Blog - Archive for July, 2011

L.A Metro Home Hot Pick – Echo Park, Country Club Park

July 30th, 2011

Great opportunity to own a Los Angeles Historic Cultural Landmark in Echo Park California.

817 Glendale Boulevard, Echo Park $895,000.00

Property is a 3 bedroom 4 bathroom with approximately 2820 sq. ft of living space on a 5750 sq. ft lot. Sited high above the street, the house looks out to the Echo Park fountain. There is an office, den area and master bedroom downstairs and  2 bedrooms upstairs. Two of the 4 bathrooms are half baths. House offers a very large living room with wood beam ceiling and fireplace, a formal dining room, breakfast room, plus a family room. There are sliding doors leading out to a covered patio. Built in 1937 for a Pastor of the Angelus Temple, just down the street from the site, many of the original details such as tiles, beams and some fixtures are still in place. As with many homes of the era, time has taken its toll, the home is a fixer. Any work to be done should be comply with the L.A City Conservatory guidelines. The property is being sold in its “as is” condition, having sold only once in 1962 to its current ownership, this is a prize to own and restore to its simple grandeur.

Another area of Los Angeles known for its historic homes is Hancock Park, http://www.lametrohome.com/hancock, an upscale neighborhood developed in the 1920’s attracting the affluent to its wide palm tree lined streets and large spacious lots. There are still areas at the fringe of this esteemed community reflecting the opulence of the time but showing all the signs of decay and abandonment. This brings us to the quasi-gated area of Country Club Park. This large home, 1230 S Wilton Pl. priced at $650,000., is simple in design when compared to its neighbors further in North in Hancock Park, still maintains many original details that are signature of the period.

There are 5 bedrooms and 3 bathrooms in 3300 sq. ft. of interior space. The house has a formal dining room, library, large receiving area, maids quarters and expansive back yard all on a 12460 sq. ft lot. This is a restoration project for the most passionate and will yield a historical beauty to be cherished for a lifetime. Contact www.lametrohome.com for more detail or to arrange a viewing.

Real Estate Recovery in 2013, 14…15?

July 30th, 2011

The following article appeared in LMH L.A. Metro Home newsletter July 2011. To subscribe to newsletter fill in contact information from the www.lametrome.com website and request newsletter. Paul Cruz

Forecast: Real estate recovery won’t arrive till 2013 or beyond
‘Worst case scenario’: 12-year supply of distressed properties
By Inman News
The real estate market will see improvement in the remainder of this year and in 2012, but is unlikely to recover until 2013 or beyond, said speakers at a recent Pacific Coast Builders Conference (PCBC).
Held annually at San Francisco’s Moscone Center, PCBC attendees include builders, investors, developers, manufacturers, scientists, architects, environmental engineers and landscapers, among others.
“We’re in a ‘broken W’ economy. A couple of quarters up, then down,” said Ken Rosen, chair of UC Berkeley’s Fisher Center for Real Estate and Urban Economics. He was one of three panelists in a session titled “Translating the Macro Economic Forecast to Real Local Market Knowledge.”
“The housing market may have bottomed, but chances of a housing recovery this year are pretty slim,” said Elliott Pollack, CEO of Elliott D. Pollack & Co., an economic and real estate consulting firm.
Overall, “the recovery is happening, it’s just not happening as fast as we’d like,” Rosen said. “Tight credit restrictions are one of the biggest factors constraining that recovery. Thirty to 40 percent of the people who want to buy a house don’t qualify. Credit should be loosest at the bottom of a cycle,” he added.
Because 78 percent of all mortgages are held by Fannie Mae and Freddie Mac, he said, it’s up to them to ease credit standards. But any progress on that front is unlikely to happen until after the 2012 presidential election, he added.
“We won’t see anything happen until they change policies in Washington. I don’t see that happening until 2013.”
Rosen predicted homeownership might reach a low point of 65 percent before then. The rate was 66.4 percent in the first quarter of this year.
Citing CoreLogic data, he said prices for traditional, non-distressed homes are likely up slightly year-over-year. But distressed properties are “inventory we still have to liquidate,” he added.
In a separate panel, Rick Sharga, senior vice president of foreclosure data site RealtyTrac, said that at the current sales pace of about 500,000 a year, there is a 12-year supply of distressed properties hanging over the market.
That calculation includes 4 million loans currently delinquent, 1.1 million homes currently in the foreclosure process, and nearly 900,000 REOs (bank-owned properties).
That 12-year supply is a “worst-case scenario,” he said. “It won’t be that bad … but that’s the batch we have to get through.”
Some of those loans will be cured or modified, or the homes will be sold as short sales or traditional sales, he added. The biggest factor that will affect that supply, however, is a recovery in the economy, he said.
Not only should sales demand pick up, but those with delinquent loans “would have the financial wherewithal to meet” their obligations, Sharga said.
The economy lost 8.8 million jobs as a result of the downturn and has gained only 2 million of those jobs back, Rosen said. He expects the economy will regain 0.7 million jobs this year, 1.7 million in 2011, and another 1.7 million in 2012.
“It’ll be 2014 or 2015 before we regain those jobs,” Pollack said.
Much of the crisis in jobs stems from structural problems in the job market, said John Silvia, managing director and chief economist at Wells Fargo Securities LLC.
“We just have too many people in the wrong spot who don’t have the skills to compete in the 21st century,” Silvia said.
As a result of high unemployment, household formation rates have slowed, Pollack said.
“Your 25- to 34-year-olds, your first-time home buyers, where are they? They’re living at home with mom and dad,” he said.
“When jobs improve, so will the (housing) market.”
While building activity will increase progressively between now and then, Pollack said “balance between supply and demand will not be fully achieved until about 2014. By that time, I think housing prices will go up a lot, a lot more than people are anticipating.”
His prediction echoes a survey conducted in April that found that most U.S. adults don’t expect a housing recovery until 2014 or later.
According to a report from the U.S. Census Bureau and the Department of Housing and Urban Development, sales of new, single-family homes rose an estimated 13.5 percent year-over-year in May to a seasonally adjusted annual rate of 319,000. Sales fell an estimated 2.1 percent from April. The median sales price of new homes fell 3.4 percent year-over-year in May, to $222,600.
Unsold inventory of new homes stood at seasonally adjusted estimate of 166,000 at the end of last month — a 6.2-month supply at the current sales pace.

