Long Beach Area Hot Sheet Data Shows Trends Towards More Listings

Every day the MLS shows how many new listings, new escrows, or new sales in a given period of time.  Even though the market is still in a low inventory mode, there has been a trend lately of more new listings coming on the market vs. how many sold in a given period of time, i.e., 24 hours up to 7 days.  So for Long Beach, Lakewood, Signal Hill areas, there seems to be a "catch up" going on.  And even though you can read every day of the week in the Los Angeles Times about the latest multi-million dollar celebrity residence sale, recent sales in this area don't share that profile.  Between July 10th and July 13th, 27 houses or condos sold in these 3 areas, ranging from $235,000 (house)  to $1,070,000 (condo). These are represented by vastly different neighborhoods, and seeming show the far ends of the distribution curve for houses and condos. 

MLS Area Sold Stats for 7/10-7/13-2015

As showing at the right, the average price for these properties in this time period is $505,963.
While condos and houses are not normally used to compare with each other, this data is for trend purposes,.


New listings on the market for the same time and areas are 46, ranging from $175,000, to $3,450,000.   Three properties went into escrow right away, and 43 remain as active listings, with the average listing price being $628,072.  Whether this shows an upward trend in sales price remains to be seen, as the $3,450,000 property has been previously listed multiple times and not yet sold.

MLS Area New Listing/Active Stats for 7/10-7/13-2015

For buyers, this is a positive trend; for sellers, it's really nothing to get the least big panicked over, because over stats for June for Long Beach, for example, clearly show that there is less than 3 months of inventory for houses and condos.  This low level, which has been going on for very long periods of time, does not reflect a normal level of inventory, which traditionally means about 6 months, or perhaps double our current inventory.  Sellers often think that multiple bids due to housing shortage is favorable for them, which can be quite true, but not if you don't already have a home to move into after you sell.

If you are thinking of buying or selling, whether you have a house, condo or multiple units, give me a call for an evaluation of your selling position.
Lic# 01188996

What Do Homesellers Really Want? Four Important Things

 Judge Judy, that icon of courtroom wisdom, says "Beauty fades, dumb is forever."

"The top four tasks that sellers want from their agent has remained consistent regardless of the housing market— sellers place the highest priority on: helping the seller market the home to potential buyers, help selling the home within a specific timeframe, help pricing the home competitively, and help finding a buyer for the home.  As many sellers use an agent that was recommended to them personally, it is not surprising that the reputation of the agent is the most important factor in choosing an agent to work with (36 percent). This is followed by the importance of the agent’s honesty and trustworthiness at 19 percent and the knowledge of the neighborhood at 15 percent."  Just a few more facts out of this 128 page report:  The typical age of the homeseller was 54, vs. 46 years in the 2009 report.  Married couples were 74% of the sellers, while single females accounted for 14% of sellers.

This report stems from an annual survey, the most recent being the  July 2014 127-question survey which was sent out by the National Association of REALTORS® with a response from 6,572 home buyers who had purchased a home during the prior year within one of the four U.S. regions.  There are many elements to this report - including agent efforts, problems buyers can have with financing, characteristics of homes sold and homes purchased, all of which is valuable profile information.


Ironically, buyers in this survey rated the top two valuable features of a real estate website as being 1) the photos of a property, and 2) detailed information about properties for sale.  Maps, tours and neighborhood information came next in importance, with videos of the property second to least most important.  I say ironically, because--and here is the unspoken elephant in the room not usually overtly addressed in these nice surveys--one of the most difficult aspects of selling for many sellers to grasp is the appearance and cosmetic condition of their home, yet most sellers always want their home marketed as much as possible.  A key factor in marketing a home is how it looks to the buyer, that means the buyer who is looking at those photographs.  The cereal box needs to get off the counter, the bed sheets need to hang evenly, because those photos are memorializing your home FOREVER on the internet.  And once the buyer gets inside the house, if only they could see past the catfood, and ignore how it smells on a 90 degree day, it would all be so much easier.  This is where the faded beauty and forever dumb enter the listing.  You would not buy a car like that off the showroom floor, not for full price.  And that's where your listing is, on the showroom floor.  But I digress.  Buyers are not always perfect either, but they do have a physical inspector and a 17-day contingency period, and a 21-day loan approval contingency period.

So to have it all come up roses, it pays to pay attention--on appearance, on disclosures, on price--so that the homeseller can get what he/she really wants -- a SOLD home. If you, however, are a seller who is marching to the right drumbeat on marketing your home, my sincere congratulations!

To find out competitive listings in your area, just go to www.juliahuntsman.com.
Lic# 01188996

You Don't Have to Have a New Home to Have a SmartHome

The best part of home innovation is that it has little to do with the infrastructure in your house. So, even older homes can take advantage of the home innovation products on the market today. From wireless dimmers, to a home battery, chatting with your appliances to a speaker light bulb, new products do not require remodels of your home, but things that can be used now!

Here’s a look at the products featured and discussed by members of the Coldwell Banker Home Innovation Panel from April 2015:

1. Caséta Wireless Dimmers by Lutron. Control your lights, shades and temperature from anywhere, whether you’re home or away. Caséta Wireless dimmers and switches install in minutes, work with numerous bulb types – including dimmable LEDs and CFLs, and bring the convenience of a connected home to your fingertips. “Smart lighting may be special now, but it’s going to be part of a smart home going forward,” says Matt Swatsky,of Lutron Electronics product management director.

