Unfortunately, experience also has shown us that most sellers pick their agents for the wrong reasons, and they pay a huge price for that mistake.

Yesterday, we listed 5 of the most common mistakes sellers make in choosing an agent. Today we’ll identify the top 5, starting with one we’ve seen a lot of in the last two years, picking their agent based on:

5. Past performance as a buyers’ agent, in an easier market, or in another area. These might be good reasons to consider an agent, but they don’t prove anything about selling your property in today’s market. We could give dozens of examples from our experiences, but we’ll settle for just one, from baseball:

Just because Tim Salmon played great outfield for the Angels three years ago doesn’t mean he can play shortstop for them today. Let alone Center for the Lakers. Get the picture?

4. “She works my neighborhood.” This is called “farming,” and we do it ourselves. It’s a good way to get to know a neighborhood over time. But the number of notepads left on your porch or postcards mailed to your home proves neither competence nor integrity.

Until the agent’s been “farming” your neighborhood for at least four years, it proves nothing. In this market, you’d need to go back 17 years to get to the last major downturn!

Even with 17 years experience, you’d still want to investigate track record, and speak with sellers who’ve worked with him or her. The fliers or postcards may only tell half the story.

“Neighborhood specialists,” or “listing farmers” are like preachers, car salesmen, or Realtors as a whole. Some are ethical, competent, and diligent, but many others are not.

3. Lots of sales. This could be good or bad, but it raises a red flag. Most high volume agents operate with what they euphemistically call a “team,” which can also be good or bad.

We have a team–Dave, Blair, a transaction coordinator who is shared with several other agents, and a number of affiliates from escrow officer to termite inspector who are the best we can find. But other teams consist of several licensed and unlicensed assistants who pretty much do all the work for the named agent. You often never see the “superstar #1 agent” again after you’ve signed the listing.

At one seminar I recently heard the superstar speaker describe running into some poor seller of his in an airport. The superstar had “sold” his home a few months earlier, and he was actually bragging to us that this was the first time he’d ever actually met his “client.”

One more true story. A few years ago, the buyer for one of our listings was represented by one of those superstar top producers. When it came time for the walk-through I showed up to keep an eye on things. When the buyers came to the door (alone), I introduced myself as the listing agent. The buyer literally hugged me! “Oh my God! A real, licensed agent–not just an assistant!” she exclaimed. “We haven’t spoken with one since we signed the purchase contract seven weeks ago.”

Turns out, everything had been handled by unlicensed “assistants,” which were pretty much part-time kids. We’ve seen the same thing with sellers. They were “working” with top producing agents, but they rarely saw them, and weren’t happy campers.

2. Great listing packet or presentation. This doesn’t prove anything, either. Just because a politician’s a great campaigner with good commercials doesn’t mean he or she will make a good president or governor. It probably just means they bought a good listing presentation software package.  To get an idea of what they actually do, take them to your computer and ask them to pull up their listings on the web.  Read the remarks, check out the pictures, see how complete the data is.  Then ask to see the web sites for their current listings.  (For comparison, Blair and I buy a separate, appropriate internet “domain” name for each listing and then shoot our own virtual tour.  For example, check out LosAlDreamHome.com, which we shot July 24, 2008.

In fact, most agents know they can easily get any listing if they dress nice, are friendly, have a persuasive presentation and, most important if he or she . . .

1. Tells you what you want to hear. Works every time, and most agents know it. There are even terms for it in the business. When an agent tells you what you want to hear about price, it’s called “buying the listing.” Happens all the time–then the listing sits for months while the agent tries to get a price reduction. Worked in ’04′s up market, but not today!

Sellers have words for it, too. “Great rapport!” “We felt so good about her!” “We just really clicked!” “She was so bubbly!”

It’s kind of like interviewing three doctors about your medical condition, then going with the one who tells you every thing’s fine. Tempting, but not real smart. Better to go with the best doctor, regardless of whether you like with his diagnosis or not.

Telling you what you want to hear (instead of the truth) is amazingly effective. It appeals to the sellers’ pride as well as to their wishful thinking. Kind of like flattering them while promising to make their dreams come true. Not that different from how most politicians operate, and you know how good they are at keeping their promises.

