What Will Homes Cost in California for 2014?





2014 CA Outlook Chart

Every year about this time, the California Association of REALTORS holds its annual conference, this year at the Long Beach Convention Center. It also marks the time at which the housing predictions for the next year are made.  As with most predictions, it's not etched in real estate concrete, but may be a good indicator based on the current year.

At the right is the nitty-gritty slide (no. 114 out of 127) which is arrived at in the presentation by CAR's chief economist after her complete review of the entire state and it's housing market indicators.  So where are we possibly, for next year?  Possibly a 6% increase in the median price of a single family home, far less than the current 2013 increase of 28%. 

What are factors impacting buyers and sellers? Interest rates--they have been going up. Lending guidelines--they have been changing and more is to come on January 1, 2014.  Disposable income for 2014 may increase, the CA unemployment rate may decrease to under 9%, while population growth may remain steady.  Distressed sales have increased with more standard sales in the majority in many areas (80% of sales).  A further complication has been the short inventory supply due to little new construction in several years (and never reaching the level last seen in 1988), and many sellers being underwater, with 1-2 months inventory in many areas including some parts of Long Beach.  The 6 months supply of inventory norm has not been seen in a very long time, a situation that has generated multiple offers (highest in last 15 years) with cash buyers coming out the winner in an average of 30% in California--as the median price increases, cash buyers have slowed in 2013, however.

Income Needed As Rates Rise

While many sellers may breathe easier as equity comes back into their market value, both buyers and sellers will have to deal with rising interest rates, and the results of current governmental agency discussions about loan qualifications.  Did you know that recently a proposal was put on the table that only people with 30% down payment could get the best interest rates?  This type of strain has made FHA the loan choice of over 60% of California buyers, increasing the reliance on government lending instead of an independent market place.

Sellers are now coming to a better time and place to sell, but unrealistic prices must be curbed--cash buyers do sometimes obtain appraisals to make sure they're not overpaying.  Buyers must be more prepared than ever to search out financing in advance, save money for down payment, reduce debt, and take care of their credit scores if they really really want to buy (what's so fun about paying $2500/month in rent with no tax deduction?)

For more information, go to www.juliahuntsman.com if you want to request a no obligation summary of what your home is worth!

What the Government Shutdown Might Mean for Real Estate in Southern California

CLOSED

As of last weekend, HUD (U.S. Dept. of Housing and Urban Development) reversed its original position about loans and stated that applications for all government-backed mortgages will continue to be processed during a government shutdown, which for many California buyers means FHA loans.

But, though the loan may be processed, getting the FHA loan funded (meaning you're up to the last few days of your escrow period and ready to close) is another story.  To close an FHA loan, an IRS tax transcript (the 4506-T Form which is filed with the IRS to get your income tax information) and the Social Security Administration's verification for that buyer are needed.  The IRS is currently closed and Social Security is closed to new business.  The two closures will not affect anyone who received these items prior to the shutdown date, but to open a new loan and get it funded and closed will probably not happen during the shutdown. (NOTE: A particular FHA lender source may be willing to not require the 4506-T form itself, and be willing to close a loan without it, but not common.)  And, FHA may not have the ability to continue any loans beyond another two months in the future if the shutdown continues.  But we're not there yet.

But with FHA currently providing the majority (approximately 80%) of California buyers with their home purchase loans, there will be probably an impact to at least some parts of the California and Long Beach area real estate market, and certainly to many prospective California buyers.

Fannie Mae and Freddie Mac loans will not be affected because they are funded by fees from lenders, not by government appropriations.  Freddie Mac stated it will not require the 4506-T Form to be processed by the IRS, but that the information be provided as part of the loan.

VA loans are supposed to continue at this point, but there could be some delays with those loans.

While "economists" believe that there will be minimal impact overall, this shutdown could go on into the upcoming debt ceiling issue, and as certain legislators continue to balk, so probably the rate of home purchases.  "Research firm Capital Economics predicted that the effect of a shutdown would be minimal provided that it doesn’t presage a fight over the upcoming debt ceiling increase."  See more at DSNews .

What Does Homeowner Insurance Cover, or Not Cover?

What does your homeowners insurance cover? 

The short answer is: A basic homeowners insurance policy (called HO-1 in insurance lingo) covers your home and possessions if they’re damaged or destroyed by these things:

Fire
Lightning
Windstorm (unless you live in a hurricane zone)
Hail (not available everywhere)
Explosion
Riots
Civil commotion
Aircraft (and things falling from aircraft)
Vehicles (and things thrown from vehicles)
Smoke
Vandalism (although some policies exclude this)
Malicious mischief
Theft
Volcanic eruption.

But many states don’t allow this basic policy to be sold. Instead, you have to buy an upgraded policy that covers more perils.

Upgraded Homeowners Insurance

That upgraded policy (called HO-2) adds protection to your home and possessions from even more perils. You get protection from everything on the HO-1 list (above) plus:

New California Bill Will Cost Property Owners Addtional Recording Fees

Since the downfall in the economy and the upswing in distressed property sales, sellers of short sale properties were not taxed by the federal government on what was called "unearned income".  Thus, if the loan balance before the sale was $200,000, but the owner could only sell at $150,000 as the current market value, there was no IRS tax on the difference and mortgage debt was forgiven.  California's Franchise Tax Board followed the IRS provision, so there was no California tax either.

But that state provision was due to expire and the bill to renew that provision, SB 30, has been up for vote by the Assembly and the Senate. However, a surprise amendment last May added Senate Bill 391 (California Homes and Jobs Act of 2013), and now is tied to the first bill and which includes a provision that requires a $75.00 recording tax to all recorded documents, which could be as many as 28 different types of documents, on a property.  The idea behind SB 391 is to fund a low-income housing trust with these $75 fees.  Bear in mind, not only the California Association of Realtors objected to this, but also the county recorders, assessors and title industry opposed this bill.

If the current impasse isn't overcome in the next few days, homeowners who sold a short sale this year might end up with a big tax bill.

