 21 and 20 sales for May. The top 5 areas in average sales price for May are Belmont Heights at $878,900, Belmont Shore/Naples at $842,000, Park Estates at $749,000 (4 sales), Bixby Knolls/Cal Heights, and Lakewood Village at $544,000. Remember, these monthly average sold prices are based on properties sold during May, and are not their list prices.
Overall, the chart, based on MLS data, shows an upward trend--with monthly variances--in average price since December 2010 for the City of Long Beach.

New Listing: 555 Maine Ave., 309, Emerald Villas, downtown Long Beach

2011-06-02T12:10:00.000-07:00

Looking for that desirable "under $200,000" price? You have found it here. This is such an attractive east-facing unit in the Emerald Villas, bright and sunny in the mornings. Besides a great floor plan that features a master bedroom/master bath, plus a 2nd bedroom with a hall bath, inside laundry, and a third floor view, the buyer also receives all the appliances (microwave, refrigerator, stove AND stackable washer/dryer). The living room features a gas fireplace, and floor-to-ceiling beveled-seam mirrors on its entire south wall, plus Pergo flooring. Although it's not needed that often, this unit also has central air and heat. This is a nicely maintained unit that has been recently carpeted (bedrooms), painted in the last 2 years, with newer appliances since 2007.

If the buyer needs a loan source, I can possibly help with a source that provides 3% and 5% down conventional for condos. The building is currently FHA-approved, but its status for FHA after July 31 is unknown at this point. The HOA common areas include rooftop deck, central atrium pool and spa, and exercise room. HOA fees on this unit are $245/month and includes two side-by-side parking units. Location is near an elementary school, and all downtown amenities, including the Aquarium, Convention Center, and nearby freeway access.

Take advantage of this opportunity! These units sold in the $350,000 range in the high market. To see more on this unit, go to Long Beach Homes and Condos. Now listed at $179,000!

Credit Impacts on a Short Sale? You Make the Call

2011-05-27T12:31:00.000-07:00

I try to help people with this question: short sale or foreclosure, which is the better option? For most people, my reaction is, “Short sale, of course!” This has been mostly because I was always under the impression that a short sale, although still a ding on your credit, was easier on the score than a foreclosure.

But for some time, other sources have been saying, and according to a recent blog post by FICO Banking Analytics, that there is no real difference in the effect a short sale or a foreclosure has on your credit score. Supposedly, both the impact in points and the time to fully recover is about the same for both events.

But all this time I believed that the short sale was superior to foreclosure, largely because of its less adverse effects on credit. So I was forced to do further research into which was the better option. In doing so I learned about benefits of a short sale I wasn’t even aware of, and found that the FICO blog was not true all the time for everyone.

The fact is, each borrower’s credit situation is different, and the way that a creditor reports a short sale to bureaus is different. The reality is that hundreds of thousands of distressed homeowners who have chosen a short sale have experienced a lesser impact on their credit than those who have chosen foreclosure. One of the differences, for example, is how long the borrower had been delinquent on payments prior to the short sale, along with other credit factors.

And, another very big mitigating factor is that in a short sale, a distressed homeowner may be able to obtain another mortgage sooner than someone who has a foreclosure on his or her record. Did you know that more and more employers pull credit before hiring a potential employee, and a foreclosure might keep you from getting a job. Some employers pull credit reports on existing employees, and a foreclosure may not bode well for job advancement in certain industries.
To see a special report, go to www.juliahuntsman.com/briefcase/29690_526201142402PM32754.pdf which can be downloaded.

These benefits stacked against the negatives of foreclosure, including the embarrassment of public announcement and literally being kicked out of your home, make, in my opinion, short sale the reigning champion.

Now you make the call!

Common (and Costly) Mistakes Borrowers Make

2011-05-13T10:01:00.000-07:00

Getting a mortgage can be daunting, especially when there’s a lot of your hard-earned money at stake. It’s critical to spend a few hours researching how a mortgage works (or at least as much time as you’d spend researching a vacation or a car purchase) before you begin the process. Unfortunately, nearly half of prospective home buyers don’t understand essential mortgage information, according to a recent mortgage survey conducted by Zillow Mortgage Marketplace. This lack of basic knowledge is likely leading borrowers to make costly mistakes. Here are some of the most common mortgage misunderstandings, and how to avoid them. My comments are in italics--Julia.

Buying Mortgage Discount Points – Nearly half ( 45 percent) of those surveyed in the Zillow poll believe they should always buy discount points when obtaining a mortgage. However, because mortgage discount points have an upfront cost that can be recouped through a lower interest rate over the life of the loan, the decision should depend on how long you intend to own the home. In some cases, you may not plan to remain in the house for long enough to break-even after buying points. A discount points calculator can help you do the math.

Not Monitoring Rates - Mortgage rates can change multiple times throughout the day, similar to how stock prices fluctuate. But more than half (55 percent) of the people polled thought rates were set one time each day. To get the optimum rate, it’s important to monitor rates and talk to different lenders. When you compare various rates make sure you are comparing the exact same loan. I find prospective buyers with loan quotes or pre-approvals obtained 6 months or one year ago, thinking the terms will still apply! No, they probably won't.

Contacting Just One Lender – Many buyers believe lenders are required by law to charge the same fees for credit reports and appraisals. One-third (34 percent) of survey respondents do not understand that lender fees are negotiable and can vary by lender. Borrowers can save money by reaching out to several lenders and comparing rates and fees. Online services which allow for comparisons to various lenders can be a helpful start, but your story may not quite fit the online scenario which are generalized estimates. And trying to change lenders in the middle of your escrow may not be possible, so you should do your homework up front.

Not Considering Various Loan Options - Many people may automatically avoid certain loan products, like Adjustable-Rate Mortgages (ARMs) because they don’t understand how they work. For example, when asked if interest rates on 5/1 ARMs always reset to a higher rate after five years, the majority of those polled (57 percent) said yes. In actuality, after five years, the rate could increase or decrease, meaning that there’s a possibility for a borrower’s monthly payments to go down. Whether an ARM makes sense for you depends on your personal situation such as your appetite for risk and how long you plan to live in the home. As you consider different loan products, ask your lender to go through the worst-case scenarios to avoid any surprises during the life of the loan. This can be a very helpful step, along with being open-minded to hear and consider ALL possible options for you.

Not Knowing Basic Terms – As you begin to think about securing home financing, you may hear terms like "FHA loans" and "pre-qualification" get bandied around. According to Zillow research, many people don’t know what those terms mean. Forty-two percent of prospective home buyers thought only first-time buyers could qualify for FHA loans, and 37 percent believed if they pre-qualify for a loan it means they’ve secured financing. Familiarize yourself with basic mortgage terms before reaching out to a lender. Most importantly, don’t be afraid to ask your lender, or even your real estate agent, lots of questions about the loan throughout the process. To"pre-qualify" for a loan does not mean you've secured financing, and neither does "pre-approval" (the preferred step to take), because loan approval is still ultimately contingent upon all the necessary lending steps being taken to fund the loan at close of escrow, including appraisal.

See article at Real Estate Insider News: Common (and Costly) Mistakes Borrowers Make

Long Beach Single Family House Sales in April 2011

2011-05-11T10:29:00.000-07:00

For the top ten sales areas (by numbers of sales), for both April 2011 and April 2010, does it look like we're having more houses sold? Yes!

April 2011 Long Beach House Sales

Based on a total of 130 listings for April 2011 and about 83 listings for April, 2010, these charts are the picture of activity for these areas. The most sales in April 2011 (in this chart) took place in the Bixby Knolls/California Heights area at 38 sales closed, at an average selling price of over $449,000. Belmont Heights shows 20 sales at average of $631,000 and 21 sales at a $455,000 average in the Plaza/Ranchos.

April 2010 Long Beach House Sales

This seems to be a downward price shift and an upward shift in sales, from last year's lower number of sales and higher prices. Last April the emphasis was on Belmont Heights/Alamitos Heights area which had a total of 19 sales at an average of $862,000 selling price, followed by 2 other areas with averages of $546,000 (Lakewood Plaza/Ranchos) and $481,000 (Los Altos areas).

In fact, Altos Research indicates for THIS WEEK, there is a decrease in days on market for all of Long Beach residential properties, currently the average is 150 days, a decrease from prior weeks. (Some properties are getting offers in 7 days after hitting the MLS.)

Will there will be a point where lower price and increasing number of sales signals triggers the opportune time to buy for an even greater number of buyers? If you think this is the critical time for you in one of these areas, or another, call me to find out how I can assist you!

April 2011 Condo Market in Long Beach

2011-05-09T12:17:00.000-07:00

Condo sales April 2011

There were 93 condos sold last month (April, 2011) in Long Beach, ranging from a high of $700,000 at 1400 Ocean Blvd. to a low of $49,000 at 315 W. 3rd St. Of those, 27 were all cash transactions--nearly one-third of the total; 44 were financed with conventional lending; 13 through FHA lending. The downtown area had 13 of the all-cash sales, or almost 50%.

In the Bluff Park area, selling prices ranged from $435,000 to $335,000 for 2-3 bedroom condos, and $234,000 for a one-bedroom. Downtown Long Beach south of 7th St. (excluding Ocean Blvd. properties), the average price was $147,000 for a 2 bedroom under 900 sq. ft., to a maximum of $248,000 for a 2 bedroom unit over 1100 sq. ft. Condo properties in and around Marina Pacifica and Bay Shore Drive sold at a maximum of $688,000 and a minimum of $300,000.

To find out more about buying a condo or obtaining financing, please visit my website http://www.juliahuntsman.com/, or call me!

What Do You Do After Finding Out About the Notice of Default?

2011-04-27T17:20:00.000-07:00

What if you have a Notice of Default recorded on your property? What then?
This is what happens when your bank or loan servicer no longer is receiving your mortgage payments, and they initiate legal action as stated in your loan documents, and according to California state law.

Once you start down this path, it can be a tough course to change unless you have the financial resources to pay the bank past due payments, plus interest and penalties.

Non payment can occur because your income has been reduced, you lost your job, your payment is going to increase above your means, and last, but not least, you wanted to get a loan modification and you were advised to stop making your payments.
The last reason is a common one, but it can lead the borrower down the wrong path. By the time he/she is behind 2-3 months in payments, it may turn out the homeowner does not qualify for the loan modification program. We hope you didn't pay anyone fees up front, because that's illegal now. PLEASE do not pay anyone an upfront fee for a loan modification, and get a second opinion at least before you stop making payments.
Your credit score will drop and the effect will continue as long as payments are not made, because every month the bank is reporting another 30-day late payment.
You have about 111 days from the recordation date until the time of the foreclosure sale. If your loan was made between Jan. 1, 2003 and Dec. 31. 2007, there is an additional 30 days for the lender to contact the borrower. The Notice of Sale is usually recorded 20 days before the end of that period.
What can you do? 1) Pay your loan and make it current. 2) Put it on the market to sell it, either as a "regular" sale or a short sale depending on your loan-to-value plus costs of sale. 3) Rent it out, if you think market rent will cover the monthly costs, or your income will be able to make up the difference. 4) Try giving it back to the bank if there's only a first mortgage--if there's a 2nd with a different lender a deed-in-lieu will probably not work.

If you have considered all your options and you can't keep the property and your funds don't cover the deficient amount, please investigate a short sale. In most cases you will be able to obtain a future mortgage sooner than if you have a foreclosure--or a deed-in-lieu--on your credit report. More banks and servicers have become more efficient and able to deal with the volume of short sales in the market, and more buyers are willing to wait out the time period involved. Depending on the lender and the program, some short sales are being approved and closed within 90 days and less. But remember, you have just a certain amount of time to obtain a buyer and get short sale approval, and then close escrow. Banks may extend the sale date one or more times, but usually they want an accepted offer in hand by a qualified buyer. So it's back to the loan modification point-in-time: think twice about not making your payment unless you know what's on the road ahead.

It will cost you nothing to weigh your options, a fact that more people should remember in spite of it being such a difficult thing to think about while you're in it. In fact, a lot of people let their properties go into foreclosure without having tried to sell it. Please don't do that without consulting with a real estate professional who's had experiernce with distressed properties.

Please contact me for a printed format on your foreclosure timeline, and for more information about the your options, and the difference between short sales and foreclosure. You may also go my distressed property page and also here for more information on foreclosure timelines and prevention.

The House Market in Long Beach Has Increased Last 3 Months

2011-04-26T13:04:00.000-07:00

Long Beach Sales of Single Family Houses last 6 months

The Long Beach single family home market has been busy, especially in the last 3 months. Both the average sales price and the number of sales of houses has gone up. The chart to the right is based on a group of about 1100 listings in the entire city, from November 2010 to the April 26, 2011, where the average price has risen from $379,515 to $419,100:

Month, #of Sales, Avg Price

Nov 2010 150 $379,515

Dec 2010 143 $387,407

Jan 2011 166 $374,575

Feb 2011 184 $404,359

Mar 2011 223 $435,699

Apr 2011 226 $419,100

LB condo avg price last 6 months

The news about condos is not the same: based on results of 330 condo listings in the same time period, the average condo price in Long Beach as a whole has dropped $225,042 to $133,969.

Figures for certain homeowner associations and certain local markets may vary, because of the concentration of sales data in the distressed property markets in certain geographic locales, which impact the overall city-wide results.
Data for Los Angeles County also shows a year-over-year drop for March of about $26,000 in the median sale price from March, 2010. In general, the condo market has been impacted strongly because they were the entry-level property by buyers who were vulnerable to the economy, a distressed property market which now attracting cash investors. However, for zip code 90803, Belmont Heights, Belmont Shore, Bluff Park and Naples, for the last 6 months, the stats show an upward trend--based on 42 listings--the sale price has increased from an average of $291,400 to $390,000. For 90802, we are back to the decrease in average selling price for the last 6 months: $225,000 in November to $100,000 in April, based on a group of 120 listings. Zip code 90814 has also decreased in its condo prices (Bluff Heights, parts of Belmont Heights, Rose Park areas).