If two people agree on everything, one of them is not necessary. If an agent agrees with you too much, they’re either lying or incompetent, or you don’t need an agent at all. It’s probably one of the first two.

You need an agent who knows and tells you the truth. I remember telling an older seller who was “interviewing” us that they really needed to remove the velvet flocked red wallpaper they loved. I knew they didn’t want to hear it, but it was the truth. A few days later I got the call. “Dave, we decided to go with Suzy Q. We just had such great rapport, and she really loved our decorating.” Guess I’m glad somebody did.

If you want to feel good, go find a friend. But if you want to sell your house for top dollar in any market, especially today, go find an honest, experienced, diligent agent who will tell you the truth.

If you missed the first half of this post, just click here for numbers 6 – 10 of the most common mistakes sellers make in choosing an agent.

Unfortunately, Mr. Williams has lots of company. We’d say at least 90% of the today’s sellers today are making at least one of ten major mistakes in picking their agent.

These are mistakes people naturally tend to make–and virtually all agents are able to easily take advantage of those tendencies if they choose to. Because they’ve listed a whole lot more homes than you have!

Here’s our list of the most common wrong reasons to pick a listing agent. Read it and weep. We do.

10. Amazing gimmicks. Mr. Williams picked his agent because of his “This House Talks” sign. Uses an 800 number to capture leads & texts them right to the agent’s phone. Very impressive to demonstrate to a potential seller.

But a gimmick is just a tool, & it doesn’t sell the home any more than the latest lazer level makes an incompetent carpenter into an expert. Selling today takes expert pricing, staging, negotiating, and marketing, plus integrity, diligence, & experience. Not one or two flashy gimmicks. Just ask Mr. Williams.

9. Mr. Williams also liked the agent’s warm friendliness. Can’t say we blame him–we like the guy too. But he’s only been in the business a few years, has never seen a market like this before, and it shows:

Of the 27 listings Mr. Williams’ friendly agent has taken over the past 12 months, only 4 have actually sold. 16 have expired or been canceled without selling–4 expireds for every sold! We had zero actual expireds in the last 12 months, but quite a few closed sales. Gimmicks and friendliness alone just don’t cut it.

8. Never list with someone from work. Inherently bad decision. Today you need a full time agent who’s good enough to make his living from real estate sales alone. If you know her from work, she’s not full time, no matter what she claims. Blair and I were both part time once–the first two years of our career, when we were also quite inexperienced. We know a whole lot more now than we knew then! Never, ever, ever list with a coworker, unless you work in a real estate office!

7. Friend or family, especially one who “really needs” the listing (duh!).

I recently met a fellow whose Lakewood home had been on the market for five months without an offer.

“How’d you pick your agent? ” I asked.

“Friend of my wife.”

“Any idea how many homes she’s sold in this tract?”

“Not as many as you.”

Actually, that agent had never even listed a home in that tract before. In fact, I just checked the SoCalMLS data base, & she’s never listed or sold a home in the entire city of Lakewood. And she’s only sold a grand total of one listing in the past 12 months, anywhere! That home in Lakewood’s still on the market, but now it’s in foreclosure.

Blood lines, friendship, club or church membership, or having a kid on the same soccer team as yours has absolutely nothing to do with being a good agent. Before you even mention your situation with a friend or relative, do some research. (We’ll give some tips in a few days.) Otherwise, you may become “obligated” to list with an agent that isn’t right for you. It’s a great way to ruin a friendship or family relationship. And lose money.

6. Because of the office or franchise. You can’t tell a book or an agent by their jacket! Our 30 years of selling hundreds of homes has taught us that their are bad agents in virtually every office. And good ones in some. You’re never even going to see the broker, let alone any franchise employee.

Franchises are primarily created to help the broker recruit agents and secondarily to pool funds for generic TV and other old-media ads.

The office we work at is affiliated with one of the most successful franchises in California, but I don’t think we’ve ever once mentioned which franchise it is. You really have to search to even find it on our commercial website. That’s because it just isn’t that important. We’re the ones our clients see & must rely on.

Those are five of the top ten mistakes we’ve seen sellers make, but this post is getting too long.