2. Tesla. We’re all enamored with Tesla Motors. Who doesn’t want a car that drives like a dream, runs on electricity and gets new features every time the system is updated? Now, the company is offering the TeslaPowerwall. It’s a home battery that charges using electricity generated from solar panels, or when utility rates are low, and powers your home in the evening. It also fortifies your home against power outages by providing a backup electricity supply. Automated,compact and simple to install, Powerwall offers independence from the utility grid and the security of an emergency backup.

3. LG HomeChat. Start chatting with your home appliances on your mobile messenger. Heading to the store but not sure if you need milk or not, text your refrigerator and it will tell you. What is your refrigerator doing right now? Is your washer not working properly? Isn’t it a hassle to have to find your audio and play music every time you come home? HomeChat will take care of everything. “HomeChat is a digital personal assistant that you can text and tell the refrigerator to make more ice or download new wash cycles on your LG washing machine,” says John Taylor, vice president

of public affairs and communications for LG.

4. Sengled PULSE speaker bulb. Each intelligent bulb has a JBL multi-channel stereo wireless speaker hidden within. You can simply screw the bulb into your existing lamp socket and pair with your Sengled PulseMaster bulb; download and install the app on your smart devices. Instantly stream music and regulate the lighting. They also have lights that offer wireless security cameras, so cool! Because you don’t need to buy or adapt infrastructure, said Robin Foreman, vice president of marketing and business development, “You can make an impact on day one with just one bulb.

5. Nest. “We transform unloved home products,” said Ben Bixby of NEST. The company offers a thermostat that can program itself. Most people leave the house at one temperature and forget to change it. So, the Nest Learning Thermostat learns your schedule, programs itself and can be controlled from your phone. Teach it well and the Nest Thermostat can lower your heating

and cooling bills up to 20 percent.

Long Beach 4th of July

Looking for July 4th activities in Long Beach?  Here are all-day

events in Long Beach: on the Queen Mary, a bike parade, barbecue at the Aquarium, and a party at the Belmont Pier. 

All-American 4th of July
Queen Mary / 12-11pm
(562) 499-1771 / www.queenmary.com

Kids’ July 4th Bike Parade
Granada Avenue / 9:15am
http://justinrudd.com/bikeparade.html

Big Bang on the Bay - July 3
Boathouse / 5:30-10pm
(562) 493-1100 / www.boathouseonthebay.com

Late Night & BBQ
Aquarium of the Pacific / 5-10pm
(562) 590-3100 / www.aquariumofpacific.org

Party on the Pier - July 4-5
Belmont Veterans Memorial Pier / 12-10pm
(562) 477-6820 / www.alfredosbeachclub.com

• And for more summer events including movies and music, check out this page from the Port of Long Beach.

Please remember that fireworks are not allowed in the City of Long Beach, except as permitted for events. 

May 2015: Average Price of a Single Family Home in Long Beach CA: $590,000

The average price of a single family home in Long Beach at the end of May was $590,000, an increase from $427,000 in January of 2013. The overall market in California is characterized by fewer first-time homebuyers, lower homeowner turnover, static turnover in rentals. Employment levels are not expected to rise to pre-recession levels until 2019, even though California has regained all the jobs lost due to the 2008 recession. High level of speculation by investor buyers drove prices upward beyond the borrowing capacity of occupant buyers. California homeowners underwater in their home values is around the 9-10% level, and is another chunk of the population which is holding back movement in the market due to inability to move on.
Relocating baby boomers are anticipated to be a forward movement in selling and then buying -- however, that will vary greatly by geographic location in the state. According to an estate sale professional who works in the Long Beach area and is kept very busy with approximately three estate sales per week, it would seem many people in this area are not moving until the very end.
 Buy-and-hold owners may finally begin to let loose of their accumulated rental inventory (this has been a major impact in areas such as Riverside County), which hopefully will occur prior to a major rise in interest rates. (Interest rates bipped up twice yesterday.) This investor-held group is considered to be a massive shadow inventory which may not be released for another two-plus years, and at what price? For now, there is a gradual 3% annual increase in the number of new jobs, and a price-flattening trend compared to 2013 and 2014, all of which is helpful to bringing an upward trend in sales volume and inventory over time.

Who May Run and Check Your Credit in California?

Homebuyers seeking a purchase or refinance mortgage, or people wanting to buy appliances on payment plans or using their credit cards, are among those who will have their credit reports checked.  The federal Fair Credit Reporting Act requirements state who can look at or order your credit report.

Such people may include landlords, credit card issuers, car loan lenders, student loan lenders and insurance companies and government agencies.   However, at least ten states (California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont, and Washington) have passed laws prohibiting employers from pulling credit reports at all or restricting how and when employers may use them to make hiring or other job decisions.  According to the Fair Credit Reporting Act, access is restricted to businesses or government agencies that meet the permissible purpose requirements.

Concerning landlords:  If a landlord has a property managed or listed by a Realtor with a written contract in place giving the broker permission, the broker may be allowed to run the credit of a prospective tenant.  Or, the Realtor can also assist the property owner by helping the landlord find a source for running credit (about $25), with action performed and the report reviewed by the landlord.   The Realtor may be doing all other agreed functions for renting, but the credit report responsibility lies with the landlord if not otherwise expressly allowed for in the contract.  It would be a good idea for landlords and tenants alike to find out what should be of concern to a landlord.  Landlords can check rental history, accounts, debts, foreclosures and general credit worthiness.  For individuals who experienced getting a notice of default and foreclosure, even though they had other good credit, they found it was not easy moving to a good rental property, and some found that getting a co-signer was necessary.

To find out what can be included in your credit report and other resource material, Privacy Rights Clearinghouse and Nolo contain additional information.  For California information on accessing a free annual credit report, see the California Office of the Attorney General.