For an evaluation of your house or condo, contact me, especially if you are not certain if your loan value is higher or lower than the market price for your home. There are options, and you should know your options now.
All chart data from CRMLS Matrix.

10 Flooring Options For "Fantastic Floors"

2011-04-19T12:22:00.000-07:00

I really liked this article in REALTOR(R) Magazine Online today about the pros and cons of 10 different types of flooring--I wish it was a video to embed, but if you click on the link below you will go to an interactive display.

Often people make a choice because they love the way certain flooring appears, but don't consider the setting, or their own physical needs.

Have you ever considered leather tiles on your floor, or which part of your home where cork would make a good covering? These days everyone is thinking about eliminating allergens, and so they often think of removing their carpeting. But if you like carpeting, have you thought about the best kind?

Depending on the climate zone you live in, and your preferred maintenance plan, and longevity, choosing the right flooring may save you money--or not. Take a look at your options for linoleum, seagrass, bamboo, ceramic tile, concrete and stone.

Fantastic Floors - REALTOR(R) Magazine

How To OutBid the All Cash Buyer

2011-04-14T15:42:00.000-07:00

The real estate markets in many areas, and not just in the United States, have much to be thankful for in the all-cash buyer. The all-cash transaction will be able to avoid a buyer's loan and appraisal requirements, in a market where appraisals alone have held up -- or killed -- some transactions completely. Appraisal issues, due to guideline changes, have eased up a little, but this does not lessen the desirability of the all-cash buyer in the eyes of the seller. This is especially true for "difficult" properties, such as major fixers, and condominiums in HOAs where the association may have other legal or financial challenges, including too many owners who haven't paid their monthly dues on time.
But it's a knife that can cut both ways. Some all cash buyers traditionally have believed that the seller will sell for a lower price in order to avoid a buyer's loan process. While that strategy may apply for certain cases, sellers are still just as concerned as ever about their net cash at closing. In a tougher market however, some sellers do prefer to get to a faster closing if they can accept the buyers terms. Buyers with loans who are attempting to compete with all-cash buyers should take a look at the percentages below, and also learn the specific neighborhood where they are likely to compete. The National Association of Realtors states that all-cash buyers made up 33% of all buyers in February, 2011. In 2010, the total was 59% nationally.

All Cash 1st Quarter 2011 Closings for Single Family Homes and Condominiums:

Long Beach (23%) - 155 Cash out of 665 Total: $254,091 average price, up to $1,800,000.
Cerritos (23%) - 19 Cash out of 84 Total: $382,210 average price, up to $990,000.
Seal Beach (32%) - 8 Cash out of 25 Total: $440,706 average, up to $800,000 .
Lakewood (9.59%) - 17 Cash out of 163 Total: $330,173 average, up to $500,000.
Huntington Beach (20%) - 69 Cash out of 344 Total: $452,409 average, up to $1,500,000.

Therefore, buyers need to prove their strength to the seller, because if your seller has a lot of equity in their property, they are less likely to be interested in a "low-ball" cash offer.

Before shopping for a new home, go to a recognized lender and get completely pre-approved, by allowing your credit to be run and submit all requested to documentation to the loan officer.
Learn what the list-to-sell percentage is in your neighborhood of interest so that you can make a good offer that applies to the true value of the home.
Submit your lender's pre-approval letter and contact information with your offer.
Write in a strong deposit amount, at least 2% or higher, with your offier--this shows your commitment to the seller.
Understand the terms and conditions which may be associated with a short sale or and REO property: they are not the same negotiating experience as with an equity seller.
Be prepared to act quickly--you may not have days to decide if you want the property or not.
Have the patience and fortitude to keep looking if you lose an offer in the beginning, but asking some questions up front through your agent may help to avoid the worst calamities, and may help you find out what's important to the seller. If you can be flexible, your chances may improve.

And also remember, sometimes the cash deals fall apart also.

A Lower Assessment?, or, Have You Checked Your Property Tax Data Lately?

2011-04-04T17:29:00.000-07:00

During the 1990s recession, many property owners filed for a re-evaluation of their property taxes because of the falling market prices, which meant a lower property tax. To do that--then, as now--there were certain forms and a procedure to follow to apply for that lower assessment. That information, by the way, is posted on the County Tax Assessor's site. One thing to know right now, though, is that the Los Angeles County Tax Assessor's office has been diligently pursuing the market trends and automatically lowering property assessments during this latest downturn.

If, however, you think you are still not getting the correct assessment, you should know that deadlines must be met, or you wait until the following year to make an appeal. Review your property data for square footage, number of bedrooms and baths, etc., to make sure it compares correctly with the real configuration of the property.

If you believe your property data as entered in the tax records does not represent the property, documentation will be required in the form of an appraisal (if you have one) or other documentation. For instance, if your home shows as a 3 bedroom on the tax records, but it was later modified and is functionally a 2 bedroom, this will require documentation to present to the Tax Assessor's office.

Be able to provide recent comparable sales (usually about 3) in your area to show current market values. If you need help with this, please contact me for information on filing deadlines, or the sold listings provided through the MLS that would be a comparable for your property.

And, while you're at it, you should make sure you've taken your $7,000 Homeowner Exemption, which also saves you a little more because it lowers your tax basis by $7,000.

By lowering your assessment, you save money.

How Many Short Sale Listings in Belmont Heights, the Shore and Naples Areas?

2011-03-24T11:43:00.000-07:00

3923 E Vista

Currently, including actives and those taking backup offers, there are 20 single family properties in short sale status in the 90803 zip code. They range in price from $449,000 for 3923 E. Vista St. to $2,350,000 for 5649 E. Corso Di Napoli.

3923 E Vista is a two-bedroom 1923 bungalow style home in Belmont Heights, east of Redondo Ave, with a detached garage.
The Treasure Island home on Corso Di Napoli is a bay front home with open water view, and includes two 48' boat docks.
It is listed as a two-story house, with 3 bedrooms and 3 baths, and a 2-car garage.

5649 E Corso Di Napoli

There are 12 more active short sale listings in this area, including 2703 E 2nd St, listed at $740,000 in Bluff Park Historic District. This property is a 1909 craftsman style house on a corner lot, and is waiting for an offer! This is a great price in a neighborhood where recent sales have closed over $1,000,000.

Since December 1, 2010, 3 short sale (single family) properties have closed in this zip code; 3 properties closed as bank-owned sales; and 25 were listed as "standard sales", out of a total of 33 sold in all categories in the same time period.

If You Have Investment Property, Here Are Taxing Issues

2011-03-16T17:01:00.000-07:00

It's tax time, and a lot of people are hitting my site to find out property tax rates. (As I've said before, in California, figure approximately 1.25% of the selling price for the initial property taxes. For more information on that, go to your local county tax assessor's site.) And, the lower federal income tax rates that were set to expire on December 31, 2011, have been extended for another two years.

Tax deductions which owners of investment property could be dealing with include:

Mortgage Interest – The interest owed on a loan used to acquire or improve an investment property is a tax deductible expense. In addition, interest payments on credit cards for goods or services used in rental activity is also deductible.

Depreciation – Residential income property can be depreciated over 27.5 years; commercial 39 years. Depreciation is often the largest deduction a real estate investor can take.

Repairs - The cost of repairs to rental property are fully deductible in the year in which they are incurred. The repairs must be ordinary, necessary, and reasonable in amount. Some examples of deductible repairs include painting and fixing broken fixtures. Replacing a roof would not be considered a ‘repair’, but rather a capital improvement and the cost associated with replacing the roof would increase the basis of the property.

Travel Expenses - Property owners are entitled to deduct the costs associated with traveling to and from the rental property. The drive to a property to deal with a tenant complaint would qualify as a tax deductible expense. Likewise, flying to Hawaii to repaint a rental property would also qualify as a tax deductible expense. For overnight travel, you can deduct your airfare, hotel bills, meals, and other expenses. If you plan your trip carefully, you can even mix landlord business with pleasure and still take a deduction. Please note however that IRS auditors closely scrutinize deductions for overnight travel. To stay within the law and avoid unwanted attention from the IRS always properly document long distance travel expenses.

Home Office – Landlords may be able to deduct home office expenses provided certain minimum requirements are met.

Employee, Independent Contractor and Professional Services Expenses – Fees paid to gardeners, painters, attorneys, accountants, property management companies, real estate investment advisors, and other professionals can be deducted as operating expenses as long as the fees are paid for work related to the rental activity.

Advertising – Any advertising costs associated with marketing the property for rent or for sale can be deducted.

Insurance – Insurance premiums can be deducted for almost any insurance policy related to the rental property. This includes, fire, theft, and flood insurance for rental property, as well as landlord liability insurance.

Vacant Property -If the property is vacant either because the property is up for sale or is waiting to be re-tenanted, the owner may still be able to deduct all ordinary and necessary expenses (including depreciation) for managing, conserving and maintaining the property while the property is vacant.
(Courtesy of Leonard Spoto, http://www.ax1031.com/)

Contact your tax advisor for complete professional advice.

Long Beach Sales Are Still Moving Forward

2011-03-15T13:07:00.000-07:00

There's a lot of talk about how flat the market is right now, but it's important to keep in mind that real estate is local.

6 months sales in Long Beach

The 6 month sales volume chart for single family houses in Long Beach (since October 1, 2010) shows about 206 sales citywide for February, which is higher than previous months.
And looking at the entire zip code for 90803 for the last 2 years (Jan. 2008 to Feb. 2011), sales have peaked at 18,19 and 20 in each of the highest 3 months in that cycle. January of each year shows typically the lowest number of sales, ranging from 4 to 7.

(Four years ago shows June 2007 with a peak of 31 sales in 90803 (Belmont Heights, Belmont Shore, Naples, Bluff Park), the highest of the entire 4 year period in one month.)

3 year sales volume 90803

The average days on market in 90803 in the last 6 months has ranged between 72 to 143; the average sale price in the last 6 months has ranged from $688,000 to $1,113,000.

For a market snapshot of the MLS information for your area, just contact me about current average prices, times to sell and other information to help you know your market.

Lakewood Home - Reduced to $359900!!

2011-03-14T13:59:00.000-07:00

Reduced to $359,900! Can be used in conjunction with FHA Rehabilitation Loan Program--Buyer may choose from a menu of options for repairs. Call me about this property today!! Less than one-half block from Lakewood High School, walk to nearby shopping on Woodruff Ave. Very residential area. It needs some help but is a great opportunity for the right buyer. Has two-car attached garage, solar panels on roof, nice hardwood floors in the interior, large master suite, family room. Call!

A Short Course in the Meaning of Home Equity

2011-02-25T18:31:00.000-08:00

What is your property's equity? This topic came up just recently in a discussion, and though we think it's a basic real estate question, we can't always assume that everyone knows how it gets answered.

Basically, equity is the amount equal to the current market value of your home, minus all your liens, or what you owe. Ideally, if you bought a house for $200,000 and your only outstanding lien is your total mortgage amount of $150,000, then you have $50,000 equity in your house.

Some people may think that because they invested a certain number of dollars in their house as a down payment, i.e., $50,000, plus their additional funds to pay for closing costs, that they will get the remainder back when they turn around and sell.

But just like the disclosures advise about deposits into investment funds, that depends on what's happened to the market values in the time you've owned the property. And what improvements you've made to the home, and how they are currently valued (but not usually by the dollar amount you spent on them). And the location, and the condition of the property, and how your property may be perceived by the target group of buyers searching at any given time for a home like yours. In addition to these "standard" value issues, we have the following:

As is well known now, property values increased greatly a few years ago, and then started to fall--all due to numerous complex global market forces. This was great for people who sold their homes on the upswing: That $200,000 house might have sold for $400,000, and the owner's gross net at the close of escrow, after paying off their loan, was approximately $250,000--before paying closing costs.

But for people who did not sell until the market went down, maybe they broke even: Perhaps their home was worth $165000 on the current market and they had just enough left over to pay off the loan and their closing costs. Or, or if their home value declined even further to $150,000, then they are digging into their pockets to pay off the $150,000 mortgage plus the extra money for additional closing costs. This why many people, possibly as much as 30% of all mortgage borrowers at the present time, are in a short sale position, or "under water" in the market value of their home. If you don't have a need to sell, then you should not be affected by the downward cycle. However, if your employment income has been affected and you cannot continue with payments and you have to sell, or you have experienced some other stressful impact to your financial status, you are most likely in a short sale situation because the market values may have decreased below your mortgage balance (which is tied to your amortization schedule, not the economy), and therefore you have no equity.
First of all, you should get a good assessment of your current home value, some people actually still have some equity, or could possibly "break even", and a short sale could be avoided. If, however, you think you might be in a distressed situation, please contact me to find out your options, or you may go to the Distressed Properties section at http://www.juliahuntsman.com/ for a few free reports.

Real estate goes in cycles, and it always has. Some are harder than others. There are many many people who, through no fault of their own, have experienced a negative equity situation or even the loss of their home. But before that happens to you, you should find out if you're able to get a loan modification, or it not, what a short sale vs. deed-in-lieu vs. foreclosure would mean for you. It will cost you nothing, and could help you from the most severe impacts and a faster recovery in the future.

How Many Properties Are For Sale Under $300,000 in Long Beach?

2011-02-22T10:33:00.000-08:00

Lafayette - Downtown Long Beach condos

The answer is, a lot.

The great majority of residential properties included here are single family houses and condominiums; the list also includes a much smaller number of lofts (a separate MLS designation), own-your-owns and co-ops. The grand total from SoCalMLS is 618 listed as "active", regardless of selling condition (short sale, REO, probate, etc.), or the amount of HOA dues in the case of common area properties.

This inventory is not too different from last September's post when there were 631 on the market.