For the top five wrong reasons to list, including one that most agents know will get them the listing almost every time, just click here. (starting tomorrow, 1/19/2012.)

Then, most important, make our recommendations for those who may be thinking about selling or buying in Southern California this year or next:

2011 in review:

Prices on homes going into escrow in our area moved up modestly through the spring, then trended down through the summer but started heading back up in the fall, propelled by amazingly low mortgage interest rates.

What’s ahead in 2012 & beyond?

The experts speak: The OC Register just finished interviewing 21 experts on what’s ahead for So Cal real estate. Here’s a summary of what the experts think:

• So Cal housing will bottom sometime in the next six years..
• Condos and outlying areas will be the last to recover.
• The next housing peak is 5, 10, or up to 25 years away.
• In 2012 local home prices will rise modestly, stay level, or drop 5% or more.
• Local rents will rise in 2012, as we shift to a “rentership society.”
• Almost everyone agrees foreclosures will be up in 2012.

Bottom line: Nobody’s really sure what’s next, but we’re not out of the woods yet. The “silver lining” is mortgage interest rates staying near their lows.

Our take? Based on what we’re seeing first hand, we’re a bit more optimistic than most experts. Why?

• The 2011 ended with the strongest December we’ve seen in 20 years, with home prices actually moving up.
• Low mortgage rates continue to boost sales: We’re already seeing multiple offers!.
• 2012 is a presidential election year, meaning no effort will be spared in D.C. to improve the economy. (That means 2013 could be a “clean up the mess” debacle.)

Biggest concern? “An enormous wave” of foreclosures in 2012 is predicted by RealtyTrac, an Irvine data firm, anticipated.

Recomendations:

Sellers:

• Try to get your home on the market by March 13 – May 8. (If needed, we have ways you can sell early but postpone your move for months.)
• Staging your home correctly before it hits the market is critical. Talk to us now to save loads of time and money. No obligation, just the benefit of almost 40 years combined experience and over 800 closed sales! Blair: 562 822.6532; Dave: 562 822.SOLD. .
• f you are thinking about moving up, down, or out of the area, we’ll give you a realistic idea of your net and connect you with experienced agents anywhere in the world.

Buyers:

• We expect prices and interests rates both to rise as we move from January through May, so call or e-mail us now (BlairNewman@verizon.net).
• Your first step is to talk to an honest, knowledgeable lender! We know several.
• Now’s a great time to buy a rental property, and we’ve got more experience both owning and selling rentals as anyone!

That’s our perspective, from the OC/LA County line.  What’s yours?  Feel free to let us know how thinks are looking for 2012 real estate from your perspective.

Auctions

I teamed with a fellow Realtor and friend to research and bid on a major HUD auction of repossessed properties. From experience, we knew there would be lots of bidders and lots of competition, so we decided to focus on the least desirable location with the most REOs, which was at that time was Compton, and the least desirable type of property with the most REOs, which was condos.

I spent days researching about 50 Compton properties that were on the auction list. I walked through each property, checked sold comparables and similar homes available on the M.L.S., spoke with neighbors, etc. Most of the properties, although boarded up, had been stripped of heaters, major plumbing fixtures, even light bulbs. They were being sold as-is. I carried abaseball bat as I inspected, being on the lookout for homeless people who might have moved in.

When we showed up at the auction, it was like a circus! Adrenalin-pumping music, thousands of buyers, many sitting in groups with their gold-coated Realtors. (I’m not ridiculing any company here, just reporting what I saw.) The chairs were arranged in sections of maybe 200, each one worked by a smiling, enthusiastic, tuxedoed Texan.

We sat calmly amidst the chaos, opening our large 3-ring binders to our detailed notes on each respective property as it was loudly announced in a southern drawl by the animated head auctioneer. Every single property we had researched was bid up way above our market value. Sometimes there were real pride-of-ownership homes on the market on the same block with an asking price well below what the HUD repo sold for. We were grossly outbid on all 50 homes.

At one point I commented to the Texan working our area, “These homes are going for way above market value.”