Rental Scams: Don't Fall For Them

One of the downsides of all the home listings on the internet is the abuse of them by hijackers.  They

go to sites such as Zillow and Trulia, choose a property and turn a legitimate listing into a so-called rental ad, with the listing agent not finding out until he/she receives a bunch of phone calls about a "rental".  In a very expensive and limited rental market, a renter is doubly frustrated when finding out that the seemingly good deal is too good to be true.  So not only is it a waste of time for those searching for a rental property, it's also an extreme annoyance to the listing agent whose listing is illegally used as a dupe and all the misdirected phone calls, as well as the time it takes to correct the situation on the listing site. 

The smarter people knew before they called me that $1200 per month rent for a 2800 sq. ft two-story house in a nice neighborhood of $500,000-$600,000 selling prices was suspicious, but they called me anyway after they drove by the property.  Some actually called the name given on the fake rental ad, which of course used my listing photos and information as if it were their own, and were told to send money before they would be given any more information.  This is the tipoff--a legitimate landlord or management company does not request money, i.e., security deposit or rent, up front for information. 

And another scenario may be that the rental does not exist at all.  Yet another is a rental sign in front of an actual advertised property that is for rent, or it may be a bank-owned property for sale.  In this situation the false advertiser is attempting to get business by re-directing prospective renters to actual rentals--one company has been complained about in California, yet they popped up again with their red and white rental signs on wooden stakes posted on properties that are not their rentals. 

For more information, contact the Federal Trade Commission.  Avoid sending money to people you don't know.

Have You Heard of PACE for Energy/Water Savings?

Keeping Cool

The Property Assessed Clean Energy Program, or PACE, makes it possible for an owner to finance certain improvements and pay for them via an assessment on the owner's property.
There are a wide range of conservation improvements allowed and which vary by program, but most PACE programs include  improvements such as solar panels, energy star rated core plumbing systems, duct replacement, electric vehicle plug-in stations, pool circulating pumps, water heaters, and furnace.  They work in conjunction with a local public agency, and are available for both residential and commercial properties.

To be eligible, the homeowner must be current on property taxes, with no judgment liens or federal or state tax liens, not in bankruptcy, can't be delinquent on any mortgages or late on property taxes (some exceptions), and there are limits based on the mortgage percentage value of the property.


Property tax liens associated with the homes underlying the security, which are meant to fund energy-savings measures, are senior to all other liens - including mortgages on the properties financed by Fannie Mae and Freddie Mac (which currently finance close to 90% of US mortgages).  Read more at Reuters.  Since they don't like not being in first lien position, the Federal Housing Finance Agency (FHFA) ordered Fannie and Freddie to avoid financing mortgages on homes with PACE liens already on them,  Generally, all loans following FHFA guidelines must obtain consent before being allowed to enter into a PACE program, or the lender may declare the loan in default if owner does not pay off the lien. These conditions also affect refinancing as well, especially if the loan was obtained after July, 2010.

Homeowners who may find that PACE works well for them are:

• Those who have sufficient equity or whose improvements are not that costly and therefore, would not have difficulty paying off the lien if they need to sell or refinance their home
•  Those who intend to remain in their homes for the duration of the assessment and do not plan to refinance 
•  Those whose PACE program will offer to subordinate the PACE lien in circumstances beneficial to the homeowner.

HERO

Certain PACE programs, such as the HERO PACE program are now offering to subordinate their liens in certain instances, generally for a fee.  If the PACE lien is subordinated the buyer may be able to enter into a PACE agreement and obtain consent from a conventional lender.  Homeowners in areas with HERO PACE programs should inquire with the entity. Not all cities have approved this program; according to their site, HERO programs are locally available in the cities of Carson, Bellflower, City of Industry, Hawthorne, Lomita, Garden Grove, Huntington Beach, Fountain Valley, Stanton, Westminster, Cypress, to name several.  Long Beach, Los Angeles, or Lakewood are not included at this time. 

California FIRST

This program  appears to cover Long Beach and other areas, but an address must be entered in order to find out. Their criteria and financing terms are available on the site.

FHA

Energy Efficient Mortgages have been around since the 1990s, and may work for the owner with an FHA loan. Contact an FHA lender for more information. 

Secondary Financing

Another alternative is a home equity line of credit, for people with enough home equity, which may provide some tax advantages, including lower interest rates than the PACE programs. This type of loan would automatically be paid off in sale of a home.

Similar to solar panels, any PACE lien must be disclosed to a prospective buyer and will most likely be found in the preliminary title report given to a buyer. The seller may be in the position of having to pay off the lien in order to sell, depending on the circumstances involved.

And, a property owner should always first consult with a tax advisor regarding their own circumstances before accepting any of these loans. Interest paid on PACE liens may not be tax deductible but there may be a capital gains benefit based on the improvements.

California Home Solar Panels - Buy or Lease?

Solar Panels

Solar panels are one of the many energy saving and money saving systems available to the homeowner. But save yourself some possible future headaches by investigating, beforehand, whether you should purchase or lease these panels.  Leasing seems a great way to go because it's a lot less money up front compared to buying panels outright.

Advertising your home as energy efficient seems like a great way to get a buyer fast.  But, when it comes time to sell, leased panels may turn into an outright headache for all parties:

• Your buyer will have to take over your lease payments and qualify for the lease--extra expense they may not have counted on, or a lost deal if they can't or won't agree. The monthly cost of the lease must be included in the assessment of lender's debt ratios.
• You, as the seller, may lose your next home you're in escrow for, or a job loss, if you can't move on time.
• Or, you the seller may agree to pay up on the complete lease in order to move on--one couple in Fresno paid $22,000 to get out of the lease and sell their house.

