Los Angeles is getting tough on the owners of foreclosed properties who leave them empty and let them fall into disrepair by increasing fines...

In particular officials are cracking down on financial institutions such as banks and mortgage companies that seize properties and leave them to fall into a state of disrepair.

It is the city's largest attempt to date to deal with a neglected 27,000 foreclosed properties that become an eyesore and also bring down the prices of neighbouring real estate.

‘It is right that the banks should be held accountable to cleaning them up. A lot of vacant homes have become a nuisance because of the foreclosure crisis,' said Betty Steele, one of several community activists who is encouraging residents to report problem properties via the city's 311 hotline.

New rules mean that officials can hand out fines of up to $100,000 against financial institutions that seize homes and allow them to fall into disrepair. They also mean that lenders, who often don't consider the properties their responsibility until the title is transferred, are now responsible as soon as they issue a default notice.

They also require lenders to register their inventory of properties which will make it easier for officials to identify bank owners because property records lag behind property transfers and the foreclosure market is very fluid. The new registry should allow inspectors to easily identify owners when constituents call in to complain about a property.

But the California Mortgage Bankers Association criticised the moves and said it creates unnecessary paperwork for lenders because property records already are publicly available. ‘Increased bureaucracy is not the answer. Lenders and banks have a vested interest in keeping up homes because the better condition the house is in, the more money they are going to recover when they sell that house,' said spokesman Dustin Hobbs.

California is one of the worst hit states in terms of foreclosures and overall the number of foreclosures is still rising in the US and expected to continue doing to this year and into 2011.

Real estate foreclosures in the US reached a record for the second consecutive month in May, with increases in every state, as lenders stepped up property seizures, according to the latest report from RealtyTrac.

Bank repossessions climbed 44% from May 2009 to 93,777, while foreclosure filings, including default and auction notices, rose 1% to 322,920. One out of every 400 US households received a filing.

Senior vice president Rick Sharga warned that a quarterly record for home seizures is possible if June is anything like May. He predicted last month that another five million delinquent mortgages will end in foreclosure in addition to properties that had already been repossessed.

And it is nowhere near the peak. ‘The second quarter won't be the peak. I'm not even sure 2010 will be,' he said. He added that the total amount of individual filings could reach as high as 4.5 million in 2010, up from 3.9 million filings in 2009.

Source: www.propertywire.com

Tourism is gaining, the entertainment industry is thriving and trade projections have jumped, a report from the L.A. County Economic Development Corp. says. But areas of weakness persist.
Southern California's economy is beginning to gain strength, although local residents may not feel the benefits for many months, according to a forecast to be released Wednesday.

Regional employers will be slow to rehire. The housing and construction industries are struggling, and tight credit is crimping consumer and business spending.

But tourism is gaining, the entertainment industry is thriving, and international trade projections have jumped since February, the report from the Kyser Center for Economic Research at the Los Angeles County Economic Development Corp. says.
Nationally, as in the Southland, the recession did so much harm that the recovery has some distance to travel before the damage is repaired, the report says. But unlike some more pessimistic prognosticators who fear the U.S. could slip back into recession, the report's authors believe the recovery "will proceed upwards and not relapse, though activity may grow in fits and starts."

"It's real. That doesn't mean it's going to be steady, but it probably won't reverse," said Nancy Sidhu, chief economist for the Economic Development Corp.

Her colleague, consulting economist Jack Kyser, put it another way: "The patient was extremely sick and in intensive care, but he's stabilized and in a very slow and challenging recovery."

In Southern California, the three strongest parts of the recovery will come in tourism and travel; motion picture and television production; and international trade. They received the only B grades among 11 employment sectors that included commercial and military-related aerospace; healthcare services; and apparel design and manufacturing.

Even in those strongest sectors, however, job growth is expected to be mostly flat compared with 2009 or still on the decline in 2010, with modest gains coming in 2011. Nonfarm employment in the five Southern California counties, for example, will fall from 6.6 million last year to 6.5 million in 2010, or a 1.2% decline, before rising to 6.6 million again in 2011, the report said.

The Labor Department said Tuesday that California in June continued to post the nation's third-highest unemployment rate at 12.3%, behind Nevada's 14.2% jobless rate and Michigan's 13.2%. Employers cut overall jobs in 27 states in June, with California and New York recording the biggest decreases, the government said.

International trade activity is now expected to rise 14% in Southern California this year, having been revised upward twice by economists from just 5% growth in February. But this sector, which employs about 400,000 in the five Southern California counties, isn't expected to see overall job gains until 2011.

Technology employment, centered mainly in Los Angeles and Orange counties, is expected to show a similarly weak pattern. After employing 223,800 workers in 2008, that sector fell to fewer than 207,000 in 2009 and will fall by an additional 1,200 jobs in 2011.

Tourism-related businesses aren't expected to add jobs until 2011, and then only modestly. Employment in that sector will rise from about 87,400 jobs in Los Angeles, Orange, Riverside, San Bernardino and Ventura counties this year to 89,100.

Part of the reason for the tepid jobs outlook is employer caution.

"The first people they will hire are the former employees that they let go during the recession," Sidhu said. "The next group will be temporary employees. That will continue until businesses begin to believe what we are telling them, that this recovery is real."

Another reason is that the credit crunch continues to have a daunting effect on both consumers and businesses.

"A growing economy needs plenty of borrowing capability," Sidhu said. "If you want to buy a new home, you need a mortgage. If a business wants to expand their factory, they need to be able to borrow to do it. If the economy is really going to get going, we need to be done with the credit crunch."

Don't expect any improvement in manufacturing or the housing sector, where it is unclear where the bottom of the market might be, researchers said. Also of concern were the constraints of the seriously unbalanced state budget, which was expected to limit the amount of spending local governments could do.

But there were some strong signs for the future. Some businesses, Sidhu said, were buying computer equipment.

"This is new since February. We are seeing purchases of high-tech equipment. Not just new personal computers, but some of the more sophisticated servers. Some businesses are working very hard to develop their Internet sites and online capabilities," Sidhu said.

Kyser said California had scored some recent successes in attracting new business and employment opportunities.

"We're seeing some business move here," he said. " Dendreon is a biotech firm out of Seattle putting a facility in Orange County. You have several retailers looking to get into the Southern California market and taking advantage of the glut of vacant retail space.

"Some of the major banks are expanding their presence in this market, like Chase and U.S. Bancorp.," Kyser added. "People sense that there is still opportunity in Southern California."

Source:Los Angeles Times.

Job growth is expected to decline less than 1 percent in the San Fernando Valley an indication the economy is beginning to look up following a poor 2009, according to the mid-year forecast from the Los Angeles Economic Development Corp.

The Antelope Valley should see a 1.1 percent employment loss, particularly in retailing and professional and business services while the Santa Clarita Valley is expected to have a 2.4 percent employment loss, according to the forecast.

The mid-year report was presented July 21 by economists with the LAEDC. The presentation marked the final one by its long-time senior economist Jack Kyser, who retired last month.

The forecast painted an improving picture for Los Angeles County although cautioning that some major industry sectors will continue to face challenges as the economy struggles to recover.

Tourism, entertainment, and international trade were identified as bright spots, and even retail is expected to improve as consumer confidence increases during the year. Manufacturing, nonresidential real estate, and apartment and condo construction are expected to remain weak.

Nonfarm employment is forecast to drop at about 1.2 percent in L.A. County, an improvement over the loss of 5.9 percent in 2009.

In Ventura County, employment is expected to drop by 1.5 percent as activity slows at Port Hueneme, the financial services industry continues to struggle, and construction and real estate remain weak.

Positive forces include growth in health care and social services, and continued good news from the agriculture industry.

Source:Los Angeles Times.

The number of default notices in the second quarter falls 43.8% compared with the same period in 2009. Meanwhile, banks step up repossession of foreclosed homes.
The number of Californians entering foreclosure slid dramatically in the second quarter to a three-year low as the fallout from the worst of the housing crisis continued to abate.

Default notices, the first stage of the foreclosure process initiated by banks on troubled homeowners, plummeted 43.8% in the second quarter over the same period last year to 70,051, and 13.6% from the first three months of the year, research firm MDA DataQuick of San Diego said Wednesday.

Banks are pushing alternatives such as loan modification programs and short sales — in which a property is sold for less than the value of the mortgage — helping to reduce the number of people entering foreclosure. A modest recovery in home prices also means that fewer homeowners are likely to sink "underwater," a situation in which a property is worth less than its mortgage, considered to be a predictor of whether a homeowner will walk away.
"The most important thing is the housing market has stabilized, that house prices are up and not down anymore," said Kenneth Rosen, a professor at the UC Berkeley Haas School of Business. "People are now able to do a short sale, and they may not be as underwater as they were, so improving markets are really a good part of this."

Banks stepped up their seizure of homes from people already ensnared in the repossession process in the second quarter, reflecting an effort by economically resurgent financial institutions to clear troubled loans off their books after having survived the depths of the banking crisis. Many of those loans went into default months ago, taking an average of 9.1 months to get through the process, DataQuick said.

The plunge in default notices was experienced throughout California, including places such as the troubled Inland Empire and the state's Central Valley, resulting in the fewest new defaults since the second quarter of 2007. Default notices peaked statewide in the first quarter of 2009, when 135,431 households received filings, contributing to a steep slide in prices as bank-owned houses sold at extreme discounts.

The least expensive regions of the state continued to be the places where people were most likely to receive notices of default. An analysis of the state's most affordable ZIP Codes by DataQuick, representing about 25% of the existing housing stock, found that these areas accounted for about 40.1% of all defaults in the second quarter.

Neighborhoods with a median sales price of less than $300,000 saw 10.6 default notices for every 1,000 homes compared with 2.9 for every 1,000 homes in areas with a median price above $800,000.

Lenders that originated loans receiving some of the highest number of default notices in the second quarter include many institutions that had been acquired during the banking crisis, including World Savings, with 2,982 loans, Washington Mutual, with 2,547, and Countrywide, with 2,532. Wells Fargo, which still exists, had 2,117 loans with default notices filed on them.

In Southern California, the number of default notices dropped 46.9% in the second quarter from the year-earlier period, and 15.23% from the first quarter. The county with the biggest decline in the second quarter was Riverside, with a 49.2% drop in default notices from the same quarter last year, and the county with the smallest decline was Ventura, with a 44.6% decline, underscoring the broad drop in default activity.

"We are now three-plus years into the housing crisis, and at this point of time we are seeing stabilization across the board," said Stuart Gabriel, director of UCLA's Ziman Center for Real Estate. "The stabilization is in fits and spurts … but it is evidenced in a variety of indicators."

The mortgage meltdown made most subprime and nontraditional loans unavailable, and the bulk of mortgages in the intervening three years have been fixed-rate loans made to solid borrowers. These loans are generally performing better than the poorer-quality ones being flushed out of the system.

The Southland's housing recovery has held its ground for more than a year, even though sales in recent months have been fueled by federal and state tax incentives. Buyers have included first-time purchasers as well as investors packing courthouse steps to scoop up foreclosures and bidding up prices by tens of thousands of dollars in minutes.

Furthermore, some researchers are beginning to conclude that fewer homeowners may walk away from their properties than previously thought, said Richard Green, director of USC's Lusk Center for Real Estate.

"There are incentives to avoid default even if you are underwater," Green said, adding that people struggling to pay their mortgages may not be as ruthless in their financial decision-making as some experts had presumed they would be.

With banks booking big profits these days, they are facing increasing pressure from federal regulators to clean up their problem loans. Banks stepped up their repossession of homes statewide and in the Southland during the second quarter.

The number of trustee's deeds — the last stage of foreclosure — filed on California properties increased 4.4% from the same quarter a year earlier, and 11.2% from the previous quarter, for a total of 47,669. In Southern California, the number of deeds filed jumped 4.5% from the same quarter a year earlier, and 9.6% from the previous quarter, to 24,367.

Experts and real estate professionals said the increase in foreclosure activity also has to do with the steadying housing market. Now that prices have bottomed, banks apparently feel comfortable putting more inventory on the market.

"It's a little bit busier, and everything is selling pretty fast because interest rates are so low," said Leo Nordine, a Los Angeles real estate agent who specializes in selling foreclosed homes on behalf of major lenders. "The high end is still really slow, and the banks are really pushing short sales hard."

Source:Los Angeles Times

Points, fees, and adjustable rates. If you are brand new to the home buying arena, then mortgage terminology can be as foreign as reading Greek.

The famous quote by Sir Francis Bacon rings true for all prospective buyers, "Knowledge is power." Use the following glossary of terms to help you raise your own awareness.

Underwriting: This lender process is used to determine how much of a risk you and your mortgage would be to their company. An underwriter will evaluate such things as your credit, available collateral, as well as your employment and current debts.

Points: Broken into two categories, discount and origination, this term refers to a fee paid when obtaining a mortgage.

Discount -- These fees are tax deductible. You can assume to pay 1% of the total loan amount for each point. Paying points can reduce your final interest rate.

Origination -- Less popular with buyers, as they offer no real benefit to the borrower, these points are fees paid to the lender or loan officer in exchange for their job of evaluating and processing your mortgage loan. These points are not tax deductible.

Fixed Rate: Your interest rate will remain the same throughout the life of the loan.

Adjustable Rate: Your interest rate is adjusted periodically. There also may be a penalty for paying off the loan before its maturation date.

Amortization: The decrease in the principle owed on a home, as it decreases over the life of the loan.

Down Payment: A portion of your total home cost that is paid up-front. It can result in a smaller monthly payment and a lower principle balance.

Good Faith Estimate: RESPA requires the lender to provide a borrower with an estimate of the fees that will be due at closing. They must provide this within three days of taking your application.

Escrow: Your funds are held in an escrow account by a third party until the closing of your transaction.

Refinancing: There may come a time during the life of your loan that you will wish to refinance. Perhaps you want to take advantage of lower interest rates or to consolidate debt. If you are eligible, in great credit standing, you may be able to do just that.

Source:Mortgage basics - Yahoo Real Estate.

Atty. Gen. Jerry Brown sues mortgage agencies and their regulator that shut down access to funds that allow state homeowners to pay for solar panels and other efficiency upgrades in installments.
California is suing the federal government to stop it from derailing a program that allows homeowners to finance solar panels and other energy-saving improvements through their property tax bills.

Atty. Gen. Jerry Brown on Wednesday filed suit in federal court in Oakland against Fannie Mae, Freddie Mac and their regulatory agency, the Federal Housing Finance Agency, which have effectively shut down the financing vehicle in California.

The Property Assessed Clean Energy program, known as PACE, was pioneered in Berkeley. The program makes it affordable for homeowners to invest in energy efficiency by allowing them to pay in installments over a decade or more. Local governments raise money through bonds, then lend it to homeowners who use it to purchase equipment such as solar panels, which can cost tens of thousands of dollars. The homeowners then repay the funds through special assessments added to their property bills. The assessment are senior liens, which take precedence over an existing mortgage in the case of a foreclosure.

PACE has been hailed by clean-energy advocates and community leaders as a way to speed the adoption of solar and other technologies to help fight global warming. Homeowners have lauded it for making solar energy systems affordable and helping them slash their energy bills. The Obama administration has devoted more than $150 million in stimulus money to the effort nationwide.
But on July 6, the Federal Housing Finance Agency said that PACE loans presented "unusual and difficult risk management challenges" for lenders, servicers and mortgage securities investors in a "fragile housing finance market."

The decision effectively suspended many PACE efforts across the country. That's because Fannie Mae and Freddie Mac either own or guarantee about half of all U.S. mortgages.

Calling the move a "regulatory strangulation of the state's grass-roots program," Brown alleged in the suit that the federal government had mischaracterized PACE funds as "loans" instead of "assessments" and improperly portrayed the program as violating Fannie Mae and Freddie Mac's standard lending procedures.

The stakes are high, said Brown, who is the Democratic gubernatorial nominee for the fall election.

California could stand to lose more than $100 million in federal stimulus money, he said. He said San Diego's idle PACE program, for example, has left more than 100 newly trained workers without jobs while clean-energy companies around the state are facing layoffs.

Michael R. Peevy, president of the California Public Utilities Commission, and Commissioner Dian M. Grueneich sent letters to top Obama administration officials, including Treasury Secretary Timothy F. Geithner, lamenting that more than $450 million in retrofit projects were in limbo in more than 200 communities across the state.

Thousands of local construction jobs and other positions are now at risk, as are other state energy efficiency and low-income programs that had been molded to work with PACE, the officials said.

Source:Los Angeles Times.

Mortgage rates were unchanged this week at the lowest point in decades, but it hasn't been enough to jump-start the housing market.

Government-sponsored mortgage buyer Freddie Mac said Thursday the average rate for 30-year fixed loans this week was 4.57 percent. That's the same as a week earlier and the lowest since Freddie Mac began tracking rates in 1971.

The last time home loan rates were lower was the 1950s, when most mortgages lasted just 20 or 25 years.

Rates have fallen since the spring. Investors, concerned with the European debt crisis, have poured money into the safety of Treasury bonds. Treasury yields have fallen and so have mortgage rates, which tend to track yields on U.S. debt.

However, low rates have yet to fuel home sales and have sparked only a modest increase in refinancing activity.

The housing market has slowed since federal tax credits for homebuyers expired at the end of April. And the latest decline in mortgage rates is unlikely to boost the market.

Mortgage rates have hovered near record lows for some time, so most people who can afford to buy homes or qualify to refinance their loans have already done so in the past 18 months. Doing so again wouldn't be worth the cost for most.

Meanwhile, millions of Americans are unable to take advantage of the low rates. Many have seen the value of their homes plummet and have little or no equity. Or they lack good credit or steady income to get or refinance a mortgage.

Rates could go lower and still not budge the housing market, analysts say. That's because a person without a job can't afford a home and a person worried about losing their job is unlikely to do so either.

To calculate the national average, Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day.

Rates on 15-year fixed-rate mortgages decreased to an average of 4.06 percent, down from 4.07 percent last week. Rates on five-year adjustable-rate mortgages averaged 3.85 percent, up from 3.75 percent a week earlier.

Rates on one-year adjustable-rate mortgages fell to an average of 3.74 percent from 3.75 percent.

The rates do not include add-on fees known as points. One point is equal to 1 percent of the total loan amount. The nationwide fee for all types of loans in Freddie Mac's survey averaged 0.7 a point.

Source:Los Angeles Times.

It’s been three years since the sub-prime mortgage crisis began, triggering a global recession. Richard K. Green, director of the USC Lusk Center for Real Estate, takes stock of the housing market in California and other states. How close are we to real estate recovery, and will we ever see pre-2007 prices again?

“The main answer is things have stopped getting worse, and they stopped getting worse a year ago,” Green says.

“California is doing a little better than the rest of the country — particularly places like Arizona, Nevada, Florida, Michigan and Ohio,” he notes. “California was among the hardest-hit states, and we’re starting to come out of it; those other places aren’t.”

However, even in California, housing prices and home sales are far from realizing 2006 peaks. “In Los Angeles, prices are about where they were in 2002. In San Bernardino, Riverside, Fresno and Kern Counties, they’re lower,” Green says. “We’re seeing small increases, but it’s hard to know how to interpret that, because what’s being sold is changing.” He explains that rising prices may simply be due to shifts in the type of housing stock involved; for example, foreclosures made up half of home sales in the region a year ago, but in 2010 dropped to a third.

“Overall, we’re just bumping along flat,” Green says.

Looking to the future, Green believes that cities like Riverside and Bakersfield may never return to 2006 prices in our lifetime (discounting possible inflation). However, the prospects for other parts of Southern California are rosier. On L.A.’s Westside, prices have the potential to reach their old highs within a year or two.

As with all real estate, demand is key. “Places in Malibu are like buying a piece of art, not a home,” Green says. “Rich people value trophies, and a house in Malibu is a trophy.”

Discounting these isolated gems, many places may not rebound to 2006 levels. Before the crash, prices had really gotten out of hand in certain areas, Green says. The mortgage crisis, dire as it was, had a corrective effect.

Source:Los Angeles Times.

If you're a cash-strapped homeowner, an offer to modify your mortgage or help you avoid foreclosure no doubt sounds tempting. After all, you may be behind on your home loan. Credit card bills could be past due, as well. And you're likely struggling just to make ends meet.

But when someone comes along promising to help you save your home, how do you know whom to trust?

Fortunately, there are reputable organizations available to help financially troubled homeowners – as well as some telltale signs that can tip you to a foreclosure rescue scam.

Despite the bona fide assistance out there, it's harder than ever for many consumers to separate trustworthy foreclosure assistance companies from the bogus ones. And with unemployment and mortgage delinquencies remaining stubbornly high, con artists from coast to coast are increasingly preying upon Americans going through hard economic times.

This year, for instance, officials in California indicted two San Diego men on charges of illegally collecting $900,000 from desperate homeowners looking to avoid foreclosure. Authorities said the men billed people $2,500 to $3,000 for loan modification services, then did nothing.

The duo made their operation appear official by pretending that their offices were located near the White House, and sending out letters marked with the seal of the U.S. Capitol. They also claimed that they had forensic accountants and lawyers on staff. In reality, the two men worked out of Southern California and had no accountants or attorneys on the payroll.

Meanwhile, in New York, Attorney General Andrew Cuomo recently sued two loan modification companies, and shut down two other foreclosure rescue firms for alleged illegal practices.

Red Flags on a Foreclosure Rescue Scam

As mentioned, there are some surefire ways to spot a fraudulent – or potentially bogus – mortgage modification or foreclosure rescue offer.

According to Loan Scam Alert (a national program from NeighborWorks which is designed to help homeowners avoid scams and report them), here are six red flags that indicate you may be dealing with a scammer.

1. A company/person asks for an upfront fee to work with your lender to modify, refinance or reinstate your mortgage. The person may just take your money and do nothing.

2. A company/person guarantees that they can stop a foreclosure or get your loan modified. No one can guarantee that they'll save your home from foreclosure or get a loan modification. Legitimate, HUD-approved counseling agencies will just promise to try their best to help you.

3. A company/person advises you to stop paying your mortgage company and pay them instead. This is a huge red flag. Never send a mortgage payment to anyone other than your mortgage lender.

4. Someone pressures you to quickly sign over the deed to your home, or sign any paperwork that you haven't had a chance to read, and don't fully understand. Reputable agencies and legitimate housing counselors don't use such high-pressure tactics.

5. A company claims to offer "government-approved" or "official government" loan modifications. Don't fall for anyone claiming to be approved by, or affiliated with, the government. Also, remember that real government programs don't require you to pay any fees to use them.

6. A company/person you don't know asks you to release personal financial information online or over the phone.Only give sensitive information to those you know or trust, like your mortgage lender or a HUD-approved counseling agency.

"NeighborWorks America is the most active nonprofit in the fight against foreclosure," spokesman Douglas Robinson told me. "We are managing more than $410 million in grants to nonprofits in order to help homeowners avoid foreclosure. The loan scam alert campaign is our latest program."

Another tip: Be aware that most loan modification and foreclosure rescue scams fall into two categories:

Equity skimming/property theft scams

With this ploy, a homeowner is convinced to quit claim his or her property over to the foreclosure "rescuer." The homeowner is allowed to continue to live in the home, paying rent. The homeowner is also told that the home will be deeded back to him or her once the individual gets back on their feet financially.

Instead, what ends up happening is that the con artist records the quit claim deed, and sells the property from underneath the unsuspecting homeowner.

Advance fee scams

Under this scenario, homeowners pay upfront fees to people who promise to provide any number of services, but never deliver. Most commonly, the scammers purport that they will "negotiate" with a lender on the homeowner's behalf. So the con artist warns the homeowner not to contact the lender directly, since doing so would allegedly "jeopardize" the negotiations.

In the end, the homeowner forks over several hundred or several thousand dollars, and they're no closer to fixing their mortgage dilemma than they were before.

So if you're ever looking for help with a burdensome mortgage, always start with a free, non-profit HUD-certified housing counselor.
Ultimately, you can avoid the vast majority of foreclosure rescue scams by arming yourself with information, working only with trustworthy professionals, and using common sense in dealing with anyone promising to relieve you of your financial problems.

Here are a few well-known, legitimate foreclosure-prevention groups:

NACA, the Neighborhood Assistance Corporation of America
HOME Ownership Preservation Fund
NFCC, National Foundation for Credit Counseling
NeighborWorks America
Hope Now

Source: Los Angeles Times.

Los Angeles is getting tough on the owners of foreclosed properties who leave them empty and let them fall into disrepair by increasing fines. In particular officials are cracking down on financial institutions such as banks and mortgage companies that seize properties and leave them to fall into a state of disrepair.

It is the city’s largest attempt to date to deal with a neglected 27,000 foreclosed properties that become an eyesore and also bring down the prices of neighbouring real estate.

‘It is right that the banks should be held accountable to cleaning them up. A lot of vacant homes have become a nuisance because of the foreclosure crisis,’ said Betty Steele, one of several community activists who is encouraging residents to report problem properties via the city’s 311 hotline.

New rules mean that officials can hand out fines of up to $100,000 against financial institutions that seize homes and allow them to fall into disrepair. They also mean that lenders, who often don’t consider the properties their responsibility until the title is transferred, are now responsible as soon as they issue a default notice.

They also require lenders to register their inventory of properties which will make it easier for officials to identify bank owners because property records lag behind property transfers and the foreclosure market is very fluid. The new registry should allow inspectors to easily identify owners when constituents call in to complain about a property.

But the California Mortgage Bankers Association criticised the moves and said it creates unnecessary paperwork for lenders because property records already are publicly available. ‘Increased bureaucracy is not the answer. Lenders and banks have a vested interest in keeping up homes because the better condition the house is in, the more money they are going to recover when they sell that house,’ said spokesman Dustin Hobbs.

California is one of the worst hit states in terms of foreclosures and overall the number of foreclosures is still rising in the US and expected to continue doing to this year and into 2011.

Real estate foreclosures in the US reached a record for the second consecutive month in May, with increases in every state, as lenders stepped up property seizures, according to the latest report from RealtyTrac.

Bank repossessions climbed 44% from May 2009 to 93,777, while foreclosure filings, including default and auction notices, rose 1% to 322,920. One out of every 400 US households received a filing.

Senior vice president Rick Sharga warned that a quarterly record for home seizures is possible if June is anything like May. He predicted last month that another five million delinquent mortgages will end in foreclosure in addition to properties that had already been repossessed.

And it is nowhere near the peak. ‘The second quarter won’t be the peak. I’m not even sure 2010 will be,’ he said. He added that the total amount of individual filings could reach as high as 4.5 million in 2010, up from 3.9 million filings in 2009.

Source: Los Angeles Times

Tucked between Sunset and San Vicente boulevards lies a leafy Brentwood neighborhood whose ranch homes, driveway basketball hoops and occasional picket fence are a far cry from the nearby luxe enclaves of Bel-Air and Beverly Park.

Yet this tract of upper-middle-class Los Angeles is in the midst of a change — a heightened version of the transformation that has turned other parts of the Westside from neighborhoods that were once merely prosperous into playgrounds for the superrich.

The first sign came in 2006, when a ranch house that had belonged to the late Ernest Lehman, the screenwriter of "North by Northwest" and other classics, sold for $4.9 million.

About a year later, the house next door traded hands. Then, in a steady stream, came the sales of five more parcels in the immediate area, several for prices that appeared to neighbors to be over the prevailing market price. Together, they cost about $29 million and established a tract that, at last count, totaled just under three acres — roughly the size of three football fields. Chain-link fences covered tightly with green netting keep the curious guessing.

On the expanding site, crews have been moving dirt, filling in pools and erecting building frames. Trees have been uprooted and moved to other locations. One immense wood-sided hole appears to reflect the footprint of a planned 3,300-square- foot basement — part of an addition to an existing single-family home that would grow to 18,000 square feet.

Although each of the sales was handled through an attorney, disguising the true owner, it did not take long for neighbors to figure out the buyer's identity: Patrick Soon-Shiong, a South Africa-born entrepreneur who has lived in the neighborhood, originally known as Westgate Acres, since before he vaulted into the ranks of the nation's billionaires.

The son of a practitioner of Chinese herbal medicine, Soon-Shiong, 57, joined UCLA as a surgeon and medical professor at age 31 and went on to head Abraxis BioScience, a drug development company best known for Abraxane, a blockbuster breast cancer treatment drug he helped develop.

Source:Los Angeles Times.

EVERYONE loves a library. And that's just what Los Angeles city officials are counting on. Last week, the Los Angeles City Council voted to draft a ballot measure for a $39-a-year parcel tax to support libraries. But they held off deciding whether it should go on the November or March 2011 ballot.

The tax works out to a fee of $3.25 a month on every parcel in the city no matter the size - and would raise about $30 million just for the city's libraries to use. And they sure could use it. As part of deep budget cutting, city libraries have had to eliminate programs and reduce hours and days of service.

Ultimately, voters will have to decide if they want to impose a regressive tax to maintain a certain level of library service. They will have to decide if being able to walk into their local branch six days a week - as opposed to five days a week under the reduced service - to check out "The Proposal" and the latest Stephenie Meyer book is worth tacking another fee on homeowners' property tax bills.

It might be an easy decision for those voters who don't get hit with yearly tax bills. Instead of a parcel tax, we challenge city officials to use the next few months to come up with better financing schemes.

There's no doubt that the Los Angeles city library system is first-class. In recent years, library officials have judiciously used bond money to build impressive new community branches, rebuild existing branches and upgrade service. The online component to the library is also impressive. Patrons can browse books online and then "order" them to be delivered to the library of their choice for free. And the DVD movie selection carries a large selection of current popular movies.

As well, libraries have become important community centers during the economic downtown, allowing job seekers and students to use computers and the Internet for free.

Perhaps we need to consider what "core" library services, such as book purchases and branch hours, should be maintained with city money. And what "noncore" services, such as current DVDs and popular music, might include a reasonable user fee. That might not be the right answer, but let's at least hash out ideas before the city considers nickel and diming property owners.

Surely all the bright minds in a city the size of Los Angeles can come up with a better solution than just another new tax to go into the black hole of the city's budget.

And there's certainly good reason to make other solutions a priority. Already, elected officials are thinking about new parcel taxes for parks and other services.

Los Angeles' libraries are treasures worth protecting. This is a good opportunity to rethink how we fund library services, rather than just relying on another short-term tax solution.

Source:Los Angeles Times.

The market changes and changes again.

Foreclosures spiked 19% last month and 257,944 houses were taken back by the banks last quarter of 2010 according to Realtytrac.com, both record numbers. Realtytrac goes on to say that nationwide, almost 4 million foreclosed homes will ultimately have to find their way back to the market in the next few years before we have any semblance of a normal market.

That’s four million bad credit reports for the unfortunate homeowners.

Whenever I read national foreclosure stats, I break it down further for California investors. California, Nevada, Arizona and Nevada account for the lion’s share of house foreclosures, and California usually gets around 21% of all foreclosed houses. So that means California will see another 840,000 people out on the streets eventually. Southern California will get about half of those so that means there will another 420,000 REOS/short sales show up on credit reports for those unfortunate homeowners.

Will those 420,000 soon to lose their property ever buy a house again, and are they forever locked out of the housing market?

The answer is no, according to Fannie Mae. The mortgage giant is offering troubled borrowers who opt to do short sales (sell their homes for less than the value of the mortgage) or deeds in lieu of foreclosure (essentially just hand the keys over to the bank) the chance to get back into home ownership more quickly. Two years sooner, in fact. Last week it was at least four years before Fannie would underwrite a borrower with a foreclosure on their credit report.

Fannie Mae (i.e. the government) is looking to get Americans out of homes they can’t afford and into homes they can.

That’s right; everything is peachy after two years. Hand over the keys, walk away from hundreds of thousands of debt you promised to pay back and you are healed.

Don’t get your hackles up and join the local Tea Party Rally to bemoan the lack of responsibility of those receiving a free pass from a government bailout. Don’t worry about it; it’s happened before. Only ten years ago, as a matter of fact.

Underwriting guidelines were tight in the depths of the last real estate down turn. Mortgage broker booked lots of problem loans. In 1996, many loans were in process but fewer closed. Properties didn’t appraise for enough money, borrower’s credit was suspect and their job stability was suspect. Many loans were flying into loan offices on a wing and a prayer.

Loan approvals became tough as foreclosures mounted from 1994 to 1999.

But a funny thing happened in the late 1990’s to the early 2000’s. Everybody had marked up credit, or so it seemed. Loan approvals became easier as mortgage companies competed for the borrowers that were buying or refinancing. Suddenly, foreclosures and bankruptcies were ok as long as they were 2 years old. Then in 2002 to 2007, the real estate boom was everywhere, loans were easy and money was loose and if the foreclosure was one year old, you were still ok with some underwriters.

The nature of capitalism is bubble driven; how can it be otherwise? Everybody wants to make money during boom times and the smart ones know how to make money in any market.

So when you read another 4 million foreclosures (440,000 for Southern California) happening this year, remember 3 things:

1. In 3-4 years, they will all be gone

2. Bank loans will become easier to get, but cheap properties will be hard to find

3. Buy and hold investors will get rich. Hold for cash flow now and greater capital gains later.

The market changes, and changes again


Steve Dexter’s latest book is “Buy and Hold Forever- How to Build Wealth for the 21st Century

Source:LosAngeles Times.

Though fewer distressed properties changed hands in the first quarter, many more are in the pipeline, data firm RealtyTrac says.

Fewer bank-owned homes and properties in foreclosure sold in the first three months of 2010, according to a report released Tuesday. But experts said the nation's housing market will remain troubled for years to come.

A total of 232,959 U.S. homes that sold in the first quarter were either bank-owned or in some stage of the foreclosure process. That's a 14% decrease from the prior quarter and a 33% decline from a peak in the first quarter of 2009, according to Irvine-based RealtyTrac.

Those distressed properties made up 31% of all previously owned homes sold in the U.S. in the first quarter, RealtyTrac said. And while the number of homes sold in foreclosure has declined this year, the housing market probably won't return to a more normal state until the second half of 2013 as foreclosure activity by banks remains elevated, said Rick Sharga, RealtyTrac senior vice president.

"It is a much longer recovery cycle than we have seen in housing," Sharga said. "But the boom was also unprecedented."

In California, 59,823 distressed homes sold in the first quarter, a 21% decline from the prior quarter and a 47% drop from the first quarter of 2009. In Los Angeles County, 10,823 distressed homes sold, a 22% decline from the prior quarter and a drop of 41% from the first quarter of 2009.

Prices of foreclosed homes are getting slightly cheaper. The average sale price for a foreclosed home in the U.S. was $171,971 in the first quarter of 2010, a 1% decline from the fourth quarter of 2009 and a 3% decline from the first quarter of 2009.

More housing inventory from foreclosures probably is on the way. Although fewer people appear to be entering foreclosure, banks stepped up their repossession of homes at a record pace in the first quarter, according to RealtyTrac.

The rise in property seizures by banks was attributed to the expiration of several moratoriums on foreclosures last year and the failure of the Obama administration's effort to provide widespread permanent mortgage relief for borrowers.

Source:Los Angeles Times.

Millions of dollars in green financing for California homeowners is being held up by a dispute between local government agencies and federal housing officials.

A new state program allowing homeowners to pay for solar panel installations and other energy efficiency improvements through their property taxes was put on hold in Placer County and San Francisco in May after federally backed mortgage lending giants Fannie Mae and Freddie Mac began raising questions about such loans.

The launches of similar programs in Sacramento County, Los Angeles and San Diego could be delayed if the regulatory roadblocks remain.

"It's extremely frustrating; this pretty much came out of the blue," said Jenine Windeshausen, treasurer and tax collector for Placer County.

The holdups have prompted Gov. Arnold Schwarzenegger, Attorney General Jerry Brown and California's congressional delegation to write letters to Fannie Mae, Freddie Mac and other federal authorities asking that the agencies reconsider.

The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, said it is working with California officials to resolve the issues.

"FHFA is very cognizant of the concerns and interests of programs in California and we are working diligently to address the concerns we have heard," said Alfred Pollard, FHFA's general counsel.

Hailed as one of the top 10 breakthrough ideas for 2010 by the Harvard Business Review, Property Assessed Clean Energy, or PACE, programs provide homeowners with low-interest loans to install solar panels and other energy projects.

The locally run programs, made possible in California by the passage of Assembly Bill 811 in 2008, let borrowers pay back the loans over time through their property taxes.

Placer and Sonoma counties, Berkeley, San Francisco and Palm Desert were among the first to embrace the idea, which aims to reduce customers' energy bills, protect the environment and promote green jobs.

Sacramento and Yolo counties are part of a group of 14 counties that plan to launch their own PACE programs later this year.

Problems arose in May when Fannie Mae and Freddie Mac issued warning letters that the arrangements may violate their rules because they give counties a priority position when it comes to getting paid back.

If a homeowner defaults on a loan, that would mean counties would be repaid before Fannie Mae and Freddie Mac, the federal agencies have argued.

Some lenders, as a result, are requiring homeowners to repay the full amount of solar financing when they sell or refinance their homes, adding significant costs in an already down real estate market.

Windeshausen, Placer County's treasurer, said the county stopped processing financing applications from homeowners nearly two months ago when the Freddie Mac and Fannie Mae letters came in.

About 33 applications seeking nearly $800,000 in solar energy loans were left hanging, she said.

Started in March, the program, dubbed mPower Placer, has had about $2 million a month in new applications, Windeshausen said.

San Francisco also was forced to put its PACE program, dubbed Green Finance SF, on hiatus after operating for just one month.

Johanna Partin, director of climate protection initiatives for San Francisco Mayor Gavin Newsom, said the city has received more than 20 applications and interest in the program had been growing.

"It's terribly unfortunate since the one bright spot in the economy had been the clean tech sector," Partin said.

Cliff Staton, vice president of marketing for Oakland-based Renewable Funding LLC., said green finance programs set to launch this year in Sacramento County, Los Angeles and San Diego face delays if the dispute with federal housing authorities lingers.

Staton, whose company serves as the third-party administrator for PACE programs in San Francisco, Berkeley and parts of Los Angeles, added that the holdups are beginning to cost jobs.

Recurve Inc., a San Francisco-based green energy remodeling company, said it recently furloughed a handful of its workers for several days when San Francisco suspended its PACE program.

Matt Golden, Recurve's president, said the 70-employee company ramped up its staffing by 80 percent over the past year only to see the PACE-related work dry up overnight.

"It made our entire construction schedule look like Swiss cheese," Golden said.

Roseville-based Solar Power Inc., which manufactures and sells solar panels, said delays to Placer County's programs have cost the company about $2 million in revenue.

The company handles about 40 percent of the solar loan applications in Placer County, said CEO Steve Kircher.

"It's just incredible that there's so much emphasis by the federal government and the state to get renewable energy and energy independence, and then this happens," Kircher said.

Source:Los Angeles Times

Congress late Wednesday night extended the deadline by three months of a popular home-buyer tax credit that has helped fuel the real estate market in recent months.

The extension is only for those buyers who signed a purchase contract by April 30 and need extra time to close their deals. The deadline to close was Wednesday and the extension will push that deadline to Sept. 30. The incentive offers up to $8,000 for certain buyers.

Real estate brokerage offices and mortgage lenders have been backlogged with the number of people trying to close their deals by the Wednesday deadline, according to the National Assn. of Realtors, a group that lobbied heavily for the extension. The group estimated that the extra time would assist some 180,000 people nationally and 17,700 Californians who qualify for the credit but did not appear as if they would meet the Wednesday deadline to close their deals.

Syd Leibovitch, president of Rodeo Realty in Bel-Air, said the extension would help people in Southern California who qualify for the incentive but whose deals have been delayed from closing through no fault of their own.

“It’s fair, because you have people in short-sales transaction where the escrows take a lot longer than you would think,” he said. “Most of the delays are because of lenders taking a little longer to get loans, or getting approval from short sales.”

The federal tax credit was created in 2008 by the Bush administration as a $7,500 incentive for first-time purchasers, who were required to repay the money in a series of installments. Congress increased the amount to $8,000 in February 2009 when it passed the economic stimulus package and waived the repayment requirement. As an initial deadline for the credit loomed last November, Congress extended and expanded it to include as much as $6,500 for some current homeowners.

The Realtors group in Washington estimates that a total of 4.4 million people have received the credit since it was made nonrefundable last year. That includes 2.9 million first-time buyers and 1.5 million repeat buyers, the group said.

Source:Los Angeles Times.

