So Cal Real Estate News

(by Dave Emerson) Blair, I and our immediate families returned earlier this week from a trip to Tennessee to see with my newest grandchild and Blair’s newest niece , Ivy Grace Sasser, who was born just last week. A child being born, a long journey, even paying taxes (from sales to car rental to air travel to accommodations)–not all that different from that first Christmas in some ways!

Certainly there’s nothing like the miracle of birth–a miracle we’ve been blessed with four times in the last three years as our four amazing grandkids entered the world. God has blessed us with a wonderful family, which helps put some of the craziness of the current economy and Southern California real estate in proper perspective.

The winter holidays help achieve the same thing.

Hanukkah: A celebration of light, freedom, and God’s power

As Christians, Barb and I find inspiration in the story of Hannukkah, and spent some time trying to help our kids understand the significance of the event. In John 10:22 we find Jesus apparently celebrating Hannukah in the temple when his teachings sparked an effort to stone him. While Jesus’ opposition by the religious power structure of his day ultimately resulted in his crucifixion, his appreciation of Hanukkah should motivate Christians of today to at least respect and learn from the events that preceded Christ by about 200 years.

Here is a summary of Hanukkah, or Chanukah, from the orthodox Chabad website:

Chanukah — the eight-day festival of light that begins on the eve of Kislev 25 — celebrates the triumph of light over darkness, of purity over adulteration, of spirituality over materiality.

More than twenty-one centuries ago, the Holy Land was ruled by the Seleucids (Syrian-Greeks), who sought to forcefully Hellenize the people of Israel. Against all odds, a small band of faithful Jews defeated one of the mightiest armies on earth, drove the Greeks from the land, reclaimed the Holy Temple in Jerusalem and rededicated it to the service of G-d.

When they sought to light the Temple’s menorah, they found only a single cruse of olive oil that had escaped contamination by the Greeks; miraculously, the one-day supply burned for eight days, until new oil could be prepared under conditions of ritual purity.

To commemorate and publicize these miracles, the sages instituted the festival of Chanukah. At the heart of the festival is the nightly menorah lighting: a single flame on the first night, two on the second evening, and so on till the eighth night of Chanukah, when all eight lights are kindled.

On Chanukah we also recite Hallel and the Al HaNissim prayer to offer praise and thanksgiving to G-d for “delivering the strong into the hands of the weak, the many into the hands of the few… the wicked into the hands of the righteous.”

Chanukah customs include eating foods fried in oil — latkes (potato pancakes) and sufganiot (doughnuts); playing with the dreidel (a spinning top on which are inscribed the Hebrew letters nun, gimmel, hei and shin, an acronym for Nes Gadol Hayah Sham, “a great miracle happened there”); and the giving of Chanukah gelt, gifts of money, to children.

Click here for the complete story of Chanukah, and here for a comprehensive “How To” guide for the observances and customs of Chanukah.

Christmas: A celebration of joy, peace, and God’s love

About 170 years after the Maccabean victory celebrated by Hanukkah, Christians believe God again miraculously sent light and deliverance into the world, this time in the form of an infant who was son of both man and of God, the ultimate gift of love.

This time we’ll let first century physician and historian and Gospel writer Luke fill in the details of that first Christmas, roughly 20 centuries ago about 12 miles outside of modern Jerusalem:

The Birth of Jesus Christ

2:1 In those days a decree went out from Caesar Augustus that all the world should be registered. 2 This was the first registration when Quirinius was governor of Syria. 3 And all went to be registered, each to his own town. 4 And Joseph also went up from Galilee, from the town of Nazareth, to Judea, to the city of David, which is called Bethlehem, because he was of the house and lineage of David, 5 to be registered with Mary, his betrothed, who was with child. 6 And while they were there, the time came for her to give birth. 7 And she gave birth to her firstborn son and wrapped him in swaddling cloths and laid him in a manger, because there was no place for them in the inn.