The solar leasing company may say that very few times such issues arise, since most buyers either agree to take over the lease, or most sellers can pre-pay it to move on. However, just know that leased solar panels, whether you're the buyer or seller, must be dealt with in a property transaction.

A leased solar system will usually show up on a preliminary title report because of the recorded UCC-1 filing which secures the system. But even if there's not a recorded filing, the seller must disclose the system in the transaction by checking the appropriate box on the Seller Property Questionnaire and/or on the Transfer Disclosure Statement.

In the standard Realtor contract form in California, the buyer review of lease documents and approval of solar leased panels is one of the contract contingencies, and can cancel the contract if the lease terms are not acceptable to the buyer. Buyer and seller could also negotiate on each paying an acceptable contribution towards the lease, as one option.

If the seller thinks another good reason for installing solar panels is because they increase the appraised value of the home, think again.   Leased panels are not allowed under FNMA appraisal guidelines, however owned solar panels do have appraised value and are included per underwriting guidelines.

So before obtaining leased panels, the property owner should ask the company:

1. What are the credit and other requirements required for a buyer to assume the solar lease?
2. Does the company offer alternatives to buyers with weak credit, such as placing a cash deposit?
3. Does the solar company have a dedicated team or other procedures to facilitate the transfer of leases to buyers?
4. How long does it take typically for the lease transfer to occur? 
5. Can a lease be transferred easily within the timeframe of a thirty day escrow?

 See Ken Harney's recent Washington Post article on solar panels.  For a more indepth article on this subject about issues during a California residential transaction involving leased solar panels, please contact me!

New Transaction Closing Rules with CFPB - Part II

Note:  The new start date is October 1, 2015. 6/28/2015.
Mark August 1, 2015 as the date on which transactions will be impacted!

The Consumer Financial Protection Bureau is an independent agency which operates withoutCongressional supervision, one of the few such entities in the country, and is considered a least accountable agency (by just about everybody including Congress).  It oversees banks and financial institutions, credit unions, students loan, credit card companies, payday lending companies, mortgages, foreclosures.  (It resulted from the Dodd Frank Act which came into place as a result of the economic crash, and its director was appointed by President Obama.)

The CFPB is not federally funded, but instead issues fines to banks for their bad behavior:
Wells Fargo - $24 million; Chase - $11.7 million, NewDay Financial - $2 million; and just the other day, per their website "Green Tree to Pay $48 Million in Borrower Restitution and $15 Million Fine for Servicing Failures".  Yes, there have been failures by the banks, but how we got to a bureau that seems to have no oversight seems to be borrowing a page from the bank failure book.

But for now, consumers, lenders, escrow, title and real estate agents are at the beginning of changes will are most certainly to lengthen the average 30-day transaction to 10-15 days longer.

New terms:
Escrow=settlement agent
Lender=creditor
Day loan docs are signed=consummation day
Close of escrow day=settlement day
LE=loan estimate (no longer a good faith estimate)
CD=Closing Disclosure (replaces HUD-1)

Buyers and sellers, get familiar with all terms but know that "CD" is a 5-page disclosure which must be received by the borrower a minimum of 3 business days before signing of loan documents.  It doesn't matter if you can read and sign in 3 hours, you must wait 3 business days before loan documents can be signed.  What if you ask the seller, and the seller agrees, to compensate the buyer $350.00 towards the buyer's closing costs during escrow?  The borrower receives a new CD and must wait 3 business days.  If the lender decides to mail out the CD to the borrower instead of allowing digital signature time, then the lenders will give a total of 7 business days from send out.

Sellers, I can only say this:  Make reasonable repairs, including all carbon monoxide and smoke detector placements where required,  prior to listing to avoid delays with appraisers calling out such repairs, which will require a second visit by the appraiser, and which also costs the borrower more, in order to avoid these delays.
Buyers, If you decide to make an offer on a property which requires numerous or even just a few, repairs, be prepared for a longer transaction, because everytime a change is made, a new 5-page CD goes out to the borrower from the lender.  You can see how the time starts adding up, going well beyond the existing 17 and 21 days for buyer to investigate and remove contingencies.
Other examples of changes which will require 3 business day re-disclosure:
Changes in APR; changes in the loan product; addition of a pre-payment penalty.
Realtors must be prepared for these changes and be able to work with their clients on these timelines.

A sample calendar provided to me recently shows Day 1 starting on a Monday (Saturdays are included as business days, Sundays are excluded), going all the way through to Day 38 in a NORMAL transaction showing the lender's schedule, but this calendar did not take into account what else could be happening between the buyer and seller during the various contract contingency period, which is how further issues and additional time periods could come up. There is much that will be found out on a practical level when the time comes, because there are still unknowns in these new requirements.
Additional issues:  Lenders may refuse to work with certain escrow companies, and therefore buyer and seller may not be able to choose in some circumstances, because the lender may force both parties to transfer the file to another company.  Please remember, California escrow companies already are "vetted" and responsible to the Department of Business Oversight which maintains their own rigorous standards.

At this point, consumers need to change some of their expectations, both with their loans and the property transaction itself, and who they may be able to select for services.
These are nation-wide changes, not just something happening in one county or one state.  Some industry professionals are saying they've never seen anything like this during their 30 or 40 years in real estate (and they don't mean it in a nice way), so what happens after August 1 will be different--that much we know.

Just Sold! 1030 E. 2nd St #8, Cute Condo

Too bad you missed this one!

Cute one-bedroom condo with upper floor courtyard view in Alamitos Beach.  It came with garage parking, a huge plus in this older established neighborhood of multi-unit structures, and community laundry.