“Oh oh!” he said, between prodding buyers to up their bids. “That means most of these deal will probably fall out and not close.” Even auction buyers apparently get remorse and sometimes realize they overpaid.

Our conclusion: There are buyers who are willing to pay any price for a foreclosed “bargain!”

From the Bee article, and others in local papers, I don’t think much has changed.

update: I spoke today with a friend who is also a former President of one local Board of Realtors. He’s now on the homeowner’s association board where he lives, & he told me that a townhome in his mid-priced OC complex just sold in a foreclosure auction about 20%- 25% below market, so apparently there are bargains out there at auctions right now.

We still recommend that you do your homework, like we did, and be careful of getting caught up in the euphoria of an auction.

By the way, that 20% below market margin is my minimum discount for buying a “flip” in a modestly improving market. I think I’d want 30% or more before I’d buy to flip today. That townhome was apparently bought by a Realtor who does a lot of business in that tract and intends to flip it. I hope he does better than the Realtor whose flip I plan to describe in a new post in the next day or two.

Foreclosure Tips

Now here’s a summary of what the Bee says you need to know in advance about buying bank-owned properties:

- First-time buyers will need to be pre-approved by one or more lenders.
- Don’t be surprised if the bank that owns the home requires that you finance your
purchase with them.
- Expect competition. Many buyers bid on multiple properties.
- Banks won’t accept offers that are contingent on selling your home.
- The best deals generally are those homes with the longest time on the market.
- Bank-owned homes typically sell for 10 to 20 percent less than their listing price.
- Be sure to pay for an inspection and consider the cost of repairs or damaged or
missing appliances when bidding on a foreclosure.
- The bank is likely to make a counter-offer. Be sure to consider this when submitting
your first offer.
- Some banks will not accept an offer unless it is submitted by a REALTOR®.
- Banks generally are looking to close quickly, within two weeks to 45 days.

For our view on how we got into today’s foreclosure crisis, check out “How we got into this mess“

For seven options for homeowners trying to avoid foreclosure, see “Trouble making your mortgage payment? 7 ways to get back on track“

For what a seller should do in today’s market, there’s “Top 5 ways NOT to pick an agent and “How to sell your So Cal home for top dollar in 30 days.”

If all this down market is depressing you, that means you’re a homeowner and not a buyer. To keep things in perspective, consider any of the posts in our “perspective” category in the column to your right.

Today’s market presents many challenges and opportunities. Each cycle is different, but they all come to an end. That’s one reason they’re called cycles. The sun will come up tomorrow. Especially in Southern California!

(11/14/11)  I originally put this post up over three years ago, and came across it as I was reviewing some of our older posts.

I clicked on the link, an OC Register story about the gentleman to the right, and found it as inspiring as ever, in a market that, sadly, hasn’t changed all that much from 2008.

Woke up this morning to one of those stories that makes you thankful for what you have. Even if it is going down in value.

Worth a read:

“Pride in A Paycheck”

There’s more to life than money. Way more.

Here’s what we know so far:

1. The program will now be available regardless of how “upside down” the homeowner is.
2. Borrowing requirements will be simplified, primarily focused on verifying that the homeowners:
   1. have made their last six payments
   2. have no more than one missed payment in the last year and
   3. have a job or another source of income.
3. The refinance program is limited to homes backed by FNMA or FMAC, commonly referred to as “conforming” loans, which includes most fixed rate mortgages that aren’t FHA, VA, or “jumbo.”
4. The loans must have been made before June, 2009.
5. FNMA and FMAC fees will be reduced for all program participants.
6. Homeowners who shorten their loans to amortize over 15 or 20 years, and  possibly 10 years, will have all FNMA or FMAC fees waived.

That last item is part of a push by the government to encourage homeowners to refinance into loans that pay down principal, or amortize, more rapidly.  That allows upside down  homeowners to get to a point where they actually have equity in their homes faster, especially helpful in our current stagnant housing market.

The program is not as aggressive as many market analysts had hoped, but it is certainly a step in the right direction.

Details of the program will continue to emerge over the next month, with some banks hoping to be ready to take applications by December 1.  If you or someone you know has a fixed mortgage that was originated before June, 2009, this program is well worth looking into.