Some people think that only "irresponsible" people are involved with short sales (really? what about if you just lost value in your home because the market went down?), however as one person recently pointed out:  "Why should just one subset of society, those that happen to need to record a document, be on the hook for funding subsidized housing?"  So true, jskdn, who wrote to The Sacramento Bee. 

27388.1.

 (a) (1) Commencing January 1, 2014, and except as provided in paragraph (2), in addition to any other recording fees specified in this code, a fee of seventy-five dollars ($75) shall be paid at the time of recording of every real estate instrument, paper, or notice required or permitted by law to be recorded except those expressly exempted from payment of recording fees. “Real estate instrument, paper, or notice” means a document relating to real property, including, but not limited to, the following: deed, grant deed, trustee’s deed, deed of trust, reconveyance, quit claim deed, fictitious deed of trust, assignment of deed of trust, request for notice of default, abstract of judgment, subordination agreement, declaration of homestead, abandonment of homestead, notice of default, release or discharge, easement, notice of trustee sale, notice of completion, UCC financing statement, mechanic’s lien, maps, and covenants, conditions, and restrictions.

Don't panic yet, home sales are excluded (normally there's about two recorded documents on a home sale).  But to return to the low-income housing trust fund, Dan Walter of The Sacramento Bee states: "One of the rare times the supermajority functioned was last spring when the Senate voted 27-0 for Senate Bill 391, which would impose fees on real estate transaction documents to raise money for low-income housing, at least $300 million a year."   This is another great example of how real estate is seen as the mother's milk for every funding idea/tax/fee that comes along.  $300 million to be gained from recording fees?  I wish there was an explanation for that projected amount of income. 

Did someone count 4,000,000 documents recorded statewide last year?

Read more here: http://www.sacbee.com/2013/09/06/5711663/dan-walters-posion-pill-would.html#mi_rss=Dan%20Walters#storylink=cpy

Top Five Reasons Investors Bought

What do you think of when you hear the word "investor"?  A large entity such as a corporation or company where individual names and identities are not easily known or seen? But according to a recent California survey, three-fourths of all investors are "mom and pop" type of investors who own from 1 to 10 properties, and the preferred type of property purchase is most often a single family home. Low yields on alternative investments is one reason for the demand for real estate investments.  These investors are looking for profit potential, as the median purchase price was under $300,000, which was the most frequent reason, with location being the least frequent reason for buying.  (Often, when first time investors say they want to buy an investment property, they frequently object to the location.  There might be a good reason for doing so, but selecting a location based on personal identification with a certain area is perhaps a sign the "investor" is looking for a place to move into some day.)

The five top reasons for an investor purchase in this survey were:
1.  Profit potential
2.  Good price
3.  Low interest rates
4.  Personal
5.  Location

The majority of these investors were interested in long-term potential of about six years, and over two-thirds in the survey rented out their properties after purchase.  About 25% of investors fixed and re-sold their purchases for profit, or "flipped" them, a phenomenon seen frequently in the less expensive housing markets in some cities.

The top countries of origin for foreign investors--27% of the total--were China, India and Mexico.  For all investors, the median rate of return was about 14% and the majority self-managed their properties.

Most investors found their properties through the MLS, so for an opportunity to find a property by working with a local real estate agent who knows the local market and can help you "pencil out" your investment figures, contact me via phone or e-mail! 562-896-2609.

Long Beach Area Sellers Have An Optimal Time to Move, Now

 

For the first time in years, sellers have an optimal time to sell, because more people are looking for a better place to live.  Interest rates are still lower, and prices are too (yet rising in areas as well).  Rising prices in some areas have lifted some sellers out of negative equity, or very close to it, so that they now may feel they can move on. 

 

It's an optimal time, take advantage of it now.

 

New Listing: Downtown Long Beach Condo in The Sovereign.

 Here is a vintage one-bedroom/one-bath corner unit in downtown Long Beach, in the vintage 1920's building, The Sovereign.

This is a fifth floor corner unit, not on the market for several years. This is a lovely and interesting building from an earlier era in Long Beach--it has a beautiful lobby and a top floor atrium with ocean views.

Priced under $130,000, with HOA dues of about $301/month.  Occupant must find their own parking, but their are nearby reasonably priced options.  This is ideal for an investor buyer, please call for more information.


For more information, see this link:

http://mrmlsmatrix.com/Matrix/Listings/ZHUNTJUL246/MyResiListings.mls

Julia Huntsman
REALTOR/Broker
#01188996
562-896-2609

NOTE:  Property is sold.

California County Tax Assessors Are Sending Notices About Property Tax Increases

Do you know about the increase of impending property tax assessments?

A precedent setting California court case allows county assessors to recapture tax cuts as real estate values recover their losses.

Citing a practice called “value restoration” or recapture”, County Assessor's offices throughout the state are sending out notices this week.

County Assessor's offices say they can raise taxes by more than Proposition 13's two percent limit when home prices rebound for properties that had prior assessment reduction; plus two percent each  year for every year they‘ve owned the property.

Many homeowners who got tax cuts during the recession will see their taxable values rise as much as seventeen percent this year.

The California Supreme Court affirmed assessors' right to do this after Seal Beach lawyer Robert Pool lost his court fight to block the Los Angeles County Assessor (and all California assessors) from recapturing lost assessment values after the 1990s housing market crash.

This week 31,803 Orange County homeowners face that same shock via a “blue notice” in the mail.

The Assessor's Office must notify property owners by mail by July 20th. 

Property owners have until Sept. 16, 2013 to file an appeal with the Clerk of the Board of Supervisors. 

C.A.R. Mid-Year Market-Update July 2013

Here is the California Association of REALTORS mid-year market update, it's quick and easy to follow, by analyst Leslie Appleton-Young. While one projection by CAR anticipates a slowing in home price increases, this presentation also points up the continuing lack of home inventory. With the increase in prices since one year ago, investors are having a harder time finding bargains, and we are seeing a majority of sales as "standard" transactions, with short sales being 25% or less of the market statewide.  Where will the home increase be in 2014? With supply and demand coming to closer balance (inventory increased about 2 percent between April and May), CAR's projection is a four percent annual increase in 2014. 