This 1950's building has been upgraded with newer windows and updated exterior color. This well-maintained condo came with an upgraded heating/cooling feature, very nice hardwood floors and a remodeled kitchen which all helped this condo sell fast!

Standard sale, conventional loan; sold 4/10/2015 at full price $210,000.

If you are interested in a market analysis for your propertym whether it's a condo, single family or income units, please contact me:

Julia Huntsman, Broker REALTOR
562-896-2609
Huntsman Properties
Licensed since 1994, #01188996
www.juliahuntsman.com

Market Stats for 1st Quarter, Long Beach CA and Nearby Cities

Not surprisingly, with the low low interest rates, prices have climbed especially with single family homes.  Condo prices have varied, and do vary by zip code, especially in Long Beach where completely different areas have their own pricing.  All median prices in the chart below are for cities regardless of specific areas, and this chart is meant to show an overall trend for the 1st quarter of 2015:

MEDIAN SALES PRICES	1/1/2015	3/1/2015
Long Beach Single Family	$482,500	$540,000
Long Beach Condo	$310,000	$275,000
Long Beach Multi-Family	$599,000	$620,000
Lakewood Single Family	$443,500	$475,000
Lakewood Condo	n/a	$300,005
Lakewood Multi-Family	$452,000	$579,000
Cerritos Single Family	$602,000	$638,000
Cerritos Condo	$285,000	$453,000
Cerritos Multi-Family	n/a	n/a
Bellflower Single Family	$418,000	$395,000
Bellflower Condo	$300,000	$280,000
Bellflower Multi-Family	$550,000	$602,000

Data provided by Market Analyzer

New Transaction Closing Rules -- Starting August 1 by CFPB

Be Careful Crossing the Road of Financial Protection

The Consumer Financial Protection  Bureau was brought into being by the Dodd-Frank legislation, and the CFPB has teeth which are being inserted into the lives of lenders, and therefore the lives of home buyers and sellers.

The "Know Before You Owe" rule, effective August 1, 2015, is bringing a new closing document (6 pages) and is doing away with our HUD-1 statement (3 pages) in the form of a non-uniform closing package which does away with the uniform coded costs which have been in existence for . . . decades.  By non-uniform is meant that lenders can call their categories what they so choose, and therefore may be different from one bank to another all across the country.  On the other hand, "the new forms resolve the problem of redundant and overlapping information presented in the standard Real Estate Settlement Procedures Act (RESPA) and Truth In Lending Act (TILA) disclosures that lenders are required to send to borrowers following submission of a mortgage application and just prior to the closing." See, for a very indepth industry discussion, this article by Patrick Barnard.

One of the net results is that there's more pages to get to a closing, and the closing will probably end up being extended well beyond the initial escrow period IF there are credits back which must be given a 3-day period to sign on and disclose to the lender.  So if, for example,  the seller agrees to credit the buyer $500 for some repairs rather than perform the repairs, that will require a written documented disclosure to the lender, the total of such amounts may not exceed the lender's cap.  Such a $500 agreement between buyer and seller will require a new good faith estimate from the lender, which in turn adds to costs by some lenders.  Another fact of life is the cost involved for escrow companies and lenders to retool their technology because they will be required to be in sync on this process.

Since this is being  implemented on a national basis, it will affect procedures and laws in all states.  The bottom line for buyers and sellers is that a 30-day escrow may turn into a 45-day escrow, which impacts people's moving plans for making the smallest of changes.

More will be said here on this issue, but the bottom line for residential buyers and sellers is to grasp the transactional costs and fees, including termite inspection (very costly sometimes) and what they agree to agree on with each other in the beginning.  I can see a world of even more advance planning on both sides.

Water Heaters Are About to Cost Much More

If you need a new water heater, consider buying one in the next three weeks.

Effective April 16, 2015, water heater replacement rules will go into effect.  A new amendment to the National Appliance Energy Conservation Act will require higher energy ratings on all new residential gas, electric, oil and tankless gas water heaters.  The changes will impact how they are designed, manufactured, tested, distributed and installed, as many will be taller, wider and heavier than your current installation.  Because of the potential increase in size, the homeowner may have an additional cost of housing the new heater in a larger cabinet.

 According to  the U.S. Department of Energy, "Standards mandatory in 2015 will save approximately 3.3 quads of energy and result in approximately $63 billion in energy bill savings for products shipped from 2015-2044. The standard will avoid about 172.5 million metric tons of carbon dioxide emissions, equivalent to the annual greenhouse gas emissions of about 33.8 million automobiles."  For water heaters under 50 gal., this greater efficiency is achieved by adding more insulation (making it bigger).  For larger water heaters, heat pumps will be required, and some larger water heater may be discontinued because they cannot meet the standard.  In the end, there will be less energy consumed, but not before the consumer pays more up front.  Also, the self-help install program will just not work, licensed plumbers will be a fact of life.  

And according to EnergyStar.gov site at least 30% of a home's energy is spent on heating and cooling:

According to the Bradford White website "It is important for contractors to understand that products manufactured before April 16, 2015, can be bought and installed after the changeover date."  However, since production of the new standard units started some time ago, some stores have been stocking up for some time, so older manufacture dates may be harder to find.

To extend the life of your current water heater, drain it yearly, and if possible, add a water softener to decrease sediments.   For more information go to http://www.energy.gov/search/site/water%20heater.

You Need to Know About Your Appraisal

The appraisal process often baffles consumers. They may feel that their home is worth a higher dollar amount, and so the appraised value doesn't always make sense to them. It is important to know that the appraiser is completely independent from lenders, buyers, sellers, and real estate agents, and that the guidelines to which they adhere are dictated by the Uniform Standards of Professional Appraisal Practice and Fannie Mae. In most states, the mortgage lenders must also disclose the purpose of the appraisal, as each transaction carries its own set of rules.