Click here for more details from a Wall Street Journal Article written today.

Click here for a Reuters article on Obama’s planed announcement.

This enlarged home features 3 large bedrooms, two baths, and a living room with fireplace.

(9/2/2011) One way  to give our readers a snapshot of the current market is to take a detailed peak at some of the best of the newest listings.

So let’s take a look at a home that just hit the Southern California Multiple Listing Service this morning.  It’s in Lakewood, one of the  best priced centrally located communities in Southern California’s “sweet spot,”  the temperate Coastal Plain.

The specifics are a great way to demonstrate concretely what a lot of knowledgable people are saying about our current market.  Because this home is a great example of the opportunities today’s market provides.

About the community:

Situated just north of Long Beach, Lakewood has easy access to freeways in all directions.  We’ve had buyers chose Lakewood because it’s just a half hour’s drive from Downtown Los Angeles (& Dodger Stadium) and also from central Orange County (& Angel Stadium, not to mention Disneyland) as well Orange County’s John Wayne airport.  LAX, your choice of beaches, & both L.A. and Long Beach Harbors are even closer, as are several major Universities.

This home combines classic includes a real wood burning fireplace, a raised foundation & hardwood floors without the tiny rooms that usually accompany such amenities

The great thing about most Lakewood homes is they were built in the late 1940s and early 1950s with features that you can’t find in even the most expensive new homes today.  Features like:

• Real lath and plaster walls, with greater insulating capacity, durability, and ease of repair.
• Real oak hardwood floors.
• A raised foundation:  no walking & standing on concrete slabs covered with a thin layer of vinyl or carpet.
• Greater separation between homes, at least the width of a driveway.
• Garages in back, with room to work on a car or leave your garage open behind the house.

About the home:

This home is in the Lakewood Gardens tract, which also features real wood fireplaces in each home as well as an optional Community Pool and Clubhouse.

A spacious master bedroom, big enough to serve as a family room once the kids start moving away, was added on

These are classic quality touches that money can’t buy in a new home today, but they usually come with a trade-off:  Bedrooms way too small for today’s furniture.  So imagine our surprise when we discovered two spacious master bedrooms in this home, as well as a good sized third bedroom or den.

This was the result of a unique combination:

1. Lakewood Gardens homes were originally built with two larger-than-normal bedrooms along with one smaller bedroom.
2. A former owner added a large additional master bedroom, then converted the smaller bedroom into a hall to access the bedroom and a master bath.

The home, located at 5832 Castana Ave., Lakewood, CA, has almost 1700 square feet of living area plus a double detached garage and sits on a 5,266 square foot lot near the middle of the block.

About the value:

A few years ago this home would probably sold for close to 3/4 of a million dollars, but it’s available right now for just $389,999.

But that’s only half the good news!  It wasn’t that long ago that a fixed rate 30 year loan on this home would have gone for around 9%  With 20% down, that would have made your payment, even at the current list price, a hefty $2510 plus property tax and insurance.

After the recent dramatic drop in mortgage rates, a buyer today could lock in a 4.25% interest rate for a full 30 years.  That drops the monthly payment almost a thousand dollars a month, to $1,535!

About the current market:

A year ago if you’d found a home at this low of a price, it probably would have been a foreclosure, with appliances missing, holes in walls, dead landscaping, and loads of work for the buyer.  This, however, is an owner occupied home with lots of pride of ownership  features.

A year ago, if you’d found a home in this good of a condition, it probably would have been a “short sale” that would require the buyer to wait as long as 12 months for the seller’s current lender to agree to the sale. . . or cancel it!

This, however, is a “standard sale,” with none of the hassles, problems, and uncertainties of a foreclosure or “short sale.”

Today there are more standard sales available than we’ve seen in quite a while, and the lowest rates in our lifetime, and the lowest prices in almost a decade!  We expect this window of opportunity for buyers to start closing sometime within the next 3 – 5 months, possibly sooner.  Interest rates could start rising any time, and prices normally start moving upwards right after Christmas.  Which is why we believe today’s market presents a unique opportunity for buyers.

Summing it up

So there you have it:

• A quality home with quality features they just aren’t making any more plus  room sizes they just weren’t making back then!
• A great, central location.
• A “standard sale.”
• A very competitive price4.