This is a good quick summary and easy to follow:

New Fannie Mae and Freddie Mac Loan Modification Guidelines for July 1, 2013

If you're still an "underwater" homeowner of a single family residence, a condominium, a second

Did you buy when the market was high?

home, or an investment property with a mortgage owned or guaranteed by Fannie Mae or Freddie Mac, you might be eligible for sweeping new changes as of July 1, 2013, known as the "Streamlined Modification Initiative."

Past programs for helping borrowers modify their loans met with less success than hoped for, and Fannie Mae/Freddie Mac are now offering eligible borrowers the opportunity for less documentation and document collection which also removes administrative issues for the lender.  Under this new program, borrowers are not required to document their hardship or financial situations.

This program ends August 1, 2015, so it's basically in effect for 2 years.

What are the borrower eligibility requirements?

• The loan must be owned or guaranteed by Fannie Mae or Freddie Mac.
• Homeowners must be 90 days to 24 months delinquent.
• There must be a first-lien mortgage that is at least 12 months old with a loan-to-value ratio equal to or greater than 80 percent.
• Loans that have been modified at least two times previously are not eligible.
• The borrower must participate in a trial payment plan period of 3 months.

Loan servicers, i.e, Bank of America, Wells Fargo, Chase, or whomever handles your loan payments, will be required to send a Streamlined Modification Solicitation Offer to borrowers who are at least 90 days delinquent and meet the initiative’s eligibility requirements.  The HAMP program (Home Affordable Modification Program) is still available to borrowers, and may offer more favorable payment options to the borrower, however it also requires borrowers to meet certain guidelines and submit full documentation. 

If you are considering selling, and are not yet 90 days delinquent on your loan, you should carefully consider your plan of action.  The proposed monthly payment may or may not be satisfactory to you under this Streamline program, and as a seller, you would ideally have a very clear picture in your mind as to the direction you are going to take.  Borrowers should be aware that "strategic defaulters" will be screened for in advance, so if someone is purposely defaulting in order to obtain this program, Fannie Mae and Freddie Mac will be on the lookout for that.

Interestingly, some property owners are not aware of current selling prices in their local market, so obtaining a good market valuation on your property should be a first priority. If your property is a candidate for a non-short sale transaction, you could move on. If on the other hand, you would rather stay put and not sell if you obtained a better mortgage payment, you should find that out as soon as possible to avoid being an unmotivated seller at this time.

For more details about this program, or to find out if you have a Fannie or Freddie mortgage, please contact me via e-mail or phone, I will welcome the opportunity to help you. I serve the Long Beach, Lakewood, Cerritos, Cypress, Seal Beach, Los Alamitos, and San Pedro areas, including adjacent cities such as Huntington Beach.

In Long Beach, What Can You Buy Under $300,000?

There have been several articles talking about this price range in the last few years since the market downturn.  With both limited inventory, and an increase in the real estate market, there is a declining number of single family homes available under $300,000 in Long Beach, California.  There are 47 listings as of July 1 in this category, in various areas of Long Beach.  One of the best values in this range is really Windward Village, a secure planned unit development (PUD) park which offers open space and recreational facilities. 



Windward Village Home--Click on photo for info 

As of July 1, 2013 (check for any updated information) the home in the photo is listed in the MLS for $239,000, and at the listed 1600 sq. ft. for 2 bedrooms and 2 baths, is an unbelievable value. 

Windward Village homes may qualify for FHA, VA or conventional financing, and because it's a PUD, the new owner owns the land too.  Individual lot sizes vary from 2500 sq. ft to 3800 sq.ft., equal to or more than lot sizes in Belmont Shore.  While older models feature the carport style, newer models offer closed door garage parking.


Community Center

The complex has a 24-hour guard entry where all entrants are checked in by staff; there is a community center for activities and gatherings, an outdoor pool, grassy green areas, outdoor play areas for children, basketball  and tennis courts, car wash center, guest parking, and a putting green. For the unit shown above, the HOA dues are only $188/month.  Contrast that figure to the average condominium HOA fee of $250/month elsewhere in Long Beach, without all the recreational facilities.
Because these are manufactured home purchases, there are some differences from a regular single family home process which are normal to this type of purchase, such as the foundation system. But because it is a PUD and the owner owns their own land, there is absolutely no space rent, a monthly cost of $900 or more per month in similar complexes.

The common areas are very well kept with well-maintained and patrolled asphalt roads, and has the feel of a small single family residential community. It's a great opportunity while prices are still low, and nowhere else in Long Beach can you buy your own private home and have such advantages.

Please contact me about this complex!

Long Beach Summer 2013 Schedule for Concerts in the Park

Stearns Park





Did you know that Long Beach parks rate as the 22nd best among the 50 largest cities in the United States?  Park size and access are among the reasons for such a favorable review.  According to the Trust for Public Land, 78 percent of Long Beach residents live with a 10-minute walk of a park (the national average is 64 percent). Long Beach spends more ($125) than the national average per resident.  The city has more than 3,100 acres for recreation, equivalent to 9.7 percent of the city's 50 square miles.


Stearns Park, one of many LB parks

See below for this summer's Concert in the Park schedule, offered by one of the few cities that has its own municipal band led by Larry Curtis:

Theme: Star Spangled Special
Tuesday, July 2:	Whaley Park
Wednesday, July 3:	Los Cerritos Park
Thursday, July 4:	Marine Stadium
Friday, July 5:	El Dorado Park West
Sounds of Cinema
Tuesday, July 9:	Bluff Park
Wednesday, July 10:	Los Cerritos Park
Thursday, July 11:	Marine Stadium
Friday, July 12:	El Dorado Park West
Cartoon Musical Madness
Tuesday, July 16:	Bluff Park
Wednesday, July 17:	Los Cerritos Park
Thursday, July 18:	Marine Stadium
Friday, July 19:	El Dorado Park West
The Voices
Tuesday, July 23:	Bluff Park
Wednesday, July 24:	Los Cerritos Park
Thursday, July 25:	Marine Stadium
Friday, July 26:	El Dorado Park West
Swing is the Thing
Wednesday, July 31:	Los Cerritos Park
Thursday, August 1:	Marine Stadium
Friday, August 2:	El Dorado Park West

See more at  http://www.longbeach.gov/park/recreation/lb_municipal_band.asp

Checking Your Credit Report is Important for Buying Long Beach Real Estate

According to DS News, 22% of Americans have never checked their credit report, according to Findlaw.com survey conducted in March, with about 1,000 participants.