In essence, these important guidelines help appraisers put a fair market value on homes based on comparable sales in the same area, and the home must be bracketed in size and value.  What does "bracket" mean?  It means that selected comparables must be, within certain percentage levels, larger and smaller in size, higher and lower in value, as well as better or worse in condition.  These may vary not only according to lender but also type of loan.

For example, there is no set dollar figure associated with a great view, pool, spa, bathroom upgrades, etc. If a homeowner installs a custom pool that cost them $30,000, but the local marketplace supports the value of a pool at $15,000, then that item will be bracketed as [$15,000] on the appraisal.
Upgrades can usually be expressed at a higher percentage of their value in newer homes because the only way to obtain those upgrades was to put more money into the cost of building the home. On the other hand, the upgrading or remodeling of an older home is rarely reflected in full in the final appraisal. This is because typically 25%-40% of the project involves demolition and the fixing of issues that aren't uncovered until the project has already begun, such as plumbing or wiring that may need updating.

Ultimately, the value of the upgrades must be supported by comparable examples within the same marketplace. These comparisons must be drawn from current market activity within the last six months. This is a safeguard to prevent appraisers from attaching too high a value to the home in question, and opening up the appraisal for review. This guideline further states that appraisers can only base their opinion on the value of home sales that have actually closed, however, current active and pending sales will also be included in an appraiser's report.

In addition, the guidelines in the 2009 Home Valuation Code of Conduct must be applied, which among other things prohibits a lender from having any contact with or influence on how the appraiser values a home. This Code, however, does not prevent the seller or buyer REALTOR from having direct contact and asking questions concerning the appraiser's familiarity with the area.  This is very important to know about an appraiser, since it's the local marketplace that determine the adjustments in values.

Article information taken from an e-mail from South Pacific Financial Corporation

Just Listed! Alamitos Beach Condo

 One-bedroom, one-bath unit in Alamitos Beach area of Long Beach.  Very nice upper unit at a great price for a cash buyer looking for a getaway place, or a first time buyer just starting out (conventional loans only, please) in this 12-unit building.

Nice interior with soft colors and double-paned windows.  Bathroom is close to original 1950s style with newer vanity, and plenty of closet space for the bedroom.  A big plus is the garage parking for this condo, and the view down on a very nice courtyard area. Great area for walking and close to the beach.

It's a great price at $210,000, with HOA monthly dues of $183.00.
Please call for more information for 1030 E 2nd St., #8, Long Beach 90802.
(Information current as of 3/10/2015)

Julia Huntsman, Broker
Lic 01188996
562-8962609
MLS:  PW15049517
http://mrmlsmatrix.com/Matrix/Listings/ZHUNTJUL246/MyResiListings.mls

Four Critical Credit Tips

Dear Buyer,

Your credit score is an important benchmark for mortgage lenders, landlords and even potential employers. Use these tips to avoid hurting your credit score:

1. Don’t max out your credit cards.
A big factor in your credit score is your debt-to-credit ratio. When you hit your spending limit, your debt-to-credit ratio rises and your credit score falls. As a rule, always have more credit available than outstanding debt. Doing so not only boosts your credit score, it keeps your payments low and leaves a buffer for emergencies.

2. Consider the pros and cons of cancelling credit cards.
While removing temptation is one way to check excessive spending, cancelling credit can actually damage your credit score. Why? Cancelling credit increases your debt-to-credit ratio just like maxing out a card, dropping your credit score. If you need to cancel a credit card, obtaining the same or higher amount of credit with a new card diminishes the effect. (But it's best not to cancel, just stop using the card.)

3. Stop applying for store credit cards in the checkout line.
It might be tempting to save 15% on a one-time purchase, but applying for unnecessary credit. It can seriously damage your credit score. Lenders make a hard inquiry whenever you apply for a new card. This type of inquiry often lowers your credit score by several points, which accumulates when applying for multiple cards. A soft inquiry occurs when you check your own credit, which is highly encouraged routinely and before a major purchase.

4. Apply with multiple lenders when shopping for a mortgage.
While I have preferred lenders I would much rather work with because ultimately, professionalism and knowledge are what gets the job done, not all lenders do all loans or work with all lender sources. Buyers should know this. When you apply for a mortgage, the lender performs a hard inquiry. This will lower your credit score by a very small amount, around 5 points. However, when multiple mortgage lenders run your credit within a 45-day period, it only generates a single credit penalty. Thus, applying at one, two or even a dozen mortgage lenders only produces one minimal deduction to your credit score. Unless you have a serious credit problem, applying with more than three is probably unnecessary, but to satisfy yourself that you are getting the best mortgage rate and terms, just like shopping around for a new car, it would be wise to take a little time in the application process and ask questions.

If you want to learn more or discuss your home buying or selling options, contact me.

Energy-Efficiency Upgrades and Residential Energy Tax Credits for 2014

If you made your home more energy efficient in 2014, you might qualify for the residential energy tax credit.

Tax credits are especially valuable because they let you offset what you owe the IRS dollar for dollar for up to 10% of the amount you spent on certain home energy-efficiency upgrades. 

The credit carries a lifetime cap of $500 (less for some products), so if you’ve used it in years past, you’ll have to subtract prior tax credits from that $500 limit. Lucky for you, there’s no cap on how much you’ll save on utility bills thanks to your energy-efficiency upgrades.

