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

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.

Able and Baker, Two People in the Subprime Economy

Here's what I found in my e-mail today:

Let’s discuss two California families and the real estate market. We’ll call them Able and Baker.

Able sold a home at the top of the real estate market for $500,000 and bought a new home for $800,000, paying 10% down and getting a new adjustable rate mortgage for the remainder. Baker stayed in their existing $500,000 home and we all applauded Able for selling at the top of the market.

There are many different opinions on the amount of the drop in prices but we can all agree prices have dropped, more in some areas than others. For our example, we will use a simplified 35% drop on all homes.

Today, Able is in their home with a loan still around $720,000 and can’t refinance because their value is $520,000. Their property taxes are still hovering around $8,000 per year (my note: but does he know about property tax reduction offered by the county?). This is called being underwater, and they could be facing tax problems because of forgiveness of debt, etc.

Baker decides to sell today and finally move up to a bigger home. Their home has dropped in value and they think they have suffered a loss of $175,000 as the home is worth only $325,000. They sell and buy the former $800,000 home for $520,000. They get a loan for $468,000 at the current rate of under 5% and their taxes will be about $5,200 per year.

They might also qualify for a $8,000 tax credit and other inducements in today’s market. Also, there could be appreciation as the market recovers and would you rather have appreciation start now on a $325,000 home or a $520,000 home? Plus they’re living in their move-up home and the family is happy. So, who is better off now. Able or Baker?

Do you think we're at the bottom of the market?

See http://www.juliahuntsman.com/ for property searches.

Long Beach Selling Trends for March 2009

Has your idea of a new home taken root? You might find this interesting:

The overall picture for Long Beach from February 7-March 3, 2009, is that the inventory for residential properties continues under 6 months, meaning that it would take that amount of time for the current number of listings to sell before all properties would be sold, or off the market. Inventory supply for the current period climbed up to 4.6 months (from 3.5 months from the prior month).

In the pool of eight areas--Lakewood, Cypress, Cerritos, Los Alamitos, Long Beach, Signal Hill, Rossmoor, and Seal Beach--Long Beach is in the middle in terms of inventory supply, with Lakewood having the lowest amount at 2.3 months, and Seal Beach at the highest with 11.9 month. Just a reminder: a classic real estate "benchmark" is that 6 months of inventory is the turning point for a buyer or seller market, thus by definition the first 6 in the list are in a seller's market at this time.

But is that true for all price ranges in Long Beach, and all neighborhoods? No, overall, residential properties under $700,000 have less available inventory, with the $400,000-$600,000 going the fastest at 4 months and less.

Areas with the longest months' supply is Belmont Shore/Heights/Naples (90803) at 8 months, and downtown/Ocean Blvd. (90802) at 6.6 months. The other major zip code areas in the city were less than six months, with Carson Park/El Dorado Park Estates/other east Long Beach areas (90808) having the least amount of inventory available at 2.4 months. Does this correspond with selling price? Well, the 90808 zip code area, with the least amount of inventory, sold in the upper half of price-per-square foot range at $331, while 90813 sold at the low end of $203 per sq. ft.

For a copy of the complete report via e-mail, please contact me with your information, and I'll be happy to send it.

In comparison to this time last year, Long Beach was second highest in terms of inventory supply at 8.7 months, second only to Signal Hill, and all price ranges except one was over 6 months. In this period 2008, Long Beach was second highest in price per square foot at $409, and is now 3rd highest at $348 per sq. ft.

Yes, it's very much a "pricing reality" message for sellers, and a "get moving" time for motivated buyers who would like to avoid the multiple offer situation as much as possible.

Currently, in terms of number listings, there are 71 single family residences listed in 90808, and 86 condos and single families in 90813 (parts of downtown further inland from the shoreline).

To find more properties on the market, go to http://www.juliahuntsman.com for an easy property search.

Will the Real Home Value Please Speak Up?

December, 2008 median home price: Is it $387,021 for Los Angeles County, or is it $278,000? Well, for one thing, you have to dig a little deeper. Dataquick's $278,000 median price figure is for "Southern California" which includes at least 5 counties (single family and condos), and if you've been following the reports, you know that Riverside County has taken a very large "hit" thus lowering the overall median for Southern California. The other important thing to know is that condos prices have softened considerably, and are lower overall than detached single family home prices. Zillow's median price of $387,021 is based on Los Angeles County alone, and is considerably higher based on its own calculations of "size and characteristics of homes in the area -- whether they were sold or not -- and other factors". California Association of Realtors for Los Angeles County is $336,980 (not including condos).

The thing to remember is that "all real estate is local". So if you would like to know the prices for your area, contact me for reported sales in your zip code or neighborhood.