Unfortunately, there is always potential for errors and negative information to be entered onto your credit report. And even though credit reports and scores as they currently exist came into usage in very recent history, after the economic downturn in the 1990s, they now have a major influence in our lives.

Obtaining a mortgage is one of the best known times when credit scores are reviewed, but also employers check credit scores to evaluate job candidates, insurance companies evaluate prospective insureds, and auto loan makers also pull credit.  I was once in the position of paying all cash for an automobile with a guaranteed check, yet the auto dealer still consulted my credit score online before finalizing the deal to make sure my overall profile fit who I said I was--they didn't want another "buyer" driving a new car off the lot on a phony check, never to be found again.

Protecting your credit, and your credit cards, may take additional work.  You may be at risk if you pay restaurant bills--where you have to give up your card momentarily while it's taken away out of your sight by the waiter for processing--and it's out of your hands.  It's an opportunity for a dishonest person to write down your card account number and use it later.  I rarely ever have had such problems to worry about, but this happened to me recently when I discovered my account number had been used by someone else to establish an account for, guess what, checking their credit at an Equifax site and I was billed a small amount monthly.  It went on for some time before I caught it (another reason to balance your account every month) and fortunately I got my money reimbursed.  But of course I had to cancel that card, write checks for a few days, and wait for a new card to be issued.  It was a time in which I was reminded that this is increasingly a plastic card world.  Writing checks is less common, and in fact there are some circumstances where checks or cash are not accepted and merchants want payment only by your credit card.  So keeping your credit in good shape is so important.

My bank offers a service where I now have credit card alerts sent to my email so that I can spot a problem right away--if you have Smartphone or mobile tablet, you don't have to wait until you get to a desktop computer to check your email or messages. It's working great. 

Here is the entire article at DS News.

Update to HAFA Short Sale Program in 2013

The "Home Affordable Foreclosure Alternative" (HAFA) program is a program for distressed homeowners to sell their homes and avoid foreclosure.

This program applies only to participating lenders who agreed to participate in the government's "Home Affordable Modification Program" (HAMP). There are currently about 100 participating lenders, including Chase, Wells Fargo, Bank of America. On February 1, certain rules were changed for these lenders (who are not Freddie Mac, Fannie Mae, or FHA/VA lenders, which are excluded from this post), which simplified some of the steps.

One change now in effect is that the property is no longer required to be owner-occupied, in fact, it may be vacant or tenant-occupied, to be eligible for a HAFA short sale, and the tenant/borrower/non-borrower occupant may qualify for the $3,000 in relocation assistance. Payment to subordinate mortgage lienholders (do you have a 2nd mortgage?) has been increased to a maximum of $8500.

Borrowers are no longer required to successfully complete an initial trial loan period or be eligible for a HAMP loan modification in order to be eligible, and the borrower may apply directly for the HAFA program.

The hardship must be verified by the borrower's lender, with no convictions relating to mortgage fraud or real estate transaction within the past 10 years. A hardship means the borrower must show, among other things, they no longer have sufficient assets to make the mortgage payment (these are  not supposed to include retirement funds).

The current program cutoff date is December 31, 2013 for submission of request for a short sale, or request for approval of an executed sales contract, with conclusion of the transaction by September 30, 2014.

There are specific procedures and forms the borrower must cooperative with during the approval process, which includes about 12 steps including all borrower document submission and lender deadlines. Additional information may be requested depending on the particular loan investor on the borrower's loan.

For a more complete fact sheet on a HAFA short sale, please contact me and I will be happy to e-mail the information, plus links to informational sites.

Renting vs. Buying a Home in California Today

Each region has it's own market, and here are some interesting comparisons around California for buying vs. renting.

A prospective homebuyer needs to think about total costs and expenses of owning a home--these include the principal and interest on the monthly mortgage payment, home insurance, property taxes, home improvements and repairs. Don't forget--tax deductions on mortgage interest and property taxes are among the savings that you will benefit from, plus other tax deductions as allowed in the owner's particular situation. Renters are basically concerned with costs of monthly rent and renter's insurance.

Is owning for everyone? Perhaps not, depending on the individual's desire to maintain a property, long term financial abilities, and short term or long term job relocation factors, and the fact that in some areas, renting may be a lower monthly expense.  But when the long-term view is taken, owning a home offers long-term security and financial return over time.  Whether you rent or own, you're paying for the home, but when you rent, you're buying it for your landlord--is that really what you want?

Today's interest rates are still low, around 3.75% for a conventional loan under $417,000 and even lower  for FHA loans.  In today's buyer's market, we're hearing lots of complaints about buyer competition especially in lower price ranges.  While each local market varies, so far this year, housing inventory is up compared to 2011 and 2012, so buyers need to "hang in there" and not give up, because this is still one of the best cycles in which to become a homeowner!

Do you want a more detailed explanation of your rent vs. buy scenario? Please contact me for a buyer's estimate sheet, and for additional market report information, go to my Market Trends page.