The breakdown includes the following:

295 are single family houses, 31 of which are partially in Wrigley, Alamitos Beach, North Long Beach, Rose Park, and their adjacent neighborhoods.
1 is classified as a loft in downtown Long Beach, and only 7 are own-your-owns or coops. More of the OYOs and coops have converted to condos, one of the recent projects underway is a co-op on Atlantic Ave.
314 (about 50% of the total) are condominiums, including the Marina Pacifica complex, Belmont Heights, Bluff Park and adjacent neighborhoods, The Lakes on Spring St. The majority of condominiums are located in the 90802 zip code which includes Alamitos Beach, downtown Long Beach, Ocean Blvd. luxury buildings (31 condos are for sale along Ocean Blvd.!!)

There is opportunity for many people here right now--including 1st time homebuyers, second home buyers, and investors. For a property search of these areas go to http://www.juliahuntsman.com/ at the property search tab, where all types of properties, including 2,3, and 4 units, may be searched throughout Long Beach, Los Angeles County and Orange County and all cities in Southern California. And, also take a look at two listings: an Emerald Villas Condo at $185,000 and a single family home in Lakewood for $365,900.

Emerald Villas is an FHA approved complex!!

Short Sales are Working Better in 2011

2011-02-15T08:57:00.000-08:00

Lenders are primed for short sales in 2011 because short sales are a terrific option for homeowners struggling with unaffordable mortgage payments. In fact, lenders’ losses due to foreclosure are projected to increase at record rates in 2011, giving them more reason to pursue short sales. Lenders are projected to incur losses as severe as 85 percent in foreclosure! Meaning, after deducting the expense of the foreclosure process on a $100,000 loan, they may only get back $15,000!

It’s common sense that lenders will be looking toward the short sale solution. Even though they are accepting less than is owed on the property, they lose far less than in a foreclosure sale.

In fact, right now in the Long Beach market, short sale transactions for condos and lofts increased by more than 200 units from 2009 to 2010. Short sale transactions for single family houses grew from approximately 762 home in 2009 to 875 homes in 2010, or about 27% of all sold, cancelled or expired single family listings in the MLS.

Thus far in 2011, there are 593 single family homes in short sale status as active, in escrow, or otherwise on the market, out of a total of 1280 or 46%; and 380 condos and loft units are in the same categories of short sale, out of a total of 738, or 51%.

It may be a surprise to many that lenders actually want to work out a solution that benefits all parties. Oftentimes, the lender is seen as the villain in the situation. I’ve found that the lenders want to avoid foreclosure just as much as homeowners. The free, downloadable report at "Distressed Property" called "On the Edge of Losing Your Home" on this website at Long Beach Condos and Homes talks more about working with your lender, and details all the foreclosure alternatives available to you.

Download the report and call me today; I can help you develop a plan to work with your lender and avoid foreclosure.

Take These Steps Towards a Successful Short Sale

2011-02-08T09:34:00.000-08:00

Lenders and the federal government, prompted by the sheer volume of loan modification and short sale requests, have overhauled their systems and programs, making the foreclosure avoidance process much easier than in the past. If you haven't considered this option before, maybe now is the time to find out more.

If you are considering short selling your home to avoid the financial and emotional fallout of foreclosure, you should be aware of the five steps you should take to increase your chances of a successful transaction.

First, do you qualify?

You must:

1. Have a verifiable hardship, like unemployment, medical bills, or relocation

2. Must have a monthly income shortfall

3. Be insolvent (you have no cash or assets that can be sold to pay down the mortgage), or headed towards insolvency

If you meet these qualifications, follow these five steps to a successful short sale:

1. Contact me so we can identify your servicer, fill out a short sale packet for the lender, and assemble all the required information needed to list your home for sale

2. Gather financial information (i.e., bank statements, pay stubs) from at least the last three months

3. Keep your house in showcase condition for showings, and make as many repairs as necessary and that you can afford

4. Expect the lender, junior lien holders, and private insurance companies to request more paperwork, and try to gather requested information quickly to ensure transaction efficiency

5. Set realistic expectations and work with me, the lender, and the buyer to the satisfaction and benefit of all parties involved

For more information about how the short sale process works, or about any other foreclosure alternatives you may qualify for, call me today. I can help you alleviate the burden that the threat of foreclosure brings, and we can develop a strategy to help you breathe a little easier.

Looking Down That Road: Borrowers Need to Know Their Options

2011-02-02T16:12:00.000-08:00

For some people, the picture of this highway might represent escape. For others, it could mean taking a new direction. It's important to know how this looks to you, or someone you're helping, because it probably represents the starting point of dealing with a potentially distressed property issue.

The national average is that about 1 in 7 or 1 in 8 homeowners is facing a difficult time with their mortgage. And recent statistics were published from the 4th Quarter U.S. Census data stating that there were 18.4 million vacant homes in the U.S. (11 percent of all housing units vacant all year round). While the breakdown of rentals, foreclosures held off the market, or homes not sold, etc., is not clear, we know that many of those homes used to be occupied by people whose were foreclosed on.
Did you know that many many people allow themselves to go through foreclosure without first checking their options, which include:

Reinstatement
Forbearance
Selling the Property
Renting the Property
Mortgage Modification
Refinance (or even a reverse mortgage in some cases)
Deed-in-Lieu of Foreclosure
Bankruptcy

Not all of these may work for you, or your friend or relative, but shouldn't you find out? Many people never take that step of obtaining professional advice--it's difficult to think about because they're already short on funds. But did you know there are free resources to talk with? HUD is one, and believe it or not, there are attorneys and tax advisors who may be willing to give you 15-30 mintues of their time at no charge. And certainly, there are REALTORS who are training and experienced in giving you basic information and guidance, short of stepping outside of their license qualifications, and can direct you to resources. Many people who are letting themselves go into foreclosure are doing so without even trying to obtain their bank's approval for a short sale.

Some of the options above have more long-term impact on credit than others--and foreclosure is one of them--which is why a borrower should take a little time to investigate these terms before travelling down that road.

To find out more about available resources, go to http://www.juliahuntsman.com/distressed-property-resources-short-sales.html and http://hosted.cdpe.com/LongBeachForeclosureResource/Foreclosure-Solutions.aspx

Consumer Credit: Tips for the Way to Better Credit

2011-01-21T14:30:00.000-08:00

In spite of general information available online, many consumers are still "in the dark" about how credit scoring functions and the best actions to take to improve it.
In spite of advice on repairing credit, a tip from an professional who has been in the business for many many years, often the best way to improve your credit is to simply pay your bills on time and reduce your credit line debt as much as possible--your payment history accounts for 35% of your FICO score.
Many consumers have recently experienced reduction of their credit lines, which then increases the percentage of debt, which then lowers their credit score. If a line of credit allows up to $50,000 and the outstanding debt is $45,000, but then the line of credit is suddenly reduced to $30,000, the borrower now appears to have exceeded the credit line. So now, the FICO score may be lowered, even though the borrower is always on time with payments.
Another factor that can impact credit scores is that not all banks report their credit limits for a borrower, but instead reports the highest balance--this actually can end up lowering the borrower's credit score because the debt utilization percentage does not show up. (See Liz Pulliam's "Weird Stuff that Hurts Your Credit.")
Borrowers, in an effort to simplify their credit history, make the mistake of voluntarily closing a credit account. This actually can be a very bad thing, especially if it was established much earlier in the consumer's credit history. Your credit history accounts for 15% of your score, so you could anticipate seeing that much of a reduction on your score: A score of 750 could be reduced to less than 650. And, for instance, if you had a bankruptcy, you may be categorized with others who have also, but if you have that bankruptcy removed from your record, you will now be compared differently, which can impact your score negatively.
Something else not generally known, is that simply by paying bills on time and reducing debt, your FICO score can also improve in a short period, sometimes in as little as 30 days (or a few months), depending on the various factors of your credit history. The FICO score is a mathematically produced number based on certain elements that are used by the Fair Isaac Corporation, and is very complex, but you can know its basic components:

Type of Credit: 10%
New Credit Inquiries: 10%
Payment History: 35%
Length of Credit History: 15%
Amounts Owed: 30%

Further, many borrowers think that the credit scores they obtain online from a free credit reporting site is an accurate representation of their score, but in fact, they cannot substitute for the ones lenders must obtain when working with a potential homebuyer or refinance borrower.
Further, many borrowers believe that it is best for them to pay down all debt prior to obtaining a home loan, when that is not always the case.
Another important thing to know is that Fair Isaac Corporation, the maker of the FICO score, changes its model, and may be doing so again at this moment--this can change how much you are going to pay for your home loan. If you are looking into borrowing or refinancing at this time, current information would be extremely important for you.
One company works on "credit mapping" as opposed to credit repair. The borrower is advised to investigate what either type of company could do for them, but in general credit repair companies may cost $800 or more and in certain cases has not helped the borrower through it's actions. Another company uses credit mapping outlines for a particular borrower--at a much lower fee cost--based on their credit report and other circumstances, and what may best work for them, as opposed to the generic information found on sites such as http://www.myfico.com/ . For more explicit information about credit mapping and general advice, see this article in the Orange County Register published last September.
In summary, you really need to know about your particular situation to best know what to to, before you make a move.
More tips about credit: Improving Your Credit Score, Recognizing a Credit Repair Scam

California Market: Neither the Best Nor the Worst?

2011-01-19T10:05:00.000-08:00

The Housing Predictor has published its 25 best and 25 worst markets for 2011, and fortunately or unfortunately, California is not on either list. Are things getting better finally? The appreciation predicted for the 25 best areas ranges from 2.3% to 3.6%, and depreciation in the 25 worst markets ranges from 8.2% to 11.5%. For Los Angeles County, Housing Predictor foresees an overall 5.4% loss for 2011, with Sacramento and San Diego faring a little better in the 3-4% loss range, with Sacramento also on the list for one of the first markets to recover. Sacramento is considered one of the most affordable cities in the state. Meanwhile, pointing out that California is the world's 6th largest economy, and that it's not "falling into economic ruin", the sluggish housing market is still affecting Los Angeles County. The tax credit that boosted sales in 2010 is not around now. Per Realist Tax Data, in fact, the overall median price of a single family home did increase from October to November in Los Angeles County, from $330,000 to $335,000--but the median price of a condo decreased by $5,000 from $305,000 in October to $300,000 in November.

Per data by Dataquick released yesterday and published today by the LA Times, a Southern California median home price was up by 1% in December from November, even though lower when compared to the end of 2009, while sales volume was up (Dataquick tends to lump both house and condo prices into one overall median).

However, did you know that a long-gone single family loan type has returned? The 3% down conventional loan for houses is back on the scene--and some condos and condo buyers may be eligible for a 5% down conventional loan. These loans should be a great help to the conforming loan market buyers and sellers.

This would be a good time to review The Cost of Waiting To Buy -- a blog article that receives the most hits since last May.

New Listing: 2 Bedroom Condo in Emerald Villas in Downtown Long Beach

2011-01-12T07:10:00.000-08:00

This is a well-situated condominium in the gated Emerald Villas, a 1991 complex with resort-like surroundings. This light and spacious-feeling 2 bedroom, 2 full bath unit features indoor laundry, including the stackable washer/dryer, a cozy fireplace in the living room and a city lights view towards the east. Both bedrooms are carpeted, and the hall area provides extra counter space and cabinets for work area and storage. There's plenty of closet space in each bedroom.

Parking is in a secure, gated garage for two side-by-side spaces. The central courtyard in the common area has a beautiful pool and spa, and the fountain and the well-planted entry area are a gracious introduction to this beautiful complex. The HOA also features a BBQ area, sun deck and exercise room, and is within short walking distance to a nearby school and park, and is very convenient for freeway access. More information on this unit listed at $189,000 at 555 Maine Ave., #208, Long Beach, CA 90802. NOTE: off market 9/7/2011

New Listing: Lakewood Single Family Home $379,900

2011-01-10T15:40:00.000-08:00

A cute vintage 1942 home, ready for a buyer in Lakewood. It has a master suite with higher ceilings, and a large family room with a rock-faced fireplace. One bedroom could work well as an office or library, and there's room in the backyard for the spa and playspace. An attached 2-car garage has a door into the family room, and the huge tree in the front yard provides plenty of shade for this west-facing home.
While it needs some work, it has plenty of charm in this circular floor plan. Hardwood floors in the formal dining area, living and front bedrooms. Very well-priced for the area and the size, at $379,900.
Please see more at http://www.juliahuntsman.com/featured-listings.html.
2/25: Now $365,900!!

Monthly 1-Minute Newsletter

2010-12-31T16:47:00.000-08:00

See my monthly newsletter below for December, 2010. Just click on the logo below for the best summary around of local and regional market info! Have a very Happy New Year in 2011!

To receive this every month, join my Facebook page at http://www.facebook.com/LongBeachHomesandCondos

Are You Having Trouble With a Loan Modification?

2010-12-21T14:13:00.000-08:00

It's probably no surprise to many mortgage borrowers by now in this Christmas season to realize that they've had a tough time getting their loan modified this year. If they do not qualify for the Home Affordable Loan Program (HAMP), they try their bank's program. Often this application process goes on for months, while the homeowner may grow short on funds and cannot continue the monthly payment, and then they begin the process for a short sale, or worse, foreclosure. This story has been repeated over and over by many borrowers. If a loan modificaton is approved by the lender, often times the delinquent payments and refinance fees are added to the principal, making the new higher payment very unattractive, so the borrower rejects it.
One issue is that lenders have very little incentive to modify loans, as the cost of doing so cannot be billed back to the investor, and the work involved is very labor intensive and is not easily automated. Many banks have not invested in qualified staffing to take care of the high volume of distressed owners. And their agreements with investors on securitized mortgages may not actually cover the details of completing loan modifications, but do address foreclosure, so they believe they are in a risky situation with fulfillment of their contract terms.
In a 31-page study by the Federal Reserve, based on data from over 105,000 loans from 94 loans servicers dating from 2005 from California, Oregon and Washington, to determine who receives a loan modification (no discernible differences according to race and income differentials were found, "In fact, we find that Blacks/African Americans, Hispanics/Latinos and Asians are slightly more likely to receive a loan modification, and that these loan modifications have slightly larger reductions in their interest rate than those of similarly situated white borrowers"), it was still unclear after its research into the behavior of various financial institutions as to why the number of loan modifications was still falling well short of the number of foreclosures, even though the HAMP program has been declared effective with borrowers who received one, a group with a low re-default rate, despite literature published to the contrary. Here is the complete Federal Reserve study.