Piggybacking off the worst national housing crash since the Great Depression, Southern California will soon encounter a crisis of its own, Leslie Appleton-Young, the chief economist for the California Association of Realtors, told a crowd of South Bay real estate agents Wednesday. A housing shortage is predicted within the next 10 years, she said.

The South Bay Brokers met at the Crowne Plaza Hotel in Redondo Beach to hear about the future of the housing market in Hermosa Beach and other South Bay cities.

"If you look at this data and see, since 2004, new construction has dropped [more than] 80 percent," Appleton-Young said. "And we're still having lots of babies in California. There's a much greater household density going on with people doubling and tripling up, but at some point people are going to be looking for homes again."

Some Southern California towns have already ranked nationally as the hardest hit by foreclosures, according to the Brookings Institute's Metropolitan Policy Program.
Appleton-Young predicted that foreclosures would increase for the next three to four years among moderate-to low-end properties. Meanwhile, the South Bay is not building enough of these affordable homes to keep up with future demand.

"Those moderate- to low-end properties weren't on the market, yet they were kind of in the foreclosure timeline," Appleton-Young said. "So the sales were drying up, because the mortgages weren't available anymore."

Appleton-Young's data also showed a substantial inventory of high-end properties in Southern California worth $1 million or more that haven't been sold. As the economy recovers and a demand for homes returns, housing inventory in Hermosa Beach may be too expensive to meet housing demand.

Jim Van Zanten, co-chief executive officer and founder of South Bay Brokers, said that local real estate agents should look into short selling houses for the next few years, before the shortage hits. A short sale occurs when a property is sold for less money than what is still owed on it.

"If you're staying away from short sales, there's probably no reason to do that. You're going to have to plow into that," Van Zanten advised. "A lot of people are closing those sales every week."

But even if real estate agents follow this approach, the housing market will remain volatile, Appleton-Young said her data showed.

"We're going to need to build more," she said.

Source:Los Angeles Times.

Homes price in Los Angeles and Orange counties rose at an 7.8% annual rate in April, according to the latest S&P/Case-Shiller real estate report. That’s the largest rate of increase in the index since August 2006.

On a month-to-month basis, too, the index was up – plus 0.68% vs. March. That’s the 9th gain in 11 months – and ends a back-to-back losing streak seen in February and March. Still, LA/OC prices are 37% below 2006’s peak prices.

As for the 20 large markets followed by S&P/Case-Shiller, only San Francisco (up 18%) and San Diego (up 11.7 percent) had larger year over year gains. For April, 18 of the 20 had month-to-month gains.

But S&P isn’t ready to call thse gains a full-fledged recovery. S&P’s David Blitzer says: “Many of the gains are modest and somewhat concentrated in California. Moreover, nine of the 20 cities reached new lows at some time since the beginning of this year. The month-over-month figures were driven by the end of the Federal first-time home buyer tax credit program on April 30th. … Other housing data confirm the large impact, and likely near-future pullback, of the federal program. Recently released data for May 2010 show sharp declines in existing and new home sales and housing starts. Inventory data and foreclosure activity have not shown any signs of improvement. Consistent and sustained boosts to economic growth from housing may have to wait to next year.”

The quick analysis by economist at IHS Global Insight: “The tax credit pumped up demand through April, and led to a surge in new and existing home sales, and a ramping up in housing starts. With the credit now behind us, the housing numbers are taking a beating.”

Source:Los Angeles Times.

The move down was expected: Treasury yields fell this week to their lowest in more than a year.
Mortgage rates slumped to record lows this week, Freddie Mac confirmed Thursday, with lenders on average offering 4.69% on a 30-year fixed-rate loan.

The average rate on the 30-year loan fell from 4.75% last week, dropping below the previous record of 4.71% set in December. As recently as early April, the average was at 5.21%.

The latest move down had been expected after Treasury yields — which usually influence the direction of home-loan rates — fell this week to their lowest levels in more than a year on concerns about the durability of the economic recovery.

Freddie Mac's survey, which the mortgage giant has been conducting since 1971, asks lenders what rates they are offering — and the upfront fees required to obtain those rates — for well-qualified borrowers who have at least a 20% down payment for a home purchase or that much equity in a property being refinanced. Actual rates negotiated by solid borrowers are often slightly lower.

Upfront fees on 30-year fixed-rate mortgages this week averaged 0.7% of the amount borrowed.

Rates also hit record lows on 15-year fixed-rate mortgages and so-called 5-1 hybrids, which have a fixed rate for five years before turning adjustable for the remaining 25 years.

Despite the slide in mortgage rates in the last two months, the housing market has been showing renewed signs of weakness.

The government reported Wednesday that sales of newly built homes collapsed in May to a record low. And an industry group said that sales of existing homes slipped 2.2% last month. Both drops were blamed on the expiration of a federal tax subsidy for home buyers, but the sales data also came in significantly lower than expected.

Source:Los Angeles Times.

The unsold inventory index -- the number of months needed to deplete the supply of homes on the market at the current sales rate -- was 4.6 months in May, unchanged from the same period a year ago, according to a report Tuesday from the California Association of Realtors.

The median number of days it took to sell a single-family home was 39.8 days in May, a significantly shorter time frame than the 52.4 days for the same period a year ago.

Existing, single-family home sales increased 1.2 percent in May to a seasonally adjusted rate of 552,800 units on an annualized basis compared with May 2009, while the statewide median price of an existing single-family home increased 23.2 percent in May to $324,430.

In Los Angeles County the median price in May was $346,350, up 17.4 percent from the same month last year. In Orange County the median price in May was $505,750, up 19.5 percent. In the Riverside/San Bernardino area, the median price was $194,960, up 24.3 percent

Statewide, the median price of an existing, single-family detached home was $324,430, a 23.2 percent increase from the revised $263,440 median for May 2009

Statewide, the 10 cities with the highest median home prices in California during May were:

* Manhattan Beach, $1.55 million
* Los Altos, $1.50 million
* Saratoga, $1.43 million
* Palo Alto, $1.29 million
* Palos Verdes Estates, $1.26 million
* Newport Beach, $1.10 million
* Los Gatos, $1 million
* Laguna Beach, $960,000
* Mill Valley, $954,500
* Lafayette, $928,500

Statewide, the cities with the greatest median home price increases in May 2010 compared with the same period a year ago were:

* Richmond, 75 percent
* San Juan Capistrano, 58 percent
* Newport Beach, 56 percent
* Lemon Grove, 53 percent
* San Bernardino, 50 percent
* Oceanside, 47 percent
* West Hollywood, 45 percent
* Watsonville, 42 percent
* Los Gatos, 41 percent
* Santa Ana, 37 percent

Source:Los Angeles Times.

Home sales and prices in the Coachella Valley rose in April and May, the latest real estate market report from MDA DataQuick shows.
This makes the seventh consecutive month of positive sales and price gains.

Economists say that's a sign the market is in a stage of recovery.

“The market is doing very well for buyers and sellers,'' said Brady Sandahl of RE/MAX Real Estate in Palm Springs.

DataQuick reported the 1,029 sales of new and existing homes in April rose 8.1 percent and the median price hit $215,000, reflecting nearly a 23 percent surge in price from 2009.

May posted 1,021 sales, recorded a 7.8 percent rise in sales and measured a $210,000 median. That median is 15.7 percent higher than in May 2009.

Since December 2009, median prices have been above $200,000 — besting the performance for most of 2009 when the median bumped along the $180,000 line.
Prices off from 2008

The April and May home sale prices still are well off the $301,000 median in April 2008 or $309,000 in May 2008 — prices hit their highest point at $410,000 in February 2006 — but the Southern California market already is at the $300,000 level.

Southern California home sales prices topped $300,000 in May for the first time in 20 months, a spurt DataQuick linked to a cache of buyers capitalizing on low mortgage rates and the California home-buying tax credits that kicked in May 1.

The gains also were attributed to a shrinking stock of “ultra bargains” in the low-cost inland areas.

The DataQuick report for April and May seems to bear that out.

Hard-hit foreclosure zones of Coachella, Desert Hot Springs, Indio, Thermal and Thousand Palms, which had triple-digit sales activity in 2008 and part of 2009, saw sales contract year-over-year in April and May.

As sales there sputtered, the buying gravitated to communities of Indian Wells, Palm Desert, Palm Springs, La Quinta and Rancho Mirage.

Home sales in La Quinta are up 42 percent in April and up 22 percent in May, as is the median sales price.

Source:Los Angeles Times.

Local Realtors say the housing market in the San Gabriel Valley and Whittier area is continuing to make gains.

Figures released Tuesday by the California Association of Realtors support that, although year-over-year housing prices fell significantly in some communities last month.

Home sales in Los Angeles County rose 4.7 percent in May from the previous month and were up 3.7 percent from a year earlier.

California posted an April-to-May sales gain of 14.1 percent and an annual uptick of 1.2 percent.

That was significantly better than the nation, which saw its home sales fall 2.2 percent in May from the previous month to a seasonally adjusted annual rate of 5.66 million, according to the National Association of Realtors.

Nearly a third of nationwide home sales in May were foreclosures or other distressed properties.

James Joseph, owner of Century 21 Ambassador and Coldwell Banker Ambassador in Whittier, acknowledged that foreclosures and short sales still account for about 40 percent of his transactions.

But Southern California's housing market is faring far better than than the nation's, he said.

"I'm not going to disagree with those stats, but those are national numbers," he said. "Things are different in Iowa than in L.A."

The Southland has already weathered its toughest times, Joseph said, and the rest of the nation is simply catching up.

"This report would have made sense in our area a year ago or a year and a half ago," he said. "It's kind of like a flu. Our fever has broken and we're on our way to recovery ... we're ahead of those other areas."

The region may have weathered the worst. But some cities are still feeling the sting of decreased property values.

Alhambra's median home price in May was $405,000, down 16 percent from a year earlier, CAR figures show. Rosemead posted a 13 percent drop, bringing its median price to $350,000, and Arcadia's median price fell 9 percent to $636,500.

Other communities posted big annual gains, including Azusa and Rowland Heights (both up 18 percent), La Crescenta (up 16 percent), Glendora (up 13 percent) and Covina and Duarte (both up 11 percent).

Joseph said his Whittier realty offices just had their best May results in years.

"The $8,000 (federal tax credit) pulled some buyers off the fence, and we're just seeing a lot of demand," he said. "If a home is priced right you're seeing multiple offers."

L.A. County's median home price for May was $346,350, up 2.2 percent from April and up 10.6 percent from a year ago, CAR figures show.

California median price rose 5.9 percent in May to $324,430 and was up 23.2 percent from a year earlier.

Laura Brererton, a Realtor with the Parsons Real Estate Team at Keller Williams Realty in Pasadena, is bullish on the local market.

"This is a great market - a very fast-paced," she said. "If a home is priced right and presented cleanly from the first day, it will move quickly with multiple offers."

Brererton said she just listed a Hastings Ranch home in Pasadena for $1.19 million that entered escrow above the listed price.

"We also listed a home in the Caltech area for $799,000 and got multiple offers that put it over the list price," she said. "I think what we're seeing is a slow recovery in our market."

Source:LosAngeles Times.

Commerce Department says new homes sold at a seasonally adjusted annual rate of 300,000 units in May, a record low and an 18.3% drop from a year earlier. Sales in the West were down by more than half.

Sales of newly built U.S. homes collapsed in May, falling to a record low and stirring concerns among some economists that the housing market would stumble again now that a popular federal tax credit for buyers has expired.

The Commerce Department said Wednesday that new homes sold at a seasonally adjusted annual rate of 300,000 units in May, a record 32.7% drop from the revised April estimate and 18.3% below the May 2009 figure. It was the lowest sales pace since the government began collecting such data in 1963.

Despite the lowest mortgage interest rates in 60 years, sales fell across all regions and were down by more than half in the West.
New-home sales plummet nearly 33% in May from April
Commerce Department says new homes sold at a seasonally adjusted annual rate of 300,000 units in May, a record low and an 18.3% drop from a year earlier. Sales in the West were down by more than half.

A home under construction in Cincinnati. Many economists were expecting sales of both new and resale homes to falter in coming months as the effects of the federal tax credit waned. But the May drop was significantly larger than most experts had anticipated.

Sales of newly built U.S. homes collapsed in May, falling to a record low and stirring concerns among some economists that the housing market would stumble again now that a popular federal tax credit for buyers has expired.

The Commerce Department said Wednesday that new homes sold at a seasonally adjusted annual rate of 300,000 units in May, a record 32.7% drop from the revised April estimate and 18.3% below the May 2009 figure. It was the lowest sales pace since the government began collecting such data in 1963.

Despite the lowest mortgage interest rates in 60 years, sales fell across all regions and were down by more than half in the West.

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Many economists were expecting sales of both new and resale homes to falter in coming months as the effects of the federal tax credit waned and potential buyers remained concerned about possible layoffs in a slow job market. But the May drop was significantly larger than most experts had anticipated.

"No two ways about it, these figures were just awful, when you look at the magnitude of the decline," said Michael D. Larson, a housing and interest rate analyst for Weiss Research. "Obviously we were all expecting some kind of hangover impact, but this is like what you would have on New Year's Day."

The pessimistic read on new-home sales came as a survey released Wednesday by the Mortgage Bankers Assn. found that applications for home purchases and refinancings fell again last week, marking the sixth decline in the last seven weeks. Taken together, the reports indicate the housing market is weakening despite rock-bottom interest rates.

"The big thing is this is happening while mortgage rates have fallen to historical lows," Irvine economist John Burns said. "If there was ever a time to buy a home, you know now is the time."

While new-home sales make up a much smaller share of the housing market than do sales of previously owned properties, analysts watch them closely to get a read on consumer sentiment and job creation, particularly in the construction industry.

The new-home sales figures also give an indication as to where the broader market might be headed in coming months, as new-home sales are recorded when a buyer signs a purchase contract — as opposed to sales of previously owned homes, which are measured when deals close.

The federal tax credit required buyers to enter into a home purchase contract by April 30 and close deals by June 30. The credit offered as much as $8,000 to first-time buyers and $6,500 for some current homeowners.

"Today's numbers certainly reinforce the idea that housing is weak outside of government support," said Dan Greenhaus, chief economic strategist for Miller Tabak & Co. in New York. "The question always has been and remains, how quickly will we appreciate, how quickly are sales going to grow without government support? And the answer is, they are likely to be somewhat muted."

Sales of previously owned homes fell 2.2% in May when compared with April, the National Assn. of Realtors reported Tuesday.

The median sale price of new houses sold last month was $200,900, a 1% increase from the previous month but a nearly 10% decline from the year-earlier median. The Commerce Department estimated that 213,000 new houses were for sale at the end of May, representing a supply of 8 1/2 months at the current pace.

"We are likely to see renewed decline in prices," said Dean Baker, co-director of the Center for Economic and Policy Research in Washington. "The people who think prices have stabilized, I don't really see the basis for that."

Not all the news was bad. For the first time in two years, fewer homeowners are missing mortgage payments, Treasury Department regulators reported Wednesday.

Three years have passed since the mortgage debacle made most subprime and nontraditional loans unavailable, and the bulk of loans since have been "plain vanilla" fixed-rate mortgages to prime-credit borrowers. The better-performing newer loans stand in contrast to the dicey old ones that finally are being flushed away for good.

The regulators' first-quarter report on mortgages serviced by large national banks and thrifts said delinquency rates dropped in all categories, including the most default-prone subprime and alt-A loans. (Alt-A borrowers had decent credit scores but added risk factors; an alt-A borrower might have paid interest only at a fixed rate for the first five years with limited documentation of income and assets.)

According to the Comptroller of the Currency and the Office of Thrift Supervision, the percentage of mortgages that were current and performing increased for the first time since the agencies began publishing the report in June 2008. Delinquencies fell in all categories, from a single missed payment to 90 or more days of delinquency.

The numbers increased, however, in all foreclosure categories. Compared with the previous quarter, newly initiated foreclosures increased 19% to 370,536; foreclosures in process increased 9% to 1,170,874; and completed foreclosures increased 19% to 153,654.

The regulators attributed the increase to servicers having exhausted efforts to assist holders of troubled loans. Under the government and private loan-modification plans, lenders proceed with seizing and selling homes if foreclosure is the least costly option for banks or loan investors after all modification options are applied.

The developments come as mortgage rates for highly qualified borrowers have dropped to the lowest level since 1950 and 1951. Borrowers with solid credit, 20% down payments and the provable ability to repay were able to find loans Wednesday at interest rates as low as 4.25% for a 30-year fixed mortgage and 3.75% for 15-year loans, said John K. Holmgren, a spokesman for the California Assn. of Mortgage Professionals.

Separately on Wednesday, the U.S. Treasury gave final approval to a previously announced plan to provide $1.5 billion in federal funds to support anti-foreclosure programs in the five states hit hardest by the housing collapse, including $700 million in California to assist moderate-income families and military personnel.

The state plan includes three mortgage assistance programs and help in finding rental housing for borrowers who can't afford to stay in their homes after exhausting all other options.

Critics of California's proposal say the program gives banks too much incentive money to reduce the principal on the mortgages of borrowers who are "underwater," or owing more on their mortgages than their homes are worth.

Yvonne Mariajimenez, deputy director of Neighborhood Legal Services of Los Angeles County, said the state's plan "rightly targets principal reduction for California homeowners but risks helping too few borrowers while giving away too much to banks."

Source:Los Angeles Times.

The housing market in California showed rising sales and prices in May, indicating a possible shift in local areas.

Home sales in Southern California rose in higher-priced areas, while sales are accelerating in San Francisco. The monthly rate of mortgage defaults and subsequent level of foreclosures also drew back last month.

As discounted bargains dried up in SoCal's lower-cost inland areas, sales migrated to higher-priced coastal neighborhoods over the past year, according to San Diego-based real estate information provider MDA DataQuick.

A total 22,270 new and resale houses and condos closed escrow in May in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties. It marked a 9.7% increase from the month before and a 7.2% increase from the same time a year earlier.

Tax incentives and low mortgage rates fed sales in mid- to high-end areas, where sellers have become more motivated over the last year, MDA said. The median sales price in SoCal jumped $20,000, or 7%, from April to $305,000. The median sales price, which topped $300,000 for the first time in 20 months, is now 22.5% higher than the same time last year.

"Last month's jump in the regional median sale price is the flipside of what we saw a year ago, when low-cost inland foreclosures dominated and sales in the costlier coastal towns struggled for a pulse," said MDA DataQuick president John Walsh. "Today the bargains on foreclosures are fewer and farther between, and the high-end is approaching a normal sales rate."

Walsh added: "The important thing to remember, though, is that what we saw in May was partly driven by government stimulus. In the second half of the year the market will have to stand on its own again, barring new forms of government involvement. Prices will be tested if there's any sudden move by lenders to release a flood of distressed properties."

North along the Californian coast, the San Francisco housing market is seeing a bit of its own revival. Home sales activity is accelerating, working inventory down from historic highs, according to the San Francisco Association of Realtors.

"As closed sales activity has rebounded, sellers have regained some leverage in negotiations," says Association president John Lee, in a statement. "Prices at the low-end of the market are stable while pricing volatility in higher-priced segments remains."

The median single-family home price rose slightly on a yearly basis to $752,500 in May. Despite the relatively flat appreciation, pricing conditions appear stable, according to the Rosen Consulting Group, a California-based real estate and regional economics research consulting firm.

"Rising housing affordability, driven by attractive pricing and low mortgage rates combined with a more optimistic view of the economy assisted by government incentives have brought buyers back to the market," the Rosen Consulting Group said in a statement.

"Recognizing the shifting market conditions, sellers who have been waiting for more favorable market conditions to place their homes on the market should begin to do so in coming months."

Source: Los Angeles Times

INLAND EMPIRE – The volume of home sales across the Inland region is showing little month-to-month change as the inventory of foreclosed homes dwindles.

Sales prices are rising as buyers are forced to look at more expensive homes. The average home in Riverside County sold for $210,000 last month, a nearly 17 percent gain over a year ago.

San Bernardino County homes are still Southern California’s cheapest, selling for an average of $160,000 last month. The Southern California average topped $300,000 for the first time in 20-months, according to MDA DataQuick.

Buyers are taking advantage of tax credits and low mortgage rates.

Source: Los Angeles Times

Tax incentives spur sales. The median home price rises to $278,000, reflecting less a rise in housing values than a shift in sales toward more expensive coastal markets.
Fueled by tax incentives, California home sales rose in May, helping lift the Golden State's median home price by 20.9% from its year-earlier mark.

The median was $278,000 last month, MDA DataQuick of San Diego said, a 9% increase from April. But that reflects less a rise in the actual valuation of homes than a continued shift in sales away from cheaper, inland areas of the state toward more coastal markets.

That shift is being driven partly by an increasing willingness of owners in pricier neighborhoods to sell at a lower price, DataQuick has said. And much of the jump in sales has been driven by a surge of buyers rushing to close deals to take advantage of state and federal tax incentives.
"In the second half of the year, there's obviously going to be less wind in the market's sails, given the fading tax credits," MDA DataQuick President John Walsh said. "A healthier job market and low mortgage rates will be key to driving demand."

A total of 40,965 new and previously owned houses, condominiums and town homes sold last month, a 9.3% increase from April and a 4.9% jump from May 2009. Experts fear that once the effects of the credits wane, sales and prices could slump again.

"Of course, you are going to see a slowdown; these programs basically steal sales from the future," said Christopher Thornberg, principal of Beacon Economics. "Now that may be a good policy option, but understand when you get to the future you are going to feel the effects of that. It's just the nature of the beast."

The federal credits of up to $8,000 for first-time buyers and $6,500 for some current homeowners required that deals be reached by April 30 and close by June 30, though Senate Democrats have moved to extend the closing deadline to Sept. 30.

The California credits, which kicked in May 1, are for first-time buyers and purchasers of new homes, with $100 million set aside for each credit. The state credit for first-time buyers is quickly running out. The state's Franchise Tax Board said Thursday that it had received applications claiming an estimated 80% of the first-time credit. It expects to run out of money for the first-time credit much faster than the one for new homes as those sales often lag because of the time it takes to construct a home and because the resale market is much bigger. The state did not say Thursday how many applications had been received for the new-home credit.

In the San Francisco Bay Area, sales took off in some of the region's costlier neighborhoods last month, DataQuick reported, helping push the median home price above $400,000 for the first time since the U.S. was gripped by the financial crisis 21 months ago. The decline in bank-owned inventory there helped the median sale price for all property types reach $410,000, up 10.8% from April and 20.1% from May 2009. Sales jumped 18% in May over April and 11% over May 2009.

The Southland's median price rose 22.5% from its year-earlier level to $305,000, DataQuick said Tuesday, and sales jumped 7.2% from May 2009.

Source: Los Angeles Times

Time is running out to qualify for California's first-time home-buyer tax credit.

The state Franchise Tax Board has received applications claiming about 80 percent of the funds allocated for the credit. Although it's hard to predict, tax board spokeswoman Denise Azimi says the credit could be gone within a few weeks.

In March, the Legislature approved $100 million in state tax credits for first-time home buyers who purchase a new or existing home in California. To qualify, the buyer must close escrow after May 1 and before the $100 million runs out.

The credit is 5 percent of the purchase price or $10,000, whichever is less, spread over three years. To make full use of the credit, the buyer would have to owe at least $3,333 in California income taxes in each of those three years.

Because many first-time buyers won't owe that much tax and lose part of their credit, lawmakers allowed the tax board to reduce the $100 million pot by only 57 percent of the credit claimed by each buyer. If a buyer requested a $10,000 credit, the pot would shrink by only $5,700.

As of Tuesday, the tax board had received more than 15,000 applications claiming more than $78 million in post-reduction credits. Because many applications are duplicates or invalid, the board said it plans to accept at least 28,000 applications to make sure the full $100 million is awarded.

The board, which has been posting weekly updates on its Web site showing how much money remains, will announce the cutoff date at least 24 hours in advance so people can fax their documentation. The credit will be allocated on a first-come, first-served basis, according to the time and date stamp on the fax. The board warns that submission before the cutoff does not guarantee a credit; it will stop allocating credits once the $100 million is gone.

A first-time buyer is someone who did not own a principal residence for the preceding three years. The buyer must reside in the home for at least two years immediately following the purchase date.

At the same time it approved the first-time home buyer credit, the Legislature approved a separate tax credit for people who already own a principal residence who purchase a newly constructed (but not an existing) home. This credit is also worth up to $10,000, spread over three years. Because more repeat buyers will be able to take full advantage of the credit, this $100 million pot will be reduced by 70 percent of the tax credit allocated to each buyer.

This program also has $100 million in credits available, but the money is not close to running out. Buyers can reserve a credit by entering into a binding contract between May 1 and Dec. 31 and closing before Aug. 1, 2011.

Source:Los Angeles Times

Driven by tax incentives and low mortgage rates, homes sales in the Los Angeles County rose 12. 3 percent in May, compared to the same month a year ago, a real estate information service reported on Tuesday.

A total of 7,320 homes changed hands locally last month, compared to 6,521 in May 2009, according to MDA DataQuick.

A total of 22,270 new and resale houses and condos sold in the six-county Southern California region -- Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties -- in May, according to DataQuick.

That was up 9.7 percent from 20,299 in April, and up 7.2 percent from 20,775 in May 2009.

May sales throughout Southern California were the highest for that month since 2006.

The combination of tax incentives and low mortgage rates helped stoke sales in mid- to high-end areas, where distress has increased over the last year and sellers have become more motivated and realistic, DataQuick said.

"The important thing to remember, though, is that what we saw in May was partly driven by government stimulus," said John Walsh, DataQuick's president.

"In the second half of the year the market will have to stand on its own again, barring new forms of government involvement," he said. "Prices will be tested if there's any sudden move by lenders to release a flood of distressed properties."

In May, home prices increased 15 percent in the Los Angeles area,DataQuick said.

The median price of a home in Los Angeles County in May was 345, 000 dollars, compared to 300,000 in the same month a year ago.

The median price for a Southern California home was 305,000 last month, up seven percent from 285,000 in April, and up 22.5 percent from 249,000 in May 2009, according to DataQuick.

Source:Los Angeles Times.

The median prices of Los Angeles County homes and condominiums didn’t budge in May, but sales volume in both categories increased slightly compared with April. However, prices were significantly higher than the same time last year.

The data are suggesting that the county’s housing market, which has seen fairly steady year-over-year sales for 21 months, has passed its nadir – especially given some gains in the local jobs market.

“There’s not a ton of stability right now, but we’re seeing a very gradual ascent in prices, driven by slow and modest economic growth,” said Paul Habibi, a professor of real estate at UCLA’s Anderson School of Management who is a developer and owner of multifamily housing.

The county’s median home price was $350,000, exactly the same as in April, but slightly higher than in the first quarter of the year. Following roughly the same pattern, the median price for condos hovered at $310,000. Sales volume in both categories grew slightly, from about 4,150 to 4,380 units for homes and 1,520 to 1,560 units for condos, according to data provided by HomeData of Hicksville, N.Y.

According to statistics released last week, pending home sales in the United States rose in April beyond projections, prompting some to question whether the government’s $8,000 tax credit was artificially boosting sales. Buyers needed to enter escrow by April 30 to qualify for the credit, and the May data for Los Angeles County, which is for sales, would include any boost from prior months.

However, Habibi maintained that, given the relatively high prices of L.A. real estate, the buyer’s tax credit only created a temporary market floor and “any real boost has to come from solid fundamentals – and we’re seeing that happen now.”

Indeed, year-to-year prices were up significantly in several disparate areas including Altadena, where the median home price increased 51 percent, from $371,000 to $562,000; Beverly Hills’ 90212 ZIP code, where it jumped 37 percent from $1.7 million to $2.3 million; and Bell Gardens, where it spiked 22 percent from $252,000 to $308,000.

The most dramatic increase in sales volume involving more than a handful of houses occurred in Agoura Hills, where sales jumped 88 percent from last year to this. One area that bucked the upward trend in year-over-year pricing was Artesia, where prices dropped 41 percent.

Source:Los Angeles Times

Los Angeles County homeowners will have up to 1,800 reasons to smile this year following the latest reassessment of property values.

The average annual tax bill for affected homeowners will fall between $1,500 and $1,800, LA County Assessor Robert Quon said Wednesday after reviewing 405,000 homes.

Similar reviews done last year and in 2008 resulted in lower property taxes for more than 330,000 homeowners.

For single-family homes, the average value reduction was $162,000, amounting to an average property tax savings of $1,800, Quon said. For condos, the average reduction was $133,000, or an average savings of $1,500. The lower assessed values will be reflected on the property tax bills sent out in October.

William Roberts, director of the San Fernando Valley Economic Research Center at California State University, Northridge, said the reduction in property taxes is going to help many homeowners.

“It’s been a real struggle and a lot of people have lost their homes,” Roberts said. “This may give some people the ability to stay in homes where they have had difficulty making the payments.”

Valencia retiree Danny White, 62, welcomed the news.

“I’ve now got a few more dollars in my pocket to spend the way I think I should be spending it rather than the way the county and state spend our tax dollars,” White said.

But in this case, what’s good for homeowners is definitely not good for a county government struggling for new revenue.

The assessed value of properties in the county is expected to drop 2.3 percent this year — compared to just a .05 percent dip last year, Quon said. The drop, the largest in recent history, will further reduce the county’s property tax revenues, which have already fallen by $132 million in the last two years.

The county expects to collect $3.7 billion in property tax revenues next fiscal year.

The decline in property tax revenues comes as the number of people seeking $221 a month in checks from General Relief, the county’s welfare program, has increased more than 60 percent from 58,000 in 2007 to nearly 94,000 today, Assistant Chief Executive Officer Ryan Alsop said.

“Local property tax revenues provide us the money to operate the county and are directly related to the … assistance we provide,” Alsop said.

Quon conducted the decline-in-value review as part of an ongoing effort to reduce the assessed values of homes whose prices dropped in the housing crash. After peaking in February 2007, the median price of a home in the county dropped from $616,230 to $295,100 in March 2009. Since that time, the median price of a home has fluctuated and stood at $338,970 in April.

“What you are seeing is an industry that looks like it’s looking for a bottom, but we are not willing to say it’s there yet,” said Jack Kyser, the founding economist at the Kyser Center for Economic Research at the county Economic Development Corporation.

Quon’s review involved single-family residences and condominiums purchased between July 1, 2003 and June 30, 2009. In some hard-hit areas — particularly the Antelope Valley – assessors reviewed homes purchased as far back as the 1980s.

“We looked at statistics and in the Lancaster and Palmdale areas especially, the property values have declined more sharply than in most other areas of the county,” Quon said.

Quon said his office reviewed 560,000 homes this year, including 290,000 single-family residences and 115,000 condos with reduced values as a result of real estate market declines.

Quon noted that nearly all of those homeowners whose property values were reduced in previous years will either see the lower assessment continue this year, or, in some cases, reduced even further.

Quon said most of the people who will see large property tax reductions this year were those who bought their homes between June 30, 2008 andJune 30, 2009.

Quon’s office has begun mailing the results to property owners, who should receive the notices by June 30.

Owners who dispute the results or whose property was not reviewed, including properties other than single-family residences or condos, may file a one-page decline-in-value application available at www.assessor.lacounty.gov.

The application form can also be downloaded or requested by calling 888-807-2111. The deadline for filing a decline-in-value application is Nov. 30.

“Our free review also eliminates the need for most taxpayers to go through the application process, and hopefully will curtail the scam mailers from some private companies offering to submit a review application for a substantial fee,” Quon said.

Source:Los Angeles Times.

Southern California's housing market appears to be bottoming out after one of the nation's worst drops and its pattern may be repeated across the country, Standard & Poor's Ratings said in a report released on Tuesday.
But as property-tax revenue begins reviving, cities and states will face the longer-term problems of paying for their workers' pensions and healthcare, upgrading roads and bridges, and dealing with new green legislation.

"In our view, in the longer term, the challenges that cities and states face are more about liabilities than lower real estate values," S&P said.

The recent improvement seen in some of Southern California's housing market partly stems from the slim recovery in the prices of homes that were bought in the bubble years -- from 2003 to 2008 -- whose owners were among those likeliest to default.

These gains must be sustained for the overall market to recover, S&P said.

"We believe things may finally be looking up in that, even in the worst housing markets, the slide in home values appears to have bottomed out, with some markets experiencing their first bit of good news as recently as March 2010," it said.

For example, median home prices rose 15.8 percent in San Diego County in the second quarter of 2010. That gain contrasts with last year, when property-tax assessments were cut for 216,636 homeowners and business owners, S&P said.

While lower property-tax revenues can open budget gaps for counties, cities, and schools, these governments have benefited by using more conservative policies than the private sector.
,
"Governments aren't out to maximize shareholder value, in our view, state and local governments exist primarily to provide essential services such as education, trash collection, clean water and transportation infrastructure, and therefore, we believe that they tend to handle their finances more conservatively and take fewer risks," the report said.

Even San Bernardino County has a "healthy" budget reserve though 93,000 homeowners lost their homes after the bubble burst and houses sell for a third of their 2006 prices, S&P said. Any rebound for this inland county, whose expansion was depended on luring people from the more costly coastal counties, "is still well into the future," S&P cautioned.

In Los Angeles County, property taxes are unlikely to recover anytime soon, but its politicians have a long history of managing a $23 billion budget and dealing with problems, from state mandates to a $42 billion pension liability, the credit agency said.

Source:Los Angeles Times.

Sellers Hold Steady on Prices With a Median Reduction of $19,240
According to a monthly review of MLS-listed properties within 26 of the country's largest housing markets conducted by the national online real estate brokerage ZipRealty (ZIPR 3.29, +0.09, +2.81%) , more than 43 percent of home sellers slashed their home's list price in May, up two percentage points from April. The median "for sale" price dropped nearly $2,500 to $264,936.

The same review showed that although there were more price-reduced "for sale" homes in May, the median reduction was $19,240, down slightly (1.06 percent) from April.

"Home sellers may be lowering their list price to help stimulate interest from home shoppers now that the first-time and repeat homebuyer credits have expired," said Leslie Tyler, vice president of marketing for ZipRealty.

Highlights of ZipRealty's May survey include:

-- More than four out of every 10 "for sale" homes include at least one
price reduction -- with 43.1 percent of all listed homes across the 26
markets price-reduced, up more than 3 percent compared to April
-- Sellers reduced their list price by 6.8 percent on average in May,
which is a decline of .15 percent compared to April, and down from
7.09 percent in March
-- The highest percentage of price-reduced "for sale" homes was in
Jacksonville, Fla., where more than half (51.8 percent) of all
listings had at least one price reduction
-- Denver saw the lowest percentage of price-reduced homes on the market
in May, with 30.5 percent
-- Buyers in the San Francisco Bay Area continued to enjoy the biggest
home price discount in absolute dollars, with a median price-reduction
of $39,000 in May
-- Buyers in Houston, Dallas and Raleigh-Durham found the smallest price
reductions, with a median price cut of only $10,000 in each of the
three markets
-- The biggest month-over-month drops in median list prices in May were
in Phoenix ($9,100), Tucson, Ariz. ($7,995), Baltimore ($5,000),
Jacksonville, Fla. ($4,900), Las Vegas ($4,900), and Chicago ($4,000)
-- Markets with the largest median price reduction in absolute dollars
were:

------------------------------- -----------------------
Market Median Price Reduction
------------------------------- -----------------------
San Francisco $39,000
------------------------------- -----------------------
Orange County, Calif. $35,000
------------------------------- -----------------------
San Diego $31,000
------------------------------- -----------------------
Los Angeles $30,000
------------------------------- -----------------------
Miami/Ft. Lauderdale/Palm Beach $30,000
------------------------------- -----------------------

About the Report ZipRealty compiled real estate listing and price reduction data from the MLS in 26 of the 35 major U.S. metropolitan areas where the real estate brokerage operates. The data cited within this report was pulled on June 1, 2010.

This report is intended to convey information on the general market conditions where ZipRealty operates, not on ZipRealty's operating results. ZipRealty's operating results may be materially different from the general trends shown in this report. Please do not draw any conclusions about ZipRealty's operating results based on the information contained in this report but, instead, refer to ZipRealty's earnings releases and periodic reports as they are made public.

About ZipRealty, Inc. ZipRealty is a full-service residential real estate brokerage firm. The Company utilizes its user-friendly website and employee real estate agents to provide home buyers and sellers with high-quality service and value. ZipRealty's website provides users with access to comprehensive local Multiple Listing Services' home listings data, as well as other relevant market and neighborhood information. The Company's proprietary business management system and technology platform help to reduce costs, allowing the Company to pass on significant savings to consumers. Founded in 1999, the company operates in 35 major markets in 22 states and the District of Columbia.

Source:Los Angeles Times.

Wasn't flipping houses a fad that ended when the real estate bubble burst? Actually, even in a depressed housing market, there are opportunities to make money in flipping. Investors are profiting by purchasing foreclosed homes, often at auction, fixing them up quickly and inexpensively, and reselling them.

But while just about anyone could buy and hold a property and quickly resell it for a profit during the bubble, in today's market it takes real skill to locate and purchase the right properties at the right price.

What Is Flipping?
Flipping refers to making a profit by buying and selling a property within a short time frame. That time frame can range from a week to a few months. The profit comes from buying the property at a significant discount and/or from a rapid appreciation in housing market values (the former is obviously more common in today's market). Flippers commonly need to make cosmetic changes to the home to increase its value, and experienced flippers may even undertake structural repairs or improvements. (For background reading, see Top 5 Must-Haves For Flipping Houses.)

Flipping is often glorified as a quick and easy way to generate income, but there are plenty of opportunities to lose money in the process as well. The home may not sell. It may not sell for as much as you'd hoped. The renovations may take longer or be more expensive than you anticipated. You may discover a hidden defect that makes the property expensive to repair or difficult to sell. Unforeseen factors, like a major nearby company closing its doors, can cause an unexpected tumble in area real estate values. In other words, it's not a sure thing. (To learn more, read 5 Mistakes That Make House Flipping A Flop.)

Real Estate Markets Ripe For Flipping
Home values declined in numerous metropolitan areas in the first quarter of 2010, according to the National Association of Realtors, and there have been reports that a large shadow of inventory is poised to enter the market in the coming months. However, there are some bright spots in the housing data that real estate investors shouldn't miss. These three cities have seen home prices increase every month for almost a year now, but still offer potential bargains in the foreclosure market.

1. San Diego
According to the Case-Shiller Index, San Diego has seen 11 consecutive months of home price increases. But RealtyTrac data for April 2010 shows that in the 92122 and 92104 zip codes, which include neighborhoods like University City, La Jolla Colony, and the area northwest of the San Diego Zoo and Balboa Park, foreclosures offer a savings of up to 46%.

The greatest difference between the average overall sale price and that of a foreclosed property was $95,750 in the 92115 zip code, the area surrounding San Diego State University. The area has a blend of condos and single family homes with an average list price of $329,500. Redfin data shows that the median sold price in this area was up 40.5% as of February.

Real estate investors should keep an eye on two troublesome indicators, however: San Diego's unemployment rate, which at 10.9% is 1.2% above the national average, and new single-family housing permits, which had significantly increased since last year as of April. New homes mean more inventory, which can lower prices.

2. San Francisco
The city by the bay has also experienced 11 consecutive months of rising home prices. Buying a foreclosure here can result in savings of up to 29%, with the biggest discounts in the 94107 zip code. This includes the Central Waterfront, Inner Mission, Mission Bay, Potrero Hill, South Beach and South of Market areas, which consist largely of condos.

The biggest difference between the average foreclosure price and the average sales price is in the 94112 zip code, where the difference is $59,673. The average sale price is $567,548, while $507,875 is the average foreclosure sale price. The 94112 zip code includes Bernal Heights, Crocker Amazon, Excelsior, Ingleside, Ingleside Heights, Mission Terrace, Oceanview, the Outer Mission, and a smattering of other areas. Most of the properties for sale in this area are single-family homes.

Like San Diego, San Francisco experienced 10.8% unemployment in recent months. It has also seen a significant increase in new single-family housing permits, with 830 issued as of April, a 51% increase since last year.

3. Los Angeles
Home prices in Los Angeles have been steadily increasing since May 2009 with only a small dip in March 2010, the most recent month for which data is available. The Los Angeles Times reported in April that house flipping is back in South Los Angeles (not one of the city's more desirable areas).

