So Cal Real Estate News

Poor Mr. Williams. We just drove by his house & noticed the sign was down. Hadn’t sold. If he’d read this post 6 months ago, it could have saved him at least $5,000 and half a year of his life.

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 (more…)

A while back the Sacramento Bee ran a good article on buying foreclosures. It reminded me of a very interesting experience with a HUD auction during the last recession in 1994.

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 (more…)

(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.

(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!

(8/1/08) Frequent readers know Blair & I have been candid about what we don’t know during this amazing real estate market cycle here in Southern California. (See “How low will prices go?“)

But today, as I was looking through the Orange County Register’s Friday new homes advertising section, it suddenly hit me:

Prices on most So Cal new construction have either already hit bottom, or will be hitting bottom between now and December 26.

So, if you’ve always wanted to live in a new home, I suggest you start doing your research now.

Why now?

Simple:  Supply and demand.  New home permits have been way down for over a year now.  Most developers may be as addicted to building as a drug addict is to dope, but they aren’t crazy.  And even if they are, their bankers aren’t.  There just isn’t that much additional inventory coming onto the market.

In most segments, we’re in the final phases of a clearance sale, and the stores haven’t been ordering new inventory for some time.  Essentially, they’re going of business–some permanently, others temporarily.  And the “going out of business sale” is winding down.

Exactly which new construction?

In the developed areas of Orange, San Diego and Los Angeles Counties, the lower end of new construction will probably hit bottom first, as may also be the case in resales.  That would include almost all starter homes, especially condo/townhomes/lofts and “C” neighborhood detached homes.  As Lyon Homes reported today, the lower end homes are now the bulk of their sales, allowing them to sell out these tracts earlier.

In the outlying areas, it’s a bit trickier due to the impact of high commuting costs and economic problems from the building slowdown itself.  The areas with shorter commutes will most likely bottom first.  High end, move-up tracts may have further down to go as well.  Do your homework and look for desperate builders or whole tracts that are now bank-owned.

What about resales?

The glut of bargain basement new homes needs to be cleared out to stabilize resales, so this would be a step in the right direction.  There are two additional problems facing resale housing:

1. The glut of foreclosures and “short sales,” especially on the low end.
2. The lack of the normal buyers for move-up homes, because most owners of starter homes either already moved up during the boom or else have had their equity disappear during the plunge.  For example, last weekend we held open a beautiful Los Alamitos five bedroom, three bath pool home. Over 50 people came through, and most of them fell in love with the home.  Unfortunately,  almost all of the potential buyers had another home they needed to sell first.  In most cases, that home had been taken off the market because they couldn’t sell it at a price that they felt they needed to make the move, including one family that was making a lateral move back to California from Florida.  (The first Florida summer will do that for you!)  Same problem that Lyons is having with move-up homes.  On the flip side, prices have been “stickier” on most move-up resales, due to both a lack of competition from foreclosures and the ability of their sellers to wait out the downturn.

For resales, we’re sticking for now with our latest projections (see”An optimistic update on our projections of a home price bottom“).  In short, we think the odds are for a bottom either this coming winter or next, but it’s too close call as to which.

What to do?

• If you’ve got your heart set on a new home, start looking now and be ready to close before year’s end.
• If a resale will do, get your “ducks in a row” by figuring out what you’ll qualify for and what your home might sell for if you’re moving up, or if you’d be better off refinancing out your down payment now and renting it out.  (You’d need to close escrow on it within 3 years of moving out or you lose your tax free $250,000/$500,000 exclusion of capital gains.)  This winter should be good–prices have already dropped more than I’ve ever seen in my 28 years as a Realtor and broker.   But prices might be better in winter of ’09-’10.

We think the deciding factor should be your personal situation.  For more, check out our classic post on “What to do when nobody knows what’s next.”  Of course, we’ll try to answer any question you leave in the form of a comment below.  You can also feel free to go to “About Us” and scroll to the last few lines to get our phone numbers, or simply put “contact me please” in the comment section below (click the word “comments” below if there’s no box to complete).

Times of great opportunity are ahead.  For many new home buyers, they’ve already arrived, and quite possibly for resale buyers as well.  Praying for wisdom might be a good place to start!

As you may know, a few weeks ago we started what we hope will be the first of several local real estate blogs with LakewoodRealEstateNews.com. Blair and I work both sides of the L.A./Orange County line, and we hope to later add possibly Long Beach and West Orange County blogs as well, maybe more.  You can’t live in Southern California for over 50 years and sell real estate here for almost 30 without getting to know quite a few communities.

Earlier today we put up a post there based on my first home purchase way back in 1976.  We focused primarily on some unique situations in Lakewood, but there are some interesting issues that apply to most Southern California communities.  Especially interesting was a price and rate comparison between 1976 and 2008.  Maybe we’re closer to the bottom than I thought, even with IndyMac’s failure today and all the problems with Fannie Mae and Freddie Mac.

If you’re interested, this link will take you straight to today’s post, “How to pick a Realtor:  Don’t make the mistake I did!”

Enjoy. . . and learn–from my mistakes!

UPDATE: Katelyn Elizabeth Newman checked was born at 3:16 a.m. Wednesday morning, 5/28, weighing in at 8 lbs 6 oz, 20 inches. Mom, Dad, baby, grandpa Dave & others all tired but doing well. Film or at least photo at 11. Hopefully.

Guess I’m getting a little first-hand help with that whole keeping real estate in perspective thing we’ve been posting about periodically. (See “A Memorial Day perspective on our housing market,” “A little perspective,” or “A little more perspective.”)

Although Blair & I had been expecting his wife & my daughter Beth to go into labor this week with their second child, I was still caught a little off guard when Kaiser checked her in after her weekly check-up this morning.