Another very clear problem is that some banks do reach out to their customers, but many borrowers fail to make contact with their banks, even after being contacted by them. And the longer a delinquent borrower spends in delinquency without contacting their bank, the more likely the home will be lost to foreclosure.

If you are interested in a loan modification, you might be successful, and you should contact your loan servicer. But it's important to understand that possibly no matter how much information you submit to your bank, for a variety of reasons you may not get one, or you may have to struggle for up to a year or more with them. Banks are not equal in this situation--one of the factors may be if your loan is a portfolio loan or one securitized with investors. The study mentions the "lack of transparency" because data is issued in the aggregate, and information directly linked to borrowers is still difficult to track. Also, according to this study, 52% of foreclosure sales lack "reciprocal servicer contact" (does that mean the bank didn't return the borrower's initial contact)?

Overall, banks recoup a little more money if a property is sold in a short sale, rather than going into foreclosure and coming back on the market as an REO. This usually costs banks more money, and their "loss severity" rates are looked at closely when making their decisions.

The bottom line is: If you are having trouble making payments, contact your bank now. If you have to keep submitting your information over and over again for periods of 30-60-90 days, then you should obtain assistance through a Realtor who is familiar with short sales, or an attorney who specializes in loan modifications, not just any attorney, for further help. Don't wait too long.

Is the Southern California Market Stabilizing?

2010-12-15T18:10:00.000-08:00

With so many analyses and predictions going on about the direction of the real estate market, the average person is often uncertain about the real truth. Recently, I've heard a few prospective buyers that I've been talking with express the belief that the market is going to drop even more by a certain percent, or just drop in general, all depending on what they've most recently read. But there's one truth that most real estate experts and practitioners agree on, all across the country: All real estate is local. So whether or not a large bank stops foreclosures for a while, or some other wave hits on the financial scene, it may or may not affect your immediate market in your part of the state, county or city, or even your neighborhood, depending on the many economic characteristics and forces that make up your area.
So, having said all real estate is local, in general, the number of Southern California residential sales for November fell, but overall, prices stayed stable. Southern California means the six counties of Los Angeles, Ventura, Orange, San Bernardino, San Diego and Riverside.
For Los Angeles County, the sales volume dipped by 11.5% compared to the prior year, but the median price (lumping new and resale houses and condos all together) for LA County decreased by only 1.2%; Orange County's median increased by .6%; San Diego and Ventura Counties increased price by over 3% and 2%, respectively; San Bernardino, hard hit by foreclosures, decreased another 5% in median price over last year. Per Dataquick, the overall median price for all six counties increased by .7% even though the sales volume decreased by 15%.
Local cities, per the most recent information for new and existing houses and condos published through October 2010 by California Association of Realtors, show:

Long Beach decreased its median price by 4.7% from prior October.
Cerritos increased its median price by 5%.
Lakewood stayed the same.
San Pedro decreased by .1%.
Bellflower decreased by 1.7%
Gardena increased by 9%
Buena Park increased by 3%
Huntington Beach stayed the same
Westminster increased by 1.1%
Newport Beach increased by 17%
Downey decreased by .4%.

Breaking down by zip codes in some cities show that certain areas such 90810 and 90813 in Long Beach are showing increases, but the higher priced 90803 zip code is still showing decreases in median price. That's a similar story for other zip codes such as in Newport Beach, when compared to a higher priced section within the same city.
And, to top it off buyers, the past two weeks or so saw the biggest jump in interest rates in the past several months. Many mortgage professionals believe the floor of close to 4% may be permanently gone, and as of today, FHA quotes were at 4.75%, while a 5% down conventional loan for a condo was quoted at 5%. It's easy to take a calculator to check out this would affect your monthly payment. A free calculator download is at Real Data.
Buyers should start making hay while the sun is shining!

Have a wonderful Merry Christmas, Happy New Years, and Happy Holidays.

Christmas Homes Afternoon Photo Time

2010-12-10T16:22:00.000-08:00

Getting into the local neighborhood Christmas spirit!

How Many Properties Under $300,000 in Signal Hill?

2010-12-07T16:59:00.000-08:00

This is a good price point to consider because it works for second home buyers, 1st time buyers, and people looking for a good investment in a desirable location. The property in this price range will most likely be a condo but if a buyer is willing to consider North Long Beach or West Long Beach, it could be a single family home. For a two-income couple, the total monthly payment (principal, interest, taxes, HOA dues and insurance) may be $2000 or less at current interest rates. It's actually a very competitive price range because of the number of investors able to invest cash or a very large down payment, and it's an affordable price range for many buyers. Some areas of Signal Hill have great views towards the mountains and toward the ocean, and in fact, the City has taken a stance to protect those views. It has gone through much development in the last 20 years to shed its oil derrick image, and most recently a new grocer's has opened up across from Home Depot on Cherry Ave.

Right now in Signal Hill, 29 properties are listed at $300,000 or less (out of a total of 66 active listings in showing in the MLS as of today). This is almost 50% of the inventory, where the average of all list prices is over $400,000. All of these properties are condos, except for two single family homes, and almost half are standard sales. With interest rates still under 4.75% (but see this article from Zillow about the biggest change in 5 months) a buyer could possibly meet the goal of keeping the total payment under $2000.
To see Signal Hill properties now, click here.

Opportune Time for Buyers.

2010-11-30T15:59:00.000-08:00

National Association of Home Builders comments on the current market, both for new housing and existing homes. Prices nationally --and locally -- have returned to the 2003 levels. NAHB believes there is price stabilization in many areas of the country. Future household formation--which has slowed in the current economy--will eventually demand more housing. This is the "opportune time for buyers" because buyers who are motivated to buy and are qualified at this time should take advantage. Los Angeles County, though experiencing fewer sales than one year ago, has not lost in the median price point of a single family homes since one year ago: Year-to-date in LA County the median price of a single family home is $340,000, Click on the video for more on housing market conditions currently.

When Is "Diving" into Lease Option a Good Idea in Southern California?

2010-11-23T13:11:00.000-08:00

Sometimes I'm asked about the possibility of a lease-option as a way to buy a single family home.

Lease-options were used extensively with commercial properties in the past and have also become a method for purchasing a single family home in the residential market.

They work best when: 1) the owner wants to sell but does not have to transfer title right away; 2) or the seller may need continuing cash to pay fthe mortgage, 3) the house may be vacant or will soon be because the seller has already moved on, 4) the money from the sale is not needed immediately by the seller, 5) and, very important, the seller has equity in the property or has other income. When a seller's market is slow and a house with equity in it is not selling, a seller might consider this scenario from a renter/buyer.

There are advantages for both the buyer and the seller in this arrangement. It's also important to use a good lease-option agreement which covers, among other things, the percentage of rent credit towards the down payment, the date by which the sale will close, and other clarifications concerning who is paying the taxes, who is maintaining the property (usually the seller), agreement on the final sales price. Tenants in this situation are more likely to treat the property very well since they see themselves as the future owners.

An advantage for the seller includes retaining the income tax deductions and having good tenants. The advantages for the buyer are getting into a house for little money up front (the amount is negotiable of course), building up a rent credit towards a down payment, trying out the neighborhood, still having time to shop for the best mortgage or interest rate, and the possible benefit of the price being locked in if the value goes up.

The buyer must first find out what the seller's circumstances are, which a Realtor can definitely help out with, before spending time on making lease-option offers. In many neighborhoods, short sales are about 50% or more of the local market and many if not most of those properties will not have a seller who will be able to rent out the house at local market rent because their mortgage payment may be much much higher, and they do not have either the desire or the ability to carry a negative cash flow.

However, if an equity seller can wait 6 months or even a year for the buyer, it might be worth the wait.

For some additional explanation, see this general article about lease-options.

If You Got a Home Loan From the Bank, Are You Its Client?

2010-11-15T22:03:00.000-08:00

No. You're the borrower. And as the borrower, you voluntarily took the loan from the bank, and according to the usual circumstances of an arms-length loan transaction, there is no fiduciary relationship.

However, Bank of America's investors, for example, include Pimco of Newport Beach, TCW Corp. of Los Angeles, BlackRock, Inc. of New York, and Federal Reserve Bank of New York. Bank of America has about 500 investors, all of whom it may owe a fiduciary obligation because of their investment/purchase of funds. Banks in these cases are the servicers for these investors, with whom they have agreements or contracts. Those contracts are known as PSA's, Pooling and Servicing Agreements, which guide the specific demands made on loan modifications or short sales requested by the borrower. It may not be easy to find out the exact terms in those agreements, and in fact, it's often difficult to find out what investor holds the note due to the use of MERS in the last few years. But those servicing agreements spell out the relationship of the Bank to the investor, and ultimately, the course of your short sale or loan modification request. The servicer may actually have leeway in negotiating for the investor, but if the investor is able to accuse the servicer it did not act in the investor's best interest, the servicing bank could have a lawsuit on its hands. So you might be told the "investor" is making demands, but is that really the full story?

The banks/servicers frequently require the use of their bank addendums to be added to Realtor contracts--adding another layer to interpret in the transaction. Here is another use of the term "fiduciary"--On a recently published Purchase Contract Addendum by Wells Fargo in July/August of this year, the following language definitely confuses the issue: "It is the Brokers’ fiduciary responsibility to present the highest and best offer to the servicer." To be very clear, 1) the seller's broker has a fiduciary duty to the seller, not to the seller's bank, and 2) offers are presented to the seller, not to the bank. The "highest and best offer" (and the best offer may not necessarily be the highest price) is presented to the seller, who ideally accepts an offer when it then becomes a contract, which is than submitted to the bank for its approval to accept less than the outstanding loan amount. Naturally, the bank is interested in recouping as much money as possible, but the issue of fiduciary relationship--the person to whom you owe the greatest care--is clearly laid out for brokers in agency law, and that person is your seller if you are the listing broker, not the bank. The broker cannot be the servant of both because the broker already has a contract (the listing agreement) with the seller who owns the property, not with the bank--or investor--which owns the note.

Sellers would like a clear, black-and-white outlook for their property, and it's rarely easy, and full of complications. It's very important for the seller to read the letter issued by the bank when a short sale has been approved--the seller should not assume the bank is issuing language that is completely in the seller's interest without taking the time to examine it, or have it looked at by a tax or legal advisor!

FICO Scores May Mean Savings on Monthly Payment of $200

2010-11-10T09:56:00.000-08:00

Many buyers, and property owners who want to refinance now, realize that FICO scores are important when it comes to getting a loan. But what exactly is the picture on the benefits to a higher score, and what kind of a difference will it make? Below is a general chart for score categories and interest rates.

The sample breakdown below may not be exactly like this because a borrower's other circumstances with a particular lender or a particular program could vary, so it's important to keep that in mind. But oftentimes prospective borrowers are not aware of how their decision to buy one more piece of furniture, or buying that new car, BEFORE closing escrow, may strongly impact their new monthly payment because they have added more debt.

30 year Fixed Rate Mortgage - $200,000 Loan Amount

FICO Score                APR              Monthly Payment

760-850                     4.466%          $1,009
700-759                     4.688%          $1,036
680-699                     4.865%          $1,057
660-679                     5.079%          $1,083
640-659                     5.509%          $1,137
620-639                     6.055%          $1,206

Chart courtesy of Pat Zaby

For more information on how debt and other credit issues can impact your credit score, I can forward you my Powerpoint presentation. Also, go to http://www.myfico.com/ for objective information about credit scoring and obtaining a free credit report.

What is the Trend in Long Beach House and Condo Prices Since Sept. 2008

2010-10-29T10:03:00.000-07:00

The two-year picture for median selling price of single family homes in Long Beach is a pretty diverse picture, just like the city itself. From September 2008 to September 2010:

Interestingly, the overall drop for the SFR from 2 years ago is only 3% from $390,000 to $379000 (per CARETS data). This is in contrast to the median price for Los Angeles County which has increased from $339,500 (Sept. 2009) to $350,000 (per CoreLogic data). There is a 30% decrease in expired house listings, and the number of sold properties is up 15% over two years ago, while the months supply of inventory is down 33%.

Condos in Long Beach have taken a bigger hit--the median sold price has dropped 22% in two years from $263,000 to $205,000 from 2008-2010, and for Los Angeles County the median price has dropped from $337,000 to $320,000 from 2009-2010. The overall median for sale condo price in Long Beach has dropped 22% in the last 2 years, but there are fewer expired properties (down 37%), and an increase in the number of sold condos in the last 2 years, by 5%. The months supply of inventory is down 32% from two years ago.

For both houses and condos, the number of properties for sale is down by 26% and 22%, a condition that eventually may contribute to more listings on the market to meet demand, driving sales volume higher and in some cases sales prices higher as inventory decreases in certain areas.

Should You Pay All Cash or Should You Carry a Mortgage?

2010-10-26T16:41:00.000-07:00

Should you be in a hurry to pay off a mortgage? Or should you never pay it off? What reasons would you have for carrying a mortgage instead of having total equity in your property? Why do we want to make a bigger down payment, get 15-year loans, pay more money every month? If you are trying to decide what to do, save a bigger down payment or pay all cash, or make a lesser down payment, take a look at this.

When the stock market crashed in 1929, the banks called (demanded immediate payment on ) home loans in the 1920's due to the run on banks, which led to homeowners losing their homes. This is when people starting believing it was bad to have a mortgage and that it was bad to be in debt. Then, mortgage loans could be called on a moment's notice, but today, due to a change in the rule, the bank is prohibited from paying in full without prior notice, and can only demand this month's payment. People have been trained to think of debt elimination and being debt-free due to this history.