Numerous zip codes show high foreclosure rates. L.A.'s foreclosure rate of 0.38% is below California's average of 0.52% but above the national rate of 0.26%. The 90027 zip code, which includes parts of Hollywood and Los Feliz, shows the highest discount potential of up to 57%, while the nearby 90026 zip code, which includes parts of Silverlake, Echo Park and downtown, shows the greatest difference between the average foreclosure price, $407,500, and the average sales price, $506,714, a difference of $99,214.

The Los Angeles metro area is experiencing high unemployment (11.8% as of March) and has seen a 38% increase in new single-family housing permits since last year.

A Word Of Caution
Anyone interested in flipping still needs to have plenty of cash to buy the house, remodel it, and pay carrying costs like taxes, insurance, mortgage interest and utilities. Flippers should also be prepared to compete with investors looking for rental properties and sometimes with owner-occupants who are willing to put in some elbow grease or live in a less-than-ideal house to get a deal.

The end of tax incentives to buy a home and continued foreclosures could reverse housing market recoveries in some areas, and investors should consider the impact of a declining market on the purchase price they can pay if they hope to earn a profit. But for the adventurous and the industrious, it's still possible to make money in flipping.

Catch up on the latest financial news in Water Cooler Finance: Buffett Speaks Up, AIG Deal Collapses.

Source:Los Angeles Times

It's the third consecutive month of gains in the National Assn. of Realtors' index of home resales under contract and a 22.4% jump from a year earlier.

The number of previously owned homes placed under sales contract rose 6% in the U.S. in April, the last month that a federal tax credit for buyers was available, the National Assn.of Realtors said Wednesday.

Pending sales have risen for three straight months, the Washington industry group said. The group's pending-home-sales index rose to 110.9, up from a revised 104.6 in March. That was 22.4% higher than in April 2009, when it was 90.6.

The index is based on a national sample covering about 20% of sales of previously owned homes. An index of 100 represents the average level of business in 2001, the first year to be examined as well as the first of five consecutive record sales years.

Pending sales were at their highest level since October, according to the index. That's when buyers were rushing to meet an initial Nov. 30 deadline for federal tax incentives of up to $8,000 for first-time buyers. Congress extended that credit through April 30 and expanded it to include a credit of up to $6,500 for some current homeowners.

Sales plummeted in the months after the credit had first been set to expire, and many economists expect a similar slump in coming months with the credit extensions expired.

Source:Los Angeles Times.

Ryland Homes effectively uses the FHA program to help homebuyers achieve their dreams of home ownership.

Ryland Homes, one of the longest operating Southern California homebuilders, has used the FHA program to help homebuyers achieve their dreams of buying a new home.

First-time homebuyers are qualifying for a greater number of new home loans through FHA financing. As a
government-insured loan program, FHA financing reduces financial risk and increases the likelihood that a first-time homebuyer will secure a mortgage.

Many first-time homebuyers are having difficulty meeting hefty down payment and stringent credit score policies. FHA financing eases the burden of traditional lending standards to provide more opportunity for eager buyers.

"The first and foremost challenge a first-time homebuyer faces is qualifying for a loan. Saving money, boosting credit and collecting the documentation can be a daunting request", says Heather Stevenson vice president of Sales and Marketing for Ryland Homes Southern California homebuilders division.

Stevenson states, "The buyer only needs 3.5% down as opposed to 20% for a conventional loan. The credit score required for FHA financing is 620 as opposed to 680 with conventional."

In addition to lower down payments and credit score flexibility, the FHA loan also offers more competitive interest rates as a result of the government-backed program. Lenders will often accommodate the needs of first-time homebuyers with an FHA loan over that of a conventional loan, which presents more risk and accountability.

FHA loans are guaranteed by the Federal Housing Authority in an effort to reduce the risk to lenders and increase borrowing power to qualified applicants.

Interested parties can learn more about the FHA financing program and how to apply by visiting the FHA website.

Source:Los Angeles Times.

Some 405,000 Los Angeles County homeowners will have up to 1,800 reasons to smile this year following the latest reassessment of property values.

The average annual tax bill for affected homeowners will fall between $1,500 and $1,800, county Assessor Robert Quon said Wednesday.

Similar reviews done last year and in 2008 resulted in lower property taxes for more than 330,000 homeowners.

For single-family homes, the average value reduction was $162,000, amounting to an average property tax savings of $1,800, Quon said. For condos, the average reduction was $133,000, or an average savings of $1,500. The lower assessed values will be reflected on the property tax bills sent out in October.

But what's good for homeowners is definitely not good for a county government struggling for new revenue.

The assessed value of properties in the county is expected to drop 2.3 percent this year - compared to just a 0.05 percent dip last year, Quon said. The drop, the largest in recent history, will further reduce the county's property tax revenues, which have already fallen by $132 million in the last two years.

The county expects to collect $3.7 billion in property tax revenues next fiscal year.

The decline in property tax revenues comes as the number of people seeking $221 a month in checks from General Relief, the county's welfare program, has increased more than 60 percent from 58,000 in 2007 to nearly 94,000 today,
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Assistant Chief Executive Officer Ryan Alsop said.

"Local property tax revenues provide us the money to operate the county and are directly related to the ... assistance we provide," Alsop said.

Quon conducted the decline-in-value review as part of an ongoing effort to reduce the assessed values of homes whose prices dropped in the housing crash. After peaking in February 2007, the median price of a home in the county dropped from $616,230 to $295,100 in March 2009. Since that time, the median price of a home has fluctuated and, in April, stood at $338,970.

"What you are seeing is an industry that looks like it's looking for a bottom, but we are not willing to say it's there yet," said Jack Kyser, the founding economist at the Kyser Center for Economic Research at the county Economic Development Corp.

Quon's review involved single-family residences and condominiums purchased from July 1, 2003, to June 30, 2009.

Quon said his office reviewed 560,000 homes this year, including 290,000 single-family residences and 115,000 condos with reduced values as a result of real estate market declines.

Quon noted that nearly all of those homeowners whose property values were reduced in previous years will either see the lower assessment continue this year, or, in some cases, reduced even further.

Quon said most of the people who will see large property tax reductions this year were those who bought their homes from June 30, 2008, to June 30, 2009.

The Assessor's Office has begun mailing the results to property owners, who should receive the notices by June 30.

Owners who dispute the results or whose property was not reviewed, including properties other than single-family residences or condos, may file a one-page decline-in-value application available.

The application form can also be downloaded or requested by calling 888-807-2111. The deadline for filing a decline-in-value application is Nov. 30.

"Our free review also eliminates the need for most taxpayers to go through the application process, and hopefully will curtail the scam mailers from some private companies offering to submit a review application for a substantial fee," Quon said.

Source:Los Angeles Times.

The housing market is relying on low mortgage rates to stimulate sales, and rates are cooperating, though long-term borrowing costs rose slightly this week.

Freddie Mac says a 30-year fixed-rate mortgage averaged 4.79 percent in the week ending June 3, up from 4.78 percent last week, just above the lowest levels of the year.

A 15-year fixed-rate mortgage averaged 4.2 percent, the lowest since Freddie Mac began tracking 15-year mortgages in 1991.

A one-year adjustable-rate mortgage was unchanged at 3.95 percent, considerably lower than the 4.81 percent one-year ARMS were averaging a year ago.

"There are also signs that credit conditions may be improving," said Freddie Mac (NYSE: FRE) chief economist Frank Nothaft. "The number of homeowners with private mortgage insurance who became current on their mortgages outnumbered those who defaulted for the third month in a row in April, according to the Mortgage Insurance Companies of America."

Pending sales of existing homes in April rose 6 percent, the third straight monthly increase, reaching the highest levels in six months, the National Association of Realtors reported this week.

The homebuyer tax credit expired at the end of April, leaving low mortgage rates as the main incentive for buyers entering the market.

Read more: Long-term rates edge higher - Washington Business Journal

Source:Los Angeles Times.

The Los Angeles area foreclosure rate fell in April compared to a year earlier, CoreLogic, which tracks the housing market, reported Thursday.

In the Los Angeles-Long Beach-Glendale area, the rate of foreclosures among outstanding mortgage loans was 3.15 percent in April. That was down from 3.19 percent in April of last year.

However, the delinquency rate for mortgage payments rose in April, with 12 percent of home loans at least 90 days overdue. That compared to 8.4 percent in April 2009.

Foreclosure activity in April for the Los Angeles-Long Beach-Glendale was lower than the national foreclosure rate of 3.2 percent.

Source:Los Angeles Times.

California home sales dropped 8.1 percent in April from a year earlier, but the state's median price jumped 21 percent to $306,230, the California Association of Realtors reported Monday.

Los Angeles County managed a 0.1-percent gain in annual sales, but its price increase of 12.7 percent was not as dramatic as the state's.

Some San Gabriel Valley cities experienced big year-over-year hikes in their median home price.

Monterey Park's median price jumped a whopping 33.9 percent in April to $471,500 from $352,000 a year earlier. That was the state's sixth biggest annual price gain, according to CAR.

Covina's median price rose 21 percent to $340,000, La Crescenta's rose 20.4 percent to $570,000, and Baldwin Park posted a 19 percent annual gain, bringing its median price to $250,000.

Leslie Appleton-Young, CAR's vice president and chief economist, said the price increases can be partially attributed to last year's more dismal housing market.

"You have to remember that we're coming up from a pretty low base," she said. "That has amplified the difference."

CAR President Steve Goddard said the statewide decline in home sales was fueled in part by homeowners opting to delay closing their escrow until a statewide tax credit took effect on May 1.

Many buyers were probably hoping to tap into that and a federal tax credit, he said
Kathleen Mueller, owner/broker of Mueller Realty in San Gabriel, has seen that trend first-hand.
"I had a couple of buyers who were supposed to close just prior to April 30 and they delayed their closing until just after May 1 to get the state tax credit," she said. "They also qualified for the federal credit. In talking to my lenders, a lot of people were doing that."

California has extended its $10,000 tax credit for first-time homebuyers and for those purchasing new homes. The $8,000 federal incentive ended April 30.

Moving forward, Goddard expects sales to pick up.

"We should see the pace of closed sales edge up in May and June as these tax-incentivized transactions close," he said.

Home sales in California dipped below the 500,000-unit level for the first time in 19 months, he said, because of supply issues. The demand for "attractive foreclosed properties" well exceeds the number of properties on the market, according to Goddard.

Still, mortgage interest rates continue to hover near historic lows, and many buyers are out in force to take advantage of the combination of low interest rates and affordably priced homes.

"It's an ideal time for many families to purchase their first home even though they may face stiff competition," Goddard said.

Mueller said many potential first-time buyers are putting in offers on homes, only to be outbid by others.

"There are still a lot of foreclosure properties, but there are hundreds if not thousands of buyers out there and that is keeping prices more firm," she said.

Other San Gabriel Valley cities weathered significant price drops, including Walnut, which saw its median price fall 15.3 percent in April to $520,000 compared with $614,000 a year earlier.

La Verne's median price dropped 12.6 percent to $413,000, while Glendora was down 7.7 percent.

Appleton-Young said prices will continue to stabilize or increase because buyer demand far exceeds the number of foreclosed homes that are coming onto the market.

"There is no doubt that the state and federal tax credits have provided a sense of urgency for buyers, so we expect the market to pull back a little when that's gone," she said. "But we don't expect the market to derail. I think it will continue to have momentum."

Source:Los Angeles Times.

C.A.R. reports April median price increased 21 percent; home sales decreased 8.1 percent

Multimedia:
• Click here to view Unsold Inventory by price point.
• Click here to view a data table comparing current prices with trough prices in areas throughout the
state.
• Click here to view a video of C.A.R. Chief Economist Leslie Appleton-Young discuss the highlights of
the April sales and price report.

Quick Facts:
• Existing, single-family home sales decreased 8.1 percent in April to a seasonally adjusted rate of
483,830 units on an annualized basis compared with April 2009.

• The statewide median price of an existing single-family home increased 21 percent in April to
$306,230, compared with April 2009.

• C.A.R.’s Unsold Inventory Index rose to 5.1 months in April, compared with five months in April 2009.

LOS ANGELES (May 24) – Home sales decreased 8.1 percent in April in California compared with the same period a year ago, while the median price of an existing home rose 21 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.

“It’s likely that the state tax credit that went into effect May 1 created an incentive for many buyers to postpone closing escrow so they could take advantage of both the state and federal tax credits that were available,” said C.A.R. President Steve Goddard. “We should see the pace of closed sales edge up in May and June as these tax-incentivized transactions close.

“Sales dipped below the 500,000-unit level for the first time in 19 months also because of supply issues – the demand for attractive foreclosed properties well exceeds the number of properties on the market,” he said. “At the same time, mortgage interest rates continue to hover near their historic lows, and many buyers are out in force to take advantage of the combination of low interest rates and affordably priced homes. It’s an ideal time for many families to purchase their first home even though they may face stiff competition.”

Closed escrow sales of existing, single-family detached homes in California totaled 483,830 in April at a seasonally adjusted annualized rate, according to information collected by C.A.R. from more than 90 local REALTOR® associations statewide. Statewide home resale activity decreased 8.1 percent from the revised 526,720 sales pace recorded in April 2009. Sales in April 2010 decreased 6.4 percent compared with the previous month.

The statewide sales figure represents what the total number of homes sold during 2010 would be if sales maintained the April pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

The median price of an existing, single-family detached home in California during April 2010 was $306,230, a 21 percent increase from the revised $253,110 median for April 2009, C.A.R. reported. The April 2010 median price increased 1.5 percent compared with March’s $301,790 median price.

“The strong demand for distressed properties continued unabated last month, and overall, inventory remains constrained in most segments of the market,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “Listings in April increased compared with a month earlier, typical for this time of year, as more sellers entered the market. At the $300,000 and below price point, the number of homes for sale is at a 3.3-month supply, well below the historical average of seven months.”

Highlights of C.A.R.’s resale housing figures for April 2010:

C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in April 2010 was 5.1 months, compared with five months (revised) for the same period a year ago. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.

Thirty-year fixed-mortgage interest rates averaged 5.10 percent during April 2010, compared with 4.81 percent in April 2009, according to Freddie Mac. Adjustable-mortgage interest rates averaged 4.16 percent in April 2010, compared with 4.82 percent in April 2009.

The median number of days it took to sell a single-family home was 39.4 days in April 2010, compared with 48.1 days (revised) for the same period a year ago.

Regional MLS sales and price information are contained in the tables that accompany this press release. Regional sales data are not adjusted to account for seasonal factors that can influence home sales. The MLS median price and sales data for detached homes are generated from a survey of more than 90 associations of REALTORS® throughout the state. MLS median price and sales data for condominiums are based on a survey of more than 60 associations. The median price for both detached homes and condominiums represents closed escrow sales.

In a separate report covering more localized statistics generated by C.A.R. and DataQuick Information Systems, 254 of the 374 cities and communities reporting showed an increase in their respective median home prices from a year ago. DataQuick statistics are based on county records data rather than MLS information. DataQuick Information Systems is a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. (The lists are generated for incorporated cities with a minimum of 30 recorded sales in the month.)

Note: Large changes in local median home prices typically indicate both local home price appreciation, and often, large shifts in the composition of housing market activity. Some of the variations in median home prices for April may be exaggerated due to compositional changes in housing demand. The DataQuick tables listing median home prices in California cities and counties are accessible through C.A.R. Online at http://www.car.org/marketdata/historicalprices/2010medianprices/apr2010medianprices/.

Statewide, the 10 cities with the highest median home prices in California during April 2010 were: Manhattan Beach, $1,572,500; Saratoga, $1,440,000; Los Altos, $1,428,750; Mill Valley, $1,200,000; Laguna Beach, $1,162,500; Cupertino, $1,120,000; Newport Beach, $1,037,500; Los Gatos, $1,034,000; Calabasas, $925,000; and Santa Monica, $870,000.

Statewide, the cities with the greatest median home price increases in April 2010 compared with the same period a year ago were: Richmond, 63.2 percent; Pittsburg, 56.7 percent; Tulare, 37 percent; San Bernardino, 37 percent; Cupertino, 35.7 percent; Monterey Park, 33.9 percent; Tustin, 31.6 percent; Highland, 29.2 percent; Manteca, 28.1 percent; Lancaster, 27.6 percent; and Seaside, 26.9 percent.

Leading the way...® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with nearly 160,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

Source:Los Angeles Times.

As some parts of the U.S. housing market work their way out of the housing recession, while the majority of markets continue to decline, homeowners across the country had mixed opinions of the state of their own homes’ values, according to the Zillow Q1 Homeowner Confidence Survey. Nationally, homeowners were overconfident, with half (50%) believing their own home’s value declined in the past year. In reality, 65% of U.S. homes declined in value, according to Zillow’s Q1 Real Estate Market Reports.

Meanwhile, 7% of homeowners, which translates to 5.3 million homes, said they would be “very likely” to put their home on the market in the next 12 months if they see signs of the housing market improving. By comparison, 5.2 million existing homes were sold during 2009. An additional 8% said they would be “likely” to put their home on the market, and another 14% said they would be “somewhat likely.” These homeowners represent “sidelined sellers,” a component of shadow inventory that if materialized, could significantly delay timing of a market recovery.

The most pessimistic homeowners reside in the West, even as home values in many California and Colorado metros have stabilized over the past year, according to the Zillow Q1 Real Estate Market Reports. Eighteen percent of Western homeowners believe that their home gained value over the past year when in reality 31% of Western homes gained value. That resulted in a Misperception Index of -12 (a Misperception Index of zero would indicate that homeowner perception is in line with reality, and a negative Misperception Index indicates that homeowners are overly cynical about their own homes’ values).

On the other end of the spectrum were Southern homeowners, who were overly optimistic, even as many Southern markets continue to see significant decreases in home values. Thirty-four percent of Southern homeowners said that their home gained value over the past year when in reality 27% of homes gained value. That resulted in a Misperception Index of 14.

Homeowners in the Northeast and Midwest recorded Misperception Indexes of -2 and 4, respectively.

“It is clear that there is a lag between market realities and public perceptions of home values. For quite a while after the market peak, Western homeowners continued to believe their own homes’ values were doing better than they were in reality,” said Zillow Chief Economist Dr. Stan Humphries. “Conversely, after years of press coverage about declining home values, homeowner perceptions are now in line with market conditions from early last year, although the Western market has improved since then.

“We see the opposite phenomena in the South where home values in most markets – with the exception of Florida – took some time to begin falling. Many markets there have recently joined the housing recession in earnest, with five of the nine Southern states tracked by Zillow hitting their home value peak after 2007, but homeowners there are likely to believe the downturn has not affected them. This could also be a result of the fact that most attention has been on the hardest-hit areas of California, Florida, Nevada, Arizona and Michigan, and homeowners outside of these markets may have less information about what has happened in their local markets.

“However, when homeowners across the country do start to believe that their home’s value has stopped declining, we can expect to see a lot of new inventory entering the market via sidelined sellers. This added inventory, combined with current elevated inventory levels and continued high rates of foreclosure in many areas, will likely serve to keep home values treading near the bottom for several years. Inventory must come down for home values to go up.”

Source:Los Angeles Times.

Los Angeles is one of America's largest cities and this week we got stats on how the L.A. area compares to others around the world in terms of retail rents, and how the federal home-buyer tax credit helped L.A. in comparison to other U.S. cities.

We also learned about some noteworthy L.A. citizens, from the richest to the "Best" (there was no overlap). And how you can get in on planning and building in Santa Monica.

Here's what happened in L.A. real estate news last week:

* U.S. home sales jump 7.6 percent in April over the prior month. Likely reason: the expiration of the home buyer tax credit. However, this didn't affect California's home sales, which dipped slightly from the prior month, according to the Los Angeles Times. It's expected that many who took advantage of the credit will be counted in May or June, so we'll see how those numbers pan out.
* Los Angeles was rated no. 12 in the most expensive retail rents in the world, according to CB Richard Ellis.
* We wrote last week about Los Feliz homes suffering with the rest of real estate, but the L.A. Times is doing its part to help "Loss Feliz," profiling a $2.45 million dollar 1929 house.
* If you want to get in on Santa Monica development for the next two decades, the Santa Monica Daily Press tells about the Planning Commission's next workshop. These are held before decisions are adopted to work on the final plan.
* Los Angeles Business Journal's annual list of the 50 "Wealthiest Angelenos" came out: A biotech engineer tops the list, with the rest of the top 10 including many Hollywood moguls and a supermarket magnate. With their net worth up to $93 billion this year, they can afford to buy some good real estate, non?
* Interior Designer and HGTV Design Star winner Antonio Ballatore is one of those profiled in LA Weekly's "Best of People" issue for 2010. No wonder he is the self-proclaimed "Lady Gaga of Interior Design" -- he used to be a set designer for Annie Leibovitz and David LaChappelle.

Source:Los Angeles Times.

The surge is attributed to the expiring federal tax credit for buyers. Without the popular incentive, the volume of deals is expected to drop. Sales were up 21.7% in the West.

Sales of new homes surged 14.8% in April from March, the Commerce Department reported Wednesday, as an expiring federal tax credit for buyers helped fuel activity. Without the popular incentive, many analysts are expecting sales to slump in months to come.

"Clearly, government handouts have had their desired effect: They juiced home sales and helped builders clear out even more inventory," said Michael D. Larson, an interest rate and housing analyst with Weiss Research. "We're also going to see yet another hangover in the coming couple of months due to the tax credit's expiration, with sales rates dropping off."
New single-family houses sold at a seasonally adjusted annual rate of 504,000 units in April, the Commerce Department said. That was 47.8% above the April 2009 pace.

New home sales in April were up 21.7% in the West from March. Sales rose 10.8% in the South and 31.6% in the Midwest but were flat in the Northeast.

Patrick Newport, U.S. economist with IHS Global Insight, said he was optimistic that factors other than the federal tax credit of up to $8,000 for first-time buyers and $6,500 for current homeowners that expired April 30 were at work.

He noted that a quarter of the new homes sold last month hadn't been started and just under a third were being built when sold. That means many may not be completed by June 30, when deals must close to qualify for the federal incentive. That was a "sign that many new homes are being bought by people who want to live in new homes, not by individuals looking to take advantage of a tax credit," he said.

Because the Commerce Department reports sales of new homes when contracts are signed — unlike sales of previously owned homes, which are reported when deals close — last month probably was the peak of any boost from the credits.

The median price of new houses sold in April was $198,400, and the inventory of new homes for sale at the end of April was 211,000, representing a five-month supply.

Source:Los Angeles Times.

Nationwide foreclosure filings fell 9 percent in April compared with the previous month and were down 2 percent from a year earlier, according to a RealtyTrac report released this week.

But California still posted the nation's fourth highest foreclosure rate, with one in every 192 housing units receiving a foreclosure filing.

In fact, California, Florida, Michigan, Illinois and Nevada accounted for 52 percent of the national total.

But the market in some San Gabriel Valley communities isn't nearly so bad, according to Kathleen Mueller, owner/broker for Mueller Realty in San Gabriel.

"I would say that less than 10 percent of our transactions involve foreclosures - probably 5percent," she said. "The west San Gabriel Valley really wasn't hit that hard with subprime loans. We're kind of insulated."

Mueller acknowledged, however, that banks are still making things difficult.

"They're still difficult to deal with and they're getting more difficult, rather than less," she said. "Even buyers with 20 percent down are having difficulty, and God forbid if we have less than 20 percent down and need PMI (private mortgage insurance). I've had situations where a lender will approve a loan, but then the PMI comes up with a ridiculous requirement that will kill it."

James J. Saccacio, chief executive officer of RealtyTrac, said "two important milestones" in the April report show that foreclosure activity has begun to plateau, but at a very high level that won't drop off in the near future.

"April was the first month in the history of our report with an annual decrease in U.S. foreclosure activity," Saccacio said in a statement. "Secondly, bank repossessions, or REOs, hit a record monthly high for the report even while default notices dropped substantially on a monthly and annual basis."

Saccacio expects that pattern to continue throughout most of 2010 as lenders work through their backlog of distressed properties.

Los Angeles County had 3,320 foreclosure filings in April, and the count in some San Gabriel Valley cities was relatively high.

Pasadena had 180; La Puente, 168; West Covina, 138 and Covina, 116. Other cities had substantially lower numbers, including Sierra Madre, 17; Santa Fe Springs, 20; and La Ca ada Flintridge, 22.

All told, California had 69,725 properties that received a foreclosure filing in April.

Source:Los Angeles Times.

As our most populous state, changes in the California economy have a massive impact on the country’s economy as a whole. During the housing bubble home prices in California escalated out of control, and during the ensuing market crash California got hammered. There is some good news, however, as the California housing market is slowly recovering because low home prices, low current mortgage rates, and tax incentives are encouraging people to buy.

According to a report from MDA DataQuick, year-over-year new home sales increased 17 percent in Southern California in the first quarter of 2010. This is still far below pre-recession numbers, as almost 17,000 new homes were sold in Southern California in the first quarter of 2006.

Reports from the L.A. Times suggest that builders are no longer building homes on spec, and people are no longer looking to purchase homes to flip for a quick profit. McMansions are out, and smaller, more conservative homes are in. There is an increased emphasis on location, with people eskewing larger homes with elaborate features in favor of smaller homes with shorter commutes.

The California Association of Realtors reports that year-over-year home sales increased 2.5 percent in March, and the year-over-year median price of existing homes rose 20.8 percent in March, the largest increase in five years.

Foreclosures continue to dog the California market. Banks seized a record number of homes last month, but the number of houses entering the foreclosure process is starting to ebb. California had nearly 70,000 foreclosure filings in April, which is extremely high, but down 25 percent month-over-month and 28 percent year-over-year. Unemployment in California remains above the national average, and is the main hurdle to further recovery in the housing market.

The amount of time that houses linger on the market is starting to fall as well. The average amount of time it took to sell a house in April was 40 days, down from 49 days in April 2009. Excess housing supply is beginning to come down as well, with the unsold inventory index fell to five months, down from 5.6 months the previous year.

Nationwide, new home sales rose 24 percent in March (month-over-month) and 24 percent year over year. The Price Shiller House Price Index showed annual price increases in both San Francisco and Los Angeles. The Dow Jones Home Construction Index Fund, which measures the stocks of several large home builders is up over 25 percent since the beginning of the year, a favorable sign for the construction industry.

New home sales were helped by the first-time home buyer tax credit, which expired at the end of April. In order to stimulate further growth, California instituted a state tax credit of up to $10,000 in order to replace the federal credit and further stimulate home sales.

Source:Los Angeles Times.

FreeRateUpdate.com research of wholesale lenders' rate sheets shows conventional 30-year fixed California mortgage rates as low as 4.5% with a standard origination fee of about 1 point. 30-year fixed FHA loan rates are available even lower, at 4.375% with about a point origination. These rates are available today to well-qualified borrowers says FreeRateUpdate.com.

Data suggests that despite these record low rates today, mortgage applications are at a 13 year low. Why? Purchase applications have sunk since the home-buyer tax-credit expired on April 30th.

Southern California homeowners may want to consider refinancing at today's record low rates which are a product of a slide in interest rates which wasn't supposed to happen. It was expected that after the government's mortgage-backed securities purchasing program expired at the end of March, rates would shoot to the mid 5's. Instead we've got rates matching an all time record low first set late last year.

Jumbo mortgage rates, which aren't directly moved by MBS prices, are historically low as well. Today's 30 year fixed jumbo mortgage rate is 5.5%

Source:Los Angeles Times.

Bay Area home sales fell slightly below the year-ago level and remained well below average last month as increased high-end activity couldn’t offset sales declines in the lower-cost areas and in the new-home market. The continued shift toward a greater portion of sales occurring in higher-cost coastal communities helped the region’s median sale price rise nearly 22 percent from last year, but the median fell from March, a real estate information service reported.

Last month a total of 7,003 homes closed escrows in the nine-county Bay Area, up 0.2 percent from 6,992 in March but down 1.9 percent from 7,139 in April 2009, according to MDA DataQuick of San Diego.

On average, Bay Area sales have risen 4.2 percent between March and April each year since 1988, when DataQuick’s statistics begin. Last month’s sales tally was 24.5 percent below the April average of 9,278 sales since 1988, and was the second-lowest for an April since 1995.

The 368 newly built homes that closed escrow in April marked the lowest new-home total for that month since April 1993, when 342 sold.

Some of April’s sales activity might have been delayed until at least May as buyers decided to take advantage of new state tax credits that became effective May 1. The credits are for first-time buyers and those purchasing a new home.

“It’s not clear how many April sales might have been pushed into May or June by tax credits. The bigger picture is that the housing market will gradually be decoupled from government stimulus and be on its own again. For months we’ve seen growing signs of a recovery taking hold. But plenty of challenges remain like high unemployment, the possibility of many more distressed properties hitting the market in a rising interest rate environment, and a dysfunctional jumbo loan market, which is a big deal in the Bay Area,” said John Walsh, MDA DataQuick president.

Buyers paid a median $370,000 for all new and resale houses and condos that sold last month, down 2.6 percent from $380,000 in March but up 21.7 percent from $304,000 in April 2009.

The median has risen on a year-over-year basis for seven straight months. But in April it was still 44.4 percent below the $665,000 peak of June and July 2007.

The April median’s nearly 22 percent increase over a year ago is largely a reflection of the changes that have occurred in buying patterns across the region. A year ago many more homes being sold were inland foreclosures – homes that were often in less-than-stellar condition, and which had highly motivated sellers. Also a year ago, sales in many high-end communities were extremely sluggish. This spring the re-selling of foreclosures has waned and high-end activity is much stronger, in part because prices have come down, there’s more inventory in some areas and it appears high-end financing has loosened a bit.

Foreclosure resales – homes that had been foreclosed on in the prior 12 months – made up 29.5 percent of the Bay Area’s resale market last month. That was the lowest since May 2008 and was down from 31.3 percent in March and 46.4 percent in April 2009. Foreclosure resales peaked at 52.0 percent in February 2009.

As less-expensive foreclosures have waned the past year, activity in many mid-to high-priced neighborhoods has picked up, helping to explain the recent double-digit annual gains in the median sale price. Last month 35.1 percent of the homes sold in the Bay Area were priced $500,000 or above, up from 27.0 percent a year ago. However, $500,000-plus sales still lag their decade-long monthly average of 46.1 percent of all sales.

Viewed a different way, zip codes in the top one-third of the Bay Area market, based on their historical prices, accounted for 31.5 percent of existing single-family house sales last month, compared with 22.9 percent a year ago. The number of houses resold in the top one-third of the market in April was 23.3 percent higher than a year ago, while house resales in the bottom one-third of the market (the least expensive zip codes) fell 26.6 percent.

High-end sales would be stronger, and the region’s overall recovery more robust, if jumbo and adjustable-rate financing were easier to obtain.

Mortgages above the old conforming loan limit of $417,000 made up nearly 60 percent of all Bay Area home purchase loans before the credit crunch hit in August 2007. Last month $417,000-plus loans made up 31.6 percent.

Use of adjustable-rate mortgages (ARMs) remains far below historically normal levels, too. ARMs made up just 11.1 percent of Bay Area purchase loans last month. While that’s the highest since ARMs were 13.7 percent of purchase loans in September 2008, it’s a fraction of the monthly ARM average of nearly 50 percent since 2000.

Meanwhile, federally-insured FHA loans have kept the entry-level market humming. The low-down-payment loans, which are popular with first-time buyers and some move-up buyers, made up 25.6 percent of Bay Area purchase loans last month. That was down from 25.8 percent a year ago but up from 14.4 percent two years ago.

Last month absentee buyers – mostly investors – purchased 18.2 percent of all Bay Area homes sold, paying a median $249,500. That’s up from 17.0 percent in March and up from 17.3 percent a year ago. The monthly absentee buyer average over the past decade is 13.0 percent. Buyers who appeared to have paid all cash – meaning there was no corresponding purchase loan found in the public record – accounted for 25.5 percent of sales in April, paying a median $260,000.

Home flipping has trended higher of late. Last month 2.6 percent of the homes that sold had previously been sold between three weeks and six months prior. That was up from a Bay Area flipping rate of 2.3 percent in March and 1.6 percent a year earlier. Last month’s flipping rates varied from 1.4 percent in San Francisco to 3.7 percent in Solano County.

San Diego-based MDA DataQuick is a division of MDA Lending Solutions, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. MDA DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts. Because of late data availability, sales were estimated in Alameda and San Mateo counties.

The typical monthly mortgage payment that Bay Area buyers committed themselves to paying was $1,607 last month, down from $1,626 the previous month, and up from $1,277 a year ago. Adjusted for inflation, current payments are 39.5 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 55.3 percent below the current cycle's peak in July 2007.

Indicators of market distress continue to move in different directions. Foreclosure activity remains high by historical standards but below peak levels reached over the last two years. Financing with multiple mortgages is low, down payment sizes are stable, and non-owner occupied buying is above-average, MDA DataQuick reported.


Sales Volume Median Price
All homes Apr-09 Apr-10 %Chng Apr-09 Apr-10 %Chng
Alameda 1457 1319 -9.50% $289,197 $350,000 21.00%
Contra Costa 1,699 1,635 -3.80% $225,000 $273,000 21.30%
Marin 174 245 40.80% $585,000 $659,000 12.60%
Napa 99 104 5.10% $315,000 $335,000 6.30%
Santa Clara 1,606 1,656 3.10% $405,000 $489,000 20.70%
San Francisco 402 428 6.50% $628,500 $692,500 10.20%
San Mateo 444 556 25.20% $520,000 $580,000 11.50%
Solano 717 591 -17.60% $180,000 $202,000 12.20%
Sonoma 541 469 -13.30% $290,000 $318,000 9.70%
Bay Area 7,139 7,003 -1.90% $304,000 $370,000 21.70%

Source:Los Angeles Times

An estimated 37,481 new and resale houses and condos were sold statewide last month. That was up 0.5 percent from 37,295 in March, and down 1.3 percent from 37,967 for April 2009. California sales for the month of April have varied from a low of 27,625 in 1995 to a peak of 71,638 in 2004, while the average is 44,758. MDA DataQuick's statistics go back to 1988.

The median price paid for a home last month was $255,000, unchanged from March, and up 15.4 percent from $221,000 for April a year ago. The year-ago median was the low of the current cycle. The year-over-year increase was the sixth in a row, following 27 months of year-over-year decline. The median peaked at $484,000 in early 2007.

Of the existing homes sold last month, 38.1 percent were properties that had been foreclosed on during the past year. That was down from a revised 40.3 percent in March and down from 54.6 percent in April a year ago. The all-time high was in February 2009 at 58.8 percent.

The typical mortgage payment that home buyers committed themselves to paying last month was $1,108. That was up from $1,091 in March, and up from $929 for April a year ago, the low of the current cycle. Adjusted for inflation, last month's mortgage payment was 48.6 percent below the spring 1989 peak of the prior real estate cycle. It was 58.3 percent below the current cycle's peak in June 2006.

MDA DataQuick is a division of MDA Lending Solutions, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. MDA DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.

Indicators of market distress continue to move in different directions. Foreclosure activity is off its peaks reached in the past couple of years but remains high in a historical context. Financing with multiple mortgages is low, down payment sizes are stable, cash and non-owner occupied buying is up, MDA DataQuick reported.

Source:Los Angeles Times.

Home sales volume and prices increased during the month of April compared with the first three months of the year, when adjusted for the number of selling days.

There were a total of 4,152 homes sold in Los Angeles County during April, a slight decline from the 4,186 sold in April 2009. However, last month’s sales total outperformed each of the first three months of 2010 in price and volume.

The average price of a home in the county was $350,000 for April. That’s a 16 percent increase from $303,000 a year earlier, when the median price hit its lowest level in more than five years, according to data provided by Home Data Corp. in Hicksville, N.Y.

“There has been interest in buying in the $500,000 range. That tends to be pulling up the median price,” said Delores Conway, associate professor at the USC Marshall School of Business. “People on the low end have been able to move up and there have even been multiple offers on homes.”

Moreover, many subprime loans have been restructured or foreclosed upon, which helps relieve downward pressure on prices, according to Conway. Areas where this trend is noticeable include Lancaster, Palmdale, Norwalk and Pomona. In all four cities, volume is the highest of all ZIP codes and median prices are all below the county median.

Activity has also picked up in the highest-end areas such as Beverly Hills and Bel Air, where homebuyer tax credits had little impact.

Beverly Hills reported 19 sales in April, compared with just nine a year earlier. Home sales in Bel Air jumped from three in April 2009 to 12 in 2010. Overall, the 10 highest-price ZIP codes saw 81 sales in April compared with 53 a year earlier, a 53 percent spike in volume.

“We are doing over an escrow a day,” said Jeff Hyland, president of Beverly Hills brokerage firm Hilton & Hyland Real Estate, who works with high-end homes on the Westside. “That is triple what we were doing a year ago. There is pent-up demand and buyers will move if houses are priced appropriately.”

Source:Los Angeles Times

Foreclosure sales across California slid three percent last month but were 36 percent above the level of the year before, a real estate tracking firm said on Tuesday.

On a year-over-year basis, foreclosure cancellations had surged 174 percent in California, according to ForeclosureRadar.com.

"The steady rise in cancellations leads us to believe that loan modifications and short sales are gaining traction," said Sean O' Toole, the company's founder.

"I'd caution, however, that cancellations also occur due to filing errors and extended postponements, which require the notice of trustee sale to be refiled.

"In fact," he added, "14.6 percent of new notice of trustee sale filings in April were on previously canceled foreclosures."

Two-thirds of the foreclosed inventory was taken back by lenders last month, without any competitive bids being received, but O' Toole noted the number of third-party sales at auction has increased 158 percent in the last year as investors take advantage of discounted prices.

In Los Angeles County, the number of foreclosed homes in Los Angeles County declined slightly last month, but remained far above the year-ago level, according to the firm.

The firm said in its monthly "California Foreclosure Report" that 3,245 repossessed properties in the county were sold in April, compared to 3,293 in March, about a one percent drop.

But last month's figure was 49 percent higher than April 2009, when 2,172 foreclosed homes were auctioned off.

Los Angeles County had the highest volume of foreclosure sales in the state, followed by Riverside County, with 2,398, and San Bernardino County, with 1,838, according to the firm.

Source:Los Angeles Times.

Home prices rose in nearly 60 percent of U.S. cities in the first quarter of this year, as the housing market started to stabilize thanks to billions of dollars in federal spending.

The median sales price for previously occupied homes rose in 91 out of 152 metropolitan areas tracked in the January-March quarter versus a year ago, the National Association of Realtors said Tuesday.

There were double-digit price increases in 29 cities — a sharp improvement from the fourth quarter of last year, when prices rose in about 40 percent of cities.

The tax credits — $8,000 for new buyers and $6,500 for current owners — helped gin up home sales this spring as many buyers raced to purchase a home in time to qualify before the incentives expired at the end of April.

Sales of previously occupied homes surged in March after a three-month decline caused in part by harsh winter weather.

In all, about 2.2 million households had used the first-time buyer credit as of late March at a cost of $16 billion, according to the Internal Revenue Service.

The Chicago-based trade group credited the government incentives for generating about one million additional sales, helping to bring down the inventory of unsold homes.

"Without that tax credit, if we had an additional million unsold homes on the market, the inventory would be so out of whack that we would be seeing prices continuing to decline and we might still be in recession," said NAR spokesman Walter Molony.

With the housing tax credits now over, many experts anticipate home sales will soften in the near term, and that could syphon some of the momentum in home price increases.

Prices also could be hurt as banks unload their backlog of foreclosed homes. And despite rising prices, nearly a quarter of all U.S. homeowners with a mortgage still owe more on their loans than their homes are worth, according to CoreLogic.

That's why many housing experts project home prices will remain almost flat for the next two years, according to a survey of leading economists by the Associated Press last month.

The NAR is projecting prices will increase "very modestly" in the second half of this year, assuming unemployment and the economy don't take a turn for the worse, Molony said.

The national median price was $166,100, or 0.7 percent below the first quarter of last year. Sales of foreclosures and other distressed properties made up 36 percent of all sales.

The largest percentage price increase was in Saginaw, Mich., where the median price doubled to nearly $61,000. Prices in Akron, Ohio were up 95 percent to about $95,000. Prices in Cleveland were up 54 percent to $106,400.

Those huge price gains in some of the Midwestern markets reflect the large number of discounted foreclosed homes sold in the same period last year, the trade group noted.

The largest price decline was in Orlando, Fla., where it dropped 15 percent to nearly $132,000. Prices in Ocala, Fla., fell 14.5 percent to a median of nearly $93,000. Prices in Cumberland, Md., fell 14.4 percent to $98,300.

Source:Los Angeles Times.