Los Angeles County (South) and North O.C. Tell Interesting Stories Of Prices, Sales and Inventory

The latest market updates for April, 2013, are out for the south Los Angeles County and North Orange County cities--and here is a breakdown of stats for single family homes in local cities (all comparisons are a one-month comparison of April 2013 to April 2012, not on an annual basis):

• Long Beach  -- New listings are up 4% for April 2013; the median sales price has increased 25% to $440,500 (citywide figures); the average sales price is $495,000, an increase of 27%. Listing inventory has decreased by 62.6%, with 1.4 months of inventory at the end of April.
• Cerritos -- New listings are up 25% for April 2013; the median sales price has increased 8% to $573,000 (citywide figures); the average sales price is $615,758, an increase of 14%. Listing inventory has decreased by 78%, with 1 month of inventory at the end of April.
• Lakewood -- New listings are up 8.2% for April 2013; the median sales price has increased 12% to $405,000 (citywide figures); the average sales price is $413,000, an increase of 14%. Listing inventory has decreased by 76%, with .8 months of inventory at the end of April.
• Signal Hill -- New listings are down 42% for April 2013; the median sales price has increased 18% to $594,750 (citywide figures); the average sales price is $529,875, an increase of 8.8%. Listing inventory has decreased by 77%, with 1.8 months of inventory at the end of April.

The general picture is: prices have gone up, and inventory for all properties (houses and condos) is down compared to last year this time, with the lone exception of Avalon (Catalina Island), where inventory is actually up 17% but the median market price is down 33%.   Areas with the greatest increase in median market price tended to be lower priced areas in the past, and are now attracting buyer attention, Bell Gardens and Stanton being two examples.  Los Alamitos (including Rossmoor area) actually decreased by about 6% in median price.  Long Beach stands out at the top of the list of all area cities for the greatest number of closed sales in April at 324 and the most new listings, followed by Irvine at 264 closed sales, then by Anaheim and Huntington Beach.  Of the 68 cities included in the geographic area, only 4 are showing a decrease in median price!

Do you want to know what's going on in your zip code? It's sometimes a different picture than the surrounding city. Get the picture now by giving me a call or e-mailing me, so that you can stay up with your market.

Average Selling Price for a House in Long Beach CA in 1Q 2013

For the first quarter of 2013 (January through March) in Long Beach, the MLS shows 503 single family home sales.

The sales price ranged from $98,900 (a 432 sq.ft bank-owned house) in North Long Beach to a sale for $3.8 million for a 3600+ sq.ft house on The Peninsula.  The average selling price in Long Beach for this time period was $443,772 for a 3 bedroom, 1.75 bath house between 1400-1500 sq. ft.  All cash purchases accounted for 122 of the total, or 24% of all houses sold.

• Of these homes, 18 out of the 503 houses sold for over $1,000,000 (a small percentage of all Long Beach houses), or 4%
• There were 364 houses selling under $500,000, or 72% of the total
• There were 265 houses selling under $400,000, or 53% of the total
• There were 121 houses selling between $501,000 and $999,999, or 24% of the total.

In other words, more than half of the selling activity took place at the price range under $400,000, and 88 of those purchases were by all-cash buyers, or 33% of the total number of purchases for houses sold under $400,000.  This means 72%, the vast majority, of the all-cash activity is in the lowest price range for the city. 

This is a paradise for certain sellers, and a big challenge for buyers, especially for the 1st time buyers and/or 2nd home buyers because under $400,000 is their most affordable market.  (And even though Long Beach is very competitive due to its location, some buyers are looking further south in San Diego area for lower prices.)

Cash buyers often attempt to buy at a much lower price, thinking the seller will be thrilled with them because the transaction does not require a lender or an appraisal, but often they come in very low, or much lower than what is attractive to the seller. So those offers don't always work, at least not at first. And are some sellers being unrealistic about their asking price? In some cases, yes, depending on other factors such as condition, upgrades, permitted square footage, and nearby comparables, but that is something to determine on a case-by-case basis.  Overall, the market trends in many Long Beach zip codes is going up by as much as 20% compared to this time last year.

A buyer's best protection is to be totally pre-approved with a solid pre-approval where the lender has not only their income and debt information, but their tax returns have been thoroughly reviewed as well (if possible, submitting to underwriting in advance can give additional assurance for a pre-approval).  I'm amazed at how often I hear from a hopeful property buyer who tells me they know they're well-qualified, "getting a loan will not be a problem."  If it's not a problem, do it now.  Buyers, sellers want to find out what a good loan source has to say about your loan qualifications or that your statement shows you have all the cash ready-- your own personal opinions simply will not carry much weight when you submit an offer. It is essential to accomplish this step PRIOR to looking at properties so that the seller knows qualified buyers are viewing their home. 

Please contact me for an estimate of your buying costs--I can help you with different down payment scenarios to show you what your monthly payment could be.

 

 

 

What Are Some of the California Tenant/Landlord Rules About Pets In HOAs?

If you live in a homeowner association in particular, questions may have come up about the presence (or not) of pets when leasing property:

California passed new pet laws effective in 2000 for homeowner association owners, allowing a minimum of one dog, cat, fish, or bird (simply speaking) per owner.  The homeowner association is allowed to set further rules concerning size, number of pets above one, and other rules including the presence of animals in the common area, or animal behaviors, as long as they don't conflict with state law.

So what does this mean for tenants who are renting in a homeowner association, because the pet laws for owners do not necessarily apply towards tenants, the exception to many of the following rules being if the tenant is disabled and requires a certain service animal under "reasonable accommodation" rules.

• A landlord may ban pets in a lease; the law allowing pets in an HOA concerns owners, not their tenants.
• A landlord can restrict breeds or types of pets.
• A larger deposit may be charged if a pet is allowed, but the total deposit must comply with California's rules about maximum security deposits.
• If allowed in a homeowner association, the pet provisions will apply concerning any rules such as cleaning up pet waste in the common area, being leashed in the common area, or areas where pets may be allowed or prohibited such as pools or other recreation areas.
• If, for example, a dog bites or harms the postal worker who is on the property delivering mail, the dog's owner will be responsible for his/her pet, and the property owner could also have some responsibility depending on the circumstances involved.
• A landlord/tenant lease can require the tenant to obtain renter's insurance to cover pets on the premises.

For more detailed information, please contact me via phone or e-mail to be sent a more detailed summary prepared through California Association of Realtors about landlord/tenant pet laws and how they might affect you, whether you are or will be a landlord, tenant, or someone who may want to know more about service animals in this situation.