Goverment Housing?

July 29th, 2011

Foreclosures could turn to rentals in California

Jul 27 2011 3:43PM As the number of distressed homes increases, government lenders Fannie Mae and Freddie Mac find themselves taxed with a large number of properties. While these houses have been hitting the real estate market and auction block to date, some are suggesting that Fannie and Freddie turn landlord and rent these homes out, according to The Wall Street Journal.

In California, where foreclosure properties saturate the real estate market in some areas, the opportunity to turn distressed homes into rental properties may be enticing. The state currently ranks third in foreclosures nationwide. A constant stream of short sales and foreclosure sales have driven home prices down in the region, and renting may help ease the burden.

Furthermore, the housing market is moving toward renting verses buying. Vacancy rates for rental properties recently fell to 6 percent nationwide, while rents rose to an average of $1,052 per month, according to Reuters. As mortgage qualifications get stricter and the economy fluctuates, many individuals are opting to play the waiting game when it comes to browsing open houses and saving for a down payment.

If the government is unwilling to play the part of landlord themselves, they could also sell to investors who would in turn promise to rent real estate rather than flip it, The Wall Street Journal suggests.

L.A. Metro Home Hot Pick – Bel Air, Nichols Canyon, Beverly Hills

July 27th, 2011

L.A Metro Home Hot Picks starts in Bel Air CA. 90077. Beyond the Bel Air West gate, Bellagio to Sarbonne to Chalon to 1052 Somera Rd.  Fixer alert, excellent location for this 3 bedroom, 3 bathroom 2708 Sq. ft home. Large spacious living room, dining room and den with high ceilings plus bedrooms surrounding the pool looking out to wonderful canyon and city views. There is huge potential here, whether you choose to restore or renovate and expand. Situated on a 34,000 sq.ft lot, surrounded by million dollar homes, this property will not disappoint the keen eye. Bring your architect, builder and designer.

1052 Somera Rd. View

If your looking to stay a little closer to the budget, may we suggest another great find East to Hollywood Hills West. We arrive at 3135 Chandelle rd, L.A Ca. 90046, aka Nichols Canyon. Minutes from the Hollywood nightlife while enjoying the quite serenity of one of L.A’s finest enclaves.

We enter down a long front walk way through large double doors opening out to an expansive living room space with view to the pool.

3135 Chandelle Rd, L.A. Ca. 90046 $1,079,000.

3135 Chandelle Rd Pool

The possibilities are endless in this 1964 classic with 3 bedrooms, 3 bathrooms, over 2200 sq. ft of interior space. Large Pool on a 10, 920 sq. ft lot. Perfect opportunity to create the quintessential California, Hollywood Hills indoor outdoor lifestyle pad. Rooms flow one to another and form an “L” shape around the pool. Plenty of flat area for outdoor furniture and entertaining. Surrounded by prime Real Estate in serene hillside setting you can’t go wrong with renovating this gem and creating the perfect Hollywood lifestyle.