A previous version of this story included incorrect information about the trend of mortgage delinquencies. In March, 19 percent of Inland mortgages were at least 90 days delinquent, up from 14 percent a year earlier.

After five months of year-over-year declines in foreclosure activity, it looks as if the worst of the crisis in Riverside and San Bernardino counties is behind us, according to a company that has been keeping records.

The picture seems to be brightening faster in Inland Southern California than nationally.

In April, the nation saw the third straight month of year-over-year declines in notices of mortgage default, the initial step in the foreclosure process. It was the fifth consecutive month of such improvement in San Bernardino and Riverside counties.

"Part of it is because the Inland Empire was one of the first places to crash and experience extremely high foreclosure rates. It led the way into the housing crisis and appears to be leading the way out," said Daren Blomquist, an analyst with RealtyTrac, which on Wednesday released its April report.

Riverside and San Bernardino counties combined last month reported 5,042 notices of mortgage default filed, 53 percent fewer than in April 2009. All types of foreclosure filings -- including defaults, trustee sales and repossessions -- were down 33 percent in Riverside County and 35 percent in San Bernardino County compared with a year earlier.

Blomquist and other industry experts caution that the volume of foreclosure activity continues to be high and that other reports show the number of people late on their mortgage payments is on an upswing.

"Definitely the decline in notices of default is welcome news," said Chapman University economist Esmael Adibi. "Having said that, I still think the number of defaults is relatively high and we still are going to be dealing with this problem for at least this year and next year."

Many homeowners continue to struggle to pay their mortgages, a situation blamed on high unemployment and exotic mortgages popularized during the housing boom that are resetting to higher monthly payments.

Corelogic, a real estate research company, reported that in March more than 19 percent of mortgages in the two-county Inland Southern California region were at least 90 days delinquent, up from slightly over 14 percent a year earlier.

The Obama administration's new program encouraging short sales, allowing homeowners to avert foreclosure by selling their homes for less than they owe on their mortgages, probably drove the drop in default notices, Blomquist said.

Demand for homes, including short sales, also got a boost from the federal tax incentive for first-time homebuyers, Blomquist said. He added that Riverside and San Bernardino counties further benefit from extremely affordable home prices as a result of the crash.

Blomquist called short sales "bad news for the homeowner who no longer has that place to live in and the bank has to take a loss. ... But it is probably a better overall outcome for the market. You avoid having vacant homes with lawns dying."

Dustin Hobbs, spokesman for the California Mortgage Bankers Association, said the short-sale program that went into effect in April has streamlined and standardized the short-sale process. Most important, Hobbs said, the program gave holders of subordinate mortgages on the houses incentive to participate by promising them a portion of the short-sale proceeds in return for releasing their liens to allow the sales to be accomplished.

But Kevin Stein, associate director for the California Reinvestment Coalition consumer advocacy organization, said it would be preferable for people to keep their homes by improving the success of loan modification programs.

Stein complained that since the Obama administration's loan modification program was launched more than a year ago, only 227,922 loan modifications have been completed, although the U.S. Treasury Department estimates there may be 3.4 million delinquent homeowners who qualify for help.

He said that while he welcomes a decline in defaults, he was disturbed by RealtyTrac's finding that in April the number of homes that reached the final stage of the foreclosure process nationally and were repossessed by the banks reached a monthly high.

Also the 3,624 bank repossessions last month in Riverside and San Bernardino counties, while less than half the peak of 7,337 bank repossessions in August 2008, was 526 more than a year ago.

A slowdown in the flow of bank-repossessed houses to the market last year has been credited with preventing the further collapse of home prices.

Blomquist said banks may be starting to push to foreclosure the large backlog of houses with delinquent mortgages that have been languishing in the process.

"The market has a lot of distressed properties to work through, either that have already gone into the foreclosure process or are on the brink," said Blomquist. "We believe a certain percentage of those will end up foreclosed on when all is said and done."

Source:Los Angeles Times.

Sales have been helped by tax credits and by builders' offering simpler, cheaper housing. Location is also key — buyers don't want extremely long commutes, analysts say.
The modest house has yet to be shingled and a stack of drywall sits on the bare concrete floor, but Karame Adesko and her fiance, Pablo Garcia, can envision their future in this developing Corona cul-de-sac.

Adesko and Garcia originally planned to buy one of the many foreclosed properties in Southern California. But after touring several and seeing the pricey repairs they needed, the couple opted to spend $309,000 on a new 1,300-square-foot home.

"You don't want to spend all this money and then have to fix everything up," said Adesko, a 27-year-old dance instructor. "I wanted to buy a move-in-ready house."

Helped by people like Garcia and Adesko, sales of new homes are on the upswing. Buyers purchased 3,447 new homes in Southern California during the first three months of the year, a 17% increase from the same period last year, according to the San Diego research firm MDA DataQuick.

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That's a fraction of what sales were during the peak of the region's housing boom; in the first quarter of 2006, builders sold 17,324 new homes in Southern California. Gone too are the days when developers built on spec, confident that buyers armed with easy credit would line up to purchase the finished product.

Still, there are signs of a rebound. Nationwide, sales of new homes jumped 27% in March from the month before and 24% compared with March 2009. A key index of homebuilder stocks is up 16% this year, compared with a rise of 3.4% in the Dow index. One major builder, Lennar Corp., has seen its shares rocket 47%.

Experts say new-home sales have been helped by state and federal tax credits, as well as by new tactics by builders adjusting to the no-frills post-bubble environment.

Simple floor plans, stucco facades and energy-saving appliances are in. Mini-mansions with marble countertops, Jacuzzi tubs, big curving staircases and high vaulted ceilings are out.

"In 2005, you didn't need a down payment and you figured the home would continue its appreciation in value, so people wanted big homes that were completely decked out," Irvine economist John Burns said. "Now you are getting a home with four corners and a roof."

Location is also key, analysts said, with buyers less willing to commute extreme distances for affordable housing.

Builders, too, have grown more cautious. Now many will begin construction only after a buyer has put down a deposit or signed a contract. They include KB Home, the Los Angeles company that's building Adesko and Garcia's house. KB shares have risen 21% this year, although shares slipped Thursday on an analyst's downgrade.

The firm has scaled back its more elaborate architectural offerings, focusing instead on a collection of simple floor plans it calls its Open Series.

The shift has helped KB Home grab the biggest market share in Southern California — 7.7% in the first quarter, according to research firm Hanley Wood Market Intelligence. The average price of those properties was $373,341, Hanley Wood said, nearly one-third lower than the $549,081 in the first quarter of 2006.

Shea Homes, a privately held builder based in Walnut, has also introduced a line of smaller homes with modern design, scaled-down master bathrooms and interior spaces that can be reconfigured, said Patrick Duffy, principal for research firm MetroIntelligence Real Estate Advisors.

"They have gone back and they have reengineered their entire production process," Duffy said. "Where can we find economies of scale, where can we cut price, where can we simplify?"

Despite the uptick in new-home sales, analysts expect this to be a challenging year for builders. Foreclosures continue to hit the housing market. Consumers remain saddled with debt. The nation's labor market is weak. Banks have tightened lending standards. And the generous government tax breaks, which helped fuel sales in recent months, expired at the end of April.

Still, the large, publicly traded companies that dominate the market have plenty of cash and are well positioned to ramp up production when demand picks up, Burns said.

"You have companies today who can build homes, and you didn't have that in the early 1990s," after the last housing crash, he said. "We should see construction increase more quickly this cycle."

Builders are also beginning to look beyond first-time buyers and launching pricier developments.

Later this month, Miami-based Lennar plans to open Central Park West in Irvine, a project it had put on hold during the housing crash. The master-planned, 42-acre community will feature 1,380 residences including luxury condominiums, flats, lofts and town homes with prices ranging from the upper $300,000s to more than $1 million.
Pulte Homes, based in Bloomfield Hills, Mich., is opening a new development in Northeast Pasadena on a five-acre parcel of land it bought late last year. The company, whose stock has climbed 18% this year, is selling 35 homes with three floor plans ranging in size from 2,565 square feet to 2,898 square feet, with prices starting in the high $700,000s.

"We are starting to see activity from some of the public homebuilders — acquiring land and really positioning themselves for what they seem to read as a recovery in the housing market," said Emile Haddad, chief executive of Five Point Communities, a Lennar spinoff.

Although price remains a crucial factor for many first-time homebuyers, location has also taken on new importance.

"Unlike 2005 and 2006, people are not going to just buy homes for the price and deal with the commute later. They are actually looking for location again, which is the key thing, which is still keeping the new-home sales low," said Michael Ellison, Southern California sales director for Hanley Wood.

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Corona, with plenty of land and relative proximity to Orange County, has taken off as a building hub. More than 900 new homes have been sold in the area over the last 15 months, according to Hanley Wood.

Adesko and Garcia bought in a subdivision known as Alpine at Willow Ranch. Although the project has a pastoral feel, set amid dairy farms and with views of the snow-capped San Gabriel Mountains, it's not far from her job in Placentia and his in Yorba Linda.

Directional signs with names of some of the biggest builders greet people disembarking from Interstate 15. Colorful banners and billboards advertise homes' prices and features. Marketers stand on street corners, defying an unforgiving sun, spinning cardboard arrows in hopes of drawing in traffic.

One recent morning, Adesko and Garcia were led on a tour of their future home by Arnold Lloyd, a KB Home superintendent with an impressive handlebar mustache and long, thick, white sideburns. He explained the home's features, showing them their property line, energy-saving air conditioner and gas fireplace.

"You just have to turn the switch on and you have instant romance," he said. "You can sit back and enjoy your glass of wine."

"Nice," Adesko said.

Source:Los Angeles Times.

Southern California homes are looking good. During the economic free-fall, contractors and builders offered cut-rate services and apparently SoCal citizens responded. And that's helping the remodeling industry make a comeback.

A recent L.A.Times story reported that 62 percent of homeowners said they planned to embark on home-improvement projects in 2010, with average spending of $6,200 on enhancements.

This is a much-needed relief for the home improvement market, which despite Martha Stewart's announcement to sell at Home Depot, saw consumer spending drop 27 percent since 2007 because homeowners delayed or abandoned plans to remodel.

"According to a report this month by the Joint Center for Housing Studies at Harvard University, the sector is estimated to see nearly 5% growth in 2010 -- although industry experts caution that a full rebound will take a while," reports the L.A. Times.

Both home-improvement meccas Home Depot and Lowe's have reported better-than-usual fourth-quarter profits. Each company noted that consumers are more willing to put in the money for home renovation and that store sales are predicted to increase by 3.5 percent. (Though after a 27 percent drop, that still leaves a long climb.)

If the trend continues, 2010 could produce the first annual spending increase for the industry since 2006.

Maybe Martha might help after all.

Source:Los Angeles Times.

Cheered by tenants and jeered by landlords, a city committee Wednesday recommended a four-month freeze on rent increases for Los Angeles' 630,000 rent-controlled units.

If approved by the full City Council later this week, the freeze would prevent landlords who own buildings built prior to 1978 from raising rents in the period, which could be extended by two months.

Council members said the freeze will give them time to study the city's rent stabilization ordinance and recommend changes.

"It will be a while before we turn this economy around," said Councilman Richard Alarc n, who sits on the council's Housing, Community and Economic Development Committee.

"While everyone is struggling through this horrible economy, I don't want to allow a group that is struggling to face the prospect of losing their homes (because of rent hikes)."

The San Fernando Valley has about 200,000 rent-control units scattered across a wide area.

With an overflow crowd of landlords and tenants at the meeting, the committee heard about the problems all are facing in the sluggish economy, with unemployment hovering around 14 percent.

In a 3-1 vote, the committee rejected complaints from landlords who said a freeze will do little to help tenants in a market that already favors them.

Mark Wagner, who told the committee he manages 700 units, said the freeze would only hurt landlords.
"Responsible landlords take care of heir property," Wagner said, responding to complaints from some tenants that landlords do not make proper repairs.

"None of us have ever seen economic times like this. But, there are expenses that go up. It takes real money to operate a property and to fix and repair it."

Several other landlords said the market conditions now favor tenants so much that landlords have been forced to offer free rent for up to several months in order to fill their units.

Councilwoman Jan Perry, the only council member on the panel to vote against the freeze, said the best way to keep rents affordable was to encourage more development.

"I'm concerned this will create false expectations by many renters," Perry said.

Councilman Herb Wesson called the rent control issue the most vexing the city was facing.

"I believe there are problems that adversely affect landlords and tenants," Wesson said. "I want us to try to strike a balance."

One area the City Council wants to study during the freeze involves rent increases for mobile home parks, which face a further limitation of raising rents by only 10 percent when spots become vacant as opposed to being increased to market rates.

The city's rent control ordinance took effect in 1978 following the passage of Proposition13. Under the measure, landlords of rent-controlled units are allowed to raise rents to market rates only after a unit is vacant. Meanwhile, they can raise rents by a base rate of 3 percent a year. Rent increases can be higher, if approved by the city, to reflect increased costs.

Landlords and their representatives said the freeze would drive many of them out of business or result in higher unemployment, noting they would have to reduce the number of contractors, landscapers and others who maintain their properties.

The California Apartment Association opposed the freeze, saying the city has had a report from a special Economic Roundtable on the rent issue for several months that shows 32 percent of the units are held by small business owners and many would be forced into foreclosure.

At the same time, many said they have tenants who have lived in the same units for several years and now are paying several hundred dollars below market rates.

But Larry Gross of the Coalition of Economic Survival, a tenants-rights group, said the economy should determine the need for the freeze.

"It's clear any increase on July 1 is not justified," Gross said. "The CPI was a negative 6.5 percent last year. No other jurisdiction is allowing as much as Los Angeles is considering. A freeze is just and is needed."

Source:Los Angeles Times.

The popular state homebuyer tax credit returned Saturday after running out of money last year in just four months. But if you're interested in obtaining the tax break to help reduce the cost of buying a home, you better act fast.

Funding for the credit could be used up within three weeks, said Michael Tessaro, a Realtor with East Bay brokerage J. Rockcliff Realtors and a director with the California Association of Realtors.

Association economists are projecting that funding set aside for the tax credit will be used up quickly, thanks to an expected flood of delayed closings by homeowners who hope to qualify for both the state and federal credits.

"(The state credit) is expected to run out of money in two to three weeks "... based on the number of closings in the pipeline. It's going to be done and over with very quickly," Tessaro said.

The federal homebuying credits, which provide up to $8,000 for first-time buyers and up to $6,500 for qualified repeat buyers, have a June 30 deadline for closing escrow in cases in which buyers signed a binding purchase contract by April 30.

The state credit, worth up to $10,000 over a three-year period, became effective May 1 and can be used by two groups of taxpayers: First-time and repeat buyers of new homes and first-time buyers of existing homes.

To claim the credit, first-time buyers of existing homes have until Dec. 31 to close escrow, or until program funding runs out.

Buyers of new homes with a purchase contract signed from May 1 to Dec. 31 can reserve a credit, but then must have escrow closed by Aug. 1, 2011, to obtain the credit.

The overlap window in May and June to take advantage of both the state and federal tax credit prompted many buyers to delay closing escrow until May so they also could apply for the state credit, Tessaro said.

Three clients decided to delay closing escrow on homes until this week so they could get both credits, said Faramarz Moeen-Ziai, a mortgage banker with the San Ramon-based Bank of Commerce Mortgage.

"We definitely had that happen last week," he said. "The state tax credit is only available for closing after May 1."

The state credit was made possible by legislation signed in March by Gov. Arnold Schwarzenegger. It provides $100 million in funding for all buyers of new homes and $100 million in funding for first-time buyers.

The state tax credit program is being handled by the state Franchise Tax Board.

The $100 million in funding for first-time buyers is expected to be used up quickly, Franchise Tax Board spokeswoman Brenda Voet wrote in an e-mail.

"We will provide estimates, based on sampling, of the number of first-time-buyer applications and the related credit amounts that we have received beginning May 6, 2010. We are currently working on these estimates," she wrote.

"The original revenue estimate for the First-Time Buyer Credit is that it would only last six to eight weeks" but that the funding could be used up more quickly than that.

The state credit has its limitations, Moeen-Ziai said.

That's because the maximum $10,000 credit is spread out over three years, or $3,333 a year.

To obtain a $3,333 credit, a taxpayer would have to owe at least $3,333 in state taxes.

A taxpayer who paid only $1,500 in taxes would receive only a $1,500 credit that year.

"The bottom line is that most people don't have $3,333 in state taxes," he said.

Source:Los Angeles Times

Riverside County will lurch toward an economic recovery, but getting there won't be easy, and factors rooted in state and national policies are bound to get in the way, economists told the Board of Supervisors today.

As part of its third-quarter 2009-10 fiscal year update, the board received two economic reports, both painting grim pictures of the county's near- term economic prospects.

"The county's economy is expected to take longer to recover than the Southern California region and the national economy due to continued high unemployment, lack of employment opportunities, record-breaking foreclosures and problems in commercial real estate," a report by Cal State Fullerton economists Adrian Fleissig and Mira Farka concludes.

"Because the recovery will be slow and weak, the upturn will bear more similarities to a mild recession than to an expansion," they wrote.

The report, "County of Riverside Forecasts & Economic Outlook," indicated the county's jobless rate would remain in the double digits through 2014. The rate has been hovering around 15 percent for the last four months.

According to the report, a new wave of adjustable rate mortgage resets will further depress the county's real estate market, and defaults on commercial properties are expected to accelerate in the next two years.

The economists noted that residential property tax delinquencies rose "considerably" in the 2008-09 fiscal year and will continue to climb this year and next as people find it harder to pay their bills.

The county's property tax assessment roll for both residential and commercial units was projected to drop around 4 percent in the current fiscal year, compared to 11.6 percent in the previous one, according to the forecast.

Property taxes represents roughly 80 percent of the county's general fund income.

Sales taxes are expected to slip 25 percent in the current fiscal year and remain flat until 2014, when consumer spending should pick up, according to the report.

The economists cited a "few reasons for optimism in the long-run," pointing to a "well-trained and specialized" workforce in logistics, construction and manufacturing.

"The availability of abundant land and the proximity to coastal areas should result in development projects that will support the regional economy," the report states. "The county will continue to attract new businesses and workers because of its central location, proximity to the ports ... and its pivotal role in transportation and distribution of goods."

Los Angeles-based Beacon Economics founder Chris Thornberg delivered a separate forecast to the board that tied together national and international events and how they might bear on the county's economy going forward. Thornberg said the signs of a macroeconomic recovery were evident, Advertisement

Primus Golf Academy and he expressed confidence that 2010 would be a "solid" year, with well over half of the federal stimulus money still unspent.
But he worried that another economic contraction would hit in 2011 and 2012 because the U.S. has not "moved beyond the issues that plagued it at the start of recession two years ago."

He said although federal "interventions" stabilized the economy, they had created an "out-of-control deficit" and other "imbalances ... that pushed us into recession in the first place."

"The nation seems to be trading in its private bubble for a public one, swapping one set of unsustainable economic drivers for another," he said. "And as with all bubbles, the pop, when it occurs, will likely prove painful."

According to Thornberg, the $1.4 trillion in liquidity the Federal Reserve pumped into the nation's financial sector has been largely pent up by banks unwilling to lend. Once that money is put to work, inflation may become a threat, he said.

Thornberg said global instability, such as the meltdown in Greece, could impact the U.S.

He criticized the government's "homeowners' rescue" plans, such as the federal Home Affordable Modification Program, saying the effort has kept delinquent property owners in residences they still cannot afford.

The veteran economist warned that the government's cures to fix the ailing economy are as bad or worse than the disease because of the high level of deficit spending involved.

"We've never seen deficits like this or monetary policy like this. It's off the charts," Thornberg told the board.

According to the economist, federal borrowing has reached 11 percent of the nation's gross domestic product, compared to an average 6 percent in the past. He said the bailouts are costing the nation "$170 million per hour, or $4 billion a day."

He predicted inflationary pressures will build and taxes will go up.

Thornberg told the board that uncertainty clouded the economic horizon.

"There's not much you can do. There really isn't. It's going to take time and patience to allow the economy to heal," he said.

Despite the dim view, Thornberg said he wouldn't want to be anywhere but California, noting the state remains "a major growth engine in the U.S."

He said the state's dramatic economic downturn could be followed by a dramatic upswing with the right amount of tax reform.

According to Thornberg, Riverside County's labor market will remain wobbly for the next three years, but manufacturing employment should pick up.

He said the real estate market should gain traction as foreclosure activity shakes out.

"This area is still short of housing," Thornberg said.

Source:Los Angeles Times.

Down on their luck homeowners who have a mortgage with Chase Bank, may now be in for some foreclosure luck. Yesterday, the banking giant announced that it will host borrower outreach events at its 51 Chase Homeowner Centers across the nation to help struggling homeowners avoid foreclosure.

Homeowners who have already applied for a loan modification, may also obtain short-sale assistance at these unique events. Those borrowers who are already in the loan workout process, can also conveniently drop off documentation and sign final loan modification paperwork at the centers. This will be a breath of fresh relief for many Chase clients who seem to not be able to get help over the phone.

Chase announced the opening of an 11th Homeownership Center in Florida. They also published a list of foreclosure outreach events to be held in eight major real estate markets across the U.S. this year. Up to 40 Chase housing counselors will assist struggling homeowners for up to 12 hours a day, for 4 to 5 days at each one of these events.

David Lowman, head of Chase Home Lending had this to say about their foreclosure prevention efforts , ” Chase is a national leader in preventing foreclosures, and we continue to expand on and improve our programs to keep families in their homes.” ” Since 2007, we have helped prevent more than 965,000 foreclosures,” Lowman said.

The next events will be held in Chicago May 13-17th and following events in Atlanta and Washington D.C . are scheduled for June. Chase will hold similar foreclosure prevention efforts in New York, Northern California, Orlando, Phoenix and in Southern California throughout the summer and fall months. These dates and times are to be scheduled throughout the year with no definite dates at the time of this writing.

You can get an information packet right here. Please get educated on the documentation and forms you will need to have when you attend these events. If you are missing important documentation, then your trip to the center may be a waste of time for both you and for Chase. So, with that said, get educated and be prepared with all your paperwork.

LoanSafe.org would like to hear feedback from Chase borrowers who attend these events. There are over 30,000 homeowners in our forum sharing stories, information and helping one another through the foreclosure process. If you are one of these homeowners, we would love for you to join our cause in paying it forward and helping our fellow Americans make it through this most difficult time. LoanSafe has been America’s #1 loan and debt forum for 3 years, because it is a safe community for those people who need legitimate help and caring people to listen to their stories.

Source:Los Angeles Times.

If they meet certain conditions, house hunters who qualify can get federal and state tax credits -- as long as they close between May 1 and June 30
With encouragement from home builder billboards and real estate agents, many home shoppers are scrambling to take advantage of a potential government-sponsored windfall.

If they time their home purchase just right, they could collect both a federal homebuyer tax incentive before it expires and a new California homebuyer tax incentive just as it goes into effect.

Since the federal tax incentive is up to $8,000 and the state incentive is up to $10,000, a double dipper can collect tax credits adding up to as much as $18,000.

"Everyone is trying to double up. There are people holding up their escrows so they can qualify for the state incentive," said Steve Goddard, president of the California Association of Realtors.

But making the deadlines can be daunting, given the fierce competition for bargain-priced, bank-owned homes and the diminishing number of new homes that can be built in time to qualify for the federal tax credit.

A homebuyer must close escrow on or after May 1 to qualify for the state tax credit and no later than June 30 to also qualify for the federal credit. Anxiety is mounting, those in the housing industry report, as April 30 approaches. That is the last day a homebuyer can sign a sales contract for a home to qualify for the federal incentive.

"There are buyers trying to squeeze in under the deadline and writing offer after offer after offer ... Some want you to show them property seven days a week and are writing offers on houses they haven't even seen," said Kim Kershaw, director of career development for Prudential California Realty offices in Orange, Riverside and San Bernardino counties.

Jesse Limon, manager of the Fair Housing Council of Riverside County's first-time buyer program, said, "We are getting a lot of people trying to rush in at the last minute to take advantage of the federal tax credit, but they are having difficulty getting an offer accepted."

A Winning Offer

Some like David Shay, 26, and his wife Ruby, first-time buyers of a home in Moreno Valley, have hit the jackpot.

Shay, who with his wife runs a computer repair and maintenance business, said they have been preparing to become homebuyers for two years, moving in with his in-laws to save and pay off credit cards and build up their income.

He said they weren't ready to take advantage of last year's federal tax incentive for first-time buyers and rejoiced when Congress extended it beyond its original Nov. 30 expiration date.

Shay said in January the couple started making offers on houses and were repeatedly beaten out by investors.

He said he made his successful offer on a house about half an hour after it was listed and without first seeing it. Anxiety is mounting, those in the housing industry report, as April 30 approaches. That is the last day a homebuyer can sign a sales contract for a home to qualify for the federal incentive.

"There are buyers trying to squeeze in under the deadline and writing offer after offer after offer ... Some want you to show them property seven days a week and are writing offers on houses they haven't even seen," said Kim Kershaw, director of career development for Prudential California Realty offices in Orange, Riverside and San Bernardino counties.

Jesse Limon, manager of the Fair Housing Council of Riverside County's first-time buyer program, said, "We are getting a lot of people trying to rush in at the last minute to take advantage of the federal tax credit, but they are having difficulty getting an offer accepted."

A Winning Offer

Some like David Shay, 26, and his wife Ruby, first-time buyers of a home in Moreno Valley, have hit the jackpot.

Shay, who with his wife runs a computer repair and maintenance business, said they have been preparing to become homebuyers for two years, moving in with his in-laws to save and pay off credit cards and build up their income.

He said they weren't ready to take advantage of last year's federal tax incentive for first-time buyers and rejoiced when Congress extended it beyond its original Nov. 30 expiration date.

Shay said in January the couple started making offers on houses and were repeatedly beaten out by investors.

He said he made his successful offer on a house about half an hour after it was listed and without first seeing it. Getting chosen by the bank to buy the two-bedroom, one-bath house at its appraised value of $102,000 was important, Shay said. Also, as soon as he and his wife saw the house, they fell in love with it.

Source:Los Angeles Times.

We're in the middle of the home and garden tour season, and what stands out the most this year are trends that reflect the scaled down economy, and a recognition that California has a Mediterrranean climate which suffers frequenly from drought conditions.

Smaller homes are coming back in style, and some of those homes are showing up on this year's tours.

What's most likely to jump out at visitors this year as they trapse around tours gathering ideas are the increasing number of gardens that look less like Grandma's water-thirsty flower garden and more like the hills of California.

The hottest thing in planting practices at the moment: gardening with plants that are native to California. These flora and fauna offer a host of benefits, chief among them being their lengthy root systems that allow them to tap into water

sources that plants with shallower systems may not be able to locate. Plus, natives are the essence of "low-maintenance."

"Native plants usually don't need much to encourage them to grow, because they're used to our soil," notes Rebecca Schoenenberger, owner of California Nativescapes, a landscape design and installation company that uses exclusively native plants. "Also, native plants require little water — most of the gardens I've built still aren't being watered this late in the season, thanks to all of our rain. And, natives have tons of color all year round, even in winter. That attracts hummingbirds, and other wildlife pollinators."

An entire organization—the California Native Plant Society—now exists to encourage homeowners to garden according to this model, and to connect them with native plant nurseries such as Yerba Buena in Woodside, and Native Revival in Aptos. Additionally, native plants can be found in national forests and state parks, botanical gardens and arboretums, and nature preserves (the Rancho Canada del Oro Open Space Preserve is especially breathtaking this time of year, with a profusion of native species already in bloom). A word of warning: It is illegal to collect plants from California public lands without a permit. So admire, but nip that urge to snip.

Though record rains have drenched our area this winter, the savviest green-thumbers typically consider our state's normally drier climate when planning their gardens. Choosing drought-tolerant plants is a wise strategy — but here again, selecting drought-tolerant native plants is the best way to go. Why? Transplant a shrub from the desert, where the weather's toasty year-round, and it will likely curl up and die during our annual winter soakings. In a similar vein, plants that have become accustomed to a bit of coastal fog to supply their requisite moisture may well perish when planted in an always-sunny inland back yard.

On your garden tour, you'll probably hear that incorporating environmentally friendly flora into your garden is wonderful for the planet, and it makes great economic sense, too. The Santa Clara County Water District actually offers a landscape rebate program to homeowners (as well as commercial, industrial and institutional property owners) to encourage efficiency in outdoor water usage. Along with the details on the types of irrigation systems that qualify for the incentive program, which can return as much as $2,000 to qualifying homeowners, the agency's website includes an extensive list of native plants that help contain water costs.

Given the still-sluggish economy, according to Discovery Bay-based Foreclosure Radar, Santa Clara County foreclosures shot up 72 percent in March. It's hardly a coincidence that a number of local residents have downsized from McMansions to more affordable habitats, and even rentals. This too will be evident in this season's home tours.

In its report on gardening trends for 2010, the Pennsylvania-based Garden Media Group reveals that homeowners across the U.S. are also shifting away from lavish, English garden-style arrangements to "practicality and comfort," with fully 20 percent opting for "hobby" country farms and edible gardens.

This burgeoning back-to-basics gardening model is helping homeowners shrink their grocery bills and make better food choices by incorporating fruit trees and vegetable patches into their landscaping schemes. "We've seen anecdotal information that supports this trend," says Kevin O'Day, acting Santa Clara County agricultural commissioner. "We check shipments of fruit-bearing trees coming in from Southern California for various insects. And the number of such trees being sent up here is definitely on the rise."

Adds Karl Lee, president of the Santa Clara County Association of Realtors, "We're seeing people making more and more lifestyle choices, and wanting to be good to the environment. Adding these types of plants to their gardens is certainly in keeping with that."

There's a secondary potentially more valuable "offshoot" of this trend: replacing violets with vegetables does more than stretch the family budget. As the first lady hopes, those who plant, care for and prepare their own produce are probably more inclined to eat it. So dedicated is Michelle Obama to educating the younger generation — and by extension their parents and siblings — about the importance of consuming healthy fruits and veggies that this year's White House vegetable garden has been extended by a full 400 square feet.

"There's nothing cooler," Obama observed in a March 2009 New York Times interview, "than coming to the White House and harvesting some of the vegetables and being in the kitchen "... and cutting and cooking and actually experiencing the joys of your work."

Even if you're all thumbs, making the transition from high-maintenance hothouse exotics to hardier, more sustainable California natives (particularly of the consumable variety) can help transform you into a green thumb.

"The first year or two you'll want to give native plants some water, which means five to seven minutes, two or three times a week," Schwarzenegger says. "Then every year you'll see a pretty drastic drop in the amount of water you'll use, and the amount of maintenance required. And in return you'll have a beautiful — and even edible — garden."

So this spring, take a walk on gardening's wild side. Amid the beauty you'll find new ways to nurture your body, as well as your soul.

Source:Los Angeles Times.

Like many parts of the nation, but especially here in Southern California, the neighborhood known as South Los Angeles is pockmarked with foreclosed properties, the result of aggressive subprime lending. But unlike some other parts of town, house flipping just may save South L.A. from what would otherwise be a bleak destiny.

As the Los Angeles Times proclaims, "Flipping houses is back in South Los Angeles," citing figures from MDA DataQuick, which showed that at least three different South L.A. zip codes were among the top in Southern California for frequency of flipped homes, defined as houses resold "within three weeks to six months of purchase."

And, says the paper, the MDA statistics reveal that in the Watts section of South L.A., "1 out of every 6 homes during the final three months of 2009 was flipped." That makes Watts the de facto flip capital of all of Southern California!

Why is South L.A. so apparently attractive to real estate investors?

The Times quotes one investor as saying South L.A. is a good place to flip homes because it is a "blue-collar" area near a lot of work--factories and such. It is also fairly close to downtown Los Angeles.

Another factor appears to be something South Los Angeles does not have an oversupply of, according to the paper: overbuilding from previous years.

Only a few weeks ago, Business Week asked the question, "Is the return of house flippers a good sign?"

The conclusion, in general, was yes.

Flipping is returning, you see, not only to South Los Angeles, but to other areas that were hard hit by the subprime mortgage-caused housing market collapse. Places such as Phoenix.

According to the magazine, for 2009, the number of foreclosed homes that flipped within six months of being purchased in that city had jumped a whopping 81 percent from the previous year, based on figures computed by RealtyTrac.

Unlike during the housing bubble, when flippers gained a bad rep for their speculation and for helping drive up the price of real estate beyond any measure of reality, this time flippers are seen as people who are "stabilizing" whole areas.

In fact, even the federal government seems to now see the merits of house flipping: As of this past February, the Federal Housing Administration issued a one-year waiver of its previous anti-flipping regulation.

"We do believe investors will play an important role in today's marketplace because they tend to be more liquid than first-time home buyers," Vicki Bott, an official with the Housing & Urban Development Department in D.C., tells Business Week.

The truth is, of course, it is far too early to tell whether the return of the house flipper is a good or bad thing: As with many things in life, moderation will be the key. In moderation, house flipping probably will be a positive influence for many neighborhoods.

But real estate investors in the past few years have often proven themselves to be anything but moderates. Taken to an extreme, house flipping could just lead us right back where we started from.

Source:Los Angeles Times.

According to Real Estate Specialist Alejandro Aldrete of Hilton & Hyland, most cities that rebound faster from a recession have strong, diversified economies that aren’t focused solely on one industry. As a result, they’re shielded from economic volatility as they benefit from a variety of other secondary industries. Los Angeles is one such city, in which Forbes has also ranked ninth in their recent list of 10 cities where the recession is easing. With the Los Angeles, CA real estate market staying afloat and showing encouraging signs of recovery as sales continue to climb, 2010 proves to be an opportune time to invest in luxury Los Angeles properties like homes for sale in Bel Air California.

While the housing crisis appears to have severe impacts nationwide it was more pronounced in states like California, since it was one of the first states to experience the negative side effects. As a Hilton & Hyland Bel Air realtor, Alejandro has seen an influx in decreased real estate values, while quoting, "this has given investors a strategic stance which has encouraged an increase in home sales while the market was down. This increase in real estate sales has contributed to the rebound and is one of the key factors in moving Los Angeles out of the recessionary slump.
In recent months, the National Association of Realtors reported that Los Angeles saw a surge in demand, with jumps in home sale prices up to 11% during the third quarter and another 2% leading to the fourth quarter. The numbers certainly show a lot of promise and are encouraging signs of stabilization, making real estate experts optimistic about the improvement of market conditions.

The resurgence can only attract more buyers and investors, as the market picks up, helping the city out of the recession, and outlook on the economy remains hopeful. “There’s never been a better time to enter the market and invest in luxury homes like Bel Air, CA homes for sale than now,” said Aldrete.

Located at the base of the Santa Monica Mountains just to the west of Beverly Hills, Bel Air is an upscale residential district in Los Angeles that has long been associated with quiet elegance and affluence, with homes that mostly cater to the rich and famous. For more information on Bel Air luxury properties, contact Bel Air International Realtor Alejandro Aldrete today, or visit his website at www.Alejandroaldrete.com. The site features property listings and extensive search tools, as well as a host of guides and useful resources on buying and selling Los Angeles real estate.

Source:Los Angeles Times.

The Standard & Poor's/Case-Shiller index of 20 metropolitan areas falls 0.1% overall for February. But San Diego, San Francisco and Los Angeles post gains.

A trio of California cities bucked a nationwide home price decline in February while most of the other metro areas posted losses or flattened out, underscoring the resurgence of the Golden State's coastal markets, data released Tuesday showed.

The Standard & Poor's/Case-Shiller index of 20 metropolitan areas was down 0.1% from January on a seasonally adjusted basis, marking the closely watched measure's first decline since home prices began to recover last June.

But in a positive sign for housing, the index posted a 0.6% increase from February 2009, its first year-over-year increase in more than three years.

The mixed readings come as the expiration of a federal tax credit for buyers looms at the end of this week. Many analysts expect home prices to decline once the incentive runs out — but not nearly as steeply as when values entered a nearly three-year free-fall in the summer of 2006 that helped drag the U.S. into one of the most brutal recessions since the Great Depression.

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"Generally, I don't see an upbeat picture, I see the trend as faltering," said David Blitzer, chairman of Standard & Poor's Index Committee. "One of the few spots that seems surprisingly strong is California."

California cities saw home prices in February gain 0.8% in San Diego, 0.4% in San Francisco and 0.2% in Los Angeles.

Mark Zandi, chief economist with Moody's Economy.com, said the strong showing in California reflected the reduction in foreclosures on the market over the last year. Foreclosures made up 44.3% of the resale market in February, down from an all-time high of 58.8% in February 2009, according to San Diego research firm MDA DataQuick.

"California is perhaps the most efficient state in respect to resolving its foreclosure issue and so a lot of properties were pushed through the process," Zandi said. "There are now fewer in the pipeline."

Although foreclosures may increase in California in coming months, leading to a period of flat prices and perhaps even some declines, the state was "much further along in getting its house in order than most parts of the country," he said.

Not reflected in the Case-Shiller numbers are regions in the state farther from the coast where overbuilding was more prevalent and the unemployment rate remains above average, said Richard Green, director of USC's Lusk Center for Real Estate.

"We are doing a little better than the rest of the country, and that is not particularly surprising because California, in general, didn't overbuild the way Arizona and Las Vegas and Florida did," Green said. "In the places we did, prices collapsed so much it's hard for them to fall much further."

In the next two months, some California shoppers have a shot at as much as $18,000 worth of tax credits if they get their timing right.

The federal tax-credit program, set to expire Friday, provides up to $8,000 for first-time purchasers and as much as $6,500 for some current homeowners. To qualify for that credit a buyer must sign a contract on a home by April 30 and close the deal by June 30.

Adding to that incentive is a statewide credit, which was approved by lawmakers last month and kicks in May 1, for as much as $10,000 for first-time buyers and those purchasing newly built homes.

The Case-Shiller index covers three months of data beginning in December, when sales began a three-month slump after what was to have been the federal tax credit's Nov. 30 expiration; Congress in November extended the credit. February's sales data capture that plunge and the traditionally slow winter months. Home sales picked up again in March, and many expect that trend to continue at least through April.

Along with the California cities, Las Vegas eked out a 0.1% gain. Fourteen cities posted declines in February over January, with the biggest losses in Portland, down 1.9%; Dallas, falling 1.4%, and Chicago, down 1%. Two cities were flat for the month.

Source:Los Angeles Times.

Vacancies are increasing and rents are falling. The trend is tough for landlords but great for tenants who are looking for new space or negotiating to renew their existing leases.
Southern California's long-suffering office market continued to weaken in the first quarter as demand slid and rents fell, a pattern expected to carry on through the months ahead.

The trend is dreary for landlords, who have seen their incomes fall for more than a year, but a boost for office renters who are looking for new space or negotiating to renew their existing leases as they expire.

"Rents are as low as they have been in a number of years," said Joe Vargas, executive vice president of real estate brokerage Cushman & Wakefield.

With its long lease agreements -- five years is typical -- commercial real estate is a lagging indicator of the economy. So even though the nation's economic outlook is showing some signs of improvement, the office market has yet to digest the downturn.

Overall office vacancy in Los Angeles County reached 17.6% in the first quarter, up from 14.3% a year earlier, according to Cushman & Wakefield. The average rent landlords asked for dropped to $2.60 a square foot per month from $2.82 in last year's first quarter.

The office market remains traumatized by bloodletting in corporate America, industry observers said.

"I think we are still searching for some sort of bottom" in office rents and vacancies, said J.C. Casillas, who oversees Southern California research at brokerage Grubb & Ellis. "Employment is not improving any time soon."

With California unemployment hovering at post-World War II highs of more than 12%, companies have yet to start hiring on a scale that would require them to rent larger quarters. In fact, many businesses still have more space than they need after conducting layoffs. As a result, they often try to sublet their extra space to other businesses or downsize their offices as their leases expire. Other businesses have simply closed during the recession.

Landlords experienced a net loss of 9.6 million square feet of rented space last year in Los Angeles, Orange, Riverside and San Bernardino counties. In the first quarter, an additional 967,000 square feet fell off landlords' rolls.

When occupancy and rents fall, so do property values, because potential buyers judge an office building's worth by its income stream. With income from rents -- and hence values -- uncertain and financing hard to come by, sales of office buildings have been rare for the last year.

Southern California vacancy rates aren't quite as bad as they were during the last real estate downturn in late 2002 and early 2003, Casillas said, but they are still trending the wrong way.