Among the upgrades that might qualify for the credit:

• Biomass stoves

• Heating, ventilation, and air conditioning

• Insulation

• Roofs (metal and asphalt)

• Water heaters (non-solar)

• Windows, doors, and skylights

To claim the credit, file IRS Form 5695 with your return, the 2014 version may be found at their website with the instructions.

What is the January 2015 Real Estate Profile of Long Beach, Cerritos, Lakewood and Rossmoor?

Here is a brief summary of January 2015 sales, compared to January 2014:

Long Beach - Median sales price for a single family home: $481,000 (up 5.8%), housing inventory down 22%, with only 2.2 months supply of inventory on the market.

Cerritos - Median sales price for a single family home: $602,000 (up 3%), housing inventory down 9% with only 2.1 month supply of inventory on the market.

Lakewood - Median sales price for a single family home: $443,500 (up 3%), housing inventory down 44%, with 1.4 months supply of inventory on the market.

Rossmoor - Median sales price for a single family home: $807,500 (up from $800,000), housing inventory still at 2.6 months supply of inventory on the market.

By checking points along the graph, prior months' sales prices are seen. Long Beach and Cerritos are down, Lakewood and Rossmoor are up. This is a live graph, and is updated with each month's sales.

Would you like to know what buyers' home buying motivations are? Buyers who purchased brand new homes did so because of fewer electrical and plumbing problems. Sellers who take this and other items into account when preparing their home for sale are less likely to get a laundry list of repairs desired by buyers.

NAR's 2014 Profile of Buyers and Sellers

Don't Let Marketing Your Home Create an Unnecessary Gateway

Julia Huntsman
Lic 01188996

Cash Buyers Slowing, Home Price Gains and Low Inventory In Southern California

Looking toward downtown Long Beach from Bluff Park

For quite a while the price increases have been pretty noticeable, but on closer look it's not the same for all segments of the Southern California real estate market.  According to Dataquick,

"In December, the lowest-cost third of the region's housing stock experienced a 12.9 percent year-over-year increase in the median price paid per square foot for resale single-family detached houses. The annual gain was 6.3 percent for the middle third of the market and 2.3 percent for the top, most-expensive third."

And the Southern California six-county median price for a single family home is still 17% lower than the median peak price in 2007.  While all cash transactions are decreasing in some states and regions because prices have increased enough to make returns unattractive to real estate investors, low inventory is still prominent.  Overall, the number of home sales in Southern California was more than 8% less in 2014 when compared to 2013.  This need for more homes to sell is evident in just about every local city and zip code, especially in the market below $500,000.  In Long Beach in December, 2014, there were 371 houses for sale, which put the "months supply of inventory"  at 2.1 months, a decrease of 12.5% from December 2013.   Townhouses and condos were only slightly better at 2.2 months of inventory in Long Beach.  Normal inventory levels are for a 6 months supply.  The average home sale price in Long Beach was $535,000, while the median was $464,000 for December.

At the moment, there is a demand for houses in the more affordable $400,000-$500,000 range in the Long Beach area.  For a comparable sales analysis, always a good way to get a current market education, please contact me via phone or e-mail.  Even if you don't plan on selling right now, there are good reasons why you should get a good estimate of value from an experienced professional. (Remember, sites such as Zillow offer information based on tax records, which do not tell the whole story of your home's value.) In an economy where appraisals and mortgages are still quite stringent, a professional REALTOR is the best source for finding out about market value.

New California Real Estate Laws for 2015

The following are some of the new real estate laws taking effect in the future in California.

California brokers are required to keep transaction records for at least 3 years. These records used to include text messages, instant messages and tweets, but per AB 2136, as of January 1, 2015, such electronic "ephemeral" records are not now required to be kept.  If you wish to maintain a good permanent record of communication with your agent, faxed documents and/or e-mail messages are a better way to go.

Many HOA associations use the services of a property manager who commonly carries out the forwarding of HOA documents to the buyer during escrow.  The fees charged by them for the gathering, production and delivery of such documents has been the subject of controversy and regulation in the past, all the more so since electronic documents do not incur the expense of actual copying and messengering to an escrow office that once was common.  To eliminate the practice engaged in by some companies where non-requested documents were included with requested documents--and charged for--document bundling is now prohibited. It is the now the responsibility for the seller to pay HOA document fees, and the fees must be itemized for mandated disclosures, i.e., CCRs, Minutes, By-laws, special assessments, financial/budget statements, rental reports, operating rules, etc.  The HOA must estimate the cost of such mandated documents prior to production, and if the seller possesses them electronically, they must be provided free of charge.  It is the responsibility of the seller to pay the HOA for any charges which the HOA is allowed to incur. The California purchase agreements have been revised to reflect this change in the law. So if you own a condominium and you are selling it, be aware that you are now legally required to pay for the mandated documents which are to be sent to the buyer, and that these documents can no longer be ordered by escrow using the buyer's deposit funds (a common practice until now).  These and other requirements are detailed in  AB 2430.

There are several other new HOA-related laws concerning exclusive use maintenance, use of recycled water, use of low water-using plants, judicially enforceable dispute resolutions, allowance of personal agriculture in a back yard.  For specific information on these, please contact me.

If you see one in your front or back yard, the California red frog is now the state amphibian.

On July 15, the California state water board adopted emergency regulations restricting water use for outdoor landscapes. The regulations prohibit using potable water outdoors, such as watering your lawn, that results in runoff water on sidewalks, driveways, roadways and your neighbor’s property; washing a car with a hose unless the hose is fitted with a shut-off nozzle; watering down your driveway and sidewalk; and using water in a decorative fountain unless it recirculates. Violation of the regulations is an infraction and may result in a fine of up to $500 for each day the violation occurs.  Various cities, such as Long Beach and Los Angeles, also have water regulations, i.e., watering on certain days and times. Try checking with their web sites.