Mortgages don't affect home values--mortgage is not a debt, it is an asset class.
Equity is built whether or not there is a mortgage, it is built due to market growth in value.
A mortgage is the cheapest money you can borrow because it is secured by the property (unlike most debt which is unsecured and is given at much higher interest).
Mortgage interest is tax-deductible.
Mortgage interest is tax-favorable.
Mortgage payments get easier over time, the payment never grows, but your income does.
Mortgages allow you to sell without selling; owners have the opportunity to use the equity.
Mortgages enable you to create more wealth than you otherwise would.
Mortgages allow you to invest more money more quickly.
Mortgages give you greater liquidity and greater flexibility. The 30-year loan may actually give a better return than a 15-year loan--if you save and invest the difference.

Many people carry a mortgage even though they have the money to pay it off because they have learned to use their mortgage to create wealth. A big mortgage is not an excuse to buy a big house--Buy the cheapest house you can buy, and get the biggest mortgage. See Ric Edelman, 10 Great reasons to Carry a Big Long Mortgage

Buying a Home is An Opportunity to Leverage

2010-10-21T12:02:00.000-07:00

Often when prospective buyer(s) think about making the change from being a renter to a homeowner, they add up all their monthly costs as a renter and then compare it to their monthly costs as a homeowner. If the amount as a homeowner is more, then they get discouraged and assume that buying is not a good deal for them. But instead of focusing on only their current role as a renter, they should go further and realize their role, and their opportunity, as an homebuyer/investor for their future:

Some people define leverage as using other people's money but another way to describe it is when a small down payment controls a large asset by placing a high loan-to-value mortgage on it. There are not many investments that allow leverage but homes certainly do and especially with FHA or VA loans.

Let's assume a couple or single buyer has the down payment and good credit that would allow them to buy a home. We'll compare some alternatives to see where their best outcome may be.

If a person put $6125 in a certificate of deposit (CD) that earned 2% annually, it would be worth $6,762 in five years and the profit would be taxed as ordinary income. If a person could take a little more risk and pick the right stock, the $6,125 might grow to $7,817 and the profit would be taxed at the more favorable long-term capital gains rates if they held the stock for more than one year.

On the other hand, if the $6,125 were used as a down payment for a $175,000 home (possible with an FHA purchase) that went up in value only 1% per year, the equity would grow to $30,575 in the same five year period of time based on appreciation and amortization. In most cases, the gains on principal residences are excluded from income tax subject to limits. (Single person usually has an IRS $250,000 capital gains exemption and married couple usually has an IRS $500,000 capital gains exemption.)

The difference is dramatic and is one more reason that buyers should be taking advantage of the great selection of homes, the lower prices and incredibly low interest rates to fix their cost of housing for years to come. There may never be a better time to buy a home than now.

For more information on this, a rent vs. buy analysis may be obtained. Or please contact me through http://www.juliahuntsman.com/

Inspired by Pat Zaby

Has Your Home Loan Been Sold?

2010-10-18T11:15:00.000-07:00

What if your home loan has been sold? This video interviewing Paul Leonard of the Housing Policy Council explains why mortgages may be sold, what is securitization and its function in the market, and the new banking changes which will require anyone who touches a mortgage in the future to have some responsibility for it: the Dodd-Frank Wall Street Reform and Consumer Protection Act (summary is 16 pages).

Was 2009 the Low Point of the Market?

2010-10-13T18:43:00.000-07:00

Almost two years ago, in December of 2008, I did a post called The Cost of Waiting to Buy. Blogger has a new stats tool for keeping track of your hits (since its inception June 1, 2010) and that particular post is the all time winner, which is interesting because it tells me there's lots of people who are at least thinking of buying, or would like to buy, or are looking for good reasons to not buy and they're having arguments with themselves or others, which means they're thinking about buying. And then someone left a comment saying they didn't think the bottom of the market had come yet, and that commentor may have been correct. Well, some people are now beginning to think that it has, and that the bottom of the market in California may have been last year, 2009.

After two consecutive years of record-setting price declines, the median home price in California will climb 11.5 percent in 2010 to $306,500 and increase another 2 percent in 2011 to $312,500, according to the forecast. CAR Housing Market 2011 Forecast.

The bottom is behind us. John Karevoll, Dataquick at CAR 2010 Expo at Anaheim.

Foreclosure activity remains high by historical standards but is lower than peak levels reached over the last two years, and jumbo loans above $417,000 increased 15.7% from August 2009. DQ News.Com 9/2010.

The steady 9-month increase in median price for Los Angeles County could be another indicator.

For buyers, the price of a home and the availability and costs of a mortgage are two significant benchmarks. Is this your time? With prices still lower and, in spite of stringent underwriting by lenders, there are loans with low interest rates available. It could be your time.

A Market Snapshot for California Real Estate Activity for 2010 and 2011

2010-10-08T12:09:00.000-07:00

The market predictions for 2011 were given out just prior to the California Association of Realtors Expo October 5-8, 2010.

The California median price for a single family house bottomed out in 2009 and in August 2010 the unsold inventory index was about 6.1 months, a market "normal". Unsold inventory by price is highest at the upper end of the market, and the lower end of the market is a 4 month supply. Affordability reached 70% in 2009 and 65% in 2010, meaning two out of three household can afford to buy an entry-level home in California.

Median price for condos was $258,000 statewide, sales of condos were up in the Spring. First time homebuyers are 44% of the market, especially for condos. However, 20% down payment was the median down payment statewide.

There are more non-distressed sellers coming on the market this year, comprising up to 59% of the market, while short sales are 22% of the market overall. Multiple offers (about 4) existed on 51% of properties in June, 2010. Sellers net about $35,000 in cash at close of escrow in 2010. FHA loans were used by 32% of all buyers.
Short sales or distressed property conditions were the reason for 29% of all sellers putting home on the market--a record number since the survey started.
Investors comprised about over 13% of purchasers, an active part of the economic recovery, while 5.3% were second home/vacation property purchases.
44% of buyers changed their minds after opening escrow, reflecting a great deal of fear and uncertainty about the market for many buyers.
2011 should bring a slight increase in sales volumeby 2% (to 502,000 units) and a slight increase in median home price of about 2% to $312,500 for the California median price. Interest rates are expected to remain low, with as much as a .5% increase in rates.

2011 should bring a prime opportunity to buy, but the actual number of move-up buyers and sellers is also of concern due to the number of owners with continuing negative equity in their homes who may hold off selling for a long period of time.

High cost loan limits ($729,750) will continue through September 2011, very important to the Califonria housing market, because the median home price is still significantly higher than the rest of the country.
Los Angeles County median home price is about $349,000, an increase of 2.8% over 2009. This is also a reflection of the movement in the low end of the market where properties have moved much more rapidly than the high end where some prices have softened.

Overall, home prices in the state have either stabilized or improved.

The "shadow inventory" properties held by the banks are predicted to be in a 3-5 year window for the foreclosed properties to return to the normal market, but prices are likely to hold steady because it is not in the lenders' best interests to flood the market with properties.

There is upward movement in low-end prices where there is a lot of competition between first-time buyers and investors, more than in the $1,000,000-plus market where there is much more inventory.

Long Beach is a "microcosm" of the state -- high end areas over $1,000,000 and low end areas such as North Long Beach with a high proportion of distressed properties, and will probably mirror similar Los Angeles County area performances. The recovery for the city will not be uniform, and will be a reflection of its various internal markets.

Modest price appreciation in the future is a much more realistic expectation than the 20%-plus gains during the boom years which precipitated the market downturn.

"We expect a net jobs increase of approximately 1.4 million jobs in California for the year to come and an improvement in unemployment figures,” Leslie Appleton-Young (CAR) said.

From the California Association of Realtors annual Realtor survey and the Housing Market Forecast for 2011.

How Many Properties Under $300,000 in Long Beach?

2010-09-27T14:38:00.000-07:00

Ocean Blvd Condo

Today, the Southern California MLS (combined with CARETS) shows 631 properties in all areas of Long Beach. This is more than June, 2009 (431) and less than December, 2008 (737).

There are 269 single family homes of which 38 are bank-owned and 136 are short sales, the majority are in North Long Beach. There are 340 condos under $300k, of which 48 are bank-owned and 182 are listed as short sales. There are 13 co-ops, 4 require short sale approval and 1 is lender-owned. There are only 9 OYOs, probably because many have converted to condominium status in recent years--only 1 requires short sale approval and none are listed as bank-owned.

From these 4 categories, it's clear that short sales constitute nearly 50% of the market in this price range, while bank-owned properties, while bank-owned properties are about 14% of this category in Long Beach.

If you the buyer submits an offer on a short sale, know that they require patience and the ability to wait. The seller wants to avoid a foreclosure, and can usually only do so by obtaining short sale approval from the bank, and counting on the buyer to stick around for the entire process. Buyers should understand all of the short sale addendum terms, and be clear about the waiting period you've agreed to--if there is no waiting period (number of days) inserted in the addendum, that means you're committed to waiting until either the bank says it's not approved, or the bank says it's approved--whichever is longer. In other words, agree to 90 days and if there's no approval by that time, then it's safe to cancel and move on. A 30-day escrow including bank approval would not be realistic for almost all properties.

This is the affordable range for many people, and it also attractors investors who have a lot of cash. Some properties give a 10-day period for owner-occupants to make offers, another reason why the buyer should be prepared in advance with loan approval and funds documentation to be ready to make that offer, assuming it's the property you want. Otherwise, try to find a property being sold by an equity seller.

The future will continue to feature distressed properties in one form or another: "Sales of distressed properties are set to peak in 2011 at 2.3 million transactions before falling to more normal levels at 850,000 in 2016, according to a report from John Burns Real Estate Consulting." Does that mean prices will continue to fall? It all depends . . . on the area and local real estate. That's why you should keep up with prices in the area of your interest, and stay in touch with a good lender and a good Realtor who can keep you updated on recent sale prices, interest rates and current lending guidelines (which can change every few months or every few weeks).

Nearby cities of Cerritos, Lakewood and Signal Hill also have properties, ranging in number from 22-27 each, under $300,000--the vast majority are condominiums with a small sprinkling of houses. Norwalk, however, has 200 properties, the majority being single family homes, so this is another area of opportunity for those willing to live a little further inland.
To see all properties of interest to you, including income property, just go to my website property search at http://www.juliahuntsman.com/.

Going Green: Recycle Your California Appliances

2010-09-22T10:52:00.000-07:00

Is your refrigerator getting more expensive to run? I think mine is because it's now 10 years old, and my electricity usage is going up (but cleaning the coils can also lower electrical usage too). If you're going to replace them, don't dump your old appliances or have them hauled away before you check this program first. The California Energy Commission is behind the Cash4Appliances program. Click on the link for more information.

Don't dump your old appliances, instead, recycle them, and/or get a rebate through the listed partners if you bought from them. This includes Best Buy, Home Depot, Fry's, Howard's, Lowe's, and other major chains. I unfortunately do not see Sears on this list (where I bought my refrigerator). This program applies to residential occupants, and landlords and tenants of residential properties.

This program started in April, 2010, and will continue until funds are gone. Per their website today, there is over $11,000,000 available in funds. This program includes your refrigerator, clothes washer, room air conditioner, freezers, dishwashers, certain water heaters, and certain furnaces. As of July 28, eligible energy efficient appliances and rebate amounts available are: refrigerators $200, clothes washers $100, and room air conditioners up to $50. California Cash for Appliance PLUS rebates include: dishwashers $100, freezers $50, water heaters $300-$750, and HVAC systems: $500-$1000.

Another source for recycling refrigerators is through Southern California Edison, which will remove your working refrigerator and pay $35.

FHA Loan Right After Short Sale?

2010-09-18T13:14:00.000-07:00

Short sales are a problem for sellers who want to get into a new home right away. Besides the probable impact to your credit score and the issue or rebuilding it, there are normally the mortgage loan guidelines that require a waiting period of 2 or more years after a short sale, depending on the buyer and the loan.

But for certain buyers, there could be an option: If you are a borrower who has not suffered delinquent loan payments, but has suffered a market devaluation of your current home, you could be eligible for an FHA loan immediately upon sale of your current home IF:

1. You aren't selling your home and buying a new one simply to take advantage of today's lower prices;
2. You purchase at a reduced price a similar or superior property within a reasonable commuting distance;
3. The short sale is for your primary residence.
4. You are current on your mortgage payments and no 30-day late payments.
5. Your home is not pre-foreclosure (with a Notice of Default recorded against it).
6. You have no late payments on installment debt prior to the short sale.

The borrower's reasons for selling would have to be approved on the new loan's underwriter, but for example, if you're moving for school reasons for your child, or job relocation reasons for yourself, perhaps this loan is for you.
Please give me a call or e-mail me to see if this would work for you!

Condo Prices in Bixby Knolls and Belmont Hts/Belmont Shore/Bluff Park

2010-09-15T10:49:00.000-07:00

The August 2010 median sold price of a condo in 90807 (Bixby Knolls and adjacent areas) actually increased by $10,000--to $170,000--compared to August 2009. That's down, however, from the $240,000 condo median in April. I chose this zip code because I actually underwent a first time experience ever of receiving a buyer's lender appraisal $20,000 less than the contract price. (This leads into issues about out-of-area appraisers and the AMCs, which will not be elaborated on here.) So therefore, it seemed a good idea to see what Clarus Data Metrics research revealed this month. The for-sale price in this zip code for condos shows an overall decrease in asking price by 23%, but an overall increase in selling price by 6%. December and April were two months of exceptionally high prices reaching up to the $300,000 median. The monthly number of units sold range from 4 to10 in the last 12 months, and the same range for properties in escrow each month over the last 12 months, currently up 75% from August 2009. The monthly total number of condos for sale ranges from 39 to 55 over the last 12 months.