With so much space vacant, office development is nearly at a standstill. That means the loss of construction and other development expenditures that contribute billions of dollars to the Southern California economy during boom years.

The long bleat of bad economic news has forced landlords to lower rents and boost incentives -- such as free parking and periods of free rent -- for new tenants to sign leases.

Last year in the first quarter, many landlords were holding out hope of getting higher prices. On the Westside, the region's most expensive market, the average asking rent was $4 a square foot and some owners sought more than $6. This year the average asking rent was $3.38 a square foot in the first quarter.

"Landlords understand where the market is," Cushman's Vargas said. "More deals are being done than at the same time last year."

That may be only out of necessity, broker Jerry Porter said. "Tenants whose leases are expiring are taking negotiations down to the bitter end."

In some cases, lease discussions have been going on for as long as two years, said Porter, chairman of Cresa Partners. "We're really seeing much more brinkmanship on both sides."

With plenty of space on the market, tenants are under less pressure to make commitments, he said, and often hope to postpone real estate decisions as they work on strategies to cope with the recession. Sony Pictures Entertainment, for example, announced plans in February to lay off 450 employees at the same time that Porter was negotiating an office lease for the company, he said.

Many leases now being signed are short term, he said, such as renewals that last a year. Tenants are reluctant to commit to longer deals when they are unclear about their business plans.

"We are in for an extended period of reduced demand and oversupply," Porter said. "I just don't see what changes the equation for the next five years."

Source:Los Angeles Times

The busy spring home buying season is here. For homeowners who are ready to put their property up for sale, and don't want to do the work of marketing and showing it themselves, it's time to hire a listing agent.

A good listing agent takes charge of placing the home on the area's listing service, and advertises in newspapers and on the Internet. He or she also helps set the price, offers advice on staging or repairs, and acts as an objective negotiator.

The goal is to attract other agents -- and their buyers -- to the home.

Agents earn a commission when the deal is completed, helping them recover their costs. Commissions are negotiable, but they usually are around 6 percent of the sales price and are split with the buyer's agent and both agents' firms.

Consumers think the most important criteria for an agent to have are a good reputation, trustworthiness and knowledge of the market, according to surveys conducted by the National Association of Realtors.

Here are five strategies to find a reliable listing agent.

1. Ask for advice from family and friends, but also do your own research.

Many sellers seek out referrals -- it's a tried-and-true strategy. Most people choose an agent based on word of mouth recommendation, the Realtors group says.

Still, sellers should do their own homework. They can contact a real estate company and ask for a list of qualified agents. Also, sellers can search the Internet for self-employed agents who do steady business in their area.

Also, websites like Zillow.com and Trulia.com have listings for homes for sale that include addresses, prices, photos and details like square footage and the number of bedrooms. Sellers should educate themselves about the homes for sale in their area, to make sure they agree with their agent on pricing.

Sellers should meet with a few agents in person, and both parties should feel confident that they can work well together. Personal appearance, personality, and organizational and communication skills become more clear during a face-to-face conversation.

2. Agents should approach the first client meeting as a job interview. If they appear frustrated at repeated questions from a seller, then they might react the same way toward buyers asking about monthly utility costs or when the kitchen cabinets were installed.

An important first question is, ''How long have you been in real estate?''

An agent with several years of experience should have strong knowledge of the area and is skilled enough to adjust to market fluctuations.

''How many clients do you have?'' is another good question. An agent with a heavy client list may be more likely to delay answering e-mails or phone calls.

3. The agent should have experience working in your area.

The listing agent should have intimate knowledge of the property and the neighborhood to help set a competitive price and sell the home quickly. He or she should advise the homeowner about how to fix up the home and hold open houses to lure a multitude of buyers.

The agent must also consider any upgrades the seller made to the home when setting the asking price.

4. The agent should know how to negotiate.

Agents must have the time and the skill to navigate the back-and-forth negotiation process. For example, sellers need an agent to help them decide whether to lower the asking price to generate interest in the home, or whether to stay firm and hold out for the price they want.

A good listing agent also knows when to offer concessions, such as paying closing costs for the buyer, to get the home sold quicker.

5. The agent should have knowledge of the entire process.

Since the housing downturn, real estate agents have become more active in helping sellers and buyers navigate the complicated process that begins when a contract is signed and ends at the closing table.

Tight lending practices, government tax incentives, and expanded rules for appraisals and lender disclosures have only added to the crush of paperwork.

A listing agent should be able to explain each step and correctly answer the seller's questions.

''The more knowledgeable your real estate agent is with respect to the current economic environment, the more easily you'll be able to go from start to finish in a real estate transaction,'' said Gary Painter, director of research for the Lusk Center for Real Estate at the University of Southern California.

Source:Los Angeles Times.

A 40.2% drop in the first quarter suggests that the foreclosure crisis is easing.
The California foreclosure crisis appears to be abating, new data show, as the federal government and big lenders step up efforts to keep troubled borrowers in their homes.

Mortgage default notices — the first step toward foreclosure — plunged 40.2% statewide in the first three months of the year compared with the same period in 2009, according to San Diego research firm MDA DataQuick.

Foreclosure sales dropped 1.7% from a year earlier and 16.1% from the last three months of 2009, DataQuick said Tuesday.

The numbers suggest that the housing market won't be flooded by a fresh wave of bank repossessions, which had been seen as a major threat to the market's recovery.

"It is surprisingly good news," said Gerd-Ulf Krueger, principal economist at Housingecon.com. "There is still a lot of supply lurking out there, but at this point, it looks like it is pretty much under control."

Stuart A. Gabriel, director of UCLA's Ziman Center for Real Estate, said the declining foreclosure numbers are "consistent with a broad range of indicators that are suggestive of not only a healing economy but the beginning of healing in the housing market."

Southern California home prices jumped 14% in March from the same month a year ago, to a median $285,000.

Even so, economists note that further gains statewide are jeopardized by continued high unemployment, particularly in the Inland Empire and the Central Valley.

Foreclosure activity remains concentrated in these inland areas, which suffer from above-average unemployment. DataQuick said mortgages were most likely to go into default in Merced, Stanislaus and San Joaquin counties. Conversely, defaults were least likely in the Bay Area counties of Marin, San Francisco and San Mateo.

"In coastal California, things are looking pretty decent," said Richard Green, director of the USC Lusk Center for Real Estate. "I still think if you get into the Inland Empire, Fresno, Bakersfield, Modesto, people are really struggling because the unemployment rate is so high — so that people just need help to get out from under."

California loan default notices peaked at 135,431 in the first quarter of 2009. Since then, the federal government has put increasing pressure on banks to work with homeowners behind on their payments. At the same time, experts say, banks have recognized that flooding the market with foreclosures weakens the value of the properties they have taken back and must resell.

Nestor Fabian, 44, and his wife, Ada, 41, are among those who are hoping for a break from their lender.

The couple bought a four-bedroom, three-bath home in Victorville in 2006 and said they owe Wells Fargo Bank about $305,000 on a property they believe is worth about $128,000. Ada lost her job at a Mervyn's store about two years ago and has since been jobless.

"I feel like a prisoner in my home," said Nestor Fabian, an audio technician who commutes to Pasadena. "Basically, I am asking for any peanuts they can give me."

Fabian is trying to arrange a lowered mortgage with Wells Fargo through the Obama administration's $75-billion effort to help troubled borrowers.

While the Fabians are hoping for relief, many others are still losing their homes. Paula Murray, 65, and her husband, Roger, 58, lost their Apple Valley home to a foreclosure sale in January. They are scrambling to find an apartment before they are evicted June 1.

But it isn't easy, Paula Murray noted, because both she and her husband are unemployed and the foreclosure has damaged their credit rating.

"It hurts me because the government gives all this money to these big rich guys to bail them out, bails out the banks, but the little guy can't get bailed out," Murray said.

In March, the Obama administration unveiled measures aimed at getting lenders to reduce principal balances on problem mortgages and refinance "underwater" borrowers, those who owe more on their home than it is worth. Another provision would allow many unemployed homeowners to get three to six months of reduced mortgage payments while they look for a job.

Kevin Stein, associate director at the California Reinvestment Coalition, said that although the program has added some uniformity to efforts to modify loans, it remains fundamentally flawed.

"Its main limitation is it continues to rely on voluntary participation and financial incentives for the banks to do what it is we all want them to do, which is work with families to avoid foreclosure," Stein said.

Foreclosures may also be slowing because banks are deliberately putting fewer homes on the market, experts said. It's now taking homes about 7.5 months on average to go from a default notice to a foreclosure sale. A year ago, it was 6.8 months, according to DataQuick.

"They may be a little bit reluctant to put homes on the market all at one time," said Celia Chen, a housing economist with Moody's Economy.com. "I also think the process is lengthy and there are many homes in the foreclosure process, and so the process may just be clogged up."

Across California, 81,054 borrowers received a notice of default in the first quarter of this year, down 4.2% from 84,568 in the fourth quarter of 2009. It was the fourth straight quarter in which default notices declined.

There were 42,857 foreclosure sales, a decrease of 16% from 51,060 in the fourth quarter of 2009 and 1.7% from 43,620 in the same period a year ago.

Source:Los Angeles Times.

Home sales surged 17 percent in the West last month, as buyers scrambled to take advantage of low mortgage rates and qualify for tax credits that expire at the end of this month.

The median price in the 13-state Western region was $209,400, down almost 8 percent from a year ago, the National Association of Realtors said Thursday.

Nationwide, by contrast, sales of previously occupied homes rose almost 20 percent from March of last year, without adjusting for seasonal factors. The median sales price was flat at $170,700,

Shoppers who have been on the hunt for some time can hear the clock ticking and are trying to make offers before the tax credits run out. Even some people who weren't planning to buy are jumping in, said Kathi McLeod, sales manager for Windermere Real Estate in Boise, Idaho.

First-time buyers can get a federal tax break of up to $8,000, while current homeowners who relocate to a new home get up to $6,500.

''Last year, a lot of buyers were afraid to follow through with a purchase because of the economy and the extent that lending had changed,'' she said. ''What we're seeing now is confidence, as well as acceptance of what types of loan programs are available.''

Sales across most major Western metros improved in March, according to The Associated Press-Re/Max Monthly Housing Report, which tallies all home sales in the metropolitan statistical areas. The report, also released Thursday, counts sales filed by all real estate agents, regardless of company affiliation.

All but one of the 13 Western cities tracked in the report saw annual sales increases last month. Boise and Seattle both posted gains of more than 50 percent, according to the report. Los Angeles was the only major city that saw a decline in sales, off 7 percent.

San Francisco saw the sharpest gain in median price, up nearly 38 percent to $489,000. The city also had the lowest average number of days on the market, which dropped by about a quarter from last year to 49 days.

Sales in San Francisco climbed nearly 9 percent from a year ago.

''Buyer confidence has increased dramatically from last year,'' said Sue Schultes, an agent with Paragon Real Estate Group in San Francisco. ''When things are uncertain, people have a difficult time making a decision. We're now noticing many houses selling over list prices with multiple offers and a lot more movement in the luxury market.''

In Los Angeles, Julie Kryukova, an agent with 360 Realty, said she expects there will be a jump in sales this month too as buyers grab up foreclosures and other financially distressed properties.

''People are ready to make that last-minute dash and take advantage of these deals,'' Kryukova said.

While Los Angeles saw an average decline in sales, swanky pockets of the city including West Hollywood, Santa Monica and Marina del Rey are seeing sales up as much as 300 percent from last year, she said.

Though sales in Boise were strong, the city had the biggest price decline among the Western cities in the AP-Re/Max report. With a drop of 14 percent to $149,900, prices are now back to 2003-levels.

''Now we see affordability back to what it was. Inventory has grown, prices are dropping and investors are back in the market with all of these movers and first-time buyers,'' said Van States, an agent with Keller Williams Realty in Boise. ''It's shaping up to be a great selling season.''

Source:Los Angeles Times.

C.A.R. reports March median price increased 20.8 percent; home sales increased 2.5 percent
Quick Facts:
. Existing, single-family home sales increased 2.5 percent in March to a seasonally adjusted rate of
516,590 units on an annualized basis compared with March 2009.

. The statewide median price of an existing single-family home increased 20.8 percent in March to
$301,790, compared with March 2009.

. C.A.R.’s Unsold Inventory Index fell to 5 months in March, compared with 5.6 months in March 2009.

LOS ANGELES (April 22) Home sales increased 2.5 percent in March in California compared with the same period a year ago, while the median price of an existing home rose 20.8 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.

“The end of the federal tax credit on April 30 will remove some urgency from the market, but is not likely to derail current market trends as favorable prices and low mortgage rates continue to attract buyers and investors,” said C.A.R. President Steve Goddard. “The March year-to-year median price gain of 20.8 percent was the largest in more than five years. With the number of homes for sale in the state expected to remain lean, gains in the statewide median price may well outpace the nation going forward.”

Closed escrow sales of existing, single-family detached homes in California totaled 516,590 in March at a seasonally adjusted annualized rate, according to information collected by C.A.R. from more than 90 local REALTOR® associations statewide. Statewide home resale activity increased 2.5 percent from the revised 504,200 sales pace recorded in March 2009. Sales in March 2010 decreased 2.5 percent compared with the previous month.

The statewide sales figure represents what the total number of homes sold during 2010 would be if sales maintained the March pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

The median price of an existing, single-family detached home in California during March 2010 was $301,790, a 20.8 percent increase from the revised $249,790 median for March 2009, C.A.R. reported. The March 2010 median price increased 7.8 percent compared with February’s $279,840 median price.

“While the federal tax credit has helped drive sales, near record-high affordability resulting from current prices and low mortgage rates also has impacted the market,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “Four years ago, the median price to household income ratio was at a record high of 10 to one. It’s now near a historic low of four to one.”

Highlights of C.A.R.’s resale housing figures for March 2010:

. C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in March 2010 was 5
months, compared with 5.6 months (revised) for the same period a year ago. The index indicates
the number of months needed to deplete the supply of homes on the market at the current sales
rate.

· Thirty-year fixed-mortgage interest rates averaged 4.97 percent during March 2010, compared with
5 percent in March 2009, according to Freddie Mac. Adjustable-mortgage interest rates averaged
4.20 percent in March 2010, compared with 4.86 percent in March 2009.

. The median number of days it took to sell a single-family home was 39.2 days in March 2010,
compared with 48.5 days (revised) for the same period a year ago.

Regional MLS sales and price information are contained in the tables that accompany this press release. Regional sales data are not adjusted to account for seasonal factors that can influence home sales. The MLS median price and sales data for detached homes are generated from a survey of more than 90 associations of REALTORS® throughout the state. MLS median price and sales data for condominiums are based on a survey of more than 60 associations. The median price for both detached homes and condominiums represents closed escrow sales.

In a separate report covering more localized statistics generated by C.A.R. and DataQuick Information Systems, 230 of the 357 cities and communities reporting showed an increase in their respective median home prices from a year ago. DataQuick statistics are based on county records data rather than MLS information. DataQuick Information Systems is a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. (The lists are generated for incorporated cities with a minimum of 30 recorded sales in the month.)

Note: Large changes in local median home prices typically indicate both local home price appreciation, and often, large shifts in the composition of housing market activity. Some of the variations in median home prices for March may be exaggerated due to compositional changes in housing demand. The DataQuick tables listing median home prices in California cities and counties are accessible through C.A.R. Online at http://www.car.org/marketdata/historicalprices/2010medianprices/mar2010medianprices/.

 Statewide, the 10 cities with the highest median home prices in California during March 2010 were:
Los Altos, $1,476,500; Manhattan Beach, $1,340,000; Palo Alto, $1,264,000; Calabasas,
$1,260,000; Newport Beach, $1,102,250; Palos Verdes Estates, $1,017,000; Mill Valley, $910,000;
Rancho Palos Verdes, $878,500; Los Gatos, $869,000; and Cupertino, $865,000.

Statewide, the cities with the greatest median home price increases in March 2010 compared with
the same period a year ago were: Pittsburg, 42.3 percent; Arcadia, 40.2 percent; National City, 37.7
percent; Auburn, 34.1 percent; Lodi, 33.3 percent; Richmond, 30.4 percent; Placentia, 29.9 percent;
Newport Beach, 29.7 percent; Novato, 28.8 percent; and Petaluma, 27.7 percent. Quick Facts:
. Existing, single-family home sales increased 2.5 percent in March to a seasonally adjusted rate of
516,590 units on an annualized basis compared with March 2009.

. The statewide median price of an existing single-family home increased 20.8 percent in March to
$301,790, compared with March 2009.

. C.A.R.’s Unsold Inventory Index fell to 5 months in March, compared with 5.6 months in March 2009.

LOS ANGELES (April 22) Home sales increased 2.5 percent in March in California compared with the same period a year ago, while the median price of an existing home rose 20.8 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.

“The end of the federal tax credit on April 30 will remove some urgency from the market, but is not likely to derail current market trends as favorable prices and low mortgage rates continue to attract buyers and investors,” said C.A.R. President Steve Goddard. “The March year-to-year median price gain of 20.8 percent was the largest in more than five years. With the number of homes for sale in the state expected to remain lean, gains in the statewide median price may well outpace the nation going forward.”

Closed escrow sales of existing, single-family detached homes in California totaled 516,590 in March at a seasonally adjusted annualized rate, according to information collected by C.A.R. from more than 90 local REALTOR® associations statewide. Statewide home resale activity increased 2.5 percent from the revised 504,200 sales pace recorded in March 2009. Sales in March 2010 decreased 2.5 percent compared with the previous month.

The statewide sales figure represents what the total number of homes sold during 2010 would be if sales maintained the March pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

The median price of an existing, single-family detached home in California during March 2010 was $301,790, a 20.8 percent increase from the revised $249,790 median for March 2009, C.A.R. reported. The March 2010 median price increased 7.8 percent compared with February’s $279,840 median price.

“While the federal tax credit has helped drive sales, near record-high affordability resulting from current prices and low mortgage rates also has impacted the market,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “Four years ago, the median price to household income ratio was at a record high of 10 to one. It’s now near a historic low of four to one.”

Highlights of C.A.R.’s resale housing figures for March 2010:

. C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in March 2010 was 5
months, compared with 5.6 months (revised) for the same period a year ago. The index indicates
the number of months needed to deplete the supply of homes on the market at the current sales
rate.

· Thirty-year fixed-mortgage interest rates averaged 4.97 percent during March 2010, compared with
5 percent in March 2009, according to Freddie Mac. Adjustable-mortgage interest rates averaged
4.20 percent in March 2010, compared with 4.86 percent in March 2009.

. The median number of days it took to sell a single-family home was 39.2 days in March 2010,
compared with 48.5 days (revised) for the same period a year ago.

Regional MLS sales and price information are contained in the tables that accompany this press release. Regional sales data are not adjusted to account for seasonal factors that can influence home sales. The MLS median price and sales data for detached homes are generated from a survey of more than 90 associations of REALTORS® throughout the state. MLS median price and sales data for condominiums are based on a survey of more than 60 associations. The median price for both detached homes and condominiums represents closed escrow sales.

In a separate report covering more localized statistics generated by C.A.R. and DataQuick Information Systems, 230 of the 357 cities and communities reporting showed an increase in their respective median home prices from a year ago. DataQuick statistics are based on county records data rather than MLS information. DataQuick Information Systems is a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. (The lists are generated for incorporated cities with a minimum of 30 recorded sales in the month.)

Note: Large changes in local median home prices typically indicate both local home price appreciation, and often, large shifts in the composition of housing market activity. Some of the variations in median home prices for March may be exaggerated due to compositional changes in housing demand. The DataQuick tables listing median home prices in California cities and counties are accessible through C.A.R. Online at http://www.car.org/marketdata/historicalprices/2010medianprices/mar2010medianprices/.

 Statewide, the 10 cities with the highest median home prices in California during March 2010 were:
Los Altos, $1,476,500; Manhattan Beach, $1,340,000; Palo Alto, $1,264,000; Calabasas,
$1,260,000; Newport Beach, $1,102,250; Palos Verdes Estates, $1,017,000; Mill Valley, $910,000;
Rancho Palos Verdes, $878,500; Los Gatos, $869,000; and Cupertino, $865,000.

.Statewide, the cities with the greatest median home price increases in March 2010 compared with
the same period a year ago were: Pittsburg, 42.3 percent; Arcadia, 40.2 percent; National City, 37.7
percent; Auburn, 34.1 percent; Lodi, 33.3 percent; Richmond, 30.4 percent; Placentia, 29.9 percent;
Newport Beach, 29.7 percent; Novato, 28.8 percent; and Petaluma, 27.7 percent.

Source:Los Angeles Times.

The measure, which is expected to be signed by Gov. Arnold Schwarzenegger, would waive state taxes on mortgage debt that has been forgiven in a foreclosure or short sale.

Reporting from Sacramento

Thousands of Californians whose homes were foreclosed on or sold at a loss would get tax relief under a measure approved Thursday by the state Legislature.

The bill would waive state taxes on mortgage debt that has been forgiven in a foreclosure or short sale. It is expected to affect about 34,000 taxpayers.

Gov. Arnold Schwarzenegger said he would sign the measure, which would also provide about $60 million in tax credits to green-energy companies, when it reached his desk. Californians can already claim the tax breaks on federal returns. Lawmakers passed the measure in time for people to take advantage of it by the April 15 deadline for filing tax returns.

"The mortgage-debt tax relief provision in this bill will provide financial shelter for tens of thousands of Californians who have lost their hopes and dreams in the housing market crash, and it's about time we gave these folks a helping hand," said state Sen. Ron Calderon (D-Montebello).

The short-sale provision would mean about $34 million less in tax revenue for the state over three years, according to the Franchise Tax Board.

The "green" credits are a response to the federal American Recovery and Reinvestment Act, which provides grants to firms for power plants that produce renewable energy. The federal government does not tax the grant money. Under the bill approved Thursday, California would provide similar relief.

Other parts of the measure, SB 401 by Sen. Lois Wolk (D-Davis), were called tax increases by Republicans. Even though they supported the tax-relief element, several GOP members of the Senate and Assembly voted against the bill, which was opposed by the Howard Jarvis Taxpayers Assn.

The Republicans objected to a provision that would reduce deductions for charitable gifts, and to changes that would allow the state to tax more income earned by minor dependents.

The changes would also make it harder to qualify a home as a principal residence for purposes of escaping capital gains taxes when the property is sold, and some penalties and interest charges to corporations would be increased, according to Therese M. Twomey, a principal consultant for the Senate Republican Policy Office.

These changes would bring in more than $10 million in new revenue over five years, Twomey said.

"It's an issue of fairness," said Sen. George Runner (R-Lancaster). "You are giving money to one group of people and taking it away from another group of people."

With the plunge in the real estate market, many Californians have found themselves owing much more on their mortgages than their homes are worth. Some have been foreclosed upon or asked their lender to approve a short sale, in which a home is sold for less than the debt, some of which is waived.

The amount waived has been considered taxable income under California law. The measure passed Thursday would eliminate that tax when a bank agrees to accept less than what is owed on a home.

The governor vetoed a similar bill last month because it included a provision, since removed, that would have increased penalties against businesses and wealthy individuals who abuse tax credits.

Business groups including the California Chamber of Commerce and Western States Petroleum Assn. complained that the provision would have made businesses reluctant to claim the tax breaks for fear of making a costly error. The businesses also said California's tax penalties were already tougher than those in other states.

Wolk said the penalties would not have applied to honest mistakes.

The new measure would lift a great burden from the shoulders of Valarie Wood and her husband, who were facing a $10,000 state tax bill on debt that was forgiven in a short sale of their property in Ventura.

The 10-acre property, which included an avocado grove, had plummeted in value far below what they owed.

Health problems and a "mortgage gone awry" forced the couple to renegotiate their loan with their bank, which agreed to waive about $300,000 of debt on the house and property, Wood said.

"We've lost our dream home. We are in our 60s, and it was going to be our retirement," she said, her voice choking with emotion. "This bill is crucial for people like us. We are extremely relieved."

Schwarzenegger said during a news conference Thursday that he wants to give homeowners and businesses "the relief they need."

"We want to be helpful in every way we can, so we will sign it," he said.

Source:Los Angeles Times.

The combination of federal tax credits and seasonal trends pushed up the median price of a Los Angeles County home 4 percent in March.

The median’s rise to $340,000 marks a turnaround after two successive months during which sales and prices slumped, nipping a nascent recovery begun in the second half of last year.

Many economists have attributed the strengthening of the housing market to the decision to extend until April 30 federal tax credits that had been scheduled to expire Nov. 30. The credits offer $8,000 to new home buyers and $6,500 to repeat buyers; they sparked a flurry of sales late last year.

“National housing sales have collapsed in the last three months after the stimulus package wore off,” said Christopher Thornberg, founding principal at Beacon Economics in Inglewood. “Now, again, you have these policies to restrict supply and stimulate demand in the market.”

In March, there were 4,849 homes sold in the county, an increase of 6.8 percent from February, after adjusting for the number of selling days per month as collected by HomeData, a Hicksville, N.Y., housing data firm. The median price is $13,000 higher than February, but lower than the December 2009 median of $348,000.

Geographically, sales activity in March was widespread, with ZIP codes in Lancaster, Compton, Pico Rivera, Bellflower and Granada Hills each showing more than 40 homes sold. Surprisingly, wealthy neighborhoods in Palos Verdes Estates, Calabasas and Beverly Hills also showed strong activity after years of dormancy.

“The traditional market weak spot – homes in the $1 million-$2.5 million range – has come back to life,” said Tom Dunlap, general manager at Prudential California Realty in Beverly Hills. “There is a lot of cash parked on the sidelines and the price is coming down now to where people who have been watchful are coming off the sidelines.”

Leslie Appleton-Young, chief economist at the California Association of Realtors in Los Angeles, sees the movement in luxury homes as the next phase in the recovery of the housing market, which started its collapse as subprime loans soured. The problems took longer to reach affluent home buyers, who had enough assets and income to wait out the market. But now even the owners in swanky neighborhoods need to sell and have dropped their asking prices significantly, especially as job losses have taken their toll on all wage groups.

“You’re seeing values at the high end,” Appleton-Young said. “Also, the spread of foreclosures starting a year ago has affected the high end. You’re seeing more nondiscretionary sellers now than earlier in the recession.”

David Jervis, a broker at Century 21 Jervis & Associates in Downey, said large homes in his market that previously fetched $2.5 million now sell in the $800,000-$1.1 million range.

“Typically, the people who sell are those who need to sell,” said Jervis, who specializes in selling bank-owned properties.

For homes selling for less than $550,000 that qualify for Federal Housing Administration-backed loans, “as soon as the property hits the market, we see a minimum of 10 offers and as many as 20,” he said. “People are overbidding each other up to 12 percent above asking price because there’s so little sellable inventory.”

Jervis believes the expiration of the federal tax credits shouldn’t slow demand for homes as long as banks don’t flood the market with their full list of foreclosure properties and other elements in the market remain stable, particularly liberal FHA loan terms.

In the L.A. condominium market, the number of units sold in March totaled 1,777, a gain of 2 percent compared with February after adjusting for the number of selling days each month. The median condo price in March was $300,000, a 1.7 percent rise compares with February.

Source:Los Angeles Times.

It's subtle, but higher-priced homes are starting to sell more in Southern California and that's got prices and sales volume in the region rising, according to a firm that tracks home prices.

The median price for a home in Los Angeles County in March was $329,000, according to San-Diego-

based DataQuick. The price is up 9.7 percent from last year at the same time, according to the firm.

While homebuyer tax incentives and low interest rates continue to fuel buying of homes on the lower end of the market, observers are starting to see more movement in sales of homes priced $500,000 and more.

"I think you have a little bit of a move up - just a little bit, but not a lot," said Glendora-based Realtor Marty Rodriguez.

According to MDA DataQuick, homes priced at $500,000 or more accounted for 19.4 percent of all transactions in Southern California - Los Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura counties.

That's up from 18.4 percent in February and 14.9 percent in March 2009, according to the firm.

Rodriguez said the slight uptick was reflected locally - albeit in a subtle way.

Out of the 70 properties that have closed escrow this year in Glendora, Whittier and Monrovia, five of them sold for $1 million or more (Glendora), two of them sold for $1 million or more (Whittier), and one sold for $1 million or more in Monrovia.

Last year in the same period, there were no sales in that rice range in Glendora, three in Monrovia and one in Whittier, Rodriguez said.

David Baldridge, a Whittier Realtor, said south Orange County is beginning to see a "pronounced spike" in higher-end home sales. Locally, areas such as Friendly Hills, Mar Vista Heights and Michigan Park were seeing a slight uptick.

Buyers who had been waiting to buy on the higher end are now moving in, and it's paying off. A home that sold for $3 million not long ago is now in the $1.5 million range.

Overall in Southern California, sales were up in March, according to DataQuick. They rose about 33percent to almost 20,500 from about 15,400 in February, and about 5percent from around 19,000 in March 2009. That's the 21st month in a row with a year-over-year sales rise, according to DataQuick.

There were other sorts of fuel on the market, like buyers who come in with a lot of cash.

Cash buyers, which DataQuick defined as those who bought

with no indication of a corresponding purchase loan recorded, accounted for 27.1 percent of sales. While that's a tick downward from February's all-time high of 30 percent, it's much higher than than the monthly average over 22 years - 13.8 percent.

But the upward trend doesn't mean the market is out of trouble.

Even with signs of life on the higher end, loans remain hard to get, Baldridge said. Industry observers also remained concerned about what will happen to the housing market once federal tax credits burn out.

Source:Los Angeles Times.

The median home price in Southern California rose 14 percent last month from March 2009, as more high-end homes trickled into the region's sales mix, a tracking firm said Tuesday.

San Diego-based MDA DataQuick reported that last month's median of $285,000 was up from $250,000 in March 2009 and up almost 4 percent from February's $275,000.

The increase came as the proportion of sales tilted away from low-cost foreclosures and toward pricier homes in more expensive neighborhoods.

March's sales of homes priced at $500,000 or more made up 19.4 percent of all transactions, compared with 18.5 percent in February and 14.9 percent in March 2009.

Foreclosures, meanwhile, accounted for about 38 percent of resales last month, down from nearly 55 percent a year ago.

DataQuick also said home sales rose about 33 percent to almost 20,500 from about 15,400 in February and about 5 percent from around 19,000 in March 2009, marking the 21st month in a row that home sales increased from their year-ago numbers.

DataQuick President John Walsh said the increases showed that the market was continuing on a slow, upward trajectory, but that sales still remain well below their March average of around 25,000.

"It's a reflection of just how grim things got, that we've now had almost two years of sales gains and we're still 18 percent below the sales average," he said.

Walsh said banks were still not extending enough loans to restore sales to their once-normal levels.

"The market won't rebalance until mortgage lending patterns normalize, and that's just not happening yet," he said.

Source:Los Angeles Times.

There’s only a month left to purchase a Ryland home in the French Valley with the help of the Federal Housing Tax Credit. Homes in Winchester’s Jasmine Estates qualify for the credit.
Jasmine Estates | Ryland Homes Southern California
Jasmine Estates | Ryland Homes Southern California

Ryland Homes, the premier Southern California new home builder, has homes priced from the upper $200,000s to the mid $300,000s with up to six bedrooms and four baths and a two- or three-car garage. Buyers may choose from eight different floor plans in Jasmine Estates, including two models just released for sale. Each design is highly customizable, with options for every family.

Winchester is conveniently located for north-bound commuters to Los Angeles and south-bound commuters to San Diego. Home of the Lake Skinner Recreation Area, Winchester and its surrounding area offers hometown getaways such as wineries, restaurants and shopping.

A sales contract must be signed by April 30 for the credit to apply, so contact a sales counselor today or visit www.socal.ryland.com to view floor plans and pricing.

More information about the tax credit is available at www.federalhousingtaxcredit.com.
Headquartered in Southern California, Ryland is one of the nation’s largest homebuilders and a leading mortgage-finance company. Since its founding in 1967, Ryland has built more than 285,000 homes and financed more than 240,000 mortgages. The Company currently operates in 15 states and 19 homebuilding divisions across the country and is listed on the New York Stock Exchange under the symbol “RYL.”

Source:Los Angeles Times.

One of the noteworthy characteristics of California’s housing market is that it fell early and it fell hard — crowning the state as a leading indicator of the crash that was to come. Given last week’s housing news, could California now be leading the nation out of its real estate woes?
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According to the latest S&P/Case-Shiller home price index, home prices in the Golden State showed strong gains. Los Angeles prices rose 1.8% (on a seasonally adjusted basis) in January, while San Diego’s prices inched up 0.9% and San Francisco’s, 0.6%. The index of 20 metropolitan areas rose 0.3% from December.

Those figures come on top of data from MDA DataQuick, which last month reported that statewide home sales for February were up nearly 1% from January, although they were down 3.8% from February 2009. And the median price paid for a home ($249,000) increased 11.2% from the year prior, according to DataQuick.

While California home prices are still far below the peak levels of 2006, some economists think California is on its way out of the woods. “Now we’re seeing the interior [of the state] has stabilized – because prices have fallen by 50% to 60% already,” says Stuart Gabriel, director of UCLA’s Ziman Center for Real Estate. The combination of cuts in price, reductions in mortgage rates and all sorts of state and federal programs to incentive's buying activity have brought stability. “Prices are increasing only modestly, but for all intents and purposes, they’ve stopped falling,” Gabriel says.

Anecdotally, too, real estate agents are seeing increased activity in their local areas.

Jim Chapin, a realtor with Legacy Real Estate & Associates in the San Francisco Bay area, who covers the southern Alameda and Contra Costa counties, says he’s seeing an upward trend in the market, and even an increase in the average sale price of homes. Also improved is the time it takes to get a home sold. At the end of December, the average number of days on the market was 92; now it’s down to 60, he says. “We’re encouraged by what we’re seeing here,” Chapin says.

David Kerr, a ZipRealty agent in the Oakland, Calif., area, says he’s seen a shift from last year as well. “In my case, I’m already two-thirds above of where I was this time last year in terms of number of clients in contract,” Kerr says.

Indeed, the first-time home buyer tax credit – soon to expire – has been one major driver of the activity. Another has been short sales. Banks are finally speeding up the process of these transactions. “I just submitted a short-sale offer with a buyer, and it was approved in less than a month,” Kerr says; last year the same sale could have taken six months to close.

And despite the state’s financial woes, the governor is trying to prolong whatever nascent recovery might be happening with $200 million worth of renewed state tax credits for home buyers. Worth up to $10,000, spread evenly over three years, the credit is available to anyone who buys a newly built home or to first-time home buyers who purchase a newly built or existing home. (Buyers must close between May 1 and either Dec. 31 or whenever the money set aside for the program runs out, whichever comes first.)

The tax credits might draw out a few more buyers, but what’s really going to drive price increases here – as well as in the rest of the country – is economic fundamentals. That means jobs, people’s income and population growth, says Gary Painter, a professor and director of research at the University of Southern California’s Lusk Center for Real Estate. As of February, California’s unemployment rate was 12.5%, while the national rate for March remained at 9.7%.

“You’re definitely seeing not a lot of days on the market and not a lot of inventory – so that’s encouraging,” says Painter. “But it’s going to take a while before there’s enough job growth and income growth that will stabilize and increase housing demand.”

Source:Los Angeles Times.

The number of previously owned homes placed under sales contract surged 8.2 percent in February, according to data released yesterday, the first sign the government's extended tax credit for buyers may bolster sales this spring.

The National Association of Realtors said that its pending home sales index, a forward-looking measure based on contracts signed, rose to 97.6 in February from a downwardly revised 90.2 in January. That was 17.3 percent above February 2009 when the index was at 83.2.

A reading of 100 is equivalent to the amount of activity hit during 2001, when home prices began their record climb and when the data was first measured.

Increases in signed contracts were even stronger in Pittsburgh region, said local experts.

"We were up 33 percent in Western Pennsylvania, and 30 percent overall," said Howard "Hoddy" Hanna III, CEO of Howard Hanna Real Estate Services Inc. The Fox Chapel-based real estate firm sells homes in central and eastern Pennsylvania, northeast Ohio, western New York and northern West Virginia.

When sales reports for March are compiled in the coming days, Hanna expects they too, will have jumped 30 percent over year-ago levels.

"March is important because last March was the first full month that the tax credits were in place," said Hanna, referring to the $8,000 federal credit tax for first-time home buyers.

"I don't expect a vigorous market resurgence or a sharp, new rise in home prices," said Michael D. Larson, a housing and interest rate analyst with Weiss Research. "Foreclosure inventory will continue to be doled out into the market over the next year or two, taking some vigor out of this recovery. But it will be a recovery nonetheless, one warmly welcomed by battered home sellers, banks, and home builders."

The Midwest notched the biggest increase, rising 21.8 percent. Sales rose 9.2 percent in the South and 9 percent in the Northeast. Pending sales fell nearly 4.8 percent in the West.

Sales nationally have plummeted for three consecutive months beginning in December after surging last fall as buyers rushed to take advantage of the government's credit for first-time purchases before its initial November expiration. Congress extended that incentive of up to $8,000 for first-time borrowers through the end of April and expanded it to include up to $6,500 for some current homeowners.

Contracts signed typically lead to closings in one or two months, though distressed sales such as foreclosure sales and short sales often can take longer.

Source:Los Angeles Times.

The earthquake that rattled Southern California this week was a gentle reminder that not many Californians, and not may San Diegans, have earthquake insurance. Only twelve percent of homeowners are insured.

This could spell trouble when the big one actually arrives. But there are reasons why so many people have chosen not to be covered.

The epicenter of the earthquake felt in San Diego on Sunday was in rural Baja California. And it did some structural damage in Mexicali, Calexico and El Centro. But it could have been much worse.

"California homeowners, in this most recent event, basically dodged the bullet," said Glenn Pomeroy, CEO of the California Earthquake Authority, which is a state-managed non-profit that provides 70 percent of the earthquake insurance in California.

"Let's say the 7.2 that happened on Sunday happened under Los Angeles. We would see massive destruction. Homes destroyed. Infrastructure badly damaged," Pomeroy said.

The California Legislature created the earthquake authority after the costly Northridge Earthquake in 1994 drove most private insurance companies out of the temblor business. Pomeroy said the authority has the ability to cover billions of dollars worth of claims.

But property owners won't get anything if they don't purchase policies.

Pomeroy points out that the typical homeowner's insurance policy explicitly rules out coverage for earthquake damage. He says many homeowners don't realize this, or they believe federal disaster aid will come to their rescue in the event of a big earthquake.

Pete Moraga, a spokesman for the insurance industry in California, said people should not expect the feds to make them whole if an earthquake destroys their houses.

"Keep in mind that FEMA grants usually top out at about $30,000," he said. "And if you get or qualify for a low-interest loan, it's still a loan and you're going to have to pay it back."

Those may be good reasons to get earthquake insurance, but there are reasons why most people decide to just take their chances. Those reasons boil down to the rarity of severe earthquakes, the cost of insurance and high deductibles.

If your house is totally destroyed by an earthquake, insurance is great. However, a typical earthquake policy has a 15 percent deductible. If you have earthquake insurance on a house that would cost $200,000 to replace, and an earthquake does damage to your home, you will have to pay $30,000 before you get your first dollar of coverage. The temblor that hit El Centro and Calexico this week will result in few insurance payouts, in light of those deductibles.

State Farm insurance agent Steve Seibert works out of El Centro. He said many of his customers were upset to learn that they weren't covered because their earthquake damage was not catastrophic.

"So when you actually have a policy and it turns out that, wow, I have to reach this deductible or certain things in the policy aren't covered when I thought they were," said Seibert. "That's where it leads to the frustration."

Seibert says that in Imperial County, a place riddled with fault lines, earthquake insurance is expensive, often in the neighborhood of $1,000 a year. For many customers that can double the amount they pay to insure their homes.

Pat Abbott is professor emeritus of geology at San Diego State and he focuses on natural disasters. He said he does not carry earthquake insurance on his home, even though coverage in San Diego can be as little as $300 a year. He said if you live in a new house that was built to code, the cost of insurance may not make sense.

"For most people they are better off spending even a few thousands of dollars strengthening their existing homes, and remove problems they have, at a cost less than the deductible on their insurance policy anyway," said Abbott.

Pomeroy, the CEO of the California Earthquake Authority, said he recognizes the cost of insurance and the size of deductibles discourage many people from getting covered. But he said there is a move in Congress to pass loan guarantee legislation that would make it much cheaper for the earthquake authority to provide insurance, and that would make it cheaper for California homeowners to buy earthquake insurance.