Now, If the hills are just not your thing, you prefer stepping out to the store in your Nike and parking the Lamborghini or Porsche then maybe the Beverly Hills flats is more your thing and if your a beginner, first time buyer on first time buyer budget, we have something to break you in. We arrive at 426 S. La Peer Dr. Beverly hills Ca. 90211.

The lowest price home in Beverly Hills, this charming 2 bedroom 1 bath 1200 sq.ft home on a 4800 sq.ft lot is conveniently located just South of Olympic, North of Pico, easy to walk to street shops and local restaurants. Hardwood floors throughout , living room with barrel ceiling large picture window and fireplace. Formal dining room with arched entry way. Lots of natural light. The perfect starter home in Beverly Hills School district.

For this and many other Hot Picks contact L.A. Metro Home, your resource in navigating through today’s Real Estate market. Paul Cruz, LMH L.A Metro Home, www.lametrohome.com

Senate Bill 458

July 22nd, 2011

New law gives added protection to short sale hopefuls

By Lily Leung 8 a.m., July 18, 2011
 

Gov. Jerry Brown — Associated Press file photo

A new California law will further protect homeowners pursuing short sales by barring first and secondary lien holders from going after sellers for money owed after the short sales close.

Gov. Jerry Brown signed Senate Bill 458, authored by Senate Majority Leader Ellen Corbett (D-San Leandro,) into law on Friday.

A short sale is a transaction in which the homeowner owes more on the loan than the property is worth. To sell the home, the lien holder or lien holders must approve the sale because the amount owed to the lien holder will be “short” of what is currently owed by the borrower.

Real estate tracker Data Quick said short sales made up 17.7 percent of Southern California home resales in June.

The new law builds on the protections offered by a previous law, SB 931, which required the first lien holder in a short sale to accept an agreed-upon payment as the full payment for the outstanding loan balance. The previous law did not address junior lien holders.

The new law, which became effective immediately, now prohibits secondary lien holders from pursuing deficiencies after a short sale closes.

“As the economic recession continues to impact Californians, SB 458 will allow homeowners forced to sell at a loss to have closure at the end of the process,” said Corbett, in a statement to the Union-Tribune. “By extending anti-deficiency protection to all loans on a home when a short sale occurs, a homeowner can use a short sale as an alternative to foreclosure or bankruptcy.”

The California Association of Realtors call the bill’s signing a “victory for California homeowners.”

“SB 458 brings closure and certainty to the short sale process and ensures that once a lender has agreed to accept a short sale payment on a property, all lien holders – those in first position and in junior positions – will consider the outstanding balance as paid in full and the homeowner will not be held responsible for any additional payments on the property,” said Beth L. Peerce, president of the Realtors group, in a statement.

Will you qualify for the best insterest rate?

July 18th, 2011

The article below appeared in the Wall Street Journal July 10, 2011. Want to capture the best rate? Its time to polish up your credit score if you’re not already over 730. Paul Cruz

By TOM LAURICELLA With interest rates near rock bottom and home prices down, this ought to be a great time to buy a home. But for most people, it’s a lousy time to get a mortgage.

Years after the collapse of the real-estate market and resulting financial crisis, it takes nearly pristine credit scores and hefty down payments to get the best rates.

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“Since 2009, credit has become a lot tighter,” says Greg Reiter, who follows mortgage-backed bonds at RBS Global Banking & Markets.

For borrowers, this highlights the need to pay close attention to credit scores. New rules unveiled last week should make it easier for consumers to see how their credit scores affect the interest rates they pay. These rules, the result of last year’s Dodd-Frank financial-services legislation, require banks and other lenders to disclose to consumers the scores used to determine interest rates charged borrowers, or to deny credit.

The new reality for borrowers can be seen in the FICO credit scores on the loans that banks are giving out and that are backed by government agencies Fannie Mae and Freddie Mac. These days the two agencies essentially finance 75% of all mortgages by purchasing the loans from the banks. In the process, they shape how much it costs to borrow.

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FICO scores range from 300 to 850. Pre-crisis, a score of 700 to 725 was deemed solid and a borrower could expect to get a “conventional” mortgage at the lowest rates.

From 2003 through 2006, 82% of Fannie Mae mortgages were for borrowers with a score between 700 and 750, according to data compiled by RBS.

But so far in 2011, only 13% of Fannie Mae mortgages carry that score, and just 1.7% have a score of 700 to 725, according to RBS. This year, 75% of Fannie Mae mortgages are for FICO scores of 750 to 775, up from less than 5% before 2005.