California Median Prices are Down and Up

The most recent California median prices, as reported by Dataquick for November, 2007, vary by area (figures reflect houses and condos together):
In Long Beach, zip code 90803 which is Bluff Park, part of Belmont Heights, Naples, Belmont Shore area, there were only 7 sales reported, but the median price for a single family home increased by about 9% over November 2006 sales. The condo sale median price decreased in 90803 by about 14% (based on 3 sales), and decreased in 90802 (based on 21 sales) by about 6% compared to 2006. But, overall, Long Beach only declined .98% from November 2006.

Cerritos house prices declined about 15% from Nov. 2006; Lakewood and Downey declined 11% and 12%; San Pedro, with ocean views from elevated areas, appreciated over 4%.

Some areas, such as Lancaster and Tujunga, with more foreclosure and short pay incidents are suffering hits to their prices.

Los Angeles County's November 2007 median price overall declined 4.79% over November 2006.

Long Beach long beach real estate 'Voice this!

Selling Price is Not the Whole Story

With this week's low interest rates, the opportunity to buy is better than ever. Did you know a half-point drop in your interest rate makes a huge difference on your monthly payment? Let's say you are taking out a $300,000 mortgage, and you have been expecting to pay 6%. What if the loan market changed, and/or you decided to pay an additional 0.5% to 1% towards buying down the rate (or you negotiated with the seller to do that for you!), and now you're able to get that same loan at 5.5% (an historically low rate). Your monthly principal and interest just lowered from $1798.65 to $1703.37.
What if you had that same $300,000 mortgage with a 6% interest rate and suddenly other economic factors in the market caused a jump up in rates, and in order to close on time, you're now going to pay 6.25%--you're payment is now $1847.15.
It really pays to not wait, whether it's making an offer, finding the right loan, getting that loan locked at the right time.
If you're thinking about waiting 6 months because you think home prices will be coming down further, just remember that even if that's true to a certain degree, the selling price of the home isn't the only thing that will impact your monthly payment.

Long Beach long beach real estate 'Voice this!

Market Activity in East Long Beach 90815 for September 2007

According to residential resale transactions recorded at the Los Angeles County Recorder's office for August, there were 306 transactions in zip codes 90802 through 90815--a decrease of 18% in sales for the same period in 2006 for the same area which shows 372 transactions.

California Association of Realtors reports a 27.8% decline statewide in numbers of sales for August compared to the same period last year, and an approximate 5% decline in median sales price.

Locally, though, it appears that all trends as showing in the Southern California MLS are down except the price:

Taking just the one zip code 90815, generally considered East Long Beach and including the varied housing characteristics of Los Altos, La Marina, Park Estates, Bixby Hill, Artcraft Manor, College Park West, and Stratford Square neighborhoods, 17 single family homes closed in September selling at 95% of the list price at an AVERAGE (probably very close to the median) price of $754,911 after an average of 55 days on the market--a decrease of 23% from September 2006.

The 90815 area for September, 2006, 22 single family homes closed at an average of $711,318, at 97% of the list price, after an average of 74 days on the market

For the 90815 in 2003 there were 39 sales, after 19 days on the market, selling at 99% of the list price at an aver sales price of $497,038. 2003 is the year showing the most recorded transactions from the Los Angeles County Recorder for the 11 zip codes mentioned above in the last 5 years at 423 total transactions.

The 90815 house at the right does not fit the average sale picture above--It features many interior upgrades including kitchen and bathrooms, has an earlier room addition which makes a den or a 4th bedrom, yet remains on the market after a year. The current asking price is $668,950--it's a great house for a young family because it's within walking distance to the elementary and middle schools, near shopping and the airport. If you would like to know more contact me, or find this property (it now has a little tree in the front) here.

Long Beach long beach real estate 'Voice this!

Not All Pricing Trends Are Down ...

. . . in fact, some are up. Writer Kenneth Harney, based in Washington D.C., reported August 12 about median price increases in Chevy Chase-Bethesda areas, by zip code.

In today's Los Angeles Times, a convenient interactive zip code finder is an interesting feature for finding median prices comparing July 2007 to July 2006. For instance, 90803, a Long Beach area of affluence, ocean views, and mixed single family residences, residential units, and condos, adjacent to the shoreline and a few blocks in, shows a median price increase from under $1,000,000 last year to over $1,000,000 this year, and an increase in the number of sales as well. Go to nearby zip code 90815, an area of mostly single family homes near a shopping center, schools and local libraries, and see the price and number of sales change upward only slightly since last year. On the other hand, Cerritos zip code 90703 has seen an 11% decrease in number of sales with a 3% median price decrease from $690,000 to $668,000 this year.
North Long Beach area 90805 has an 11% decrease in price and an almost 40% decrease in number of sales. This would be more the land of opportunity for the right buyer in the $400,000 price range for a house.