Source:Los Angeles Times.

The Westside corridor from Beverly Hills to Malibu boasts one of the world's great concentrations of premier residential estates.

L.A. County has plenty of high-end neighborhoods, from Palos Verdes Estates to Pasadena. But when it comes to finding the best mansions in town, there's still nothing quite like the golden corridor from Beverly Hills to Malibu.

This Westside area boasts one of the world's great concentrations of premier residential estates. The highest-price home transaction ever in California took place in this territory: the 2000 sale of an 8-acre Bellagio Road estate in Bel-Air by Dole Food Co.'s billionaire owner, David Murdock, to financial executive Gary Winnick in a $95-million deal.

Bellagio is one of a dozen streets that are among the most sought-after addresses, say veteran real estate brokers. Here's a look at these streets and why they are so coveted.

* Mapleton Drive, Holmby Hills. Home to the Playboy Mansion, Mapleton gets rave reviews for the quality and size of its properties, some of which back up to the fairways of the Los Angeles Country Club.

Arthur Letts Jr., who owned Broadway and Bullock's department stores, was instrumental in developing Holmby Hills in the 1920s. Letts picked Mapleton to be the best street and the site of his own residence, according to Jeffrey Hyland, president of Beverly Hills-based brokerage Hilton & Hyland and author of "The Legendary Estates of Beverly Hills."

Today the Letts estate is the home and famed party site of Playboy magazine founder Hugh Hefner. The street has what Hyland called "a perceived value."

"A buyer feels more comfortable where everything around is already established and well in the double digits," he said -- double-digit millions, that is.

* North Carolwood Drive, Holmby Hills. Just around the corner from Mapleton, North Carolwood has been the address of a stream of stars including Tony Curtis and Sonny and Cher. Gregory Peck's longtime home was sold in 2004 for about $22 million. Michael Jackson rented on the drive at the time of his death.

At 2 to 4 acres, these are some of the biggest parcels on the Westside. Like other premiere streets, North Carolwood has a uniformity of prices, homes and lot sizes that well-heeled buyers like. "If you just bought your home for $20 million and you see other homes that look like your $20-million investment, you feel good" about your neighborhood, said Drew Mandile of Sotheby's International Realty, Beverly Hills.

* Pacific Coast Highway, Malibu: OK, so it's a highway, not a street. But this busy thoroughfare is the street address for a cluster of homes along Carbon Beach owned by the likes of DreamWorks co-founder David Geffen, restaurateur and Hard Rock Cafe chain owner Peter Morton and Oracle co-founder Larry Ellison.

Called Billionaire's Beach, the line of oceanfront properties has protection from housing market changes because the owners never have to sell, said Stephen Shapiro, co-owner of Westside Estate Agency in Beverly Hills. "It's like a private club, but they don't have meetings."

* Bellagio Road, Bel-Air. Views of the Bel-Air Country Club and the ocean distinguish this leafy road paralleling Sunset Boulevard. The record-setting Winnick estate borders the golf course.

"Most all the lots are pancake flat, so these are very big estates," Hyland said.

* Bel Air Road, Bel-Air. Approached through the arch at the East Gate entrance of the community, this winding street has city and ocean views as it climbs. Tall, dense hedges allow only an occasional glimpse of the homes, creating an air of inaccessibility, wealth and power, said Brooke Knapp of Sotheby's International Realty, Beverly Hills. Bel Air Road is convenient to Westwood Village and its markets, shops and restaurants.

* Oakmont Drive, Brentwood. The private street at the end of Rockingham Avenue gets top billing for its secluded setting, large mansions and light traffic compared with nearby well-traveled streets. "Once you get to Oakmont it becomes quiet," Hyland said.

Residents include conductor Zubin Mehta and philanthropist Eli Broad, according to public records.

* La Mesa Drive, Santa Monica. This street is also known for its homes of similar value and size -- some less than 5,000 square feet. Large trees, with roots that stretch a good foot or more above ground, help provide privacy. "There's a consistency to the street," said David Offer of Prudential California Realty, Brentwood. Building restrictions limit the scale, contributing to the uniform look. "People like the vibe," Shapiro said.

The north side, with views of the Riviera Country Club, has a discernible premium over the other side of the street. Homes "on the rim" can bring close to twice as much as south-side properties, which back up to San Vicente Boulevard and pick up the traffic noise, according to Offer.

* Maple Drive, Beverly Hills. There are the flats of Beverly Hills, an area with relatively small lots and commercial buildings. This isn't it. Maple north of Santa Monica Boulevard boasts the largest lots among Beverly Hills' flatland areas, and the homes have a continuity of design and landscaping. The street is quiet and traffic is light because a center divider prevents left turns onto Sunset, Knapp said.
* Napoli Drive, Pacific Palisades. Properties on the south side of Napoli are prized for their views overlooking the Riviera Country Club. Having a backyard bordering a golf course is like having a park behind you, Offer said.

* Amalfi Drive, Pacific Palisades. North Amalfi has canyon views to Will Rogers State Historic Park, while some homes on the south end have ocean and Riviera views. Over the years it has been popular with such entertainers as actor Cary Grant, comedian Jerry Lewis and singer Bobby Vinton.

* Malibu Road, Malibu. This coastal street is shielded from busy PCH to the east, offering ocean views and a relatively quiet neighborhood, Shapiro said. Once they move here, homeowners tend to stay: The street has little turnover, Shapiro said.

* Malibu Colony Drive, Malibu. Gates, 24-hour security and views of the Pacific make the street desirable, said Joyce Rey, who heads the estates division of Coldwell Banker Previews International. "It's a pretty exclusive enclave," the Beverly Hills-based agent said.

But the lots and houses, once cottages used as weekend places, are smaller than properties along Carbon Beach, which has "big, magnificent homes," Hyland noted.

Of course, even the best streets have some drawbacks.

Pacific Coast Highway can become clogged with traffic; Mapleton -- with its Playboy Mansion -- is a regular stop on bus tours; and North Carolwood is a hot spot for sightseers.

The corners of Carolwood and Sunset and nearby Baroda Drive and Sunset have been staked out by three generations of the Hot Star Maps family since 1936.

Linda Welton, who has been selling the maps for 21 years, said she feels the Carolwood residents have come to accept and even appreciate her presence -- her mother and maternal grandfather having paved the way.

Michael Jackson's security people asked for one of her maps, then another, which they later returned with his autograph, she said.

These days Dr. Phil stops by to say hello.

"Once David Hasselhoff wanted to know how to get to David Beckham's house," she said.

Standing up straighter with a mock-stern expression, Welton recounted her response: "Are you expected?"

Source:Los Angeles Times.

The federal government is doling out as much as $8,000 to people who bought a home recently. Sounds simple, right? But collecting on that money isn't proving to be all that straightforward for some taxpayers.

You already know there are two different credits, right? They're both worth 10% of the purchase price of the home, up to $8,000 for first-time home buyers who have not owned a home for the last three years and up to $6,500 for people who've owned before, as long as they owned a home and lived in it for at least five years out eight, consecutively.

Here are some of the common problems cropping up.
Owners in name only

A young couple doesn't qualify for a mortgage, or for a decent interest rate, because they're too young to have a credit history. So Mom and Dad qualify for the mortgage and buy the home. That's a dilemma encountered by some clients of Marlene DeBoisblanc, an enrolled agent in Westlake Village, Calif.
The couple lives in the home and makes all the mortgage payments. Mom and Dad own a home and don't plan to move, so the parents don't qualify for either credit. Does the couple qualify?

Yes. They may claim the full $8,000, according to Melvin Kreger, a tax attorney and enrolled agent in North Hollywood, Calif. The young couple is considered an equitable owner. Clearly, the intention has always been for this to be their home. This situation crops up all the time when someone has bad credit or no credit.

How do you fix the problem with title and loan without committing fraud? Whatever you do, don't back-date documents. That's illegal. However, you can draw up current documents to memorialize the details of the original arrangement. Since you cannot add the young couple to the existing loan, consider drawing up loan documents between the parents and the children.

As for the deed, you don't have to transfer title immediately. That might cause the bank to call the loan. However, you can arrange to transfer title when the loan to the parents is paid off, which could be when the house gets refinanced or when the loan is finally paid off in 30 years. There are special documents you can use, like land contracts, where the title doesn't transfer until the loan is fully paid. A good real estate attorney will know how to draw up documents that are appropriate under your state laws. See IRS page for more on the home-buyer tax credit.

Home purchase, then wedding

A frequent question on TaxMama.com is about a home buyer who qualified for the first-time home-buyer credit when they were single and bought their home. Then, during the year they got married to someone who would not have qualified. When they file a joint return for the year, will the home buyer lose the credit? Should they postpone the wedding until next year?

The credit is based on the buyer's status on the date of the purchase, the IRS says. When you file a joint tax return, be sure to include all the documents the IRS will need to approve your credit. Include an explanation. Tell the IRS you were single on the date of purchase. Provide the wedding date, and a copy of your wedding license to prove your marriage occurred after you bought the home. See home-buyer tax credit sample scenarios on IRS.gov.
Can landlords qualify as first-time buyers?

What if you used to own your home, but you moved out four years ago and have been renting it out ever since? Does that disqualify you from the credit if you buy a new home to live in?

Not at all, according to the IRS. You may own as much real estate as you like, as long as it has not been your primary residence for the last three years. In fact, you may even own a residence in a foreign country, and still qualify for the first-time home buyer credit. The only condition is that you did not own a personal residence in the U.S. during the last three years. You're entitled to the full $8,000 or 10% of the purchase price, whichever is less.

Rent with option to buy

Then, there's the person who has been renting a home for the last three years, with an option to buy. In 2009, they exercise the purchase option. Do they qualify for the credit?

Yes, as first-time buyers. Renting a home should not preclude a taxpayer from qualifying for the credit, said Robert Marvin, an IRS spokesman. The credit is available to taxpayers who have not owned another principal residence at any time during the three years prior to the date of purchase.

Bankruptcy

Bankruptcy increasingly is turning up as a problem in claiming the credit for long-time homeowners. TaxMama has heard from several long-time homeowners who filed bankruptcy within the last two years. They would only meet the five-year ownership test if they could include the time their home was in the bankruptcy estate.

In the past few years, millions of homes have been abandoned, foreclosed or quit-claimed. When that happens, the ownership date ends at the time title is passed. However, what if the homeowner files bankruptcy before losing the home? When the home is included in the bankruptcy, does title pass to the bankruptcy estate? Or does the person still own the house until it is returned to the lender?

Kreger, the tax attorney, said this must be reviewed on a case-by-case basis. Kreger suggested a conference with the bankruptcy trustee. It's possible the trustee did not accept the home into the bankruptcy estate.

Those precious few months can make the difference between getting $8,000 towards the down payment on a new home, and not getting a new home at all.

If you're not sure, file your request for the home-buyer tax credit. Since you're filing on paper anyway (you can't e-file if you're trying to claim the home-buyer tax credit), include a cover letter explaining the circumstances. Provide a timeline that includes your purchase date, date of bankruptcy, date the house went to back to the lenders. Tell IRS you are not sure whether you qualify. Ask them to please make the determination for you.

That way, if you qualify, you will get the credit. If you don't qualify, since you are asking, instead of making a claim, you won't be penalized for making a fraudulent claim for a credit. Win-win!
Time is running out

Last November, when the first-time home-buyer credit was about to expire, there were rumblings on Capitol Hill about an extension, and then lawmakers did indeed extend the credit. This year, nary a whisper.

To take advantage of the tax credit, you must buy the home by April 30 or have opened escrow (or whatever your state's equivalent is for a new purchase). The purchase must be completed, and you must occupy the home as your personal residence, by June 30. Be very careful about meeting this deadline. Make sure to respond to all requests for documents immediately. Stay on top of lenders, escrow agents, and anyone else involved with the processing of your purchase documents. One day late can cost you up to $8,000.

Meanwhile, in California, Governor Schwarzenegger kicked off a campaign to encourage new-home sales and first-time home sales by offering $10,000 to qualifying home buyers for homes purchased from May 1 through Dec. 1. See the governor's press release.

The State of California has budgeted $100 million to each the two funds -- new homes and first homes -- on a first-come, first-served basis. The last time this happened, the funds were used up in four months. So if you're planning to buy a home in California this summer, start looking now!

Source:Los Angeles Times.

when she was able to sell her Woodland Hills condominium for $230,000 — even though it was a "short sale" on which she lost $200,000.

Now she faces the possibility of having to pay state income tax on the $200,000 debt that her mortgage holder erased when she sold her condo for less than she'd paid for it.

"That would be monumentally unfair," said Ottley, who is still looking for an accounting job. "It wasn't income to me. It just stopped the (financial) hemorrhaging for me."

Ottley and an estimated 35,000 other former homeowners in California could be hit with big tax bills because they completed a short sale in 2009.

While federal law has exempted forgiven debt from income tax since 2007, the state of California hasn't yet followed suit.

And Gov. Arnold Schwarzenegger last week vetoed legislation that would have exempted short sellers from paying taxes on debt forgiven in those transactions.

In his veto message, Schwarzenegger said he killed the bill, SB X832, because lawmakers had inserted provisions for tax penalties opposed by businesses — not because of the short-sale issue.

But representatives of legislators at the forefront of the debt forgiveness effort said this week they expect a new bill will be passed and signed before the April 15 tax filing deadline.

Two bills are already in the works — AB 1799
by Assemblyman Roger Niello, R-Fair Oaks; and SB X614 by Sen. Ron Calderon, D-Montebello.

"We've gotten more calls about this bill than any hot button issue," said Niello spokeswoman Emily Currin. "I think something will pass. I don't know in what form."

Rocky Rushing, a spokesman for Calderon, said that mortgage debt relief is definitely a nonpartisan issue.

"Our office is getting dozens of calls from Californians who are freaked out over the possibility ... they could be responsible for enormous tax bills," he said. "I have confidence that the Legislature and the governor will resolve their differences and put people before politics."

Rushing said that whether the bill "moves forward or languishes" rests with Senate President Darrell Steinberg, D-Sacramento.

Steinberg's spokesman expressed optimism about a positive outcome. "He plans on passing it ... as soon as possible," said Nathan Barankin.

In addition to mortgage-debt relief, the proposed Senate bill includes a state tax exemption on federal stimulus funds received by renewable energy developers.

Schwarzenegger already has expressed support for that provision.

"I also support ensuring that federal economic stimulus grants received for renewable energy projects are not treated as income for tax purposes," the governor said in his veto message.

"California is one of the only states in the nation that considers the receipt of federal stimulus grants under the American Recovery and Reinvestment Act as taxable income for renewable projects."

Source:Los Angeles Times.

Some home buyers in California could get a federal tax credit worth up to $8,000 plus a new state credit worth up to $10,000 if they time their purchase just right over the next three months. But double-dipping will be tricky and won't come without risks.

One couple who lucked out are Sibel Demirmen and Scott Henry of San Francisco, who are purchasing a home, their first, in San Rafael's Terra Linda neighborhood.

They were planning to close escrow on April 30, and knew they qualified for an $8,000 federal home-buyer tax credit.

To get the federal credit, buyers must - among other things - close before May 1 or enter into a binding contract before May 1 and close before July 1.

Last weekend, they learned that if they could delay their close until after April 30, they could also qualify for the new California home-buyer tax credit, which was signed into law last week. The state credit is worth up to $10,000, spread over three years.

The seller agreed, and on Monday they signed an addendum to their contract postponing the closing until May 4.

"I was elated. I was ecstatic. I was thrilled," says Demirmen, a singer, music teacher and mother of two.

Although the prospect of double-dipping will excite many house hunters, "I don't think a ton of buyers will get both and benefit from both credits," says Renee Rodda, editor of Spidell's California Taxletter.

To get both, buyers must meet two sets of strict criteria. Timing it right will be tricky, especially in foreclosure or short sales, which can involve long lead times and many parties.

People who have already locked in a rate on a mortgage could lose the rate, or have to pay an additional fee to keep it, if they postpone their closing.

Matt Duffy is buying a home with his wife in Santa Rosa in a short sale, in which the purchase price is less than the debt on the home.

The seller accepted their offer in January. Last week, they heard that both lenders agreed to the deal as long as it closes by April 26.

"We said, 'Cool, we can do that.' We have our mortgage and the federal tax credit," he says.

After reading my Sunday column on the state credit, Duffy realized he could get that too if he delayed his close.

"As it turns out, we are not going to be able to do that. The second lender is demanding we close by April 26 or somebody has to pay an additional $20,000," he says.

"I am of course upset we can't move the date. But we don't want to lose the house. We will still get the federal credit, which is the better of the two credits."

The federal credit: The federal credit is 10 percent of the purchase price, up to a maximum credit of $8,000 for first-time home buyers or $6,500 for longtime homeowners who buy a replacement home. Either type of buyer can purchase a new or existing home.

Buyers claim the federal credit when they file their tax return (or amend the prior year's return). This credit is refundable: The full amount will be paid out, even if you have zero federal tax liability or the credit is bigger than your federal tax.

You cannot get the federal credit if your income is too high or the home was purchased after Nov. 6, 2009, and cost more than $800,000.

The state credit: The California credit is the lesser of 5 percent of the purchase price or $10,000. First-time buyers can purchase a new or existing home but repeat buyers can only purchase a new home that has never been occupied.

The California credit is spread over three years, up to $3,333 per year. It is not refundable: If you owe less than $3,333 in one (or more) of those years, you lose the difference that year. Even if you owed $3,333 before you owned a house, you might owe less after because of all the new tax deductions.

The state credit has no income or purchase-price limits. But here's the rub: Some buyers who fall below the income limits for the federal credit might not owe enough California tax to get the full benefit of the state credit.

To get the California credit, you must close escrow between May 1 and either Dec. 31 or whenever the money set aside for the program runs out, whichever comes first. The money is likely to run out long before Dec. 31.

Alternatively, you can reserve a state credit for new construction by entering into a binding contract between May 1 and Dec. 31 and closing before Aug. 1, 2011. People who do this won't get the federal credit because they entered a contract after April 30.

Getting both: Both credits require you to buy the home as your primary residence. Both define a first-time buyer as someone who has not owned a home in the three years prior to purchase.

In short, to get both credits you must be in contract on or before April 30 and close between May 1 and June 30 - and meet all other requirements.

Buyers who are already in contract and want to postpone their closing need to get the seller and lender to agree.

"Sellers might be flexible because it's still a buyer's market, but they may want something in return," says Richard Redmond, a mortgage broker in Larkspur.

"If you have a loan locked in with a close date in April and you want to extend it, you may have to pay a fee or get a higher interest rate," Redmond adds.

Buyers should consult a well-informed tax person and make sure they understand both credits.

Source:Los Angeles Times.

A national index of home prices rose unexpectedly in January, with California cities posting strong gains, but some experts warned that the nation's struggling housing market could be headed for another fall.

The closely watched Standard & Poor's/Case-Shiller index of 20 metropolitan areas rose 0.3% from December on a seasonally adjusted basis. That marked eight consecutive months of home values improving.

The index also was down just 0.7% from the same month last year, the nearest that the year-over-year reading has come to positive territory in three years.
But expectations about housing's direction remain mixed as a series of government initiatives intended to bolster sales and stabilize values begin to expire.

Concern over a potential wave of foreclosures also remains high despite new efforts by the Obama administration to keep struggling borrowers in their homes.

"Forces that will bring home prices back down are mounting," said Patrick Newport, an economist for IHS Global Insight. "Our view is that despite this report, prices have further to fall -- about another 5%."

The Case-Shiller index, which covers three months of data, was influenced by a sales surge in November, when buyers rushed to take advantage of a federal tax credit for first-time purchases before its initial expiration.

Sales fell in December and January, even though that program was expanded and extended through April.

Though many economists expect the extended tax credit to give sales a further boost, they also expect another fall once the government incentive ends.

"It is way too early for this market to have rebounded the way it has," said Christopher Thornberg, principal of Beacon Economics.

A breakdown of the index showed mixed results, with 12 cities posting increases and the rest decreases. When left unadjusted for seasonal variations, the 20-city index fell 0.4%.

Economists surveyed by Bloomberg had expected the index to fall in January.

David M. Blitzer, chairman of S&P's index committee, said he was concerned about the slow construction of new homes, falling sales volumes and foreclosures hitting the market this year.

"We can't say we're out of the woods yet," Blitzer said.

But others saw the improvements as a sign that the economic recovery was beginning to help consumers gain confidence.

Source:Los Angeles Times

Home sales edged 3 percent higher in the Western region of the country last month, as many buyers moved to lock in deals in time to qualify for government tax credits.

Foreclosed homes and other sharply discounted properties continued to drive sales in many markets in the 13-state region, particularly in California, Arizona and Nevada. The median price fell by nearly 10 percent to $207,900.

And the region appeared dodge the dampening effects of winter weather seen elsewhere in the country.

''We had our best February ever in Anchorage,'' said Ed Heidel, president of Century 21 North Homes Realty in Seattle, which also has offices in Alaska and Oregon.

Nationally, sales rose nearly 8 percent from February last year, without adjusting for seasonal factors, the National Association of Realtors said Tuesday. The median price declined nearly 2 percent to $165,100.

While the supply of homes on the market rose nationally, in many Western markets there is a shortage. The supply of homes on the market in the West in February stood at 6.5 months, down from 8 months a year earlier, according to the NAR.

In addition, the inventory of homes under priced under $500,000 in major markets in California has plummeted, constraining sales, Lawrence Yun, the trade group's chief economist, said Tuesday.

In markets such as Los Angeles, San Francisco, Las Vegas and Honolulu, the roster of available homes fell 30 percent or more in February from where it was a year ago, according to The Associated Press-Re/Max Monthly Housing Report, also released Tuesday.

''We're generating more sales, but our listing inventory is dropping pretty significantly,'' said Colleen Gunderson, broker-owner of Century 21 All Star Realtors in Phoenix.

That could help propel prices higher, she added.

Sales improved in February across many major Western metros, according to the AP-Re/Max report, which tallies all home sales in the metropolitan statistical areas. The report counts sales filed by all real estate agents, regardless of company affiliation.

Seven cities registered annual sales increases last month: Boise, Idaho, Honolulu, Seattle, Albuquerque, N.M., Phoenix, Portland, Ore, and Las Vegas.

Five metros posted annual sales declines: Denver, Los Angeles, San Francisco, San Diego and Anchorage.

Some highlights from the region:

--Sharpest price gain: San Francisco, where the median price posted an annual increase of about 28 percent to $425,000.

--Biggest sales gain: Sales in Boise jumped nearly 42 percent from a year ago. The metro's median home price dropped nearly 14 percent from a year ago to $138,000.

--Largest sales decline: Denver saw sales drop nearly 9 percent from a year ago, while the median sale price surged 17 percent to $202,500.

--Steepest price drop: The median home sales price in Las Vegas tumbled nearly 16 percent from a year ago to $121,000. Sales rose 11 percent from a year earlier.

Source:Los Angeles Times.

Con artists are posing as landlords to cheat potential renters out of their money, according to a warning issued last week by the office of Los Angeles County District Attorney Steve Cooley, who says they are using homes left vacant by foreclosures.

As part of the scam, the fake landlords or rental agents offer vacant homes at below-market rental rates to unsuspecting renters, even though they have no authority to do so, according to the district attorney. In reality, they are stealing your money and could be leaving you homeless.

Beware of landlords who do not provide an office or home address and pick up the rent in person or by messenger, cautions Cooley’s office. If the deal seems to good to be true or the terms of the agreement out of the ordinary, chances are it may be a scam to con you out of your money.

Protect yourself by following a few simple guidelines and asking questions. Online rental transactions are ripe for fraud, so be sure to follow up and meet with the landlord at his or her office or home, and that you ask to see the landlord’s driver’s license. The DA says you should also visit the property in person before signing a rental agreement and if possible, try to talk to the neighbors about the property.

Ask the landlord point-blank if the property is facing foreclosure. Put this in the rental or lease agreement and always avoid unusual forms of payment such as money wire transfers and cash only deals.

For more information or to make a complaint, contact the Los Angeles County Department of Consumer Affairs Real Estate Fraud and Information Program at 1-800-973-3370. If you believe you have been a victim of rental fraud, contact your local law enforcement agency.

Source:Los Angeles Times.

The $3-billion program involves certain adjustable-rate loans issued by Countrywide Financial, the loss-plagued lender that BofA acquired in 2008.
Amid increasing government pressure to stem foreclosures, Bank of America Corp. said Wednesday that it would offer to erase as much as $3 billion in principal owed by thousands of severely delinquent borrowers who owe more than their homes are worth.

The bank's plan is by far the most ambitious and systematic effort by a major lender to help homeowners avoid foreclosures while continuing to make loan payments. Unlike previous initiatives, this one will be geared toward borrowers who are so far underwater that they are unlikely to be helped by a government housing relief plan.

If successful, the plan could become a model for other lenders, experts say, and could also help the still-fragile housing market from being walloped by a new wave of foreclosures.

"I think this is a strong signal to the industry about the importance of principal reduction in a loan modification program," said Paul Leonard, California director of the Center for Responsible Lending, an advocacy group.

Bank of America's offer would knock as much as 30% off the principal on about 45,000 adjustable-rate mortgages nationwide. BofA didn't provide a state-by-state breakdown, but spokesman Rick Simon said the largest block would be in California.

The loans were originally issued by Countrywide Financial Corp., the loss-plagued Calabasas lender that Bank of America acquired in 2008. Countrywide was the nation's largest mortgage lender, specializing in subprime and other complex loans such as option ARMs, that went bad and helped fuel the nation's mortgage meltdown.

Bank of America's new program, adopted to settle a lending-abuse suit by the state of Massachusetts, is in addition to an October 2008 settlement with other state attorneys general that was aimed at reducing payments for Countrywide borrowers by more than $8 billion.

Since introducing programs a year ago to stem the tide of foreclosures, President Obama and other administration officials have been pushing banks to modify increasingly more mortgages. But the criteria for benefiting from those programs were difficult, especially in high-cost areas such as California.

Banks have generally sought to keep borrowers in their homes by adjusting the terms of the loan, such as extending the amount of time it takes to pay off the loan or cutting the interest rate. Lenders have resisted cutting the principal amount, which many housing advocates say is needed because of the inflated prices that homes were fetching during the housing boom.

The Bank of America program stands apart by making principal reduction the first step in the program.

The bank is not initially wiping out part of the loan balances, but instead is exercising what is known as forbearance -- setting aside payments of interest on some of the amount owed. It then would allow the borrowers to earn forgiveness gradually on that part of their debt by making regular reduced payments over a five-year period.

The plan is designed to motivate holders of some especially troublesome loans, including option ARMs, or adjustable-rate mortgages for which borrowers had the option of making payments that did not cover the interest costs for five to 10 years.

Many borrowers with option ARMs have been loath to accept modifications because they owed so much more than their homes were worth, said Barbara J. Desoer, president of BofA's home lending operations.

At the same time, Desoer said, the program protects the interests of the investors who own most of the loans by not granting "windfall forgiveness" of principal but instead requiring the borrowers to earn it through good-faith payments.

"The lenders have been struggling with how to prevent unmerited windfalls to borrowers, and this may be the way," said Leonard of the Center for Responsible Lending.

The Federal Deposit Insurance Corp. and others have been urging the industry to find a way to allow customers to earn back lost equity, he noted.

Bank of America said it would contact borrowers it deems eligible for the program. To qualify, borrowers must demonstrate a hardship in making current payments, be at least 60 days delinquent on the loans and owe at least 120% of the loan balance. Information on the program was to be posted at www.bankofamerica.com/ homeloanhelp.

Most of the offers, however, will go to holders of option ARMs, whose loan balances have risen during a period when home values have plunged more than 40% in many California areas.

There are an estimated 900,000 option ARMs in existence, according to analysts, and most of the borrowers will be forced to begin making full payments on the loans over the coming two years.

Aside from making principal reduction its centerpiece, the program conforms to the Treasury Department's loan-modification plan, which has been adopted as the first course of action for troubled mortgages by most loan servicers. The government has pledged to spend as much as $75 billion to reward loan servicers, mortgage bond investors and borrowers who participate.
The aim is to reduce first-mortgage payments to 31% of gross household income. If that can't be done through principal reduction, Bank of America would employ the other tools of the government plan, reducing the interest rate to as low as 2% and extending the time for payback to as much as 40 years.

Borrowers who agreed to the restructured terms and who made the lower payments as scheduled would be able to gradually convert the principal placed into forbearance into forgiven principal over a five-year period.

For example, a borrower who owed $250,000 might be required to make payments on only $200,000 if that is what the home is currently worth, said Jack Schakett, credit loss mitigation strategies executive at Bank of America Home Loans. Borrowers who stayed current on the modified loan would have 20% of the set-aside $50,000, or $10,000 of their debt, erased each year.

An exception would be made in the fourth and fifth years of the modified loan if home values recover, Schakett said. In those years, the balance could be reduced only to the current amount of the home's value -- a feature the bank designed to placate the investors who own many of the former Countrywide mortgages.

To reach the $3-billion reduction amount, every borrower who receives an offer from BofA would have to accept it and make every payment over the course of five years, Schakett said.

He said the bank believed it would come out ahead on the program because it would be more expensive to let the loans go into foreclosure.

Borrowers with second mortgages or home equity lines of credit will not qualify in certain cases.

Bank of America and other large mortgage servicers have said that the government mortgage modification program as previously applied did not work well with option ARMs because payments already were artificially low and because homeowners were discouraged because they were so far underwater.

So reducing the loan balance -- something allowed but not required under the government program -- has been seen as the only effective way to modify these loans, and the lenders say they have selectively used their own programs to do so.

Wells Fargo & Co., which inherited more than $100 billion in option ARMs when it took over Wachovia Corp., has said it modified 17% of the option-ARM portfolio with an average principal reduction of 14% by the end of December.

Guy Cecala, chief executive of Inside Mortgage Finance Publications, said Bank of America had taken these efforts a step forward. He called it "a formal recognition by the largest servicer in the country that principal reductions or forgiveness need to be part of any broad foreclosure avoidance strategy."

"And the idea of offering principal reductions over several years to encourage staying current on a mortgage is new and seems like a good approach," Cecala said.

But as a practical matter, he said, "BofA has more than $2 trillion in mortgage servicing, which translates to more than 10 million mortgage customers. Roughly 10% or 1 million are seriously delinquent or in foreclosure."

Offering principal reductions to 45,000 troubled borrowers "would amount to less than 5% of its problem loan universe," Cecala said. "It's a help, but it's not a game changer when it comes to heading off foreclosures."

Source:Los Angeles Times.

C.A.R. applauds Gov. Schwarzenegger’s signing Homebuyer Tax Credit legislation into law

LOS ANGELES (March 25) – The CALIFORNIA ASSOCIATION OF REALTORS (C.A.R.) today praised California Governor Arnold Schwarzenegger for his leadership in signing the Homebuyer Tax Credit legislation into law.

“We are pleased that Governor Schwarzenegger recognized the positive impact the tax credit will have for families hoping to buy their first home,” said C.A.R. President Steve Goddard. “Successful passage of this legislation was the result of our efforts in Sacramento over the last several weeks as REALTORS and our team in the capital worked for the bill’s passage before it landed on the governor’s desk earlier this week.”

California’s previous home buyer tax credit program was so successful that it ran out of tax credits by the end of June 2009, eight months before it was set to expire and just as housing markets appeared to be turning a corner. Unlike last year’s legislation, the Homebuyer Tax Credit signed into law today adds a tax credit for the purchase of an existing home by a first-time home buyer.
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“The positive impact of the home buyer tax credit at the federal level is clear,” Goddard said. “Nearly 40 percent of first-time home buyers said they would not have purchased a home if the federal tax credit for first-time home buyers was not offered, according to C.A.R. research conducted last year. We expect the state tax credit for home buyers to have the same impact.”

AB 183 will provide $200 million for home buyer tax credits, allocating $100 million for qualified first-time home buyers of existing homes and $100 million for purchasers of new, or previously unoccupied, homes. The eligible taxpayer who purchases a qualified personal residence on and after May 1, 2010, and on or before Dec. 31, 2010, or who purchases a qualified principal residence on and after Dec. 31, 2010, and before Aug. 1, 2011, pursuant to an enforceable contract executed on or before Dec. 31, 2010, will be able to take the allowed tax credit. The credit is equal to the lesser of 5 percent of the purchase price or $10,000, in equal installments over three consecutive years. Under AB 183, purchasers will be required to live in the home for at least two years or forfeit the credit (i.e., repay it to the state).

“AB 183 also will significantly contribute to efforts to stimulate jobs creation within California's housing market by helping to incentivize first-time home buyers to purchase homes that have been abandoned, foreclosed upon, and returned to the lender; or have been sitting on the market for extended periods of time,” Goddard said. “It is these homes that will require substantial rehabilitation by the new owners, which will in turn generate a tremendous increase in jobs and accessory purchases connected to home improvement activities.”

Leading the way… in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS (www.car.org) is one of the largest state trade organizations in the United States, with nearly 150,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

Source:Los Angeles Times.

According to the Los Angeles times the largest numbers of Californians in recorded history are not making their mortgage payments. Strangely, however, the numbers of Californians loosing their homes to foreclosure is not rising nearly as rapidly as the numbers of non-paying home owners would hint.
the long-lasting recession?

To start off, there have been fewer foreclosures partly due to the lenders’ self imposed moratorium on foreclosures. This moratorium partly comes from the ineffectiveness at recouping loses that foreclosures has gained in recent times as well as an inability in the staff of lenders to keep up with an extra influx of foreclosures leading to foreclosures not happening in order to save paperwork.

Fannie Mae and Fannie Mac have ceased foreclosures on loans they created meanwhile other groups like Citigroup Incorporated, Wells Fargo & Company, JPMorgan Chase & Company, Morgan Stanley and Bank of America Corporation are waiting for President Obama to bring his housing plan into action first. Amendments that make it more burdensome to perform foreclosures have only fed into this effect by further decreasing the numbers of foreclosures. From the fourth quarter of 2008 to the first quarter of 2009 foreclosures actually dropped by 6%.

The number of foreclosures has fallen not just in California, but across the entire nation with a 13% decrease in the number of homes repossessed by banks yet the same strange trend of a 10% increase in the number of defaults. One theory is that loan refinancing is causing more people to fall into default with their mortgages, but the availability of loan refinancing is very limited by the fact that only those who have never missed a payment on their loan may refinance. So, what about those who are missing payments? Can Obama's plan save them?

Those waiting for Obama's plan may be in for a surprise, however, as "many troubled borrowers in California are not eligible for help under Obama's plan because they owe much more on their loans than their homes are worth. To qualify for one of Obama's programs, a mortgage's balance must be no more than 105% of the value of the home", quotes the Los Angeles Times.

With unemployment reaching 11.2% in California and 8.5% nationally, economists feel that soon even more people will be missing mortgage payments and be in default just due to the fact that it will be more difficult for them to keep up with mortgage payments. Luckily, as long as the current trends hold out, foreclosures should not be rising too steadily as "banks don't want to overtax a housing market already flooded with cut-rate properties repossessed by lenders." Attorney Jeff Isaacs suggests that it would be a good idea to hire an attorney to help with loan modifications if you are in default to avoid making a wrong decision out of desperation. Isaacs believes that "There is so much confusion out there, and people end up making really bad decisions, like borrowing against their 401(k) to make their house payments. You do that and you are destined for real misery down the road."

1st Foreclosure Prevention is here for you through the good times and through the bad times as well and has been happily serving the people of California for years. It does not matter if you need financial advice or a loan modification, 1st Foreclosure Prevention is here to listen and lend a hand. 1st Foreclosure Prevention today to see how we can help you!

Source:Los Angeles Times.

Southern California house and condominium prices jumped 10 percent in February from a year earlier as homebuyers took advantage of tax incentives.

The median price climbed to $275,000 from $250,000 a year earlier, MDA DataQuick said today in a statement. It was the third straight month that prices in Los Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura counties had an annual gain, according to the San Diego-based research company.

A federal tax credit for buyers who sign contracts by April 30 boosted prices in February, along with a declining proportion of lower-cost foreclosed properties being sold, MDA DataQuick said. Foreclosures accounted for 42 percent of the region’s existing-home sales, down from almost 57 percent a year earlier.

“The market is less lopsided, but before a real rebalancing occurs adjustable-rate and jumbo mortgages need to come back,” John Walsh, MDA DataQuick’s president, said in the statement. “Not to where they were in 2007, but back to where they were a few years before that.”

The median price of a Southern California home is still 46 percent less than the peak of $505,000 in 2007, according to MDA Dataquick. It fell to as low as $247,000 last April.

A total of 15,359 new and existing homes sold last month in the six Southern California counties tracked by MDA DataQuick, up 0.8 percent from a year earlier and little changed from the 15,361 sold in January.

MDA DataQuick is a unit of Richmond, British Columbia-based MacDonald, Dettwiler & Associates Ltd. It compiles surveys using county records and supplies real-estate information to public agencies, lenders and title companies.

Price Cuts

As of the beginning of March, 23 percent of homes on the market in Orange County had their prices cut at least once, higher than the U.S. average of 19 percent, according to real estate data provider Trulia Inc. Twenty percent of homes were reduced in Riverside county, 19 percent in Los Angeles; 18 percent in Ventura; 17 percent in San Bernardino and 14 percent in San Diego.

The average price cut ranged from 10 percent in Ventura County to 15 percent in San Bernardino, according to San Francisco-based Trulia.

San Bernardino was the only Southern California county with a median price drop last month, MDA DataQuick said. It fell to $150,000 from $153,000 a year earlier.

Source:Los Angeles Times.

Led by double-digit jumps in coastal areas, the median sales price for the region reaches $275,000. The number of homes sold was nearly flat, up only 0.8%.Southland home prices jumped 10% in February compared with the same month last year as foreclosure sales dropped significantly. San Diego and Orange counties made particularly strong gains.

The increase in prices indicates that foreclosure sales are not dominating the market as much as they were a year ago. And it could signal that more traditional buyers -- those with equity in their homes looking to trade up -- are getting back into the game.

But the number of homes sold throughout the region was nearly flat, up only 0.8%. That was the lowest year-over-year increase since home sales began to rise in July 2008, according to San Diego firm MDA DataQuick.

A more normal market isn't likely to emerge until the financing necessary to fuel larger purchases becomes more readily available, experts say.

"You still have people out there who historically would be considered very creditworthy but they can't get a jumbo loan," said Andrew LePage, an analyst with DataQuick.

"The jumbo loan market remains dysfunctional because the people who could revive the jumbo loan market -- the investors who would have to buy the loans -- still see a lot of risk in housing."

Even so, Mark and Carrie Rackow believe the time is finally right to put their renovated Agoura Hills home, replete with solar panels and yoga studio, on the market for $1,185,000.

"People are out there a little more, looking," Carrie Rackow said. "I think people are maybe a little bit more hopeful."

According to DataQuick, the median price paid for Southland homes in February was $275,000, marking the third consecutive month of year-over-year increases.

The median -- the price at which half the sales are higher and half lower -- increased 1.3% from January.

The 10% year-over-year rise in the region's median sale price came as little surprise to economists because the comparison is with a time when repossessed homes dominated the market. In February 2009, foreclosures made up 56.7% of the resale market. This year it was 42.3%.

The foreclosure factor will likely remain strong in the housing market and experts have long feared that a new wave of them is coming. Working against that, at least for now, are the Obama administration's efforts to help troubled homeowners and a general reluctance by lenders to flood the market with cheap properties again.

With sales of cheap foreclosure properties becoming increasingly competitive, real estate agents said inventory on the low end has grown tight, even as many homeowners in California continue to fall behind on their house payments.

Regions where homes typically cost more saw some of the strongest gains. San Diego County's median climbed 13% while Orange County's was up 11.2%. L.A. County's median rose 5.4%. San Bernardino County's, meanwhile, fell 2%.

Last month, 15,359 homes sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was nearly the same as the 15,361 in January, and only slightly higher than the 15,231 in February 2009.

At the higher end, the number of jumbo loans, which DataQuick defines as mortgages of more than $417,000, accounted for 14.8% of last month's lending. Before the credit crisis struck in the fall of 2007, loans above this price accounted for 40% of the market.

Adjustable rate mortgages made up only 4% of purchases in February, compared to 44.8% of all purchases since 2000, according to DataQuick.

Southern California's market is not likely to return to full health until both adjustable rate mortgages and jumbo loans make up a larger share of the market, experts said.