Values like these are usually gone within a few weeks, but things can get slow over Labor Day weekend, & we’re telling you about this one the very day it hit the market!

For a more thorough virtual tour, go to CastanaAvenue.com.

To discuss this particular home, or your concerns and questions about buying or selling, call us directly at 562 822.7653.   We (Blair Newman and Dave Emerson) have over 35 years combined experience helping buyers and sellers throughout Southern California, with a focus on Greater Long Beach and West Orange  County.

(7/11/2011)About 2 weeks ago I received an e-mail via our “contact us” link from Andrew Potter, who has a real estate blog in the UK.

Andrew thought his post “How to sell your home in a difficulty market”  might be of interest to  Southern California sellers.

With England’s future King and Queen “hopping the pond” to visit our gorgeous little corner of the world, I figured it’s only right to let my fellow real estate blogger do so electronically.

After I read the seven tips in Andrew’s post, I was even more convinced.  Turns out my colleague in jolly olde England is giving sellers over there almost exactly the same tips we’ve been giving out here!

With one important exception (see my comment below) Andrew’s tips will help any So Cal seller expedite their sale!  Thanks, Andrew, for a great guest post!

by Andrew Potter: British homeowners attempting to sell their homes in the midst of an economic decline may be in for a rude awakening. While they would like to dispense with their monthly mortgage payment, making their move may be hampered by the circumstances of the British real estate market.

Conditions have not become any clearer since last year. On the whole, prices appear to be down compared to 2010. However, Rightmove estate agent, a company that tracks asking prices and the government both show annualized rising prices. What does this mean for the average British homeowner?

The latest numbers on mortgage approvals were published not too long ago. They fared poorly, indicating a renewed downward trend in home prices.

A number of problems still face Britain’s housing market. The first problem is that, historically speaking, prices are still too high. According to Nationwide building society, prices have fallen by more than 11 percent from their 2007 peak, but they are still expensive. The 11 percent number is disputed by Halifax, who claims that prices are down by over 20 percent from 2007. Regardless of how much home prices have fallen, they still need to fall even further.

7 Great Tips

Despite the negative outlook, British homeowners who want to sell their homes must realize they are all in this situation together. The key is to make the home as attractive as possible to new buyers and make sure that they do not price their home out the market. We’ve put together 7 great tips to help British homeowners sell their properties in these tough times:

One - The homeowner should find a real estate agent and starting talking about the home in question. A good agent who knows the market and the home’s regional location should be able to tell the homeowner what’s in and what’s not. An excellent agent will be able to price the home to the pound after gathering all the relevant information and give the homeowner a schedule telling them at what point the price should come down.

Two - Leasing may be a worthy option to consider. This can ease the person who ends up occupying the home into owning it in the future. Leasing may actually be the best option for some homeowners. They will hopefully get a large enough monthly rent to cover the mortgage, and they can wait until the occupant is ready to buy. The lease payments the occupant paid then become the down payment for purchasing the house outright. The occupant is then in a much better position to qualify for a home loan than he would be otherwise.

[Note from Dave: I would urge any seller to use the “contact us” link in our masthead to discuss their situation with me before exercising this option here in Southern California.  It is rarely a short-term solution, it can dramatically increase a sellers’ capital gains tax when she does sell, and homeowners rarely make good landlords.  If you do go this route, you should consider using a good property management firm.  The only one I recommend is Ernst  & Haas Property Management.

Three – Redecorating the home to put extra shine into it can also improve its prospects. This does not take much money. A few simple changes can drastically increase the likelihood of a sale.

Buyers want to see the home as a blank canvas for them to make their own. Taking down any brightly colored wallpaper, decorative items and art pieces can improve a home in the eyes of the buyer.

Four – One of the simplest things a homeowner can do is increase the amount of natural light. A dark home turns people off because it seems gloomy and inhospitable. Changing the light bulbs can be a start. Adding lighting may be the only solution for some rooms, such as adding floor lamps.