You may find, however, that data is different depending on which source you use: See the zip code chart published in Sunday editions of the Los Angeles Times.

While certain areas are more connected to subprime loans than others, an area of affluence is still not totally immune, since some borrowers stretched themselves to the limit to get into their new home of choice.

According to the Los Angeles Times article using data from Dataquick, "Los Angeles County's median price rose 5.3%, to $547,000, and sales slid 23%, and Orange County's median was flat at $640,000, as sales fell 19.8%."

Long Beach los angeles county

Resale Homes Are Holding in California

In spite of all the negative media coverage about the housing market, the real truth in California is that the median price is strong.

As a matter of fact, it's 3.2 percent higher for March, 2007 from March of 2006. Sellers apparently are hanging on to their asking prices and still get a reasonably close sales price. In fact, according to the California Association of Realtors, the current median price of $580,090 for a single family home is 3.9 percent higher than the February 2007 median home price. And, though certain counties may be seeing a drop in their median, Los Angeles and Orange Counties' median prices have increased in March, according to Realist, the provider of tax data for the Southern California MLS. Even the Bay Area increased, reversing its decline from last year. Dataquick's data also provides the same picture as CAR and Realist data: Sales volume has lowered while prices are holdling.

Long Beach

L.A. Area Trends

Yesterday the Dow broke 13,000 for the first time, there's no sign of rents decreasing overall, and the median home price in Los Angeles County continues to increase so far for 2007. In spite of all the talk about foreclosures and subprime loans resetting in 2007 and 2008, California may only see a fraction of their delinquencies go into foreclosure because of preventive measures and assistance taken by the respective lenders.

Only a fraction of all delinquent loans will actually go into foreclosure because of measures taken by lenders to prevent costly foreclosures. For borrowers who face temporary problems, these include delaying payments for a short period of time or scheduling a lump sum payment in the near future. For borrowers with more severe problems, alternatives include short sales or mortgage forgiveness. At present, it is anticipated that the proportion of foreclosures in California should be near the long-run average of just under one percent.

Long Beach

Home Price Up Over $500,000 Median for L.A. County

Los Angeles County's median home price (including houses and condos) is over $500,000 for March sales.

"If nothing else, the long-awaited downturn seems a little tardy — at least in most of Southern California.

"The perception out there is that we're at the edge of a volcano and about to fall in, but the numbers don't indicate that's happening," DataQuick analyst John Karevoll said." Los Angeles Times.

Mark Zandi at Economy.Com continues to believe, however, that the Southern California "housing correction" is in full swing and will last through next year.

So far, it would appear the correction is in the number of properties sold, as opposed to price, at least concerning Los Angeles County.

February Sales Update

Still the same trend: Sales volume decreases but sales price increases--compared to February 2006. According to the California Association of Realtors:

"The median price of an existing, single-family detached home in California during February 2007 was $564,700, a 5.7 percent increase over the revised $534,400 median for February 2006, C.A.R. reported. The February 2007 median price increased 1 percent compared with January’s revised $559,300 median price."

It appears that sellers are hanging in there with their asking prices and so are the qualified, motivated buyers. Los Angeles County was third in median price increase (5% over January 2007), with Santa Clara and Palm Springs/Desert areas being the 2nd and 1st, respectively.

Los Angeles Median Price Still Going Up

Sales are down 20% for six Southern California counties combined, but the median price for Los Angeles County was $528,000 in February (per Dataquick Information Systems), an increase of 7.8% from February 2006.

"Basically, the economy in L.A. County is much stronger than anyone imagines. You have that driving the bus," said Jack Kyser, chief economist for the Los Angeles County Economic Development Corp.

The oft-predicted population growth factor was cited by Kyser as one feature of the current Los Angeles housing market, a factor which does and will likely continue the demand for housing now and and in the future, and is a driving force behind condo conversions and loft developments in commercial areas of local cities.

Sales volume fared a little better than other areas--in Los Angeles County, the sales volume was 11.1% below that of February 2006. See the Orange County Register's article on home prices hitting a new record.

Tracking Recent Home Prices in Long Beach

So is it really this easy to see where home prices are going? This nice graph is courtesy of Altos Research, if you look at their page they have other graphs, such as time on market and amount of inventory, to look at too. The graph is showing you their sales price about single family home sales in Long Beach since September, 2006. They are not including condos.

If you look at Dataquick's January sales zip code chart, you can see some actual break downs. You might see prices have gone up or down in your area from one year ago.