"We need to have a mortgage market that looks sort of like it did in 1997-1998," said Richard Green, director of the USC Lusk Center for Real Estate. "A healthy market demand for jumbo loans, but being well underwritten."

The gains in Southern California come amid a backdrop of pessimistic national housing news.

In a separate report Tuesday, the Commerce Department reported that construction of new housing units fell 5.9% in February, with poor weather in the East and South partially to blame. Starts gained 7.9% in the West.

Glenn Kelman, chief executive of online brokerage Redfin, said he was "bullish" on California's prospects.

"California, right now, is its own market," he said. "It started improving ahead of everyone else last winter . . . and I am not sure there is going to be another dip because there is so much demand."

Source:Los Angeles Times.

Homeowners defaulting on mortgages today may be surprised to learn years from now that they still owe thousands of dollars - and a collection agency is coming after them to get it.

That's because lenders have been quietly selling second mortgages and home equity lines left unpaid after foreclosures and short sales. The buyers: collection agencies, which in some states have years to make a claim.

If they win court judgments, these collectors could have years to pursue borrowers with repayment plans, and even garnish their wages, said Scott CoBen, a Sacramento bankruptcy attorney.

"The only relief a consumer will have is entering into a debt negotiating plan or filing for bankruptcy," said Sylvia Alayon, a vice president with the New York-based Consumer Mortgage Audit Center. The firm provides mortgage analysis to lenders, advocacy groups and attorneys.

The phenomenon suggests an ominous, looming echo of today's real estate meltdown. As debt collectors surely seek at least partial repayment of millions of dollars in unpaid home loans, some say renewed financial stresses on tens of thousands of local consumers could dampen economic recovery.

"I think there will be a lot of unhappy people when it hits," said CoBen. "We saw this in the '90s. This is not really new. Just when you think you're back on your feet, you're making money and the economy's good, they hit you with this."

Alayon said most people are so stressed out and exhausted by trying to save their homes today that they are unaware they could face another hit later. And many who are losing homes don't get the advice necessary to prevent future fallout, say nonprofit loan counselors.

"You've got tens of thousands of people in California who have this hanging over their heads who don't even know it," said Scott Thompson, principal at for-profit Mortgage Resolution Services in Carmichael, Calif. He fears a new wave of bankruptcies might flatten people just starting to recover from losing their homes.

"So many of these are people with 750 or 800 credit scores who made a bad decision," said Thompson. "Or they're people who suffered income cuts. These are people, in terms of the economy, whom we need to participate."

But an entire industry is gearing up to buy their debt at deep discounts and collect what they can, Alayon said.

"It's a big business and investors are coming out of the woodwork. It's a very lucrative business," she said. Real estate insiders and financial players know it as "scratch and dent."

One of the biggest players in the business, Texas-based Real Time Resolutions, did not respond to an inquiry on the subject from McClatchy Newspapers. Neither did Bank of America, which holds many defaulted loans made by its Countrywide affiliate during the real estate boom.

Regionally, no one knows for sure how much unpaid debt is on the line. CoBen said people who used their borrowings for a traditional loan on a house in which they lived generally have little to worry about.

But borrowers may be vulnerable in years ahead - generally, those who defaulted not only on their first mortgage but also on a home equity loan or second mortgage.

In California, banks can't collect from borrowers for primary, so-called "first-lien," loans that go unpaid. When a house is foreclosed or sold through a short sale, the lender of the first loan gets the house back or the proceeds from another buyer.

But banks also made thousands of "second-lien" loans, including those used to finance 20 percent down payments during the housing boom.

A separate category of "seconds" includes home equity loans and home equity lines of credit. Nationally, about 3.4 percent of those loans are currently delinquent, according to Foresight.

Owners are generally, but not always, on the hook for the second loans left over from a foreclosure or short sale. Most investor mortgages, too, leave the borrower liable for potential unpaid debt.

In many short sales, experienced real estate agents or attorneys can negotiate away debt obligations for the second-lien loan. But many inexperienced borrowers don't know that, and sign final-hour agreements giving lenders the right to pursue them later.
"Seek advice," counseled Doug Robinson, spokesman for national nonprofit mortgage counselor NeighborWorks America. He said nonprofit counselors can help.

"Often when you work with a real estate agent, they're not really equipped to handle the repercussions. They're set up to make the sale," he said.

Government forces are already moving to limit potential damage to millions now struggling with home loans. A new Obama administration short sale program aims to prevent banks that hold second-lien loans from pursuing collections from homeowners after the short sale. It goes into effect April 5 and works this way: Sellers will receive notice that their servicer has steered part of the sales proceeds to secondary lien holders "in exchange for release and full satisfaction of their liens."

This release would apply only to short sales done through the administration's Home Affordable Foreclosure Alternatives program.

In California, Democratic state Sen. Ellen Corbett recently introduced SB 1178, which would expand California's protections for some people who refinance and take on a second mortgage.

People who refinance, but use the funds to improve their homes or to stay in their homes with a better interest rate, would be protected. Lenders could not seek court judgments to collect from these borrowers in the event of foreclosure or short sales.

"If you refinance a property and aren't using the money for personal reasons, you shouldn't lose your personal protections," said California Association of Realtors lobbyist Alex Creel. He said the idea has been around for years but has become more urgent as thousands lose income and fall into mortgage trouble.

The bill would apply to all foreclosures or short sales that occur after it becomes law. It doesn't matter when the loan was made, Creel said.

SB 1178 is still in the early stages of consideration. It must clear both houses of the Legislature and be signed by Gov. Arnold Schwarzenegger by Sept. 30 in order to take effect.

Source:Los Angeles Times.

Southern California home sales in February were above year-ago levels for the 20th month in a row as buyers continued to snap up bargain properties with government-backed mortgages and tax incentives. The median price paid for a home rose on a year-over-year basis for the third consecutive month, a real estate information service reported.

A total of 15,359 new and resale homes sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was virtually unchanged from 15,361 in January, and up 0.8 percent from 15,231 in February 2009, according to MDA DataQuick of San Diego.

The February sales average is 17,983 going back to 1988, when DataQuick’s statistics begin. The sales distribution remains tilted toward lower-cost distressed homes, although not as steeply as most of last year.

“It’s possible the stars won’t line up this way again for many years. With prices and mortgage interest rates this low, the cost of ownership is about as low as we’ve seen it in decades,” said John Walsh, MDA DataQuick president.

The median price paid for a Southland home was $275,000 last month, up 1.3 percent from $271,500 in January, and up 10.0 percent from $250,000 for February 2009.

The median peaked at $505,000 in mid 2007 and appears, so far, to have bottomed out at $247,000 in April last year. The peak-to-trough drop in median was due to a decline in home values as well as a shift in sales toward lower-cost homes.

“The market is less lopsided, but before a real rebalancing occurs adjustable-rate and jumbo mortgages need to come back. Not to where they were in 2007, but back to where they were a few years before that,” Walsh said.

While 44.8 percent of all Southland purchase mortgages since 2000 have been adjustable-rate (ARMs), it was 4.0 percent last month, down from 4.3 percent in January and up from 2.1 percent in February last year.

Jumbo loans, mortgages above the old conforming limit of $417,000, accounted for 14.8 percent of last month’s purchase lending, up from 14.2 percent in January and from 10.7 percent in February 2009. Before the credit crisis in the fall of 2007, jumbos accounted for 40 percent of the market.

Foreclosure resales accounted for 42.3 percent of the resale market last month, up from 42.1 percent in January, and down from 56.7 percent a year ago, which was the all-time high.

Government-insured FHA loans, a popular choice among first-time buyers, accounted for 38.5 percent of all home purchase loans in February.

Absentee buyers – mostly investors and some second-home purchasers – bought 18.9 percent of the homes sold in February. Buyers who appeared to have paid all cash – meaning there was no indication that a corresponding purchase loan was recorded – accounted for 29.3 percent of February sales. In January it was a revised 29.7 percent – an all-time high. The 22-year monthly average for Southland homes purchased with cash is 13.8 percent.

The “flipping” of homes has also trended higher over the past year. Last month the percentage of Southland homes flipped – bought and re-sold – within a three-week to six-month period was 3.4 percent, up from 1.6 percent a year ago. Last month the flipping rate varied from as little as 2.8 percent in Riverside and Ventura counties to as much as 4.1 percent in Los Angeles County.

MDA DataQuick, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates, monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.

The typical monthly mortgage payment that Southland buyers committed themselves to paying was $1,180 last month, up from $1,172 for January, and up from $1,114 for February a year ago. Adjusted for inflation, current payments are 47.0 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They were 56.6 percent below the current cycle’s peak in July 2007.

Indicators of market distress continue to move in different directions. Foreclosure activity remains high by historical standards but is lower than peak levels reached over the last two years. Financing with multiple mortgages is low, down payment sizes are stable, and non-owner occupied buying is above-average, MDA DataQuick reported.

Source:Los Angeles Times.

Some experts say the 2% drop from January stems from banks' efforts to keep owners in their homes.
The number of homes caught up in some stage of the foreclosure process in February fell 2% from the previous month to 308,524, a real estate firm will report Thursday.

That number is up 6% compared with the same month a year earlier but marked the smallest year-over-year increase since January 2006, according to RealtyTrac Inc.

Executives at the Irvine firm attributed the steady decline in foreclosure activity to efforts by banks to keep people in their homes through the Obama administration's $75-billion plan to help troubled borrowers.

"One of the reasons we are not more optimistic is because we are continuing to see homeowners who are delinquent on their mortgages," RealtyTrac Senior Vice President Rick Sharga said. "The lenders are taking a longer time to evaluate those loans to see if they qualify for the loan modification program that the Obama administration is pushing -- but ultimately what we think we are going to see is really a delaying of the inevitable."

California, Sharga said, could be particularly vulnerable because of the high concentration of borrowers falling behind on their payments and because there are so many borrowers in the state who are "underwater" -- owing more on their mortgages than their homes are worth.

California ranked fourth in foreclosures among the states -- following Nevada, Florida and Arizona with 1 in every 195 housing units receiving a foreclosure filing in February.

Source:Los Angeles Times.

As the distressed housing market in the City Of Angels continues to grow, the entity that oversees operations, the City of Los Angeles, is its pulling investments and deposits out of financial institutions it deems are not cooperating with local, state and national foreclosure prevention efforts.

The Los Angeles City Council instructed the city attorney to draft a new ordinance, called the Responsible Banking Initiative, that would require banks looking to do business with the city to submit a report on investments in local communities. The “report cards” would give insight to policy makers on the bank’s investment in the city. The city currently holds almost $30bn in investments, including savings and pension funds.

According to the real estate data provider, RealtyTrac, the Los Angeles metropolitan statistical area (MSA) had the 32nd highest foreclosure rate in the country in 2009 as foreclosures remained concentrated the sand states. There, one in every 25 homes received a foreclosure filing, a 37% increase from 2008. California leads all states with the most permanent modifications under the Home Affordable Modification Program (HAMP), according to the US Treasury Department.

Source:Los Angeles Times

According to the California Association of Realtors (C.A.R.) new 2009-2010 "State of the California Housing Market" report released today, affordable home prices, tax credits for home buyers, historically low interest rates, and a large number of distressed properties prompted many first-time home buyers to enter the market in 2009.

The percent of first-time buyers increased dramatically in 2009, from 35.9 percent in 2008 to 47 percent in 2009, according to the report. The share of first-time buyers exceeded the long-run average of 38.6 percent and was the highest since 1995, when more than half of all buyers were first timers.

"It is clear that the federal tax credit for home buyers worked well in 2009 and is continuing to drive home sales," said C.A.R. President Steve Goddard. "The home buyers' tax credit is arguably the most successful strategy employed by the government's efforts to stimulate the economy."

According to a survey conducted by C.A.R. on the effectiveness of the federal tax credit for home buyers, nearly 40 percent said they would not have purchased a home if the federal tax credit was not offered. On the same note, nearly 70 percent of these buyers said the tax credit was either "very important" or "most important" in their decision to buy a home. The large number of distressed properties led to more than half of all first-time buyers purchasing an REO/foreclosure or short sale property.

Statewide, REO/foreclosures and short sales accounted for almost half of all annual sales in 2009, an increase from 35.6 percent in 2008. The median price of distressed properties declined nearly one quarter to $250,000 in 2009 compared with $330,000 in 2008. Meanwhile, the median price of non-distressed properties decreased only 10.4 percent to $485,000 compared with $541,000 in 2008.

Many sellers sold their homes with a loss in 2009, and those who experienced a net cash loss increased for the fifth consecutive year. With one-third of sellers experiencing a net cash loss in 2009, it was the highest level on record since C.A.R. started tracking net cash losses in 1989, and was more than triple the long-run average of 9.3 percent. Following two consecutive years of significant declines in prices, the median net cash from home sales declined 50 percent last year to $50,000 from $100,000 in 2008.

Although sellers experienced a steeper net cash loss, lower home prices across the state sent affordability for first-time buyers to record-high levels in 2009. C.A.R.'s First-Time Buyer Housing Affordability Index (FTB-HAI) rose to 64 percent in the third quarter of 2009. The FTB-HAI measures the percentage of households that can afford to purchase an entry-level home in California and also reports first-time buyer indexes for regions and select counties within the state.

Affordable home prices also enabled first-time buyers to purchase larger homes. The average size of a first-time buyer's house increased to 1,560 square feet in 2009 compared with 1,300 square feet in 2005. Nearly 80 percent of first-time buyers purchased a single-family home, a slight increase from 78.5 in 2008, but a significant increase from 2005 when only 61 percent of first-time buyers purchased single-family homes.

Lower home prices not only encouraged first-time buyers to purchase entry-level homes, but also lured investors. More than 70 percent of properties purchased by investors were either short sales or REO/foreclosures. The typical investment property was 1,367 square feet and had a median price of $232,750.

California's median home price hit bottom in February 2009 at $245,170. Since then, the median home price has increased steadily in month-to-month comparisons, but remained below 2008 levels throughout 2009. The annual median price is projected to increase to $280,000 in 2010 from $271,000 in 2009.

Homes priced $500,000 or less dominated the sales mix throughout 2008 and early 2009, but peaked at 85 percent in January 2009. Meanwhile, the market share of homes sold for more than $500,000 increased from 15 percent in January 2009 to 25 percent in July 2009, holding steady around that figure for the remainder of last year.

Sales of high-end homes started picking up in late 2009, with the number of closings for homes priced $500,000 or higher rising 3 percent, and sales of homes priced $1 million or more experiencing their first year-to-year increase since July 2007. Statewide, annual sales of existing homes are projected to reach 527,500 units in 2010, a 2.7 percent decline compared with 2009's annual rate of 540,000 units.

As conventional loans became more difficult to obtain, the percentage of FHA-insured loans as a first mortgage increased significantly in 2009. The percentage of home buyers utilizing an FHA-insured loan increased to 32 percent in 2009, compared with 18.9 percent in 2008, partially a result of the agency increasing its loan limit from $362,790 to $729,750. FHA loans typically require lower down payments and have less rigid credit-qualifying guidelines than conventional loans. The median down payment for FHA-insured loans was $9,888 compared with $92,000 for conventional purchase loans.

"Although the huge increase in the use of FHA-insured loans is of concern, the housing market will continue to stabilize as home prices slowly recover and discretionary sellers return to the market in 2010," said C.A.R. Chief Economist Leslie Appleton-Young.

Source:Los Angeles Times.

Southern California Home Buyer’s Fair this weekend at L.A. Convention Center

Event Highlights:
- More than 50 FREE “how to” seminars.
- More than 80 exhibit booths.
- Real estate market outlook from C.A.R.’s Chief Economist, Leslie Appleton-Young.
- Free movie tickets to the first 200 attendees each day.
- Free iPod shuffle giveaways each day.
- Free shade trees to first 200 attendees on Saturday.

LOS ANGELES – Thousands of potential home buyers are expected to converge this weekend for the third annual Southern California Home Buyer’s Fair at the Los Angeles Convention Center in downtown Los Angeles. The Southern California Home Buyer’s Fair, open 10 a.m. to 5 p.m. Saturday, March 13, and 11 a.m. to 4 p.m., Sunday, March 14, features more than 50 educational “how-to” seminars designed to help home buyers navigate today’s real estate market with confidence and peace of mind. The event is free to the public, and the first 200 attendees each day will receive a free AMC Entertainment movie ticket (one ticket per person).

C.A.R. also will give away 10 iPod shuffles each day at booth #201 in the exhibit hall. Tickets for the iPod shuffle giveaway will be handed out one hour before each drawing in the lobby of the Concourse Hall of the Los Angeles Convention Center. Drawing times are 12 noon and 3 p.m. on Saturday, March 13, and 12 noon and 2 p.m. on Sunday, March 14. No purchase necessary, but winners must be present to claim prize.

Seminar topics range from saving for a down payment and monitoring and repairing credit, to buying foreclosures, short sales, and bank-owned homes, and finding and qualifying for a home loan. Several of the sessions also will be offered in Spanish. One of the featured presentations includes the “California Housing Market Outlook,” which will be presented by CALIFORNIA ASSOCIATION OF REALTORS(C.A.R.) Vice President and Chief Economist Leslie Appleton-Young. The presentation will include an historical overview of the housing market, and a synopsis of the current financial situation and its impact when trying to secure a mortgage loan. Appleton-Young also will provide a preview of what consumers can expect for California’s housing market in the coming months.

The Southern California Home Buyer’s Fair will feature more than 80 exhibit booths, where attendees can obtain information from industry experts about homeownership and the home-buying process. On Saturday, March 13, non-profit organization Million Trees L.A. will give away 200 free shade trees on a first-come, first-served basis starting at 10 a.m. in booth #419. (Please note, proof of L.A. City residency—Los Angeles Dept. of Water and Power bill or California Drivers License--is required.)

The event is sponsored by the CALIFORNIA ASSOCIATION OF REALTORS and the Los Angeles Times. For complete information, go to www.homebuyersfair.com.

Leading the way in real estate news and information for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS (www.car.org) is one of the largest state trade organizations in the United States, with nearly 150,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

Source:Los Angeles Times.

Springtime is coming, and the Home Buyer's Tax Credit deadline is quickly approaching. Buyers wanting to take advantage of this incentive must be under contract by April 30, 2010. How has this affected the US real estate market? We take a look at different market places to see how local experts view the effects of the tax credit.
Albuquerque, NM (PRWEB) February 26, 2010 -- In the sunny southwest, Tim Fish, an associate broker with Coldwell Banker Legacy and the Albuquerque Real Estate Group, reported the average price of Albuquerque homes for sale as $214,662, representing a decline of 11.66% in the average sales price since the peak in 2007. Tim says "This number adds to savings for first time homebuyers looking to make that transition."

"As it relates to the tax credit for those not in the 'first time' category, the market is certainly prime for their attention as well," says Fish. "The current low interest rates are largely due to demand and the Fed's Mortgage Backed Securities Purchase Program which ends on March 31, 2010. Rates could rise over a period of time because the Mortgage Backed Securities will have less support from the government."Utah
In 2006, Farmers Insurance Group ranked St George Utah as the most secure location to live in the US out of 379 major cities. Database experts took into consideration crime statistics, extreme weather, natural disaster risk, environmental hazards, terrorist threats and job loss numbers.

St George was the fastest growing city in the nation for its size from 2000 to 2006, according to the U.S. census bureau. Many Californians were relocating to the city, and from 2004 to 2006 the St George Utah real estate market was over-built and over-priced.

Local realtor Brian Habel with Fidelity Real Estate reports that the inventory of homes for sale in St George has diminished considerably. He says that the local foreclosure rate, slightly higher than the national average, has worked to get prices down to record lows, with many homes priced less than the cost to build.

"When the California buyers slowed, local residents called the score and lowered the exaggerated price points," Brian explains. "Since then distressed sales have been resetting all market prices, almost to an artificially low level. Real estate in St George Utah is once again a very good investment. Combined with the tax credit incentive, we are showing a big surge in buyer activity. It's an excellent time to buy!"

California
Southern California real estate has historically seen dramatic price increases, but has also suffered from effects of the economy and distressed property sales. Last year proved to be a difficult adjustment for home sellers, and a cautious market for potential home buyers worried about their income and job security.

There has also been a change in market timing, local realtors Fran and Rowena of Dilbeck Realtors explain. "Typically our busy season starts around April, with home sellers planning to move during the school year summer break. However, this year started off with many home sellers who want their homes on the market immediately in order to take advantage of home buyers who want to purchase before the April 30th home buyer's tax credit deadline. It's keeping us pretty busy!"

"The Southern California real estate market has seen a real surge in buyer interest," states Fran and Rowena, who specialize in homes in Los Angeles. "Open houses are very busy! There's a sense that interest rates will be going up at some point, and home prices also appear to have bottomed-out in many areas. Many home buyers tell us that they feel more comfortable with their financial position in the economy."


South Carolina
Despite an abnormally cold winter on the east coast, the spring selling season for Greenville SC real estate is heating up early this year. Much of the impetus has to do with the Federal tax credits, particularly in the $120-250,000 range - entry to middle priced homes in our area. The April cutoff date seems to have kick-started the selling season by about two months. Although home prices have not declined dramatically in the last two years, good values are available as Greenville looks forward to coming out of the recession ahead of many other areas in the U.S.

Greenville continues to add manufacturing and technology jobs, particularly in the automotive sector. Proterra, a maker of electric hybrid busses recently announced that they would build a manufacturing and research facility at Clemson University. They expect to add 3500 jobs over the next 3 years, and many in the first year. This and other auto industry developments are expected to increase Greenville SC home sales in the near future.

A proposed change in FHA lending requirements is also stimulating demand as buyers anticipate a tightening of credit from that institution. FHA has made the lion's share of home loans over the past two years, but is considering raising the minimum credit score to 680 from the current 620, and reducing allowable seller-paid closing costs from 6% to 3%.

The housing market has always been a benchmark for the economy. Realty experts agree that 2010 has increased activity, and the outlook for the future is positive as efforts towards an economic recovery are continued.

So, what should a buyer for Albuquerque real estate do to take advantage of the tax credit? Tim Fish says "Buy that home now, and get your credit. In my opinion you will not regret it. Inventories of great deals are being gobbled up all over Albuquerque."

Source:Los Angeles Times.

People are realizing the problems in the housing market are simply a bigger reflection of the lingering issues in the overall economy. There have now been a few stories comparing California with the issues being experienced in troubled Greece. JP Morgan Chase CEO Jamie Dimon echoed his concerns regarding California. The markets seem to underestimate how profound the issues are in the California economy. What is more troubling is California is merely a reflection of other states. The Legislative Analyst Office projects deficits deep into 2014 and each year we experience a deficit will require higher taxes or deeper cuts. That is why focusing on jobs is such an important barometer for the improvement of the overall economy. Without one net added job in California people are already counting the next housing boom. The numbers simply do not reflect this assumption.

I want to examine some of the nuts and bolts of the market because this is where the real story is. We know that millions of foreclosures have flooded the market. We can understand how toxic option ARMs have become to the market even years after they were originated. But what does this mean going forward? First, let us examine the median sale price and monthly sales of Southern California over the decade:This is a fascinating look at the market. Even during the boom we clearly see the seasonal pattern in sales. Each fall and winter sales drop as more people take inventory off the market. Spring and summer overall are bigger sale months because of school schedules, family commitments, and just a general acceptance that this is when more inventory enters the market. But you’ll notice in 2006 that the trend radically shifted. The crash hit and sales plummeted. An interesting phenomenon occurred where the median sale price didn’t peak until the middle of 2007 well into the monthly sale crash. So it would appear that sales would actually lead future prices. So the jump in sales would indicate much higher prices going forward right? Not necessarily. Even with the jump in sales, we are nowhere close to the average sales per month over the decade. I ran the monthly sales number for the past decade and the average monthly sale number for Southern California is:

24,604 Sales

This includes fall, winter, spring, and summer. In January we had 15,361 sales and the last time we had 24,604 sales or higher was back in August of 2006. Prices have come down but the bulk of the drag to the lower side has been in lower priced home sales. Much of this has been driven by foreclosure re-sales. But another important factor to look at is how much are families committing to their monthly mortgage payment? With Alt-A and option ARM products families were able to stretch their budget. Since the bulk of loans are now backed by the government lenders are now at the very least verifying income. Let us look at the monthly mortgage payment over this time:The above tells you a lot. While the median home price in Southern California is down by 46 percent from the peak the typical monthly mortgage payment is down 52 percent from the peak. People are committing to half the monthly payment amount and this has more to do with the health of the economy. I know many would love to have a $1,170 monthly mortgage for a place in Southern California. This is already happening in many areas but not in higher priced regions like Culver City or other parts of the Westside.

It helps to look at a handful of examples to highlight what is really happening. Let us look at pre-bubble prices in areas that have corrected versus areas that still seem elevated:Now this data tells us a lot because over the past decade incomes went stagnant. The overall inflation rate for California was 25.6 percent:
You’ll also notice the difference in overall sale numbers. What on the surface may seem like an enormous crash actually looks like a correction to the inflation adjusted mean. I find it fascinating to see many communities heading back to the 25 to 30 percent inflation rate of California and are somehow finding a bottom in this range. But many areas are still over priced and this will need to adjust either with higher incomes coming from better job growth or further price corrections. Part of what is forgotten when examining the shadow inventory is the fact that these are properties in heavy distress. The L.A. Times ran a piece confirming what we have been talking about for over a year:

“(LA Times) It’s been 16 months since Eugene and Patricia Harrison last paid the mortgage on their Perris home. Eleven months since the notice got slapped on their front door, warning that it would be sold at auction.

A terse letter from a lawyer came eight months ago, telling them that their lender now owned the house. Three months later, the bank told them to pay up or get out by the end of the week.

Throughout the country, people continue to default on their home loans — but lenders have backed off on forced evictions, allowing many to remain in their homes, essentially rent-free.

Several factors are driving the trend, industry experts say, including government pressure on banks to modify loans and keep people in their homes.”

Now this wouldn’t be such a big deal if it were a handful of mortgages. But just look at this mind blowing chart:Mortgages that are 90 days late and a foreclosure hasn’t been filed are up to a record shattering 5.1 percent. Now think about that. How is this a sign that things are good? So we’ve reached a point where simply staying put in your home, rent-free is a strategy being used by banks to deal with the foreclosure crisis. The big losers are the prudent in this country. How many Americans are paying their mortgages diligently, probably needing to take a second job if there is one to be had, just to make sure they pay their bills? Wall Street has the luxury of making disastrous mistakes and yet they are bailed out to the tune of trillions of dollars and offer billion dollar bonuses. Those that over extended are then put in a lottery essentially where some can stay rent free for one and even two years before an eviction depending on when banks get to it. Others are kicked out quickly. Some are put into HAMP. The big issue? No clear uniformity to what is going on. What is wrong with renting? Half of those living in giant Los Angeles County rent. There is this stigma attached to renting a home and massive subsidies for homeownership. This carefully orchestrated play is now being held up even though tens of thousands now are living rent free in over leveraged homes. Housing seemed to work well when it was a boring, track inflation play that if you were lucky after 30 years, you had a place over your head and no mortgage. Since when did it become a rule that every 5 to 7 years you had to “trade up” a “starter home” just so you can progress forward? This twisted logic seemed to make sense because how else were most families going to save $100,000 to $200,000 just for a down payment on a 1,000 square foot home in a decent area? Of course that broken trend is now unraveling.

So putting this altogether, why would anyone want to buy in this current climate? Transparency is really not to be found. What real reform have we gotten after these two agonizing years? Is this reason in itself to buy? The headline data seems to tell us things have stalled but if we look at a deeper analysis, foreclosure filings, those 90 days late and with no foreclosure pending, bankruptcies, and other in the trenches data we realize that the market really isn’t healthy. We have yet to add one net job since the recession started. How are home prices going to go up? So let us assume the next big play is to simply turn ourselves into Japan and go for our second lost decade by putting banks into a permanent zombie position and ignoring problems. Pretending someone in a home that isn’t paying their mortgage is somehow good is probably a clear example of turning our housing market into a zombie market. Yet how is this good for prices? The same arguments were made in Japan and prices went nowhere for over 20 years!

It is interesting that the flurry of buyers jumping into the market have tapered off in the last few months. There was a period of two months where the tax credit and uptick in sales seemed to move a large number of people off the fence. There was a good amount of e-mail during this time. This has now waned significantly. But guess what? Prices are still near the trough. Why? Because incomes are stagnant. Maximum leverage mortgages are gone. Unless you plan on staying put for 30 years and can cover your mortgage comfortably, that future buyer is only going to be able to afford what their household income can stretch with a government backed loan. And looking at that typical monthly mortgage payment for Southern California it isn’t jumping up quickly. In other words, know the metrics of where you’re buying before jumping in.

Source:Los Angeles Times.

The Federal Reserve has pushed mortgage rates to near half-century lows, but millions of U.S. homeowners haven't benefited from that because they can't—or won't—refinance.

Falling home prices have left many owners with little or no equity, making it harder to qualify for refinancing. Moreover, stricter lending standards and higher fees by banks and mortgage giants Fannie Mae and Freddie Mac and declining incomes have made it tougher and less attractive for borrowers to seek new loans.

Around 37% of all borrowers with 30-year conforming fixed-rate mortgages—who collectively hold about $1.2 trillion of home loans—have mortgage rates of 6% or higher, according to investment bank Credit Suisse. Many could reduce their rates by a full percentage point if they refinanced at current rates, about 5%. More than half could lower their rates nearly three-quarters of a percentage point, according to Credit Suisse.

But new refinance applications in January stood near their lowest levels in the past year. Weekly data compiled by the Mortgage Bankers Association also show that refinance activity has been muted, considering that rates are so low.

"Traditionally, these borrowers would be aggressively refinancing," said Mahesh Swaminathan, senior mortgage strategist at Credit Suisse.One indicator of the economic impact of refinancing: Loans that refinanced in 2009 will result in $3.4 billion in savings for consumers this year, according to a report by First American CoreLogic, a research firm based in Santa Ana, Calif. That will return an additional $17.2 billion in savings to borrowers over the next five years. That's money consumers can potentially use to help spur economic recovery.

About a quarter of all mortgage holders are "underwater"—they owe more on the house than it's worth—which normally makes it impossible to get refinancing: Banks want collateral to back the value of home loans they make. The Obama administration recently extended a program intended to help underwater homeowners refinance, but few people have tapped it so far. The program has faced logistical hurdles, delays and confusion from brokers and lenders.

Some people are so far underwater, refinancing ends up being out of the question. John Albright, a retired Navy officer in Manassas, Va., hasn't been able to refinance because the value of his home has plunged. He figures its market value is now around $275,000, but he and his wife still owe more than $500,000 on their mortgage.

Their refinance application was turned down last year because they lacked equity in the home. He says his lender told him he could refinance only if he could come up with about $200,000 to pay down his mortgage. So they are stuck with an interest rate of about 6.5% at a time when his wife's income has declined. "We're going from paycheck to paycheck, but what can you do?" Mr. Albright says.Some mortgage bankers say higher fees by lenders have undermined the effort to encourage refinancing. Fees that Fannie and Freddie began imposing in 2008, as loan delinquencies began to rise, have made it unattractive for some borrowers to refinance. For example, a borrower with 20% down and a 695 credit score seeking to refinance must pay fees equal to 1% of the loan amount. Those fees rise for borrowers with weaker credit scores, higher loan-to-value ratios, or other risk factors.

Overcorrecting for the abuses of financial institutions "has defeated the Fed's purchase program," said Alan Boyce, a mortgage-securities-market veteran. Those loan fees, he said, are partly "responsible for why there's been no refi boom."

The higher fees and tight credit standards show the tensions facing Fannie and Freddie. As the government-controlled companies try to raise revenue to offset their losses, those efforts can conflict with their basic public-policy mission: to help stabilize the housing market.

Fannie and Freddie have to strike a balance between risk and access to credit. Figuring out "where that line is involves some trade-offs," said Edward DeMarco, acting head of the Federal Housing Finance Agency, which oversees Fannie and Freddie.

The last time mortgage rates were at current levels, in 2003, refinancing activity hit $2.9 trillion, according to trade publication Inside Mortgage Finance. Last year, refinance volume reached $1.2 trillion, the highest amount since 2003 but not nearly as much as expected, considering how low interest rates have fallen.

Traditionally, borrowers have an incentive to refinance when they can reduce their mortgage rate by one percentage point or more.

Borrowers who are refinancing tend to be those who need it least. Fannie and Freddie refinanced 4.2 million borrowers last year. On average, borrowers who refinanced through Freddie Mac saved $2,600 annually. But the savings on the whole have gone to "very, very good credit borrowers and it really isn't going very far down the credit spectrum," said Michael Fratantoni, the head of research and economics for the MBA.

The experience of Connecticut resident Cathy Grandahl shows some of the trade-offs borrowers must grapple with in today's low-interest-rate, high-fee environment. She wanted to refinance two loans on her West Simsbury, Conn., home: a fixed-rate mortgage with a 5.75% rate and a second mortgage with an adjustable rate that she worries will rise sharply in coming years.

Refinancing would save them around $125 a month on their first mortgage while providing a fixed rate on their second loan. But extinguishing that mortgage by refinancing into one larger loan—considered a "cash-out" refinance—would trigger an additional fee. That, plus several thousand dollars in closing costs, ultimately persuaded the couple not to refinance after all."It's not a matter of our credit. We just can't get a good enough rate to make the refi worth it," says Ms. Grandahl, a 53-year-old land-records researcher who has three children in college.Her broker, Michael Menatian, said that sort of scenario "happens all the time" with qualified borrowers. "There's nothing wrong with these people—good equity, good income—and you have to tell them, 'I'm sorry, I can't give you the low rate you thought you could get.' "

Falling home values are one of the biggest factors raising borrowers' refinancing costs. Borrowers with less than 20% equity may have to pay for mortgage insurance. On Monday, the Obama administration said it would extend for a year a program launched last April to help homeowners with little or no equity to refinance. That program, which had been set to expire this June, was called a "failure" last week by analysts at Barclays Capital. While the administration had said it would benefit millions, so far just 188,000 borrowers who owe between 80% and 105% of the value of their homes had refinanced through December. Last September, it was expanded to include borrowers who owe up to 125% of their home value, but fewer than 2,000 borrowers have used that program through December.

The administration says it is also considering new ways to allow distressed homeowners to refinance through the Federal Housing Administration.

Source:Los Angeles Times.

Home foreclosures in Los Angeles are tapering off, sparking increases in house prices in the area, based on reports from the California State University Valley Economic Research Center in Northridge and the California Building Industry Association.

In the San Fernando Valley, where more than half of Los Angeles City is located, foreclosure filings decreased by a substantial 41 percent from the January 2009 filings of 1,644 to only 972 in January this year. The filings are also down by four percent from December.

Completed foreclosures in the Valley also fell sharply to only 507 units in January, a sharp 34-percent plunge from December and an 11-percent decrease from January 2009.

With the slowing entry of properties into lists of foreclosed homes, home prices have been continuing their upward trend. Based on data from the California Building Industry Association, the median sales price for new homes in Los Angeles rose to $449,750 in December last year, up by three percent from the $437,500 median in December 2008. Another report showed that the median for existing homes rose to $398,750 in January this year.

Sales of newly-built homes also soared, posting a 31-percent jump from the 141 new homes sold in December 2008 to 184 new homes transferred to buyers in December 2009.

Nevertheless, despite the improvements in home prices and sales, a number of real estate professionals are still doubtful if the area has finally recovered from the effects of home foreclosures in Los Angeles. Robert Kleinhenz, a top economist at the California Association of Realtors, said that he is concerned about what happens to the housing market when the federal tax incentives end and when mortgage rates rise again in the coming months.

Kleinhenz explained that mortgage rates will certainly go up if the Federal Reserve carries out its plan of stopping its purchases of mortgage-backed securities from Fannie Mae and Freddie Mac on March 31. He added that this purchase program, in addition to the tax credit program, has been helping reduce the inventory of California home foreclosures.

Additionally, despite reports of price appreciation, the percentage of mortgaged homes in negative equity in Los Angeles has risen to 27 percent in the final quarter of 2009.

The pace of home foreclosures in Los Angeles surged by more than 37 percent in 2009, but could reverse its direction if the slowdown shown in foreclosure reports for the San Fernando Valley and the entire state of California in January continues.

Source:Los Angeles Times.

Phil Kelly had 18 more months to go before the fixed rate on his $2.5 million mortgage became adjustable.

But when Kelly, a former computer executive living in Rancho Santa Fe, Calif., learned he could knock his interest rate down by a full percentage point by refinancing, he went for it.

"It's always tough to pick the exact bottom or top of anything," Kelly said. "But I think this rate is about as low as you're going to get."

Rates on jumbo mortgages — loans of more than $729,750 in Southern California counties with the highest-cost housing (and $567,500 in King, Snohomish and Pierce counties) — shot up during the financial crisis as lenders and loan investors shunned anything tainted with even a whiff of higher risk. Rates on big mortgages were especially high relative to those on smaller loans.

But in a boon for borrowers in California's expensive housing markets, the jumbo-loan market is starting to return to normal.

Two weeks ago, the average interest rate on 30-year fixed-rate jumbos dropped to 5.79 percent, a nearly five-year low, according to rate tracker Informa Research Services of Calabasas. It edged up to 5.88 percent this past week, still very attractive by historical standards. The average is down from well above 7 percent in late 2008.

Rates are even lower on so-called hybrid adjustable mortgages, on which the rate is fixed for, say, five years and then adjusts annually. Kelly's new loan is a five-year hybrid adjustable identical to his old one, except that he's paying about 5 percent, down from 6 percent.

Banks are also relaxing slightly some of their requirements for jumbo loans. That's an encouraging sign because the market for jumbos, in contrast with the rest of the mortgage business, isn't being propped up by Uncle Sam.

The lower rates and somewhat easier terms reflect newfound confidence among banks in the housing market.

That's because, by definition, jumbos are too big to be bought by Freddie Mac and Fannie Mae or to be insured by the Federal Housing Administration.

Plus, the private market for mortgage-backed bonds dried up when the meltdown hit. So lenders making jumbo loans these days must be willing to take the risk of keeping them in their portfolios.

The maximum amounts for Freddie Mac and Fannie Mae "conforming" mortgages, and for FHA mortgages, are set by Congress.The cutoff for single-family homes was $417,000 from 2006 until February 2008, when lawmakers increased it temporarily in certain high-cost areas, including the Seattle area and parts of Southern California.

The increased upper limits, which have been extended until the end of this year, have created a three-tier system in expensive areas, mortgage professionals say: loans of up to $417,000, which are the easiest to obtain and carry the lowest rates; "conforming jumbos" from $417,000 to $729,750, which are somewhat harder to get and have slightly higher rates; and true jumbos, with the toughest standards and highest rates.

In the boom years of 2005 and 2006, interest rates were typically no more than a quarter of a percentage point higher on jumbo loans than on conforming loans, according to Informa Research.

That widened as the mortgage meltdown intensified and home prices dropped in late 2007. The spread ballooned to nearly 1.7 percentage points in early 2009 after the entire credit system froze.

But this year the rate spread has narrowed to less than a percentage point. It could shrink more if conforming-loan rates rise as expected after the Federal Reserve wraps up a $1 trillion-plus program to support the market for conforming loans next month.

In addition to lower rates, down-payment requirements are being relaxed in some cases.

For example, to write a jumbo loan in coastal areas of Los Angeles and Orange counties, Wells Fargo Home Mortgage looks for a 20 percent down payment or that percentage of equity, down from 25 percent last year, said Brad Blackwell, a national mortgage sales manager at the lender.

Jumbo loans remain much harder to get than before the credit crunch and recession. Borrowers typically must have a credit score of at least 700, compared with boom-era minimums in the 600s, though Laguna Niguel mortgage broker Jeff Lazerson said at least one lender was again making sub-700 jumbos available.

What's more, unless their down payments are very large, borrowers must provide evidence of high income, have sizable bank accounts as a cushion against the unforeseen and occupy the houses themselves.

But there are clear signs that the jumbo market has loosened.

One is an increasing availability of "stated income" loans — those that don't require proof of income — of as much as $2 million to borrowers with at least a 40 percent down payment, said mortgage broker Gary Bluman, owner of Real Estate Resources in Brentwood.

Also, instead of a true jumbo loan, some "piggyback" second loans are available again to help certain borrowers with 25 percent down payments pay for high-priced homes, Lazerson said.

Of course, adjustable, stated-income and piggyback loans were big contributors to the mortgage meltdown.