Meanwhile, the median score is 711, according to FICO.

“Half the population is locked out” from the best mortgages, says Mr. Reiter.

The upshot is that borrowing costs more even with a 730 score and a 20% down payment, says Norman Calvo, president of Universal Mortgage in Brooklyn, N.Y.

“Three years ago, if you had 730 it was excellent,” Mr. Calvo says. Today, he says, it could cost an extra 0.125 percentage point per year on a mortgage, “just because you have one little nick on your credit report.”

For more typical scores, the premiums are even bigger. At 700 to 725, it’s usually an extra quarter percentage point, and at 630 — if a borrower can find a loan — the additional cost is 1.5 percentage points, Mr. Calvo says. “If you have a credit score of less than 680, you’ve got to be worried about approvability.”

The news is also grim for those looking to refinance. Based on the level of interest rates, RBS estimates 60% of agency-backed mortgages should be eligible to refinance. But once home values and credit scores are factored in, just 12% are eligible.

These trends show the importance of understanding credit scores. Mr. Calvo says borrowers sometimes unintentionally make matters worse. For example, closing an unused credit card can actually lower a score in the short term, he says.

Check your credit scores at AnnualCreditReport.com. And to learn more about scores, visit the education section of myFICO.com.

Corrections & Amplifications
Closing an unused credit-card account can lower your credit score in the short term. A story in today’s Wall Street Journal Sunday incorrectly stated it could raise a credit score in the short term.

Write to Tom Lauricella at tom.lauricella@wsj.comWill Wi

Investors to the rescue

July 16th, 2011
Yes investors are rescuing the housing market.  Lenders are not in the business of renovating the foreclosures on their books nor are they in the business of loaning the average buyer the money to buy a sub par property so it is the investor who will buy and fix to return the property to the condition required for the bank to lend. I know many buyers who would be happy “splashing some paint on the walls, maybe updating the appliances” but few have the cash or work with a lender who will lend on these fixers. Read article below. Paul Cruz
Real Estate investors will outnumber traditional borrowers 3 to 1 during the next two years, a new survey says, helping clear millions or repossessed properties from the banks’ books and pave the way for a recovery.
By Lew Sichelman July 10, 2011
Reporting from Washington—

Who is going to lead the housing market out of the doldrums?

Certainly it won’t be move-up buyers. People who already own homes are not likely to be venturing forth to find another one until they can sell their current residences. And with all those foreclosures gumming up the works, it’s tough to stand out in the crowd unless you’re willing to give your place away.It probably won’t be first-time buyers, either. Despite the most affordable prices and loan rates in ages, rookies have shown a marked propensity to remain on the sidelines. After all, why rush? Who wants to buy a house, only to see its value go down? Why not wait until we know values have hit bottom?

That leaves investors. According to a new survey from the California outfit that operates the official website of the National Assn. of Realtors, real estate investors will outnumber traditional borrowers 3 to 1 over the next two years.

Investors are sometimes thought of as bottom feeders who pick off properties from financially troubled sellers who see no other way out. And while there most likely will be a bit of that going forward, this time around the main prey will be banks, not strapped consumers.

That’s a good thing. The overwhelming consensus is that before the sinking housing market can right itself, banks must rid themselves of millions of houses and apartments they’ve already taken back or will repossess in the future. Get them off their books and into the hands of users. Only after houses under duress are cleared from the decks will housing find its footing.

Investors often are in and out in a flash, buying a place, splashing some paint on the walls, maybe updating the appliances and then reselling at a good, if not huge, profit. Again, while there will be some “flipping” in the future, the survey by Move Inc. found that most investors will buy and hold for at least five years, long enough for many neighborhoods to stabilize.

Moreover, nearly half say they plan to invest their own time and energy to repair, maintain and improve their properties. And 30% say they’ll hire a contractor to do the work.

These would-be investors still expect to reap decent returns. Nearly half of the 200 investors queried — a statistically relevant sample — expect to make a profit of 20% or more when they sell after their five-year or longer hold. In the meantime, most will put their investments to work as rentals. Some may even live in their properties until they jettison them sometime down the road.

In other words, says Move Chief Executive Steve Berkowitz, today’s investors, many of whom are new to real estate, are not your stereotypical deal-driven sharks. Rather, he says, they are mostly entrepreneurial individuals who “will make vital contributions to local communities by investing their own money and sweat equity [that] over the long run will help improve housing stocks, home values and property tax bases in thousands of local communities.”

Let’s hope so.

lsichelman@aol.com

Distributed by Universal Uclick for United Feature Syndicate.

Copyright © 2011, Los Angeles Times