It’s now over 12 hours since they started the ptosin to induce her, & she might be working on it all night. Meanwhile, after visiting Beth at the hospital, moving cars, & taking care of some preparation work on a new listing this morning, good old “Papa Dave” has been providing day care for Beth’s two year old daughter & her almost two year old cousin.

So that promised “Tale of Three Listings” post is still in my head rather than on this blog. Sorry.

Don’t even have time to post about all the interesting real estate news today, although it’s pretty much what we’ve been predicting all along.

Hopefully we’ll have some posts up shortly. Maybe a baby picture too.

Just more evidence that, regardless of the market’s crazy cycles, life does go on.

And there really are things in life much more important than real estate.

It sounds like the Senate may once again prove the more statesmanlike chamber. Word is now breaking that Democrat Senator Chris Dodd and Republican Richard Shelby, with help from their respective Senate leaders, have bridged the gap between the parties and dramatically reduced the projected cost of the Senate’s version of Barney Frank’s massive Foreclosure Relief Bill.

The Senate version is projected to cost a little less than 1/3 of the projected $1.7 billion price of Frank’s bill, according to Forbes.com’s post, which is the most detailed I’ve found yet.

The New York Times quotes Senator Chris Dodd as saying “The bill addresses the root of our current economic problems — the foreclosure crisis — by creating a voluntary initiative at no estimated cost to taxpayers which will help Americans keep their homes. The bill also establishes a new fund that will help create more affordable housing for millions for Americans.”

From where we sit in on the Los Angeles and Orange County line, the foreclosure crisis may be at least as much branch as root (see “How we got into this mess“).

This more modest version may be the best we could expect, but I still have several concerns. By itself it’s hardly enough to get us out of the mortgage mess Congress, the Fed, and a cast of thousands got us into. (see “How we got into this mess“).

It’s also a great example of our ongoing mantra, “It’s impossible to know what’s going to happen next.” (See “How low will prices go?“)

Ironically, as Senators Dodd and Shelby were announcing their foreclosure progress, April DataQuick numbers indicated increasing sales but dropping prices, as we recently predicted (See “Snapshot from the front lines: One bottom, maybe two“).

It may be that what we’re seeing is the market finding it’s own bottom, as banks price their REOs at prices that are attracting buyers. Unfortunately, inflation seems to be driving interest rates up, which will put more downward pressure on prices, especially combined with all the foreclosures still in the “pipeline.” (See “So Cal April Foreclosure Data Just In.”)

There are a number of things we like in the Senate version of the housing relief bill. On the whole, it seems like a good move that will help.

However, the new challenge to housing, which we think is potentially more damaging than the foreclosure problem, is ongoing increases in long term mortgage rates (see “Oh-oh! We just passed a nationwide bottom!“).

We still think Congress would do the housing market a bigger favor if they worked to reduce the huge deficits that inevitably drive up interest rates. We’d love to see our three Senator/Presidential Candidates work together on a bill to eliminate congressional earmarks and give the next president a line-item veto.

Now that would be real “straight talk,” real “change we can believe in,” real “solutions for America,” and real foreclosure relief!

Today the Wall Street Journal reported that Senate Banking Committee Chairman Christopher Dodd (D., Conn.) and his committee’s ranking Republican, Sen. Richard Shelby of Alabama have reached an “agreement in principal” that could lead to senate approval of their own version of Barny Frank’s $300 billion dollar mortgage relief bill.

You may recall our post ten days ago about Ben Bernanke’s seeming support of such a bill.

While we are supportive of some of the many things included in Frank’s bill, there are huge problems which we hope our Senators are wise enough to correct.

1. It makes no sense to bail out loans that never should have been made and that will ultimately fail regardless of temporary bailouts. There’s plenty of blame to go around for the subprime crisis (see “How we got into this mess“), some goes to borrowers who lied about their income, other to lenders willing to make no down home loans to borrowers with Fico scores so low I wouldn’t have accepted them as renters, let along borrowers. In either case, there’s no sense in putting off the inevitable for borrowers who never should have become homeowners.
2. It makes no sense to reward and encourage irresponsibility. It’s really up to the borrower to read and understand the loan documents, not to just “trust our agent,” who probably hasn’t read them either.
3. Let’s not punish tens of millions of responsible homeowners who are also taxpayers by forcing them to shoulder billions of potential losses to bail out less responsible homeowners.

In fairness, many subprime borrowers were duped by mortgage brokers who were often also real estate agents, eager to make a commissions for both the sale and the loan. I’ve heard tales of some agents employing full time “signers” to supply signatures on loan applications and documents. Many others simply trusted agents who spoke their language to correctly explain the various English documents. The documents are indeed overwhelming. I usually scan loan docs that I sign, but rarely do I read every word of every page.

The other day as Barb & I were out for an evening stroll we passed a home which had recently been foreclosed and then sold. The buyers paid about $200,000 less than the former owners had paid almost three years ago. They had moved in, and we noticed new kitchen cabinets stacked in the garage, no doubt waiting installation.

This was not a subprime loan gone bad, just a case of a buyer who bought at the peak and then decided to accept a job transfer as prices were declining. They picked a really friendly Realtor whose child was on the same soccer team as theirs (see”Top 10 ways NOT to pick a real estate agent“).  The agent allowed them to overprice the home, then chase the market down, then take it off the market and rent it until their considerable equity was gone.

Sad for the borrower, sad for the lender, good for the buyer.  Kind of a cleansing and a fresh start, ultimately for everyone.  Not the end of the world.  Nobody died.  The sun’s still coming up.  Lender and  borrower made their choices and lived with the consequences.  And the American taxpayer didn’t have to bail anyone out.

Worse things could happen.  Rep Frank’s bailout bill, unless modified by the Senate, might be one of them.

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