AB 2310 allows the city attorney in certain California cities, including Long Beach, to demand that a landlord evict a tenant, after following certain procedures, for unlawful possession of weapons or ammunition or for other illegal conduct with controlled substances, or this action may be carried out by the City.

Seniors or disabled citizens may file for a postponement of their property taxes if household income does not exceed $35,500. This program does not include mobile homes, and takes effect July 1, 2016.  Claims are filed with the State Controller and any sums approved and paid by the state will become a lien on the property.

Please contact me for more detailed summary on some of these laws, I am happy to be of assistance.
www.juliahuntsman.com

The Technicalities of Reverse Mortgages: Are You a Non-Borrower Spouse?

Could the lady in this photo be someone in your family?

 Per a HUD (the overseer for reverse mortgages) statement dated September 4, 2013, reverse mortgage borrowers are advised that the both the borrower and his/her spouse should be counseled:  "One main concern for the non-borrower spouse is when the borrowing spouse passes away and the loan becomes due and payable. More often than not, the surviving nonborrower spouse, who is not on the deed, may not be able to pay the balance due or meet the criteria to qualify for a HECM of their own on the property in order to remain in the property. During counseling, all parties must be made aware that the HECM cannot be assumed by the non-borrower spouse." 

A non-borrower spouse may not have protection, and may be forced into a foreclosure situation if he or she is not able to buy out the reverse mortgage.  In a situation involving a 92-year-old widow in Arizona, this article outlines the action ultimately taken because of intervention by the Consumer Financial Protection Bureau (CFPB) when appealed to by the woman's son, where Bank of America bought the reverse mortgage after the widow claimed she was unaware that her name was not put on the loan, and the Bank stopped its foreclosure action and allowed her to continue living in her home. 

This Arizona story is not an everyday scenario, however, so the counseling described above is designed to make the parties aware of the position a non-borrower surviving spouse could be put in after a spouse's death or permanent placement in a facility, because, according to the HUD guidelines, the loan is then due and payable.  And how soon is "due and payable"?  Per All Reverse Mortgage Company's site: if a borrower passes away or
"if a borrower is forced to go to a hospital for more than 12 consecutive months and there is not still one original borrower remaining in the home (not a family member, but a borrower who is on the loan), then the loan shall become Due and Payable and must be paid in full at that time," also, a borrower is urged to contact the servicer if he/she plans to be away for an "extended vacation".  This is important because a reverse mortgage requires the borrower(s) to reside in the property as their principal residence, however, that doesn't mean people don't take trips, so communication is important. 

For borrowers interested in future application for a reverse mortgage, as of March 2, 2015, lenders will be required to review their:

• Credit reports.
• Payment histories on property taxes, homeowners association fees and hazard insurance premiums.
• Income from full-time and part-time employment, Social Security, pension funds, regular draws on IRAs and 401(k) accounts, plus any earnings on investments.
• Recurring household debt obligations.

FHA wants lenders to come up with a cash flow and residual income analysis.

 For further help on this topic, please contact me directly and I will be happy to refer you to a qualified reverse mortgage lender. 

One technicality tucked away in FHA’s regulations can snag owners whose spouse dies after taking out the reverse mortgage. If the surviving spouse’s name does not appear on the mortgage documents, the outstanding debt balance becomes due and payable. If the surviving spouse can’t afford to buy the house to make the payoff, the property may be put up for foreclosure sale. - See more at: http://therealdeal.com/blog/2013/03/01/232102/#sthash.Oty7WfpJ.dpuf

Recent Market Stats for the City of Long Beach Selling Price vs. Los Angeles and Orange Counties

Long Beach and Los Angeles County are almost on par with average selling price of a single family home. See the live interactive data on the chart.

Landlords and Property Owners, Don't Risk Your Property With Illegal Activity

In spite of the laws being passed in many states allowing legal consumption of marijuana, federal law says it's illegal. So in spite of the growing public "approval" towards this drug, if you are a landlord with tenants, you may be at risk if you are allowing tenants to smoke marijuana on your property.

A landlord may be at risk, according to National Association of Realtors Senior Policy Representative Megan Booth, of having his/her property taken because the federal government, which takes precedence over state laws, may seize finances and property connected to illegal activity.  So while public opinion shifts more towards acceptance and pro-legalization, the federal government is also being pressured to act in accordance with the current federal laws. “The U.S. has signed on to global treaties classifying marijuana as one of the heaviest controlled substances,” Booth said. “So there’s some outrage that the U.S. isn’t prosecuting marijuana users here as fiercely.”

At the very least, new disclosures may be required (as if there aren't enough already) in leases and real estate sales transactions, covering marijuana policies on rented premises, and selling houses and condos where nearby marijuana use is allowed.   All is not rosy in this new "industry": there has been an increase in reports of explosions on properties where tenants have been growing pot using special equipment, mold could  be an issue because the plants require high humidity, to say nothing of smoke and odors from nearby users. Such issues could exponentially deadly if this involves apartments or attached multi-unit condominium buildings where an explosion could immediately cause damage across several units, or moisture and water leakage issues spread to a lower unit causing expensive mold removal and interior replacements, and subsequent legal issues for the owners, possibly the Board of Directors, and substantial insurance and replacement costs.  (Such a story was once told to me about non-English speaking tenants who rented a unit advertised as "garden apartment" in Orange County.  Being new to the U.S., and possessing very little English, this was interpreted to mean that a tenant could start their own garden inside the unit.  So a crop of marijuana plants was ultimately found growing over the carpeting and causing extensive water damage to the unit below.)