The August 2010 median sold price of a condo in 90803 (Belmont Shore, Bluff Park, Naples, etc.) actually decreased by 4%, ranging in median price from $550,000 to about $275,000 over the last 12 months, with the current median being $326,000. The median asking price is currently $50,000 lower than August 2009. The number of sold properties for August--15 condos--is one of the two highest months for the past 12 months. The number of condos in escrow has fluctuated from 6 to 15 per month in the last year--currently the pendings are down (by 3 units) from July and down from August 2009. Currently there are 83 condos on the market in this zip code, the lowest number was 59 last January. So although supply is up, so is demand--9 sold in August 2009, 15 sold in August 2010.

Buyers and sellers should know that lending in condos means a review of owner occupancy ratio (less than 75% is a deal killer for some lenders, less than 51% is a deal killer for all lenders), the number of owners delinquent in their HOA dues (can't be more than 15%), and existing lawsuits are all items that come under review in their review of the association's documents. Other issues could be HOA reserve funds and signs of lack of common area maintenance.

FYI: "Median" is not the same as "average"--the median number divides the group into two equal halves: Half the properties sold were above $326,000 and half were under that price.

Any why are those cows there? Because they like to keep an eye on things too.

Advance Fees in California

2010-08-27T14:00:00.000-07:00

Even though a law was passed in 2009 in California, there still seem to be advance fees being requested and sometimes paid for in exchange for certain services. Here is important language to read and understand, because there are people who are still trying to take advantage of homeowners who want a loan modification, loan modifications or attempts to avoid foreclosure that just don't work out. And the homeowner loses money.

It is illegal in California, as of October 11, 2009, for a lawyer, real estate broker, real estate salesperson, including corporations and companies, to demand or collect an upfront fee, retainer fee or other advance fee for loan modifications. There have been, and continues to be, many people who have lost thousands of dollars through misplaced trust. And, if you have experienced this, please click on the link below to find out more about reporting to the Attorney General.

Remember, calling up your own bank is the first step to finding out about loan modifications. A property owner is able to do this on their own, although you may want the assistance of a consultant, because it can be an involved and lengthy process, depending on your bank. But there is no advance fee that can be charged, not until the close of escrow.

See the Dept of Real Estate story.

Tips for Increasing Your Home's Value

2010-08-24T09:00:00.000-07:00

It's not unusual for a Realtor to hear a property owner say that their home is worth a certain amount because of a particular recent sale price of another house in their neighborhood. Many times the Realtor has a different opinion about the home's value than the property owner does, not because it ultimately couldn't, but because of the way it looks right now.

It's like selling a car: A prospective buyer is far more attracted to a pretty, shiny, vacummed-out, cleaned-up, polished car sitting out on the curb when they first pull up to take a look. They are far more ready to have a discussion about it, since it compares favorably or more favorably than most other cars they looked at, and a buyer is more ready at that point to believe the car has been well-maintained, which means it's worth more to them because there will be fewer repairs. And this is the same approach owners need to take with their houses and yards. You probably wouldn't consider getting maximum value out of your car without putting some effort into its presentation--and you need to do the same with your home:

Trim overgrown trees and bushes so that branches are at least 10 feet away from your roof -- and possibly include that same guideline for driveways, walkways, and outdoor sitting areas, or if vegetation visually obscures too much of your house so that it cannot be clearly seen from the street. Water your landscaping so that it looks green with no bare spots, and remove dead plants.
Consider having the house power-washed--it may eliminate a paint job (unless you have the next issue). This should be done only by a professional.
Touch up peeling paint. Not only is this an "attractiveness" issue, it signals negative messages about maintenance, and is also an FHA loan condition issue for an FHA buyer.
Have a professional inspect your roof and replace curled or missing shingles. Remaining life-expectancy is important, especially if most of the nearby roofs are much newer looking. Stains and plant matter such as moss can be removed with a cleaning. Considering that total roof replacement could be up to $20,000, a roof in poor condition could make your house appraise lower.
Routine maintenance and cleaning eliminates setting off alarms: repair gutters, obtain a pest/mold inspection report annually, replace missing bricks, repair exposed wood beams and window frames, remove or repair deteriorated gates and fencing.
Colorful plantings in the are a minimal investment, but will do much to show off your yard and your home.

It's important to remember that the money invested now will help you obtain a higher price from the buyer, and will help to eliminate value issues when the buyer's appraiser comes out to see your property during escrow. Many times sellers overestimate the amount required to prepare -- this amount will also depend on how much deferred maintenance you have and your budget. Spending $2000-$5000 dollars may bring you another $10,000-$15,000 in price, or at least help your house sell faster if your market is sluggish. Attempting to sell without any preparation could affect offering price, impact negotations during escrow if the buyer discovers further issues through their physical inspection and decides to walk away, and/or impact the appraisal.

You can find more information on the Landscaping checklist and at the HouseLogic tab at the top of this blog.

The Economic Impact from a California Home Sale

2010-08-13T08:51:00.000-07:00

While at a meeting yesterday, I heard a statement from another attendee that somewhere between 30-50% of California's job market has been directly affected by the change in the housing market in this state--the local closings of some long-established independant businesses and the empty storefronts are a testimony to that.

When the prices of the housing market were out of reach of many buyers, I frequently heard and read statements about what a good thing it would be if housing prices dropped "back where they should be." But nothing happens in a vacuum, and when housing prices fell, so did the rest of the economy. The activity generated through the sale of one residential property conducted through a REALTOR® in California may impact up to 40 different occupations, starting with the buyer's lender and its employees and underwriters, appraisal services, escrow officer and affiliated company, title company representatives and employees, home warranty company, MLS employees, all the internet and print advertising services for marketing the property and which help to attract the buyer, accountants and attorneys connected to the transaction, home stagers whose services may be critical to helping sell the property at current market price, insurance agent, messenger companies, home construction contractors, moving truck services, property managers, car rental companies, to name some of those closer to the "ripple" effect. All of these occupations serve vital connections to a real estate transaction, and moreover, a Realtor usually has requirements to assist or coordinate with many of these participants, each of which has its own job to do. Without a home sale, many people are literally "out of the swim".

Information reported in 2009 from National Association of Realtors, Bureau of Economic Analysis and Harvard Joint Center for Housing Studies shows that when one home is sold in California, the income generated from real estate related industries $49,383.00, the additional expenditures on furniture, paint, and applicances is $5,331.00. Also, there is addtional economic multiplier impact as greater spending on charity, sports events and restaurants estimated to be $26,263.00. The new home production value, estimated at one new home constructed for 8 existing home sales, is $68,588. The total income derived from the sale of one California home (report used an earlier CA median price of $548,700--currently $311,950 for a single family home as of June, 2010) is $149,564. The National Association of Home Builders has estimated that nationally, approximately $8,900 is spent on home furnishings and improvements within 12 months following a home sale. In other words, what happens to the housing industry happens to a lot of people.

Houses in Long Beach for July: Prices Softer, Sales Volume Up

2010-08-03T17:02:00.000-07:00

July in Long Beach was a pretty busy month for single family home sales but it also saw a lowering of the median price: 196 sold at an overall median of $360,000, down from $380,000 and $375,000 from the prior two months, and down 5% from July, 2009. The July average for sold-price-to-list-price was 98%, with a low of 72%.

The peak for the last 12 months was $415,000 in November, 2009. The median list price, however, has steadily increased since December, 2009, and is up 4% from one year ago, with 1,234 single family homes currently on the market citywide. And, total number of SFRs in escrow is up 42% since one year ago and at 276 houses, is at the highest number under contract in the last 12 months. But, expired properties in all price ranges were at the highest number in the last 12 months, while the months' supply of inventory is at the lowest in the last 12 months. It has never been more important to price the house right and make the right improvements for showing.

A quick search on the MLS shows that today, there are 528 single family houses in escrow, and 434 of them are under $500,000, and 94 are listed over $500,001. See the entire report for single family houses.

What Happens to Your Sale If You Don't Pay Your HOA Dues?

2010-07-28T13:37:00.000-07:00

Many owners these days are having financial problems, and decide to stop making payments on both their mortgage and their homeowner association dues. They may later decide to sell as a short sale, do all their document submission to the lender, list their property, find an eligible buyer who is willing to wait, and look forward to opening escrow and getting it sold. And, common to many sellers, they stopped making payments several months prior, so now a significant dollar amount in delinquent HOA dues has built up--hundreds and even thousands of dollars are in arrears.

In California an HOA may initiate foreclosure on a property after 18 months of nonpayment (but then they take over all associated mortgage and other costs of that unit), but before that, an association after a few months of nonpayment may instruct its attorneys to file a lien. If a lien exists at the close of escrow, then it will raise the issue of getting it paid off prior to close, or delaying the close of escrow--and in a short sale, lenders may impose additional fees for not closing by the specified date. If the seller does not have the money to pay it off--this will include the dues, late fees and attorney fees--then perhaps the buyer would be willing to contribute, but if the buyer cannot or will not, then that particular escrow will not go forward. And if you have a Notice of Sale on your property already, the lender may no be willing to extend and wait for a new buyer--it just depends on the lender.

Another wrinkle for a closing is even if delinquent dues can be paid off at closing, the number of delinquent owners in the association may exceed the lender's guidelines, and now there's another reason it may not close escrow--for any owner. Non-payment of dues may force other HOA members to pay special assessments to make up for the loss of income, which may be a hardship for many owners who are struggling to stay current because of their own loss of income or job cutback issues. This may actually increase the number of delinquent owners.

Contrary to what many short sale sellers assume, lenders will not pick up all HOA costs, and many banks completely disallow any HOA costs in their approval, and that includes move-in, move-out fees, and provision of HOA documents to escrow as asked for in the contract, a total potential cost of up to $500 or more per transaction. Another potential outcome is that the owner will be pursued later by the association with a judgment filed against them. And I've also read that some bank approval terms are "requiring" buyers to pay the delinquency at closing, which is driving them away from the transaction.

So if the seller can't pay now because of all their financial problems, one option would be 1) to approach the association with a request to negotiate them down to what is possible, or 2) request a forbearance agreement and work out a payment plan over time. These are much better options for an owner who wants to do a short sale and avoid foreclosure.

The last piece of advice is that the homeowner should obtain legal advice. But unfortunately many people don't do that because that would be another bill to pay, so they look up information on the internet instead, which won't tell them about their specific situation. Find a legal clinic or some source of local legal advice which will be a resource. If you just decide to stop paying your HOA dues, it could ultimately cost you more than you think.

June's Median Price Showing An Increase in Long Beach/Lakewood Area

2010-07-22T14:00:00.000-07:00

Single family median price in Long Beach

The median price in Long Beach for a single family home has gone up for June 2010 to $370,000, with a total of 205 homes sold in this category for the month. This is a general increase from the $353,000 median in June 2009. The number of days on the market is trending downward gradually, the current average is 66 days, compared to 72 last year. Of course, this is a broad figure designed only to show a general trend, since prices vary from local area averages of $250,000 to well over $1,400,000 in single family homes in Long Beach.

Lakewood single family median price

It's a similar story for the City of Lakewood, a smaller city conceived of through city planning in the 1950's and with not so much diversity in housing inventory and selling prices as Long Beach. In June of this year, the single family home median price was $400,000 compared to $375,000 last year.

Los Angeles County as a whole shows the same trend for single family homes: $342,000 this year, $326,000 last year, for the months of June (however, that's a drop from May 2010 median which was $350,000).

Condos in Long Beach are still not as strong as houses, but overall, offer a great investment while their prices are still lower. The median at $232,500 for the city has risen 2% from last year, but has fluctuated greatly in that time, with days on market currently at 96, lower than last year's 108. The lowest days on market of 66 was in October 2009, matching end of year buying but mostly the 1st expiration of the $8000 tax credit. For Los Angeles County, the condo median dropped to $315,000 from $360,000 one year ago.

The Current Market is Offering Incredibly Low Interest Rates!

2010-07-06T15:00:00.000-07:00

This afternoon I did an interesting calculation because I was playing around with a feature on my website. First of all, did you know interest rates are well below 5% on a 30-year fixed, even as low as 4.25%? Second of all, do you expect that to last forever? It's lower than any rate since the 1960's and before, and certainly lower than any rate in the last 15 years since I've been helping buyers and sellers.

I did this calculation for my 2 bedroom/2 bath condo in Bixby Knolls which is currently listed at $182,500. The default down payment was 20%, the default interest rate was 6%, so using those numbers for calculate principal and interest (only), the monthly payment came out to be $875.34. (That's the price of a one-bedroom rental in some areas.) But knowing that interest rates are much lower right now, I changed the assumptions to 4.25% and assuming an FHA buyer, I used 3.5% down, and based on a loan amount of $176,112.50, the monthly P&I payment came to approx $866.37!! (Please do not use this scenario for your final loan calculations as disclosed by a lender, this is intended for general information only.)

In other words, with lower interest rates right now a buyer could be saving the difference between $6387 and $36,500 to get the practically same payment for less money compared to the higher interest rates of just 1 and 2 years ago.

Back to my earlier point: it won't last forever, so why not take advantage of the market now if your only reason is that you're "waiting"?

I am here to help you with finding a new property, so I hope you'll let me do that, because you will be helping yourself!

Owners Have Options, But What is Best?

2010-07-06T12:27:00.000-07:00

There have been numerous programs designed to assist the distressed homeowner launched under the Obama Administration. Most recent is the July 1, 2010 Home Affordable Unemployment Program (HAUP) designed to reduce, or suspend mortgage payments for at least 3 months, in coordination with the loan servicer's guidelines. The loan must be under $729,750 and originated on or before January 1, 2009, and must be in default already, or almost there. Monthly mortgage payment must be reduced to less than or equal to 31% of the borrower’s gross monthly household income and may be suspended in full. Borrowers who went through the Home Affordable Modification Program (HAMP) are not eligible, but a loan modification program may be put in place for the HAUP borrower once a job is found.