If you're really serious about more input on decisions to buy or sell, try reading real estate broker and economist Gary Watts' 8 pages or so of A Little Bit of Heaven in 2007. Trying thinking about the long term view if you're in the market to purchase a home. So what if the price went down 5% from last year or it went up 5%. If you're going to be in your house for at least several years, the rise and fall of your tax deductions, interest rates and other future market conditions would probably make it all a wash. Your house is not a cash flow cow, it's a place of comfort and security. This report is intended for Realtors and was presented last Friday to our Board of Realtors, but I'm sharing it with you because it has a lot of good stuff in it! Just read it and think.


Long Beach, CA

California's Median Selling Price in December

The median price of an existing, single-family detached home in California during December 2006 was $567,690, a 3.7 percent increase over the revised $547,400 median for December 2005, C.A.R. reported. The December 2006 median price increased 2.2 percent compared with November’s revised $555,280 median price.

While this is a statewide figure published as of January 25th, and the Los Angeles area's median house price of $584,600 is somewhat less when you look at Dataquick's figures (which combine house and condo prices), nevertheless, California home prices continue to reflect an economic fact despite a much lower sales volume than the last several years.

Long Beach, Bubble

What’s Causing Home Prices to Drop?

Basically, the answer in this article is that prices increased so much in California that buyers are still sitting on the sidelines, in spite of otherwise good economic indicators. In fact, 2006 was the third best year for sales according to the National Association of Realtors, and 2007 overall will still be strong. Mortgage rates are holding for now, and on the West Coast prices are stabilizing: Don't make the mistake of the buyer in Dallas who, in a market 15% under the national median, still wants to subtract $50,000 from his offer price. In other words, know your local market.

"Buyers who are still waiting on the sidelines must learn a basic economic fact of life: if fundamentals aren't supporting a market decline, then it's not going to decline for very long. If the nation and local communities are adding jobs and population, a market decline is destined to be short-lived.

"Price is a legitimate concern, but with growing inventories, buyers should be taking advantage of an abundant selection. In a seller’s market such a luxury doesn’t exist and slim pickings mean they must take whatever is available."
Blanche Evans, Realty Times.

2007 Median Prices May Remain Flat, But Mortgage Rates May Rise

The hoped-for huge drop in home prices many buyers have been waiting for and expecting is not likely to be the reality. While prices may go up in some areas at a very modest appreciation, or just stay the same, buyer's home payments may increase with the rise in mortgage rates. So why wait? Look for your next investment property, house or condo at www.juliahuntsman.com by clicking on the Property Search. You'll be glad you did as it's updated and current throughout the day directly from the local MLS.

The Mortgage Bankers Association expects the interest rate on a 30-year fixed-rate mortgage to jump from 6.2 percent to 6.5 percent by the end of the third quarter, as investors lose hope that the Federal Reserve will slash short-term rates any time soon.

The MBA Chief Economist

expects existing-home price appreciation to slow "significantly" over the next three years, and that median prices should remain relatively flat for new and existing homes. Price gains for both types of housing are expected to be limited to about 2 percent in 2008 and 2009.

Inman News, Jan. 17,2007

Appreciation Up, Sales Volume Down

Buyers and sellers really have the best of both worlds right now, but buyers are having a difficult time seeing that in the midst of bubble talk reports. Dataquick, in its usual way, combines condo stats with single family stats, but the story is there. Find MLS search at here.

A Stabilizing Market for 2007

Try to believe it...the market may actually be stabilizing and that is the prediction in more than one quarter as the slowdown in real estate is said to be affecting the national economy. Local market snapshots indicate a pickup in sales in certain areas. For 2007, sellers who are serious sellers should get their properties sold by pricing them right, so that buyers believe it's the right time to buy.

The Real Estate Market: It Depends on What You're Talking About

A 3rd quarter report based on a federal survey of Fannie Mae and Freddie Mac mortgages basically reflects several scenarios which have all been tackled in the media--the market is up, down, way down, or still there. Depending on which scenario you're looking for, you can find one (but various analyses of the West Coast bear this out repeatedly):

Without question the most impressively documented scenario is that many large metropolitan markets -- including some that experienced high gains during the boom years -- are still hanging in there and registering net appreciation, albeit at lower rates.

Examples include Fort Lauderdale (10.3 percent annualized quarterly gain), Naples, Fla. (10.8 percent), Los Angeles (7.4 percent), metropolitan Washington (3 percent), New York City and its northern New Jersey suburbs (3 percent), Seattle (14.8 percent), Miami-Miami Beach (14.7 percent), Chicago (5.2 percent), Orlando, Fla. (6.5 percent) and San Antonio (9.9 percent).

Click this article for a look at all scenarios.