Tighter Lending Standards Are Making Home Sales More Difficult

Long Beach housing inventory/end of 2012

Although much is being said about the housing recovery, the fact is that mortgage loans are much tougher to get than in years past.

• It's just recently come out that some lenders are loosening up the requirement for equity (30% or more) for owners wanting to keep their current homes, but then, a lot of property owners just getting into the market didn't know about that rule in the first place.  It's one of the many things making it difficult for people to move on, because even if they otherwise qualify for a new mortgage, their property doesn't. 
• Another issue is FICO scores.  Higher than ever scores are being demanded of the "average" buyer and this has impacted the market to the extent that, per Laurie Maggiano of the U.S. Treasury's Homeowner Preservation Office, between 2007 and 2012, new home purchases dropped 30% for those with a FICO score over 780.  In that same period of time, new home sales dropped 90% for borrowers with a FICO score between 620 and 680. "Where are these folks supposed to live?" asked Maggiano.  (At one time, a FICO score of 700 or higher was considered very good for a borrower.)
• And then again, specific lenders have their own overlay of loan requirements.  Fannie Mae and Freddie Mac may accept FICO credit scores as low as 620, and FHA will approve applications with scores as low as 580, yet investors for the loans may require FICOs at least 60 points

Home Projects in Los Angeles area: Cost vs. Value



10 Remodel Projects



It's that time of year when homeowners might be thinking of making some improvements.  Or, if you're buying a home this year, you'd like to know what your best improvement might be to fix up a new home.

Remodeling Magazine 2013 report breaks down project costs and returns by geographic area.

For the Los Angeles area, a steel entry door replacement offers one of the highest returns on cost--not everyone wants one for their front door, however.  Perhaps that won't fit in with the local guidelines if you live in a historic district, but you definitely would want one if you have an attached garage with a direct entry into the house for local fire code reasons.

Outdoor decks and garage door replacements are the next high value return projects. Garage doors especially when the garage is attached to the house affect the appearance of your home greatly.

Vinyl or wood window replacements are high on the list of return as well, especially when offering dual-paned inserts.

Interestingly, bathroom remodels and bathroom additions are between 50% and 65% return on value, yet when shopping for a home, updated bathrooms and kitchens are quite significant for most buyers.

All 2013 projects have increased in return on value since 2011, click here for the entire list of projects.

Long Beach is Among the Top 10 Markets in the Country

Homes Along Alamitos Bay, Long Beach

The top 10 markets in the country right now are ranked as follows, according to Michael Sklarz, principal of Collateral Analytics and contributing author to Home Value Forecast :

Top Markets

1. Boston-Quincy, Massachusetts
2. Cambridge-Newton-Framingham, Massachusetts
3. Indianapolis-Carmel, Indiana
4. Santa Ana-Anaheim-Irvine, California
5. Oxnard-Thousand Oaks-Ventura, California
6. Raleigh-Cary, North Carolina
7. Los Angeles-Long Beach-Glendale, California
8. Wichita, Kansas
9. Colorado Springs, Colorado
10. San Antonio-New Braunfels, Texas

The high end markets in the Bay Area and around Los Angeles are showing stronger price growth compared to lower priced markets. The buyer profile shows lower loan-to-value mortgages, and are affected less by the current tight underwriting circumstances.   Manhattan Beach has seen prices rise to all-time highs; Los Angeles County may be in the early stages of an upward price cycle.  These markets were included in the top 10  "based on factors such as sales/listing activity and prices, months of remaining inventory (MRI), days on market (DOM), sold-to-list price ratio, and foreclosure and REO activity."

Is this a permanent situation? A company called Radar Logic says that the current rise in prices is unsustainable, and that the entry of so many investors with all-cash may actually be dampening growth, and that this situation will not last with even growth into the future for some time to come.  Diminishing inventories have helped fuel sudden price growth, and "Corporate investors were most active during November in hard-hit markets. In fact, half of all corporate purchases took place in just five markets-ones considered especially affected by the housing crisis. Those markets include Miami, Los Angeles, Phoenix, Atlanta, and Las Vegas," areas where investors paid 25% more in November, 2012 than the same time the previous year.

How Much Can Be Saved With a 15-Year Mortgage Payment?

15 year loan vs. 30 year loan payments

A 15-year loan mortgage payment is not what all buyers can afford, but lower rates are making them very attractive for those consumers who have the ability to make the higher payments.

The 15-year mortgage accounted for nearly a third of all refinanced loans in the first 7 months of 2012, compared to 2007 when they made up just 8.5%.   And the California Association of Realtors reports that "statistics from the Mortgage Bankers Association show that a 15-year loan accounted for 23 percent of refinancing applications in November of last year."

Not only are the long term interest savings for a new purchase evident in the chart to the right, some owners could also actually reduce their current 30-year payment depending on when they took out their existing mortgage:

". . . a couple who signed up for a 30-year $300,000 mortgage in January 2004 with a 5.75% fixed rate would have a roughly $1,751 monthly payment. By refinancing the remaining balance of about $255,828 into a 15-year fixed rate loan at 2.81%, the new monthly payment would be slightly lower at almost $1,744."



Another advantage is that equity is built into the home faster with a short term loan.  Don't miss the opportunity to take advantage of today's lower interest rates if you possibly can!



Are You a California Owner of A Timeshare Property? Beware of Fraud

Timeshares . . . can be a flexible vacation option for many people.  It's a form of property ownership shared with other owners, usually for resort condominiums and vacation home purposes, and can often be utilized in various states and even countries, and offer cheaper accommodations than staying in a hotel or B&B for a week.  The downside is, timeshare ownership may be tough to sell in a down market; there just isn't a huge demand for it when money is tight and/or the market values have declined.

The California Department of Real Estate has just issued a warning and consumer alert concerning the latest wire transfer fraud schemes being perpetrated on timeshare owners. 