The programs available to borrowers are:

Home Affordable Unemployment Program (HAUP)
Home Affordable Refinance Program (HARP) - among the requirements is that the existing loan cannot be more than 125% of the current market value of the property, and must be an owner-occupied 1-4 unit property.
Home Affordable Modification Program (HAMP) - A prime requirement, among several, is that it can be a property with either one or two loans on it, but the payment on the first loan (P.I.T.I.) must not exceed 31% of the gross monthly income of the borrower. Many borrowers have had trouble meeting that payment-to-income percentage figure, and then do not qualify for that loan mod.
Home Affordable Foreclosure Alternative Program (HAFA) - This is a program with specific forms, guidelines and timelines and must be offered to the borrower by the participating bank if the HAMP loan mod has failed. There are certain protections and benefits to the qualified borrower under this program, but one problem has been the 2nd lien holders who refused to participate because they may not receive as high a payoff under this program. The buyer of such a property must also cooperate with certain timelines.

Lenders who chose to participate in one program are required to participate in all of them, which is currently about 140 lenders. IMPORTANT: To find out if your lender is, go to http://www.makinghomeaffordable.com/contact_servicer.html. Read about other aspects of these programs at http://www.makinghomeaffordable.com/.

If you have an FHA or VA loan, those loans will have their own version of this program.

Last, but definitely not least: Borrowers in distress who understandably do not want to give up their home, normally have a very difficult time "putting their foot down" on the subject of just how long they will attempt to pursue a loan modification with their bank before giving up. While some servicers are more responsive and are actively working with their borrowers, there are many others who are falling between the cracks.

If a borrower has lost their job and is concurrently in a job search while attempting to pursue a loan mod that's already been started, or if a borrower keeps hearing that the bank needs an item that the borrower has already submitted, perhaps multiple times, or if the bank or servicer keeps adding new items required before it can give an answer to the borrower, my advice is: BORROWER BEWARE. The fact is, time is slipping away--you have no loan modification, plus you may now have a notice of default recorded on your property, and then the notice of sale will be posted to your door shortly before your 121 days are up. Some banks are taking their time recording a Notice of Default, but others are very unforgiving and will NOT extend your sale date without either the loan modification in place or an accepted contract from a buyer, because they need to move forward with that property. For most people, selling their property under short sale conditions has less severe long-term impact than going through foreclosure. Please contact me for more information about those conditions.

Please, don't let foreclosure sneak up on you while you keep telling yourself you're going to get the loan modification after you just send in one more piece of requested information. You must meet the servicer's requirements, and many people don't qualify due to financial circumstances. Before you get to that stage, investigate an optional short sale possibility early while you still have time to find a buyer, negotiate the contract, submit your short sale package, and get through escrow. This could make the difference between 2-3 years' impact on your credit record vs. 7 years' impact due to foreclosure.

There Ought To Be A(nother) Law

2010-06-30T11:58:00.000-07:00

Short sales have been here and are here in large numbers for quite a while into the future. Many lenders are getting better in certain respects about speeding up their responses, even if it's not a HAFA program which does have numerous requirements, in their regular short sales. There can be many aspects and issues in a short sale depending on the bank or servicing company involved, if a notice of default has been filed, if a notice of sale date is already set, if the HOA dues are delinquent, how many lienholders there are, to name a few.

But what is one thing that's going on a lot? Second position mortgage lienholders who are refusing to accept the payoff from the first, and decide instead they would rather have their investors get nothing rather than something. So typically these 2nd lien negotiators, who are probably looking at a computer screen bearing instructions from their bosses, are allowing the entire property to go into foreclosure over a failure of $5,000-$10,000. Many do not want to deal with the HAFA program, due to the few thousand dollars obtainable under that program, nor even 10% payoff offers from the first, so their response is to say they will take nothing rather than something, and let it go into foreclosure, presumably under the belief they will be able to come back and get it later. What many servicers may not understand is that in certain states, such as California, they have no deficiency rights after foreclosusre when the loan was original purchase money mortgage on a principal residence.

And so what do we need? I know we have plenty of laws, but we need another one. We need another law that prevents junior lienholders from obstructing the successful completion of a short sale:

"...passing legislation barring junior lien holders from preventing a short sale and forcing a foreclosure would be wildly beneficial to the heart of America. It would keep homes occupied, free up capital, curb the slide in property values and it wouldn’t cost the taxpayers, or anyone else, a dime."

Also, as Lawrence Belland says on Foreclosure Radar:

"... in 37 other states the investor could accept the offer and still have the right to pursue the deficiency. That’s why forcing the foreclosure doesn’t make sense to me; it defies logic."

Second lienholders always knew they were just that, in second position. They were all too willing to make loans, and others have been very willing to buy them up, based on the continuing inflation in the subprime market. They just don't like to face reality now.
.

Interest Rates at Mostly Lowest of Historic Lows--This is Money In Your Pocket

2010-06-23T11:15:00.000-07:00

One perspective many buyers and sellers (who are able to sell now) could benefit from right now is the long-term historical perspective to realize just what this point in time can mean for them. While many articles may directly address buyers, the flip side is for the sellers who are looking for the right buyer, and the more buyers that fit in a seller's net, the greater chance each party has for a successful catch . . . I mean, sale!
I could hardly say the following points better, so I'm just going to give you Pat Zaby's post on buying,

You Can Afford to Buy and Haven't...Are You Crazy?

This may be the best buyer's market that we'll see in our lifetimes. There are lots of legitimate reasons why a person should be taking advantage of this market if they are able.
Obviously, if a person doesn't have the down payment or credit score, they won't be able to seize this opportunity. If a person is concerned about losing their job, that would be a valid reason for not buying now. If you are planning on relocating in the next year or two, maybe now isn't the time to buy.

On the other hand, if a person doesn't own a home, has good credit and job stability, they should seriously consider capitalizing on this unique combination of opportunities. A qualified real estate professional can explain all of the reasons and even suggest some very interesting financing alternatives.

Top Ten Reasons to Buy a Home NOW

Interest rates incredibly low – the rates are hovering at near historic lows. Interest rates play a huge part in the cost of housing together with the price and shouldn't be overlooked. The average mortgage interest rates for the past four decades were: 1970's 8.9%; 1980's 12.7%; 1990's 8.1%; 2000's 6.3%. Most experts agree that they're going to rise this year.

Lower Prices - Recent price adjustments have made good values that haven’t been available in some situations for years. Current buyers are able to take advantage of the discounted prices.

Selection is good – In a seller's market, buyers sometimes have to accept a home that may not meet their needs completely because of short supply. Inventories in most markets and certain price ranges are higher which allow buyers better choices.

Negotiate financing concessions – FHA, VA, and Conventional allow the seller to contribute towards financing concessions for the buyer. The money can be used for buyer's closing costs, pre-paid items or interest rate buy down.

Costs for FHA loan going up – Currently, a seller can pay up to 6% of the sales price in financing concessions but the number will be reduced to 3% later this year; the date has not been announced yet. The annual MIP for FHA loans will also probably be going up this year which will increase the monthly payment. Buyers who get in now will pay the lower fees.

Interest and property tax deduction – the U.S. is one of the few countries in the world that allow an interest and property tax deduction for homeowner/taxpayers.

Source of funds with deductible interest - a homeowner can borrow up to $100,000 above their acquisition debt and deduct the interest regardless of what purpose the money is used. This is a great opportunity to consolidate debt at a lower interest rate and be able to make the interest deductible that otherwise may not have been.

Capital gain exclusion – the U.S. allows qualified homeowners to make a profit on their home without having to pay tax on the gain.

Borrowing against equity is non-taxable event – taking money out of the equity in your home does not require recognizing capital gains income.

The combination of reasons to buy a home may never be stronger than now.

Interest rates are going up; it is just a matter of when. Inventories are starting to be absorbed by current demand. New home construction is down considerably which could lead to higher prices due to not enough annual housing units to keep up with the population. Prices have started to climb in some markets; others will surely follow.

A basic rule of investing is to buy low and sell high. There will be some buyers who take advantage of the current opportunities and will look back and remark how fortunate they were to act when they did. There will be others who look back on these conditions and say "We should have bought then." Hindsight is always 20/20. Evaluating the present and acting takes equally clear vision. The help of a trusted professional can make the difference. (reprinted with permission by Pat Zaby; emphases in bold and italics are mine)

In the meantime, the federal tax credit for $8000 is over, and the California tax credit is almost gone, the FHA seller negotiation cap will be reduced soon, but right now, a buyer with good credit will probably get an interest rate under 5% and even 4.5% in some cases, meaning over the life of a 30-year loan, you can save thousands of dollars.

And, most Americans just don't realize this, but this country is one of the few that allows a 30-year loan, most other countries require payment in 1/3 to 1/2 that time.
To easily find properties on the market, go to http://www.juliahuntsman.com/, "Find Properties".

Long Beach Has Several Farmers Markets, Find One Here

2010-06-19T09:05:00.000-07:00

Sunday from 9 a.m to 2 p.m. is a great time for visiting the Long Beach Farmer's Market at the Marina. Held weekly in the parking lot on Sundays, it's got vegetables, hot cooked food, orchids, fresh cut flowers, baked goods, and animal adoption opportunities too. To name a few. Plenty of parking as well. Farmers/vendors come from as far as Riverside and Bakersfield to set up booth every week. Prices are sometimes no cheaper (in my opinion) for some food items than the grocery store, but are a lot fresher and direct to the buyer, and one of the really great benefits is having a great variety of food to choose from.

This particular market is adjacent to the ongoing 2nd+PCH project still being planned and negotiated, so someday the landscape here might look very different with new development, especially across the street. Take advantage of this now and check other farmers markets at Bixby Knolls, Downtown and one at Marina Park on Wednesday afternoons (not on the link), and in the city of Cerritos. And it's BYOB, Bring Your Own Bag.
And, haven't we become so used to foods flown in from foreign countries that we might have forgotten our local growing seasons? See this crop calendar for California.

Long Beach Single Family Houses in May Are in Demand

2010-06-18T13:50:00.000-07:00

Single family homes in Long Beach seem to be the one property type showing some consistency in price and numbers of sales recently. At the end of May, the median price of houses currently on the market was up 5% over last May, going from $375,000 to $395,000; while the median price of sold properties was up 28% compared to May 2009. The peak for sold price was in November, not surprisingly, as the initial homebuyer tax credit was scheduled to expire in December. The trend dropped in December, but the median list price and sold price has trended upward since then. Time will tell if the current tax credit extended to April 1, and the extended period to close until September 30, will show a similar peak, or will there continue to be activity?
I keep saying this, but many buyers, especially first-timers, don't realize that low mortgage rates (currently as low as 4.5% paying one point) is actually a price drop on your home. And for condo buyers who are seeing higher HOA fees compared to 5-8 years ago, a lower mortgage rate can make up for higher monthly fees. Plus, the borrower pays much less on the total loan over a 30-year period. See the entire May single family report.
Condos seem to see more peaks and valleys in the last year, with the median price of currently listed condos being down 2%, to $235,000 from $239,000 in May 2009, and the median price of solds is up10%, $200,000 to $220,000, since May 2009, with the overall supply of condo inventory now trending down for the last several months.

Price and Value -- It's Increasing for Southern California Lately

2010-06-15T15:58:00.000-07:00

The buyers' tax credit had an effect: There were more sales. And the low mortgage rates are helping (below 5% with paying one point). Per Dataquick, May sales of houses and condos in Southern California were the highest since May 2006: "...what we saw in May was partly driven by government stimulus". May's typical monthly mortgage on new purchases was approximately $1293 -- do you remember when it was about $2200?--but that's still an increase from 2 years ago. Home flipping is trending higher--current rules require an investor to wait 90 days. Sales volume is up in Los Angeles and Orange Counties in this category, and so is the median price: $345,000 and $450,000. Although houses and condos cannot be compared across the board in all ways, nor can all geographic areas, this seems to be an overall general trend in price and sales. And, buyers who paid all cash account for over 24% of May sales. That's 10% higher than the 23-year monthly average. This is not news to those buyers who have submitted offer after offer and continually lose out in the median price range. Will this trend hold, and how much had to do with the tax credit, which ended April 30th?
California Association of Realtors reports that April sales (May's report not out yet) for single family homes statewide increased 21% over previous April, to $306,230, but sales volume decreased statewide by 8.1% from prior April for SFRs. From C.A.R. on May 24th, "Large changes in local median home prices typically indicate both local home price appreciation, and often, large shifts in the composition of housing market activity. Some of the variations in median home prices for April may be exaggerated due to compositional changes in housing demand." So, in other words, real estate is local.

Just Listed: Three-unit Property in a Long Beach Historic District

2010-06-04T14:41:00.000-07:00

This 1920's vintage triplex is located just inside the Hellman Street Craftsman Historic District at 761 Walnut Ave. The front building has two side-by-side townhome-style units with hardwood floors and Arts and Crafts era tiled faux fireplaces with original built-in bookcases, natural wood. One unit has an updated kitchen. Rear unit is a one-bedroom over garage, laundry room (currently not used) at rear of garage. Very charming private rear yard with patio and gazebo, partially fenced.

Current asking price is $405,000.
Please contact me for more information on this property.

What Do the Experts Say (About the Home Buying Market?)

2010-05-29T10:58:00.000-07:00

As we are going towards the second half of the year, and entering our summer period with the Memorial Day holiday weekend, I have to ask:

Do YOU think the real estate market has nowhere to go except for DOWN? You're not the first one! History proves that even the experts have had it all wrong, time and time again. Consider these quotes from history’s “experts”:

#1. "Houses cost too much for the mass market. Today's average price is out of reach for two-thirds of all buyers."

#2. "The goal of owning a home seems to be getting beyond the reach of more and more buyers."

#3. "If you are looking to buy, be careful. Rising home values are not a sure thing anymore.

