Long Beach Single Family Houses in May Are in Demand

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

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

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?)

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

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

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

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

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.

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

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?