Beware of websites, or any other marketers, promising and to buy or help you sell or rent a timeshare, after an upfront fee is paid.  Scammers are requesting payment by money order, wire transfer, bank cashier's check, or upfront cash by the victim, after which they disappear and no further sale or rental of the timeshare takes place.  Vacation timeshares are popular in California, Hawaii and Florida, but properties owned in Mexico are popular targets right now, so avoid dealing with telephone calls or e-mails.

Do not fall for something that sounds "too good to be true", and the DRE advises the owner to contact the timeshare resort developer concerning the communications he/she may be receiving.  The DRE states that amounts wired by gullible owners range from $3250 to $85,000.

Beware of any requests for upfront money to be wired to anyone's account for work not yet done!

Here is more information about who to contact and what you can do if you have been scammed (i.e., the California Attorney General; local district attorney and law enforcement; FTC; FBI, and others.

And, please be aware that in California, proper licensure for upfront fee payment must be obtained.

Please don't let yourself be taken in by fraudulent schemes.

Buying or Renting--What's Best for You?

What should buyers be considering BEFORE they buy?  Looking on the internet gets people into the initial stage of exposure, before they even call a REALTOR.   Most people think the property viewing stage is fun, both on the internet and in person, and it should be enjoyable.  But what about the advance homework?  Internet photos and marketing can get you hooked, but it can also be a nervous, even fearful time, coming to the decision to submit an offer when you're new to the process. Even if you're a repeat buyer, buyer's remorse or indecision will have far less impact if you think over some things in advance, and consider now what your fears may be (it's not unusual to have a few).

Sticker Shock:  Renting might be cheaper than owning -- do you have a mortgage pre-approval with estimated costs before you go out and look?

Home Maintenance: Are you prepared to spend time on painting, fixing leaks (or hiring someone), mowing a lawn, saving up for a new roof? Do you know how much it will cost to heat that pool every month--or just keep it clean? And then there's annual insurance premiums.  Just some of the things to think about.

Have you checked out all utility bill costs for a house vs. your one-bedroom apartment? It would be a smart thing to do now. 

Being a Buyer In An All-Cash Competition

I hear from buyers who put in offer after offer, but don't get the house because of losing out to the all-cash buyer or mostly cash buyer. 

What does such a buyer need to do?  First of all, be prepared to be persistent, and persevere. Next, be totally pre-approved with a good lender.  Know the difference between the average "pre-qualification" letter and a good pre-approval letter from a reputable lender with a local track record and who can close on time, and not surprise you with last-minute underwriting issues that could have been avoided up front.  A good REALTOR can be of tremendous assistance here by pointing you in the right direction, not only with all buyer preparation for an offer, but with the local market. See how quickly you can close, and be willing to negotiate with the seller on some extra days to accommodate their moving date. Be prepared to provide all necessary documentation at the time you submit your offer, sellers want to know they can close the deal with motivated and qualified buyers, not get stuck putting the house back on the market again.

Keep in mind that cash buyers may not offer a seller the most attractive offer, and that a good price from a well-qualified buyer who is getting a loan may stand a very good chance with a motivated seller.  Keep your offer terms clear and simple, and bear in mind that trying to change your contract terms after acceptance by the seller could cause them to cancel and go with one of their backup offers.

Let the seller know you are very interested in their property as your next home (presumably you are), and tell them that when you make an offer.

Last, but not least, review the 10 items to the right to remind you about being a successful buyer! I'm experienced with both 1st time and repeat buyers and can help you position yourself towards success for your next purchase, contact me at 562-896-2609.

People Still Want to Own Their Own Home



The majority of adults still think buying a home is the best long-term investment, and see homeownership as an important long-term financial goal. The majority of renters want to own in the future, and over half of first-time homebuyers bought because they were tired of renting. Over 90 percent of adults surveyed were happy with their decision to buy!

 

 

Are you ready to prepare for buying? Contact me, a Long Beach Realtor with 18 years' experience.

California's Housing Market Projected to Rise in 2013

The good news is that prices are rising in California and the share of underwater mortgages is dropping, but the fact is that 29% of California mortgages are still "underwater" and 15% of them are still more than 125% loan-to-value.

Housing affordability is at records highs with California still over the 50% mark, meaning more than half of California households can afford to buy. Mortgage lending is very tight and "defensive", and appraisals are problematic (example: Many 20% down borrowers are finding their new property doesn't appraise as high as what they agreed to pay for it, but if they can put down another 10% of the purchase price, the lower loan-to-value erases the appraisal issue), and listing inventory is down by more than half compared to one year ago, so opportunity is scarcer.  In fact, in Los Angeles County, we have an average of 2 months of inventory--down from 8 months 2 years ago.  For December, Long Beach had 1.9 months of inventory. 

Why is this?  One reason is that many sellers are stuck where they are due to underwater value, or they are skeptical of moving on, and also because large amounts of foreclosed inventory is being bought up by investors in bulk and rented out.   Distressed sales volume is decreasing gradually, and in California statewide, equity sales are now about 64% of the market.  But expect short sales to stick around, they have been about 23-24% of the market since 2011.

2013 California Market Recovery

There is a pent-up housing demand, and job creation is one thing that can loosen up the housing market--the prediction is that new housing construction will begin again in California with the improvement in jobs. 

Each city and each area has it's own local real estate market, but tight inventory, short sales, and loan issues are very much a universal picture in the local, state and national areas.  Overall, the California market is predicted to increase in 2013.


And, another important fact:  According to a REALTOR survey, buyers are more optimistic than ever before about buying, in spite of all these other factors -- because housing affordability still makes this a great time to buy (something seller need to think about also).  Thanks to Leslie Appleton-Young, California Association of Realtors, and her report of January 11,2013.

For an agent very familiar with the Long Beach/Lakewood/Cerritos areas, please contact me at julia@juliahuntsman.com, or my phone!

Benefits of the New (and Extended) Tax Laws for 2013

Much has been written about the last-minute passage of the "fiscal cliff" issues by the federal government.  But, remember there are state level issues as well, some of which are still being worked on in California., specifically SB 30.