#4. "Most economists agree.... a home will become little more than a roof and a tax deduction, certainly not the lucrative tax investment it once was..."

#5. "Financial planners agree that houses will continue to be a poor investment.

#6. "A home is where the bad investment is.

Below is a list of sources and publishing dates from the quotes, above:

#1. Science Digest 1948
#2. Business Week 1969
#3. Miami Herald 1985

#4. Money Magazine 1986

#5. Kiplinger's Personal Finance Magazine 1993

#6. San Francisco Examiner 1996

You can be the judge. If this is what the "experts" were saying throughout the years.... do you really think there is ever a truly bad time to own a home?
Don't get spooked out of buying or owning a home. Real estate is still a great investment..... history tells us so! I look forward to hearing from you soon.
(Courtesy Joe Tishkoff, Skyline Financial.)

Find residential real estate and income properties at http://www.juliahuntsman.com/, click on my property search.
For headlines about California market trends, go to http://www.car.org/media/pdf/consumer/Beyond_the_Headlines__052710.pdf .

HAVE A SAFE HOLIDAY.

New Listing: Bixby Knolls Condo 2 bedroom 2 bath - One of the Area Lowest Prices

2010-05-21T13:06:00.000-07:00

The seller is still working to get ready for showing, but this Bixby Knolls condo is a great value at $180,000 for a front end unit with 2 bedrooms and 2 bathrooms and no one below. This is a great value in an FHA approved building. Has one parking space in gated garage with storage.

No interior photos yet, will include those in it goes into the MLS at the end of the month.

Interior features are kitchen area Pergo flooring, new kitchen counters, lots of kitchen/dining storage cupboards, and new dishwasher. Seller is freshening up with new paint, and bathroom has new tile floors.

The complex is conveniently located near the 405 FWY and the Bixby Knolls and Atlantic Ave. shopping/restaurant corridor. HOA dues are about $225 monthly. Complex has very nice pool and patio area, and community laundry. One parking space. This is an equity sale!

Call me to find out more about this property. 3510 Elm, #1, Long Beach, CA.

Find this and more properties at http://www.juliahuntsman.com/

Julia Huntsman, Broker, e-PRO®, SFR, REALTOR®

562-896-2609. CA DRE #01188996

Seller, Please Take Yourself Out of the Picture

2010-05-14T09:49:00.000-07:00

At Awkward Family Photos there's one thing you can see a lot of--the kind of kids pictures and engagement photos you really don't want showing on your walls when your property is on the market. I don't know what the people at the left were thinking of, and the photo at the right was showing off the kids modeling Dad's cabinetry with a much-loved family pet.

I know what you're thinking: That you don't have anything as crazy as these photos on your walls because your photos show much better taste. After all, they were taken by an expensive portrait photographer showing the close family gathered in formal attire in a classic setting as a beautiful holiday memoir--nothing goofy about that. Why wouldn't you want to proudly show off your family for buyers coming through your home?

Well, in a nutshell, photos in your home may represent you and your family members in a very personal way, and buyers read clues about you and possibly make opinions which may not help sell your home. Even if they do identify, or sympathize, with the Star Trek outfits because they have the same picture on their bookcase, is this the focus of their seeing your home? Because personal objects are usually a distraction to the buyer, a detour into personal aspects of the seller's live(s)that is best avoided if you want an offer soon. You want to present your property, not you and your family, to get it sold as quickly as possible for the best price. You are now selling a product, as cold as that may sound, into which the buyers are trying to see their pictures, furniture, etc. So, sellers, so after seeing the photos voluntarily submitted by those who are having a good laugh at themselves, http://www.awkwardfamilyphotos.com/ , then go around your home and take yourselves out of it as much as possible, so that someone else can put themselves into it. Oh yes, thanks for California Association of Realtors for leading me to this entertaining site. I might submit a photo or two myself.

The Return of the 5% and 10% Down Payment on Conventional Loans

2010-05-06T14:13:00.000-07:00

This is welcome news for borrowers (up to $417,000) whose only option was FHA if they didn't have 10% or 20% down payment funds. This is also welcome news for sellers of single family homes because buyers whose loan amount is $417,000 or less may now borrow with a 5% down payment. Yes, we know there are cash buyers out there with that amount of money, because the FHA buyers in the Southern California market have regularly been beaten down by the all cash buyers or 50% down buyers. But assuming the borrower is well qualified, pre-approved with a lender with a track record (and I mean fully pre-approved), and motivated, a seller may well want to seriously consider such a committed prospect who as a great desire to purchase his/her first home.

And, also in the good news department, is the return of the 10% down conventional loan for condos. This has been almost impossible to get in recent history from most lenders, and this is good news for sellers also, because it relieves the issue of an FHA borrower whose lender may well have to fully approve the entire association before closing escrow. Not only is this time consuming and requires a lot of work by both the lender and the homeowner association, the HOA may not, in the end, meet FHA standards criteria. In fact, sellers, did you know that if your association has 5% or more owners delinquent 30 days or more in their HOA dues payments, there is a problem with loan qualification. This is true for both FHA and conventional loans.
But back to the good news. For associations which can overcome any such issues, the 10% down conventional loan opens up the door for many more borrowers and thus a faster sale for the seller.
So if you're thinking of selling, contact me for all your possibilities. Buyers who have been holding off should get rolling while interest rates are still in the 5% area (that's usually included paying one point of the loan amount).

Right now there are 349 single family homes listed in the MLS in Long Beach under $438,000 (for the 5% down buyer). In Lakewood, there are 96 single family homes under $438,000. No, they don't have ocean views, but find them in east Long Beach, Wrigley, Ridgewood Heights, Alamitos Beach for Long Beach, and Lakewood Park and Lakewood Mutuals for City of Lakewood, plus other areas that might be worth your investigation especially if you are a first time buyer, or looking for a down sized smaller home.
Please find these different areas at http://www.juliahuntsman.com/ by clicking on links from the first page (scroll down first).

House and Condo Selling Prices in Long Beach for April 2010

2010-05-03T18:29:00.000-07:00

Was April the month of the "Effect of the IRS Tax Credit"? While I've been telling some people that the median price of condos, townhomes and lofts was still trending downward, for the city as a whole, it's been trending upward, by quite a bit. Truthfully, it's been jumping around all over the place. March and April saw increases from the prior year, with April showing a 25% increase in median price from last year to over $240,000, but not as high as September, 2009's median price of $255,000.

A similar graph for single family homes for April shows a 10% increase in the median price for Long Beach, to $370,000, with a different peak in price showing for last November at over $400,000 (the first "end" of the IRS buyer tax credit). For Los Angeles County in March, per tax data, condos priced at $325,000, a decrease from $330,000 in March 2009.

The median price for the city does not tell the entire story, and anyone wishing an analysis of their zip code or housing area should contact me for a custom report. For Los Angeles County per tax data, the single family home median price for March 2010 was at $340,000, an increase from $303,000 for March 2009.

Sales volume for LA County in March in both categories increased over the prior year.

Long Beach, just by looking at these statistics, is definitely looking like the "bright spot" as described recently by CAR economist Leslie Appleton-Young.

Buying Without Selling? Equity Will be a Player.

2010-04-29T22:44:00.000-07:00

If you're thinking of buying a new home and renting out your current home, it will pay to plan in advance. By asking a few questions, you will start to shed light on an important subject.
For instance, do you know your current rental market and what a reasonable rent could be expected for your property? By checking local classified ads and online rental sources, plus speaking with other local owners who are landlords, you should be able to find out fairly easily. Will that amount cover your current payment, plus property taxes, plus HOA dues, if a condo? If it doesn't you need to know what your negative cash flow will be (the amount extra every month that you will have to contribute out of your income) every month. Then, by speaking with a mortgage professional about pre-approval for a new home purchase, after a discussion about your income, debts and expenses, plus that possible negative cash flow, you will soon find out if this plan will work. And, there's another wrinkle: Since the subprime market debacle, lenders have increasingly formulated tighter lending guidelines, and one of them is that a current property needs to have a good 30% equity in it to meet a more recent lender requirement, and without that equity, there will will be no loan approval on that basis alone for a new purchase. Unless the borrower can qualify for a new purchase based on his complete monthly expenses, excluding tenant contributions, plus the new mortgage. This requirement came about to eliminate loans to borrowers who, due to falling home prices and a potential short sale, walked away from their former residences after closing escrow on a new home.

This means that if you're hoping to obtain a loan modification, but are not sure about how long you'll be living there (when do we ever know the future for sure?), it will pay to think in advance about your loan-to-value. The reality is, many borrowers do not meet that 30% standard, (see this blog in Seattle) and can't otherwise qualify, and thus are forced into thinking about a short sale (or even other options, depending on their circumstances), which in turn impacts how soon you may be able to borrow again in the future. FNMA actually revised their standards a few days ago, loosening the timeline to 2 years to buy after a short sale for borrowers with 20% down, and longer for those with a lower down payment. This is an improvement, and for those who can revive their credit scores and save money in that time, it will mean a good recovery.

For an estimate for your property, contact a Realtor to provide you with a comparable market evaluation at no obligation. It would also be a great time to discuss all options which could be open to you, find out future ramifications. This is the time to find out. Find current properties in your area at the MLS search at www.juliahuntsman.com, as well as other resource information. Or contact me for recent "sold" properties to establish a value for your property. To keep up with the local area, also see my page at http://www.facebook.com/LongBeachHomesandCondos .

Why Some Loan Modifications Are So Hard to Get

2010-04-26T14:09:00.000-07:00

So far, only 17% of borrowers nationally have completed a loan modification and made it through the trial payment period under the Home Affordable Modification Program (HAMP) guidelines. One of the problems is that the HAMP guidelines only factor in the payments made on the 1st mortgage, and do not include the borrower's 2nd mortgage if there is one, which is often up to 20% of the original purchase value, and other total family expenses. Fewer borrowers can qualify, and thus end up in foreclosure anyway.

But there are other reasons too, which may have to do with why you, the borrower, or you the Realtor, keep faxing in requested documents and short sale packages, over and over after the people at the bank say they never received it, or it got lost. Or why the bank foreclosed anyway, even though it had a viable buyer and a loan ready to fund one day before the sale date. Sometimes lenders really don't want to modify a loan.

There is such a thing as Net Present Value (NPV) a complex model designed for HAMP to be used by lenders and loan servicers which is to determine if the borrower meets certain tests. However, the input criteria for those tests is not disclosed to the public. So if a borrower calls up his/her (HAMP) bank at the bank's or servicer's designated number and receives the response that they do not qualify for a loan modification, it may be because the representative is using the NPV software program which performs automatic calculations. The FDIC, however, did publish their NPV model, shown on page 3.

If you are a borrower and want to know if you can avoid a long long wait to find out from your bank if you qualify for a loan modification under HAMP guidelines based on the NPV model for which the government is allegedly unwilling to publish the critical parameters, then you might want to try out Martin Andelman's offer to use his software which he says is using HAMP guidelines.
If your bank thinks your home is worth more than your current loan balance, it will not have a lot of incentive to modify your loan because it will pay them to go into foreclosure, and then put it back on the market as an REO. And another stickler in the side of the Obama Administration are the investors who bought securitized mortgages that were sold in bundles, by Well Fargo to Goldman Sachs as one example, and now those investors are a player in the whether or not your loan gets modified:

The names of investors who actually buy mortgage-backed securities aren’t publicly available, but typically they can be foreign governments, 401(k)s, college endowments and pension funds. . . . "there could be literally anywhere from one to commonly several dozen institutional investors, and those institutional investors will be representing literally thousands of pensioners and individual investors,” says Bill Frey, head of Greenwich Financial Services.

And banks say they may have agreements with those investors, and may say they are the reason a certain loan cannot be done, but may also be unwilling to provide specific information about their "agreements."

There is more to this story, but if you are a borrower attempting to get a loan modification, be aware that not all banks are letting the timelines go by beyond what's required by law for issuing a Notice of Default and a Notice of Sale. Banks are not chartered to hold real estate, even though many are doing just that. Do not be afraid to contact a qualified tax advisor, an attorney who specializes, and/or a Realtor about your options concerning foreclosure, a short sale, or bankruptcy. The best of all possible worlds for most people is to get their loan modified, but are you going to be one of the 17% who do, and how long are you willing to wait to find out?

Capital Gains Tax Going Up in 2011

2010-04-14T17:44:00.000-07:00

April 15th is now upon us and soon disappearing, but for those who need to consider their capital gains, there is a window until January 1, 2011 before the 20% capital gains tax returns, after an 8-year hiatus at the 15% level.

If you have owned an investment property for more than one year, you could be subject to the long term capital gains tax, and beginning in 2013, an additional 3.8% tax on certain investment income which is subject to income tax, including capital gains, for those in higher income brackets, will also apply.

Investment property owners often consider a 1031 exchange as one method to avoid these capital gains taxes, evening combining several properties they no longer want to manage into one new property. There are certain rules and timelines governing these exchanges which must be complied with in order to obtain the IRS tax deferment.

Although California's February 2010 median sales price of a single family home has risen by over 14% from February 2009, you should find out the market activity in the immediate area of your property, because all real estate is local. The trend could be up or down nationally, or statewide, but find out comparable prices of similar properties within the last 3 months and within one mile or less of your property. And, even though the prices may continue upward for you, will that help you if the property has to be taxed at 20% capital gains after January 1, 2011?

For a standard chart to calculate your basis, and gain, at the 15% rate and then compare to the 20% rate, and then analyzing with and without a 1031 tax exchange, contact me. You will need certain information to make a reasonably accurate estimate, and of course, you should consult your tax advisor for specific financial calculations for your circumstances. For doing a sale and 1031 exchange, however, you will want to use a real estate professional who will provide the necessary disclosures and ability to handle the real estate transaction, and an extremely reliable and qualified intermediary for the exchange portion of the sale.

For basic information concerning exchanges, go to http://www.juliahuntsman.com/1031_Exchanges.html.