Five - Ridding the house of clutter is another positive step. Clutter makes a house look much smaller than it really is and can make buyers feel claustrophobic. Furniture is the biggest culprit in this category. Filling a house with furniture to make it seem cozier backfires because now the house is too cozy. Getting rid of all extra and unnecessary stuff makes the property much more attractive, especially in the bedrooms. Large and spacious bedrooms are a big plus for buyers.

Six - All of the internal improvements a seller makes will not matter if the buyer is repelled by the exterior of the home. A buyer will pass judgment on a home as soon as he drives up to the curb. Buyers will assume the inside of the house is in the same condition as the outside. Fixing up the curb appeal can be everything when it comes to a home. Cleaning up the outside, mowing the lawn, painting the outside walls and planting some flowers can make a sale.

Seven - The most critical part is not to overprice the home. A low market means that it will be difficult to get top price. Losing some of the equity in the home is a better option than to not sell it at all. It is actually better to under price the home to make a sale than to be stuck with it.

Bio

Andrew Potter from My Online Estate Agent wrote this guest post. My Online Estate Agent is one of the United Kingdom’s fastest growing online estate agents and lists properties on the major property portals and provides a range of online guides and tools.

A closely watched index of home prices in America’s largest cities ticked up in April over March, the first such improvement in eight months, though experts attributed the increase largely to seasonal variations. Prices of previously owned single-family homes rose a modest 0.7% in April over March [2011] but were down 4.0% from April 2010, according to the Standard & Poor’s/Case-Shiller index of 20 metropolitan areas. In a welcome shift from recent months, this month is better than last — April’s numbers beat March,” David M. Blitzer, chairman of the index committee at S&P Indices, said in a news release. “However, the seasonally adjusted numbers show that much of the improvement reflects the beginning of the Spring-Summer home buying season. It is much too early to tell if this is a turning point or simply due to some warmer weather.” After showing some signs of a rebound, the housing market began faltering again during the second half of last year with the expiration of tax credits for buyers. Economists worry that weak demand and a steady supply of foreclosures will keep the market soft for the foreseeable future, holding back any broader U.S. economic recovery.

Prices in the Greater Los Angeles area were only up by 0.3%, from March to April,  a little under half of the nationwide average increase.

Exactly what we predicted!

We actually called this one last week, in my bi-weekly real estate e-mail to clients and friends:

As you’re driving to work this coming Tuesday morning, you can expect to hear the “news” of the release early Tuesday morning of the “Standard & Poor’s Case-Schiller National Home Price Index. What they may not tell you is that it’s the April Index, based on an average of February – April closings, which went into escrow mostly in December – March. In other words, it’s old news. Since it’s normally the non-seasonally adjusted index that receives all the attention, we would hope that the strong April closings month we reported here earlier will boost the average modestly, which may prompt reports of a modest turn-around or possible bottoming out in the media. However, that’s mainly just the normal early spring price bounce from last Februasry and March, and does not reflect the ongoing weakness we’re seeing in homes going into escrow so far this June.

Case-Schiller is the best index I know of for comparing apples with apples:  It’s not a median number but a set of “matched pairs” that seeks to remove the distortions inherent in a “median price” statistic (for details, please see “What is the S & P/ Case-Schiller Home Price Index?”)   The problem is, it’s actually reporting on what went into escrow 4 – 7 months earlier:  This is primarily  a snapshot of the market last  December – February!

So what’s going on right now?

Throughout Southern California real estate prices remain sluggish and activity is slowing as we head into summer.  Most  buyers aren’t in any hurry  and more homes are coming on the market, as well as going into foreclosure.   In fact, there’s a five bedroom home in a move-up neighborhood in Los Alamitos  that’s been reduced twice since it listed a month ago. . . at what I thought was an excellent  price then!

On the other hand, the listing agent that seller picked didn’t even bother to put a brochure box on the home, which is on an access road to a desirable tract.    And if you followed the directions to the home the agent put in the M.L.S., it would have taken you to an entirely different tract!

Bottom line:  Southern California  homes are selling, prices aren’t as high as most sellers  hope for, but rates and prices are great for buyers.

And it still pays to have an honest, experienced agent who’s been through 4 or 5 recessions already.   Like. . . me!

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As always, your insights and comments are welcome!