In 2007, the new law provided, for five years, incentives for sellers to accept short sales by, in many instances, forgiving taxes that would have been due for the forgiven debt amount.

Previously, when a lender forgave a portion of borrower debt, the forgiven amount was, in many instances, considered taxable income for the borrower.

This tax incentive for sellers to participate in short sales was just extended by Congress for another year, expiring January 1, 2014; however, California's exemption under the Mortgage Forgiveness Debt Relief Act expired at the end of 2012, and currently forgiven mortgage debt is taxable state income.  SB 30 (Calderon) has been introduced, and if and when passed by the California legislature, it will make California conform to federal law, and will be retroactive to January 1, 2013.

Not all debt is forgiven in every instance. Sellers should check with their tax consultant for exceptions. For example: Maximum amount that can be forgiven is $2,000,000. To be forgiven, the debt must have been used to buy, build or substantially improve their principal residence

Other housing-related provisions brought into effect with the new laws are:

• A 10% tax credit up to $500 for homeowners' energy improvements to an existing home, and is retroactive for 2012.
• Capital gains rates remain at 15% for incomes under $400,000 (individual) and $450,000 (joint); above those income levels gains will be taxed at 20%.  On sale of principal residence, the gains rate remains at $250,000 (individual) and $500,000 (joint).
• An 2011 expired tax deduction for mortgage insurance premiums (MIP and PMI on loans) has been restored and is retroactive through 2012.
• The new "Pease Limitations", per California Association of Realtors, are at "$300,000 for married taxpayers filing jointly and $250,000 for single taxpayers (i.e., a married couple with an AGI of $400,000 would be $100,000 over the threshold; the couple’s deductions would be reduced by $3,000 which is 3% of $100,000). No matter how high a taxpayer's AGI, the Pease reduction cannot exceed 20 percent of the amount of itemized deductions otherwise allowable for the year." These were named after Ohio Congressman Don Pease and were first enacted in 1990.
• The first $5 million dollars in individual estates and $10 million for family estates are now exempt from the estate tax. After that, the rate will be 40%, up from 35%. The exemption amounts are indexed for inflation.
• More at http://www.toptennewhomecommunities.com/blog/fiscal-cliff-bill-addresses-some-key-housing-issues/

Summary for Recent Real Estate Trends at end of 2012

Happy New Year for 2013 -- there are positive signs in the housing market, and we hope that they will continue!

Pending home sales continue to rise (Pending means those in escrow, scheduled to close), as shown by the Pending Homes Sales Index which rose nationally by 1.7%, and is at the highest level in the last two-and-one-half years.  Pending homes sales have risen consecutively for the last 19 months.
The November median price for a single family home in the Los Angeles Metropolitan Area rose to $327,840 from $269,440 in November, 2011!  The share of distressed sales (mostly REOs and short sales) for single family homes in the Los Angeles area has decreased to 35% from 46% one year ago.

The market is not determined just by whether the prices go up or down, there are a lot of other factors, including whether or not sellers are motivated to sell because that in turn depends on other economic factors which create the movement in housing.  Inventory is a big issue right now, no question of it.

How will the "fiscal cliff" measures affect real estate (still not resolved as of this moment)?  An unrenewed date for the Mortgage Debt Relief Act will require homeowners who went through short sales, loan modifications and other resolutions to pay taxes on forgiven debt. And will the mortgage interest tax deduction be reduced or removed? That will affect most homeowners in the country if that happens.

Will borrowers be subjected to new mortgage rules in 2013? The lending environment is already stringent, making it difficult even for some 20% down borrowers, so buyers should be aware if how conventional vs. FHA loan opportunities could work for them in the future. The topic of "qualified mortgage" rules is being examined in the coming year, and the big question is will it mean that all borrower for conventional loans be required to put down a minimum of 20%--that's a tough hill to climb.

There is some good news in the housing market now, but it will need economic support in a variety of ways to keep that going.

If you have a reason to sell, please contact me for a free evaluation of your home's value! Find properties at www.juliahuntsman.com for the latest area listings of all residential properties.

Increase of 24% in November Home Values in California Since 2011

November median prices for home sales in California have increased by double digits compared to one year ago, and the number of sales have also increased on a year-over-year basis as well.

Higher priced homes sold at increased numbers in November, even as sales declined overall in lower-priced areas due to fewer homes available for sale. In the Long Beach/Lakewood/Cerritos area, homes under the $500,000-$450,000 range in particular have sold very fast with multiple bids.  The California statewide median price for a single family detached home increased in November to $349,300, up from October's median of $341,370, an increase of 2.3%.  November's median price was up 24% from the November, 2011, and that is the biggest year-to-year increase since June, 2004!

Additionally, California's inventory for single family homes is down to 3.1 months overall (in some areas such as Riverside County, it's far less), and this is a decrease from 5 months of inventory one year ago.

Interest rates have dipped further to a November average of 3.35% for a fixed-rate 30-year mortgage; and it's taking fewer days to sell a home: an average of 37 days compared to 56 days one year ago.

Long Beach Housing Inventory Graph
 

In Los Angeles County, the median price is $337,000, an increase of 15% from one year ago, with the unsold inventory index at 2.9 months, down from 5.6 months one year ago (that means all existing unsold housing would sell at the current rate of sale within 2.9 months if no new listings come on the market--six months of inventory is more the number we should have.) And, this picture on inventory is not unique to Long Beach, it is typical of the local cities, county, state and national status of housing inventory.

As a side note, appraisals and buyer's lender financing issues have not away, which are topics for another post.
With the increase in prices, more homes are getting a little more equity--to find out what your values could possibly be, please find out your home's value from current and complete information directly from our Realtor MLS and tax inventory.  Even if you have no intention of selling in the near future, you may need market information about your property for a variety of reasons, such as re-financing, planning an estate, or just for your own information.

P.S. For a little Christmas spirit, see my photos of a few decorated houses at www.facebook.com/longbeachhomesandcondos -- and "like" me too.