The Shepherds and the Angels

8 And in the same region there were shepherds out in the field, keeping watch over their flock by night. 9 And an angel of the Lord appeared to them, and the glory of the Lord shone around them, and they were filled with fear. 10 And the angel said to them, “Fear not, for behold, I bring you good news of great joy that will be for all the people. 11 For unto you is born this day in the city of David a Savior, who is Christ the Lord. 12 And this will be a sign for you: you will find a baby wrapped in swaddling cloths and lying in a manger.” 13 And suddenly there was with the angel a multitude of the heavenly host praising God and saying,

14 “Glory to God in the highest,
and on earth peace among those with whom he is pleased!”

15 When the angels went away from them into heaven, the shepherds said to one another, “Let us go over to Bethlehem and see this thing that has happened, which the Lord has made known to us.” 16 And they went with haste and found Mary and Joseph, and the baby lying in a manger. 17 And when they saw it, they made known the saying that had been told them concerning this child. 18 And all who heard it wondered at what the shepherds told them. 19 But Mary treasured up all these things, pondering them in her heart. 20 And the shepherds returned, glorifying and praising God for all they had heard and seen, as it had been told them. (Luke 2:1 - 19, English Standard Version)

Barb and I hope your Holiday celebrations look beyond the food, sales, and stresses to the love, joy, peace, light, and power that G-d himself wants to give each of us as we trust in him. May your family’s holiday celebrations be blessed!

(12/19/08) Back on August 30th we essentially called a bottom this winter for single family homes in established neighborhoods in Southern California’s coastal plain. Then the time bomb that was the real estate crisis finally exploded, threatening to take down the global economy.

This being an election year. the government sprung into unprecedented action. . . repeatedly. Just this Monday we saw the Federal Reserve dramatically slash the fed funds rate to. . . zero!

Where’s that leave the Southern California real estate market. Pretty much where we were back on August 30th, when we wrote the following:

Where to buy now: While we believe recovery for the desert area and the Inland Empire may not come unti spring of 2010, we now believe the next four months are likely to present the best buying opportunities for most property classes in the coastal plain of Los Angeles and Orange Counties.

Why? As we’ve indicated in “Our Two R.E. Market Cycles,” in most years both sales volume and prices for homes going into escrow tend to bottom in November and December. People are too busy preparing for the holidays to buy homes but lenders and builders are trying to unload inventory before year’s end.  It’s almost like an annual “year end clearance” sale for real estate.

With the number of homes going into foreclosure beginning to decline and effects of the federal housing relief bill beginning to kick in (see “The good news about the ‘Housing and Economic Recovery Act’ “), we think the odds now are that this winter’s apt to be as good as it gets for buyers looking in the more built out areas of So Cal.

What’s more, interest rates are still near historical lows and are expected to gradually rise over the years ahead.  Very low prices and rates make for an excellent buying opportunity.

Finally, there are literally hundreds of thousands of buyers sitting on the fence right now waiting for the market to bottom.  Once they all sense the time is right, you’ll have far more competition from other buyers than you have right now.  If you’re not early, you’ll be late.   Once everybody recognizes a golden opportunity, it’s too late to take advantage of it.

Due to the annual cycle, we know activity’s apt to pick up starting 12/26, we think the prudent buyer should at least get her feet wet in the market now.  (From “Who should buy Southern California Real Estate between now and Christmas?”)

Please don’t misunderstand.  We continue to believe that we’re in uncharted territory and nobody can be absolutely certain what will come next (see our classic post from November, 2007: “How low will prices go?“).  But the further we get into this dramatic downturn, the more clearly we can see what may well be the bottom.

What we know:

You don’t sell Southern California real estate for 30 years without learning a few things about our real estate cycle.  And we can observe a few other things from current market activity–activity that Data Quick won’t report until mid March when today’s purchase contracts show up in the February medians.   So here’s some things we know for sure or are fairly certain of:

1. The bottom for sales volume in Southern California real estate was passed last winter.  Year-over-year sales figures are up dramatically, fueled by the foreclosure bargains and other distressed sales such as “short sales.”
2. The volume of sales entering the foreclosure market is beginning to decline, especially in the stable (established–not new) areas of the Coastal Plain.  Homes financed with the worst of the subprime loans have already been foreclosed and resold.  There is not an infinite supply of such homes.  In addition, a variety of federal programs for distressed homeowners are beginnning to kick in.
3. Most well-priced bank owned homes in Southern California’s coastal plain are getting competing offers.
4. Interest rates are exceptionally low.
5. The fed is working hard to get banks to lend more, relaxing their over-reaction to the mortgage crisis.
6. Real estate sales and prices almost always bottom in December (which is reflected in DataQuick closing stats for February and March).
7. Even in the unlikely event unemployment reached 10%, 90% of the population would still be employed.
8. Home prices in Southern California have been rolled back to 2003 levels.
9. Combining low prices with low interest rates makes Southern California homes more affordable than they have been in many, many years. . . possibly since the bottom of the last recession.
10. Dramatic cut backs by builders are reducing the available supply of housing units.
11. Southern California still has the best climate, most diverse economy and most innovative economy in the nation.

All in all, there’s a very good chance this may be the best time to buy.

(12/6/08)  Today I’m writing as a native Southern Californian who’s lived here all of my 58 years, not as a Realtor.

Every now and then it hits me what a very special place I’m privileged to live in.  Today’s one of those days.  There are many things to love about Southern California, here are a few that hit me today:

1. The weather: December 6th, 2008.  Forecast high in my home town of Los Alamitos in the mid 70s.  Low in the fifties.  Crystal clear, warm, sunny day.  I took my shirt off when I went outside to jog a couple miles.  We went to a local Christmas parade last night in shirt sleeves.
2. The sunshine: Every year I tally in my journal the number of days I don’t see the sun.  It averages about five.  Somehow, it seems like we get most of the little rain we get at night.  And almost never on the Rose Parade.  I tell my friends that was the deal the Rose Association made with God about a hundred years ago.  No Rose Parade on Sundays, so people can get to chuirch, and no rain on their parade!  Maybe the NFL should try that one!
3. The geography: I live about 12 minutes from the beach.  1 minute from a nice local park.  An hour from the San Gabriel Mountains, which include a peak over 10,000 feet high and two major ski resorts.  To the east, the San Bernardino Mountains include a peak over 12,000 feet high, several alpine lakes, and three more major ski areas.  I could see both mountain ranges clearly this morning, as well as Mt. San Jacinto, just South of Palm Springs.  (Did I mention the deserts?)  It’s not all that hard to snowboard (or ski) and surf (or boogie board) on the same day, but I would recommend a wet suit for the Pacific in winter.
4. The rivalry: Right now, I’m taking a break from the USC - UCLA game, where my Westwood alma mater is doing better than expected. . . so far.  USC-UCLA is the only true cross-town rivalry among NCAA Division 1 schools in the country! Both schools are within the Los Angeles city limits, only about 12 miles apart.  Many USC students live in Westwood, by UCLA.  When I went to UCLA, it wasn’t uncommon for athletes from the rival schools to room together.  My best friend in high school went to USC while I went to UCLA.

Rival banners are flying throughout my neighborhood.  Three  of the sixteen families on my cul-de-sac have UCLA alum, but we have SC season seat holders & alum anchoring the start of the street.  My mother and I both graduated from UCLA, my son’s girlfriend hopes to go there.  My boss is a USC alumn.  Both are great schools with great traditions.  And a great, but generally friendly rivalry.  As a tribute to the Trojans, let me share the words to USC’s famous Fight Song, at least the way I learned them at UCLA (with apologies to my friends from “Figueroa Tech”):

Fight on!  for USC.

You pay a fee; you get a degree!

You’ll be smarter than me, because I went to USC!

I went to USC!  I went to USC!

Just kidding.  I think they’re both great schools, one public, one private, two of several dozen outstanding colleges and Universities ranging from Cal Tech to the University of San Diego.

I could go on and on.  Diversity.  Opportunity.  Culture.  Great churches.  Great museums.  Great beaches.  Great mountain biking.  Over 100 languages spoken in local schools.  Forward thinking.

Sure, we’ve got a lot of people, but locals figure out ways to deal with and even enjoy it.

For me. So Cal is a wonderful place to live year round.  If you live someplace else and want to move here, I just happen to know a good So Cal Realtor.  Actually, quite a few, since Blair and I mainly cover  West Orange County and Greater Long Beach.

Happy Holidays from Southern California!