But such provisions are less risky if a borrower has 25 to 40 percent equity.

Despite the confidence in the market that such terms imply, lenders and mortgage investors are still dealing with piles of bad jumbos made during the boom.

Delinquencies of 60 days or more on prime jumbo loans that were packaged into securities jumped to 9.6 percent in January, up from 3.7 percent a year earlier, Fitch Ratings reported recently.

For now, the jumbo market remains limited to the volume of loans that banks are willing and able to keep on their books. But there is hope for a return to private outside funding.

Although no jumbos have been turned into securities for at least two years, packages of delinquent jumbos have begun to be sold again to "vulture" investors, a sign that the secondary market for the loans may revive, said Michael Fratantoni, a vice president of the Mortgage Bankers Association.

"The ice sheet," he said, "is starting to crack here and there."

Source:Los Angeles Times.

Home prices edged up in December, the seventh straight monthly gain and another sign the housing market continues its bumpy recovery.

Prices aren't anywhere near the zenith of the housing boom -- they are down 30 percent from the peak in May 2006 -- and there are worries that the recovery may not last. But prices have been steadily increasing from month to month, climbing almost 4 percent off the bottom in May.

The gradual improvement is important to the nation's economic recovery. For most Americans, their home is their largest asset, so as values climb homeowners feel wealthier and more comfortable spending. And, for homeowners who currently owe more on their mortgages than their properties are worth, rising prices will rebuild equity.

The Standard & Poor's/Case-Shiller 20-city home price index released Tuesday rose 0.3 percent from November to December, to a seasonally adjusted reading of 145.87. The index was off about 3 percent from December last year, nearly matching analysts' estimates.

Home sales data for January, out later this week, are also expected to show gains over year-end levels as buyers took advantage of low interest rates and temporary tax credits.

Anna Piretti, an economist at BNP Paribas, said the price increases are "further evidence that conditions in the house market continue to stabilize."

"While conditions remain challenging in Florida, house price conditions appear to be improving in the Western states, with gains recorded in California, Nevada and Arizona," Piretti wrote in a research report.

Los Angeles was the biggest winner out of the 20 cities with home prices up 1.4 percent on a seasonally adjusted basis in December over November. San Diego was up 1.1 percent and San Francisco increased 1 percent. Analysts attributed the California gains to many investors seeking to scoop up foreclosure properties and buyers taking advantage of cheap prices.

"California is an efficient market," Cameron Findlay, chief economist at LendingTree.com, said. "Buyers are more astute in terms of monitoring market changes and, in general, they will always lead the market out of a recession."

In Denver, prices rose for the 10th month in a row, while prices dipped in key markets like Miami, New York and Chicago.

Some economists fear that demand and prices will fall after two federal tax credits expire in April. And, a Federal Reserve program aimed to keep mortgage rates low is set to end March 31.

"Prices have stabilized and are starting to rise, but forces that will bring them back down are growing," wrote Patrick Newport, an economist with IHS Global Insight.

The Case-Shiller indexes measure home price increases and decreases relative to prices in January 2000. The base reading is 100; so a reading of 150 would mean that home prices increased 50 percent since the beginning of the index.

Source:Los Angeles Times

About $60 million in loans will be made available annually to first-time homebuyers in Los Angeles and Orange counties under a bond program authorized today.

The Los Angeles County Board of Supervisors authorized the Southern California Home Financing Authority to issue $200 million in revenue bonds over the next three years to provide financing for the authority's first-time homebuyers program. The program, which will provide buyers who qualify below market, fixed-rate loans, has been in place since 1982 and has issued more than $1.1 billion in bonds and provided financing for more than 7,500 homes.

Based on a recent bond issue, its first since 2007, the housing authority is working with 12 lenders with more than 70 branches, said Gregg Kawczynski, a manager at the county's Community Development Commission.

The authority was able to go back to the market because of a federal program backing the bonds.

Though more than half of such loans have typically been made to residents earning less than 80 percent of the statewide median income, buyers who earn as much as $84,480 in Los Angeles County and up to $103,320 in Orange County are eligible for the loan program.

Borrowers who qualify can also receive assistance with their purchase, including the cash equivalent to three percent of the loan to cover a portion of the down payment and closing costs.

Homes in all unincorporated areas and cities other than Los Angeles in Los Angeles County and all of Orange County are eligible for mortgages under the program. Purchase prices of up to $708,495 may qualify.

Rates on the 30-year fixed rate loans without down payment assistance are currently 4.7 percent and with assistance, 5.125 percent.

Kawczynski estimated that the two counties together would originate about $60 million in new mortgages each year, though future totals depend on the strength of the overall mortgage market. Based on average loan size, that would amount to about 200 loans annually.

The board's 3-0 vote in support today gives the group the flexibility to finance new loans as market conditions allow.

Source:Los Angeles Times.

C.A.R. reports January median price increased 15 percent; home sales decreased 10.6 percent

Multimedia:
· Click here to view Unsold Inventory by price point.
· Click here to view a data table comparing current prices to trough prices in areas throughout the
state.

Quick Facts:
· Existing, single-family home sales decreased 3 percent in January to a seasonally adjusted rate of
539,040 units on an annualized basis compared with December 2009.
· The statewide median price of an existing single-family home decreased 6.3 percent in January to
$287,440, compared with December 2009.
· C.A.R.’s Unsold Inventory Index fell to 5.8 months in January, compared with 7.3 months in January
2009.

LOS ANGELES – Home sales decreased 10.6 percent in January in California compared with the same period a year ago, while the median price of an existing home rose 15 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.

“Many sales that closed escrow in January were on homes with offers accepted during the holiday season--a time when many house hunters are first-time buyers,” said C.A.R. President Steve Goddard. “First-time buyers typically purchase homes priced below an area’s median home price. Reflecting this, the percentage of homes priced under $500,000 increased to 77 percent of all sales in January, compared with 75 percent in December.

“Despite the year-to-year decline, sales remained above the 500,000 unit threshold for the 17th consecutive month, holding steady at pre-peak levels from early in the last decade,” said Goddard.

Closed escrow sales of existing, single-family detached homes in California totaled 539,040 in January at a seasonally adjusted annualized rate, according to information collected by C.A.R. from more than 90 local REALTOR® associations statewide. Statewide home resale activity decreased 10.6 percent from the revised 602,660 sales pace recorded in January 2009. Sales in January 2010 decreased 3 percent compared with the previous month.

The statewide sales figure represents what the total number of homes sold during 2010 would be if sales maintained the January pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

The median price of an existing, single-family detached home in California during January 2010 was $287,440, a 15 percent increase from the revised $249,960 median for January 2009, C.A.R. reported. The January 2010 median price decreased 6.3 percent compared with December’s $306,820 median price.

“The story for the median price in January was mixed. In year-over-year terms, California’s median home price saw the greatest percentage increase since December 2005,” said Leslie Appleton-Young, C.A.R. vice president and chief economist. “However, the median fell by 6.3 percent from the December 2009 median price. Although the monthly decline was large, it was less than the declines for the same time period in both 2008 and 2009 when the median price fell by more than 11 percent.

“The median price still is 17.2 percent ahead of the trough in this cycle,” added Appleton-Young. “However, the expiration of the federal tax credit for home buyers and the impact of the Federal Reserve’s withdrawal from the mortgage market continue to be the wild cards as we move through the year.”

Highlights of C.A.R.’s resale housing figures for January 2010:

. C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in January 2010 was 5.8 months, compared with 7.3 months (revised) for the same period a year ago. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.

. Thirty-year fixed-mortgage interest rates averaged 5.03 percent during January 2010, compared with 5.05 percent in January 2009, according to Freddie Mac. Adjustable-mortgage interest rates averaged 4.33 percent in January 2010, compared with 4.92 percent in January 2009.

. The median number of days it took to sell a single-family home was 33.8 days in January 2010, compared with 50 days (revised) for the same period a year ago.

Regional MLS sales and price information are contained in the tables that accompany this press release. Regional sales data are not adjusted to account for seasonal factors that can influence home sales. The MLS median price and sales data for detached homes are generated from a survey of more than 90 associations of REALTORS® throughout the state. MLS median price and sales data for condominiums are based on a survey of more than 60 associations. The median price for both detached homes and condominiums represents closed escrow sales.

In a separate report covering more localized statistics generated by C.A.R. and DataQuick Information Systems, 160 of the 366 cities and communities reporting showed an increase in their respective median home prices from a year ago. DataQuick statistics are based on county records data rather than MLS information. DataQuick Information Systems is a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. (The lists are generated for incorporated cities with a minimum of 30 recorded sales in the month.)

Note: Large changes in local median home prices typically indicate both local home price appreciation, and often, large shifts in the composition of housing market activity. Some of the variations in median home prices for January may be exaggerated due to compositional changes in housing demand. The DataQuick tables listing median home prices in California cities and counties are accessible through C.A.R.

. Statewide, the 10 cities with the highest median home prices in California during January 2010 were: Newport Beach, $1,158,000; Santa Monica, $838,000; Santa Barbara, $810,000; Danville, $800,000; Arcadia, $799,000; Mountain View, $755,000; Yorba Linda, $703,750; Redwood City, $680,000; San Ramon, $660,000l; and Redondo Beach, $649,500.

. Statewide, the cities with the greatest median home price increases in January 2010 compared with the same period a year ago were: Redwood City, 43.2 percent; Rancho Santa Margarita, 38.1 percent; Laguna Niguel, 35 percent; Pittsburg, 29.7 percent; Fullerton, 25.9 percent; Yorba Linda, 24.2 percent; Oxnard, 23.6 percent; Galt, 19.9 percent; Auburn, 19.9 percent; Chino Hills, 19.1 percent; and Petaluma, 17.9 percent.

Leading the way...® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with nearly175,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

Source:Los Angeles Times

The estimated backlog of California residential real estate declined significantly in January 2010, compared with the same period last year. While the median sales price increased, the number of home sales decreased from January 2009. See the following article from HousingWire for more on this. Californians are moving through the backlogged inventory of homes at a faster rate in January, as house prices gained nationally in Q409, according to the California Association of Realtors (CAR).

At the current pace of sales in California, it would take 5.8 months to move through the backlogged inventory of homes as of January 2010, down from 7.3 months a year earlier.

Nationwide, the credit rating agency Standard & Poor’s (S&P) estimated the “shadow inventory” of bank-repossessed properties, as well as distressed mortgages facing foreclosure, will take nearly three years to clear at the current national sales rate. As for the total amount of homes in the shadow inventory, Amherst Securities places the total at 7m. The Royal Bank of Scotland found 2.7m, and First American CoreLogic counted 1.7m.

Home sales in California decreased 10.6% from a year ago to more than 539,000 closed, single-family homes in January. But the median sales price climbed 15% from the year before to $287,440.

“Many sales that closed escrow in January were on homes with offers accepted during the holiday season — a time when many house hunters are first-time buyers,” said CAR president Steve Goddard. “First-time buyers typically purchase homes priced below an area’s median home price. Reflecting this, the percentage of homes priced under $500,000 increased to 77 percent of all sales in January, compared with 75 percent in December.”

Goddard added that despite the year-to-year decline, sales stayed above the 500,000-unit threshold for the 17th consecutive month, holding at pre-peak levels from early last decade.

The city of Newport Beach had the highest median home price at $1.1m. The largest increase in prices occurred in Redwood City, where the median price improved 43.2% from a year ago.

Source:Los Angeles Times.

Los Angeles and Orange County home prices were dead even with last year’s levels in December, the first time prices didn’t fall in almost three years, according to the Standard & Poor’s Case-Shiller Home Price Index.

It’s the first time since January 2007 that home prices had not fallen from the year before. According to the index, L.A.-O.C. home prices had fallen for 35 consecutive months, from February 2007 through November 2009.

In addition, December marked the seventh consecutive month that local home prices had increased from the previous month. L.A.-O.C. home prices were up 1% from November to December.In addition, the index showed:

* The pace of declines that began in February 2007 accelerated through October 2008, when L.A.-O.C. home prices fell by a record 28% from the year before.
* From the peak of the L.A.-O.C. housing market in September 2006 until the bottom of the slump last May, home prices fell 42%.
* Declines gradually tapered off from October 2008 through December, when the percentage change was zero.
* Nationally, the index of 20 composite cities showed that home prices fell 3.1% from the previous December and 0.2% from November.
* All 20 metro areas included in the composite index saw improvement in their annual returns.
* Only three cities – Detroit, Las Vegas and Tampa – still showed double digit annual rates of decline. Miami, Phoenix and Seattle all moved into single-digit declines in December.
* Fifteen of the 20 metro areas showed a decline in December over November, with Chicago posting the sharpest decline, down 1.6%. Las Vegas finally posted its first increase in prices from the previous month, with prices up 0.2% since November.
* The Southwest continues to be a bright spot, with San Diego posting its eighth consecutive monthly increase. Phoenix also posted its seventh consecutive monthly increase, along with L.A.-O.C.

Source:Los Angeles Times.

Rates on 30-year fixed mortgages fell slightly this week, dipping below 5 percent, mortgage financier Freddie Mac said Thursday.

The average rate on a 30-year fixed mortgage was 4.97 percent this week, down from an average of 5.01 percent last week. Last year at this time, the rate for a 30-year fixed mortgage averaged 5.16 percent, Freddie Mac said.

Rates fell to a record low of 4.71 percent in early December. They have held around 5 percent thanks to a Federal Reserve program to pump $1.25 trillion into mortgage-backed securities to try to keep rates low and make home buying more affordable. That program is set to end March 31.

Low rates also can spur refinancing activity. More than two out of three mortgage applications were for refinance transactions over the first six weeks of this year, according to the Mortgage Bankers Association.

Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day, often in line with long-term Treasury bonds.

The average rate on 15-year fixed-rate mortgages fell to 4.34 percent from 4.40 percent last week, according to Freddie Mac.

Rates on five-year, adjustable-rate mortgages averaged 4.19 percent, down from 4.27 percent a week earlier. Rates on one-year, adjustable-rate mortgages rose to 4.33 percent from 4.22 percent.

Source:Los Angeles Times.

C.A.R. reports entry-level housing affordability remained at 64 percent in the fourth quarter of 2009

Quick Facts:
. C.A.R. First-time Buyer Housing Affordability Index stood at 64 percent in the fourth quarter of 2009
compared with 61 percent (revised) in the fourth quarter of 2008
. The median price of an entry-level home in California was $257,940 in the fourth quarter of 2009
. The estimated monthly payment including taxes and insurance was $1,470 in the fourth quarter of
2009
. The minimum household income needed to purchase an entry-level home in California in the fourth
quarter of 2009 was $44,100.

LOS ANGELES (Feb. 12) The percentage of households that could afford to buy an entry-level home in California remained at 64 percent in the fourth quarter of 2009, compared with 61 percent (revised) for the same period a year ago, according to a report released today by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).

C.A.R.’s First-time Buyer Housing Affordability Index (FTB-HAI) measures the percentage of households that can afford to purchase an entry-level home in California. C.A.R. also reports first-time buyer indexes for regions and select counties within the state. The Index is the most fundamental measure of housing well-being for first-time buyers in the state.

The minimum household income needed to purchase an entry-level home at $257,940 in California in the fourth quarter of 2009 was $44,100, based on an adjustable interest rate of 4.5 percent and assuming a 10 percent down payment. First-time buyers typically purchase a home equal to 85 percent of the prevailing median price. The monthly payment including taxes and insurance was $1,470 for the fourth quarter of 2009.

At $44,100, the minimum qualifying income was 4 percent lower than a year earlier when households needed $45,900 to qualify for a loan on an entry-level home. Home prices remained below peak levels, resulting in an improvement in housing affordability compared with the previous year.

At 84 percent, the High Desert region was the most affordable area in the state. The San Luis Obispo County region was the least affordable in the state at 48 percent, followed by the San Francisco Bay region and Santa Barbara area both at 50 percent.

Leading the way…® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with more than 167,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles. Check the tables.

Source:Los Angeles Times.

Cash deals accounted for 28.9% of all Southern California home sales in January, MDA DataQuick reported, the highest level in the 22 years that the research firm has been tracking the region’s housing market.

In addition, DataQuick reported:
*All-cash transactions accounted for an average of 13.9% of all home purchases since 1988, DataQuick reported.
* Such transactions trended upward in recent months, however, due to the continued impact of the credit crisis and competition among homebuyers for lower-priced homes.
* In addition, home sellers tend to prefer all-cash deals to avoid the risk that a lender’s appraisal will kill the sale by coming in lower than the purchase price.
* DataQuick tracks the number of buyers who appear to be paying cash for a home by counting the number of transactions in which there are no records of a purchase loan.
* DataQuick reported also that home flipping trended higher in January, when 3.5% of the homes sold had been through a prior transaction within the previous six months.
* Regionwide, median home prices were $271,500, up 8.6% last month from the year before but down 6.1% from December.
* Southern California recorded 15,361 home sales , up 0.9% from the year before but down 31.2% from the previous month.

Prices and sales typically fall in January, when deals from the holiday season close escrow

Source:Los Angeles Times.

Southern California home sales eked out a modest gain in January compared with a year earlier but fell sharply – as they normally do – from December. The median price paid rose above the year-ago level for the second consecutive month, but fell 6 percent from December as foreclosures and lower-cost inland markets claimed a higher share of sales, a real estate information service reported.

A total of 15,361 new and resale homes closed escrow last month in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties. That was down 31.2 percent from December’s 22,328, but up 0.9 percent from 15,227 in January 2009, according to MDA DataQuick of San Diego.

A decline in sales between December and January is normal for the season. On average, sales have fallen 28.4 percent between those two months since 1988, when DataQuick’s statistics begin.

January’s 15,361 sales mark the highest total for that month since 18,128 sales in January 2007. However, last month’s tally was 14.4 percent below the average number of sales for a January – 17,938 – since 1988.

Last month the sales pattern shifted a bit, with a greater portion of transactions involving distressed properties and lower-cost inland homes. Meanwhile, sales in many pricier areas lost some of the steam they had built in recent months, though high-end sales still outpaced the year-ago level.

Foreclosure resales – houses and condos sold in January that had been foreclosed on in the prior 12 months – made up 42.1 percent of all Southland resales, up from 39.6 percent in December but down from 56.4 percent in January 2009. Foreclosure resales hit a high of 56.7 percent last February, then tapered or leveled off month-to-month until they rose slightly in December, then again last month.

The rise in foreclosure resales helped push sales of homes priced below $300,000 up to 55 percent of all transactions last month, compared with 51.3 percent in December and 60 percent a year earlier. In the mid- to high-end, $500,000-plus home sales fell to 18.5 percent of all transactions, down from 20.6 percent in December but up from 13.6 percent in January 2009.

Over the last decade, $500,000-plus sales made up an average of 26 percent of monthly sales. Just before the credit crunch hit in August 2007, making larger “jumbo” mortgages more expensive and harder to obtain, $500,000-plus sales represented just over half of Southland transactions.

“The January stats underscore just how atypical this market remains. A huge chunk of what’s selling is still distressed. Investors and first-time buyers continue to dominate many areas, while the move-up market has yet to kick in. For many, the financing to buy high-end homes remains difficult, if not impossible, to obtain,” said John Walsh, MDA DataQuick president.

“High-end sales aren’t nearly as sluggish as a year ago, but they lost traction over the holidays, which can be seen in the January closing data,” he said. “Whether significant new patterns are emerging in the market is unclear. We try not to over-analyze one month’s data, and historically January and February haven’t been the best indicators for the year ahead.”

The median paid for all Southland houses and condos sold in January was $271,500, down 6.1 percent from $289,000 in December but up 8.6 percent from $250,000 a year earlier. It was the median’s second consecutive year-over-year increase. In December 2009 the median rose 4 percent from a year earlier, marking the first time the median had increased year-over-year since August 2007, when it rose 2.7 percent to $500,000, near its all-time peak. In late 2008 and early 2009, the year-over-year declines in the median ranged from 30 to 40 percent.

On a month-to-month basis, the median had increased or held steady for eight consecutive months before dropping 6 percent in January compared with December. January’s median was 46.2 percent lower than the peak Southland median of $505,000 reached during several months in early and mid 2007.

Part of the January median’s drop from December can be explained by the shift toward a higher portion of Southland sales occurring inland: The percentage of sales that were in the Inland Empire (Riverside and San Bernardino counties) rose to 35.2 percent, up from 32.3 percent in December and the highest since it was 36.3 percent in May 2009.

Last month offered no signs of improvement in the jumbo mortgage market, which fuels sales in the higher-cost coastal areas. Mortgages above $417,000 – formerly the definition of a jumbo loan – accounted for 14.2 percent of all home purchase loans, down from a 13-month high of 16.7 percent in December 2009. Such jumbo loans made up nearly 40 percent of purchase loans before the August 2007 credit crunch.

Another gauge on the state of financing for high-end sales showed no change last month from December: 4.4 percent of purchase loans had an adjustable rate, the same as in December but up from 2.2 percent a year earlier. Use of adjustable-rate mortgages (ARMs) remains extremely low in an historical context. Over the last decade, ARMs averaged 40 percent of monthly purchase loans.

Government-insured FHA loans, a popular choice among first-time buyers, accounted for 36.9 percent of all home purchase mortgages in January. That’s down from 42.2 percent a year ago but up from 5.7 percent two years ago and up from 0.4 percent three years ago.

Absentee buyers – mostly investors and some second-home purchasers – bought 22.3 percent of the homes sold in January. That was up from 19.8 percent in December and up from 16.6 percent a year earlier. It was the highest for any month since at least 2000. San Bernardino County saw the highest percentage – 30.2 percent – sold to absentee buyers last month.

Buyers who appeared to have paid all cash – meaning there was no indication of a corresponding purchase loan being recorded – accounted for 28.9 percent of January sales, based on an analysis of public records. That’s up from 25.7 percent in December and up from 22 percent in January 2009. January’s figure was the highest since at least 1988. The 22-year monthly average for Southland homes purchased with cash is 13.9 percent.

Home “flipping” also trended higher in January, when 3.5 percent of the homes sold were ones that had previously sold between three weeks and six months prior. January’s flipping rate varied from as little as 2.3 percent of all sales in San Diego County to as much as 4.5 percent in Ventura County. A year ago no Southland county had a flipping rate over 2.1 percent.

MDA DataQuick, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates, monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.

The typical monthly mortgage payment that Southland buyers committed themselves to paying was $1,170 last month, down from $1,231 in December, and up from $1,081 a year earlier. Adjusted for inflation, current payments were 47.0 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They were 56.6 percent below the current cycle’s peak in July 2007.

Indicators of market distress continue to move in different directions. Foreclosure activity remains high by historical standards, although mortgage default notices have flattened out or trended lower in many areas. Financing with multiple mortgages is low, and down payment sizes are stable, MDA DataQuick reported.

Source:Los Angeles Times.

The number of U.S. homes listed for sale rose in January compared to December after 18 consecutive months of decline, according to data released on Thursday by real estate brokerage ZipRealty.

The increase in listings from a survey of Multiple Listing Services can be attributed to the extension and expansion of U.S. home buyer tax credits, which is prompting sellers to list their homes sooner rather than wait for spring, the peak home buying season, according to Emeryville, California-based ZipRealty.

It may also be indicative of banks starting to put foreclosed properties up for sale.

The total number of single-family homes and condos listed for sale increased in January from December by 2.9 percent, bringing the total number of active listings in the 27 major U.S. metropolitan markets to 567,265, the company said.

The rise means more than 15,000 additional homes were listed for sale in January in these markets.

Increased supply could negatively impact the hard-hit U.S. housing market, which remains highly vulnerable to setbacks.

More inventory on the market may hurt what is still a huge imbalance between supply and demand. Stabilization of the housing market is seen as key to an economic recovery in the United States.

The number of home listings year-over-year, however, was down 22.33 percent, with 163,000 fewer homes on the market, it said.

"Serious sellers need to list their home now rather than wait for the spring to capitalize on buyers looking to take advantage of the tax credit extension," Patrick Lashinsky, ZipRealty president and CEO, said in a statement.

"While the number of homes for sale is starting to increase, we are still seeing some markets with a shortage of homes for sale," he said.

The first-time home buyer tax credit was originally set to expire Nov. 30.

In November the Obama administration extended the $8,000 first-time buyer credit, added a $6,500 provision for move-up buyers and increased income limits. The eligible borrowers must sign contracts by April 30 and close loans by June 30, 2010.

The average median list price of $258,634 was relatively flat in January, down 1 percent, or $2,521, the company said.

ZipRealty's Housing Inventory Index for January, compiled from local MLS data, showed that inventory increased in most markets. But some markets experienced a drop in inventory in January compared to December.

Baltimore was one of only two markets where the number of homes listed for sale decreased, at a modest 1.9 percent. In Miami, ZipRealty tracked a decrease of 0.05 percent.

ZipRealty said markets in California tracked significant month-over-month increases in inventory, with Los Angeles up 4.5 percent; Orange County up 8 percent; San Diego up 6.5 percent; and the San Francisco Bay Area saw a month-over-month 10.6 percent increase in home listings, the company said.

On a year-over-year basis, most markets were down.

Markets with the most significant year-over-year inventory declines include San Diego down 48.1 percent; Las Vegas down 47.5 percent; Los Angeles down 45.5 percent; San Francisco Bay Area down 45.4 percent; and Phoenix, Arizona down 36.9 percent, the company said.

Source:Los Angeles Times.

The question is how to withdraw support without undermining the fragile recovery.

Reporting from Washington and Los Angeles - Uncle Sam is trying to get out of the business of running the U.S. mortgage market. The trick will be withdrawing support without toppling the nation's fragile housing recovery in the process.

The government rescued the sector last year with a series of unprecedented measures that staved off a catastrophic collapse, including pumping more than $1 trillion into home loans. But Washington now has effective control of the housing market, either owning or guaranteeing an estimated 9 out of 10 new mortgages.

That has critics worried that the government has asserted too much control over a critical segment of the economy while inflating the federal deficit at what some consider an alarming pace. Pressure is building on the Obama administration to scale back a variety of stimulus efforts.

In comments released Wednesday, Federal Reserve Chairman Ben S.Bernanke outlined a broad strategy for eventually tightening credit. Bernanke had been scheduled to testify on the plan before Congress, but his appearance was postponed by the heavy East Coast snowstorm.

He talked only vaguely about when the central bank might act, sprinkling his remarks with phrases such as "in due course" and "at some point."

"We have spent considerable effort in developing the tools we will need to remove policy accommodation, and we are fully confident that at the appropriate time we will be able to do so effectively," he said.

For the housing market, the plan to scale back support carries an inherent risk: that it could stall the very housing recovery that the government has worked so feverishly to jump-start.

"We understand that stimulus can't continue forever, but at the same time, trying to get the housing market back on track is key to a broader economic recovery," said Lawrence Yun, chief economist for the National Assn. of Realtors. "This policy is having that intended impact. Policymakers should be cautious about how soon to end it."

The Fed plans next month to end a $1.25-trillion mortgage-bond-purchase program that has helped keep mortgage interest rates near a record-low 5%. The Fed has been buying virtually all the mortgage bonds churned out by mortgage giants Fannie Mae and Freddie Mac, replacing private investors such as pension funds and mutual funds that have shied away since the sub-prime mortgage crisis.

That exit is expected to push up rates, which could weigh on buyers at a time of high unemployment and anemic consumer spending.

The Mortgage Bankers Assn., an industry trade group, predicts the end of the Fed mortgage-bond program could push rates up by roughly 0.5%. For a $500,000 fixed-rate mortgage, that would increase the monthly payment by $155.

Even a moderate rise could push potential buyers such as Erin Sorensen out of the market.

The 29-year-old museum educator and her husband have been trying for months to find a moderately priced home in West Los Angeles.

"If interest rates go up, there's really no hope for us in getting a home," Sorensen said.

Higher rates could force many others to recalculate where to live or what to purchase.

"If those rates jump up to 5.5% or 6%, then [buyers] can't qualify for what they thought they could qualify for, and they're not going to be able to buy as much house as they thought they could," said Frank Drury, a loan originator at Cobalt Financial Corp. in Huntington Beach.

A popular home buyer's tax credit is scheduled to lapse at the end of April. It provides tax breaks of up to $8,000 to first-time buyers and up to $6,500 for some homeowners who move up to middle-market homes costing up to $800,000. The credits were originally scheduled to lapse in November, but were extended over concerns that home sales would slow without the incentive.

There is already evidence that could occur. In December, home resales skidded almost 17% after buyers sped up their purchases the month before to make sure they qualified for the subsidy before the expiration of the original deadline.

Even with the elimination of the programs, the government would remain deeply involved in housing and would maintain several key pillars that have propped up the market. Those include expanded Federal Housing Administration programs popular in Southern California, as well as enhanced support of Fannie Mae and Freddie Mac.

Still, "it is one of what will ultimately be many steps by the government to start to take back its unprecedented support for the housing and mortgage markets," said Thomas A. Lawler, founder of research firm Lawler Economic & Housing Consulting. "There will be more."

Source:Los Angeles Times.

Here in the Inland Empire of Southern California short sales have been a hot trend since the economic downfall in 2007. Since then agents have claimed to be specialists, swearing they can help homeowners. There are short sale agents who have a talent for successful short sales in your area. The trick is how to spot them. As a homeowner considering short sale in California you need to be aware that Home Equity and multiple mortgages can come after you for the loan even after a short sale. You need to know what you can and cannot do in a short sale and how to effectively sell it!

Here are some of the common mistakes sellers make with short sales:

Short Sale Mistake #1: Priced Wrong

Short sales that sell are priced appropriately. The price should be attractive to the following parties: And remember to communicate with all 5 parties in the transaction at all times during the short sale process. This is one way agents lose their buyers in a short sale is by lack of communication.

* The Short Sale Bank
* The Buyer
* The Buyer’s Agent
* The Seller
* The Buyer’s Lender

Short Sale Mistake #2: Inexperienced Listing Agent

Sellers should find out how many short sales a proposed short sale listing agent has actually closed apart from the number of short sales the agent has listed, this is important as the major obstacle for the short sale agent is the negotiations with the mortgage banks. Unfortunately there is a large number of agents claiming to be short sale specialists who don’t know how to talk to the bank at all much less negotiate pricing and terms.

Short Sale Mistake #3: Bad Marketing

Some agents believe that price alone will sell a short sale, just because it is a short sale doesn’t mean it doesn’t deserve the same amount of attention as a standard sale! Not only does the price need to be reasonable, but the home deserves the same type of treatment as any other listing actually it needs a little extra attention becuase some buyers are put off by the sometimes lengthy process of a short sale.

Short Sale Mistake #4: Showing Restrictions

If the listing requires an appointment, a buyer’s agent might not choose to show that home in favor of a listing without appointment restrictions. Always be able to show the home, make arrangements with your realtor to be able to show the home if you aren’t there. You must be able to have a trustable working relationship with your realtor.

Short Sale Mistake #5: No Photographs

Submitting a listing with no photograph at all — is like saying you don’t want buyers. Buyers aren’t likely to return, you need to have a minimum of 4-5 photos: front of the house, kitchen, backyard, bedroom either living room or bathroom, bonus room something to make the house stand out. Sellers need to think like buyers

#6: Poor Property Condition

Sellers need to prepare the home for sale and keep it in nice condition. If toys are scattered about and the kitchen sink is filled with dishes, buyers can’t see past the mess. Understandably short sale sellers have no extra money to put into upgrading the home, but since they are going to be moving out eventually it is a good idea to start packing away unneeded items and storing them neatly in the garage or renting a storage unit.

#7: Uncooperative Sellers

Sellers need to submit required documentation to the bank in a timely manner. If the package is incomplete, the bank won’t process the file, and that will delay approval. Many banks are revising their required documents and if it is a lengthy process they will ask for updated information. Sellers need to know this upfront so they are aware that they can’t just turn in the first sheet and be done with it. They can have ongoing participation and need to keep in mind that the mortgage lender won’t work for your unless you are working for them as well.

Source:Los Angeles Times.

Although an increasing number of Inland homeowners are behind at least three payments on their on mortgage, a report released late Wednesday shows that for two consecutive months the volume of default notices that trigger the start of the foreclosure process has been declining.

This seeming contradiction most likely is linked to the growing popularity of short sales, whereby lenders allow delinquent borrowers in financial hardship to sell their homes at a price that is less than the mortgage balance, said Daren Blomquist, a spokesman for RealtyTrac, the Irvine publisher of monthly foreclosure data.

In January combined filings for defaults, trustee sales and bank repossessions dropped more than 24 percent in the region that encompasses Riverside and San Bernardino counties. It was led by a nearly 50 percent drop in notices of default. Also, from December to January the amount of all foreclosure-related filings declined almost 13 percent.
"For two straight months we have seen not only monthly decreases but year over year decreases in total activity," noted Blomquist. "I am getting closer to thinking maybe there is a more permanent downturn in foreclosure activity."

Similarly, there were 36 percent fewer default notices mailed statewide last month than a year ago and 13 percent fewer than in December, according to RealtyTrac.

But Blomquist cautioned that doesn't mean fewer borrowers are at risk of losing their homes for nonpayment of mortgages. The percentage of mortgages at least 90 days delinquent in the Riverside-Ontario-San Bernardino metropolitan region rose from nearly 13 percent in December 2008 to nearly 19 percent in December 2009, according to First American CoreLogic, a Santa Ana-based real estate research firm.

Blomquist said he believes the ebbing tide of delinquent mortgages entering the foreclosure pipeline means that lenders are taking foreclosure prevention steps earlier, either by trying to modify mortgages to more affordable terms or by allowing clients to do short sales or to forfeit their deeds in lieu of foreclosure.

But most mortgage modifications occur after a notice of default is filed and deeds in lieu would show up as bank repossessions, which also are declining.

So Blomquist credits most of the drop in mortgage defaults to a bigger effort by financially strapped homeowners and their lenders to dispose of houses as short sales.

He noted that the Obama administration, in recognition that loan modifications will not allow everyone to keep their homes, has been encouraging short sales as a fallback solution and recently amended its Making Home Affordable program to provide monetary incentives, beginning in April, for loan servicers who complete short sales.

In the past, real estate agents frequently steered buyers away from short sales in favor of bargain-priced foreclosures that could be purchased with less hassle. Sellers complained it generally took six months to get a bank to approve a short sale offer, by which time the potential buyer often purchased something else.

But with fewer bank-owned homes available, possibly due to loan modification efforts, real estate agents say short sales are looking more attractive. Currently short sales represent almost a third of the 30,546 single-family homes listed for sale by multiple listing services belonging to the California Real Estate Technology Services Inc., which covers most of Southern California.

So far the number of short sales that have closed hasn't fluctuated much since the agency started tracking them in August, ranging between 2,080 and 2,656 a month.

But real estate experts predict that number will increase because banks have determined it makes more sense to sell a house while the owner is still occupying and maintaining it than when the property is foreclosed and vulnerable to vandalism.

"The lenders have now found they lose far less money from a short sale than a foreclosure," said Rich Cosner, president of Prudential California Realty with nine offices in Orange, Riverside and San Bernardino counties.

Pete Nyiri, owner of Top Producers Realty and REO in Corona, said he expects short sales to pick up in the next few months because they are being encouraged by loan servicers who he said are planning to refer short sales to brokers like himself who now specialize in selling bank-owned houses.

Source:Los Angeles Times.

Area home prices increased for a sixth consecutive month in November, but the upward trend came as uncertainties remain in the market, according to a monthly real estate report released Tuesday.

Prices in the Los Angeles metropolitan area, which includes Glendale and Burbank, rose a seasonally adjusted 1% between October and November, according to the Standard & Poor’s/Case-Shiller home price index.

That report came a day after the National Assn. of Realtors announced that existing-home sale prices nationwide grew 4.9% between 2008 and 2009, but total sales during that period fell 16.7%.

The mixed data reflect continued uncertainty in the economy and real estate prices, experts and agents said.
Homeowners have held their properties out of the market over the last year, delaying potential sales and limiting the selection for buyers in hopes that prices stabilize and rise, experts and real estate agents said.

That has left a competitive market for buyers hoping to take advantage of historic drops in real estate prices, which has helped drive up bids for available properties, said Dan Soderstrom, an agent for Dilbeck Realtors in Burbank.

“It’s supply and demand,” Soderstrom said. “In terms of the Burbank market, what’s causing prices to go up, albeit slightly in my opinion, is just not a lot of product on the market.”

Although the phenomenon has resulted in home price increases over a series of months, the recent change locally was not substantial, said Paul Habibi, professor of real estate at the UCLA Anderson School of Management.

“It’s a pretty anemic rise overall, but it’s a rise nonetheless,” Habibi said of the reported 1% increase in November.

The six-month trend of price growth in Los Angeles could have been caused by an increase in purchasing activity leading up to the anticipated end of a federal home-buyer tax credit, Habibi said.

Demand for homes could have been pulled into the six-month period of reported home price increases, leaving fewer possible buyers in the market, even after Congress extended the tax credit offer until April, Habibi said.

That may leave sales sagging in the coming months as buyers not drawn solely by a tax incentive continue to weigh the nation’s economic progress, said Robert Bridges, professor of real estate finance at the USC Marshall School of Business.

“Job creation and employment are the things that are really going to cause people to buy their homes, stay in their homes, make their mortgage payments and all the things that make a healthy market,” Bridges said.

Without job growth and economic expansion, the home market may suffer as government efforts to prevent further real estate trouble come to a close, experts said.

Federal programs aimed at backing mortgages and keeping interest rates low could be exhausted as soon as March, resulting in a jump in rates, Habibi said.

And the expiration of the federal tax credit for home buyers may take another attractive incentive out of the market, he said.

Additionally, the potential of more foreclosures in the months ahead, even in other parts of the Los Angeles region, could affect area home values, he said.

“There’s a tiered effect to all these markets,” Habibi said. “When one of them shifts, the pool of buyers also shifts with it.”

Source:Los Angeles Times.

A big number of Los Angeles foreclosures will be fixed with the $100 million received by the city from the second Neighborhood Stabilization Program funding round of the U.S. Department of Housing and Urban Development.

Los Angeles got the highest amount among all other cities that received allocations. In addition to the $100 million it received, the consortium Los Angeles Neighborhood Housing Services was also granted with another $60 million to be spent for housing rehabilitation in the city, including buying and repairing fixer uppers for lower income families.

California was second among states in the amount of grants received. It was given a total of $318.05 million. Florida got the highest amount – $348.31 million.

The other California cities that received assistance were Modesto, which got $25 million; Long Beach, which was given $22.25 million; Santa Ana, which got $10 million; and Indio, which received $8.31 million.

The consortium Chicanos Por La Causa, which is operating in several states, got $30.8 million to fund its community projects in California. For its nationwide programs, it was given a total of $137.11 million. CPLC was launched by community advocates of Mexican descent in the 1970s.

According to LA Mayor Antonio Villaraigosa, the grant was great news for residents of the city. He said the money will be used to acquire and rehabilitate Los Angeles foreclosures and turn them into good but cheap houses for working class households.

Since 2007, more than 30,000 homes in the city have been foreclosed. In November last year, the percentage of foreclosure postings in the Los Angeles-Glendale-Long Beach area rose to 3.77 percent of outstanding home loans, higher than the nationwide rate of 3.1 percent.

Mortgage defaults also increased in the Los Angeles metro area in November, with 11.4 percent of all homeowners with mortgage loans in default by at least three months. The rate marked a jump of 6.3 percent from the November 2008 default rate.

In December, foreclosures slowed down in California as major lenders suspended their filings to allow homeowners to enjoy the holidays. Default notices fell by 17.5 percent during the month and dropped daily at an average of 32.5 percent. Foreclosure sale cancellations also increased daily at an average rate of 3.5 percent.

However, housing analysts said that the pace of Los Angeles foreclosures and foreclosure activity in other parts of California will step up in 2010 as job losses continue to increase.

Source:Los Angeles Times.

Home sales activity improves in Western cities, with big government boost.

Syd Leibovitch, owner of Rodeo Realty in Los Angeles is doing what many real estate agents can only dream of: expanding. In the past three months, Leibovitch has hired more than 40 agents and is opening a new office on Hollywood’s Sunset Strip.

“My sales last year were 30 percent higher than 2006, which was our best year,” said Leibovitch, who specializes in luxury homes in the Los Angeles area. “A lot of my competition closed or went out of business entirely, and I picked up a lot of their agents.”

He attributes some of business improvement to buyers feeling more optimistic and sellers being more realistic with pricing. But declining inventory is also helping.
“We have very little inventory of low-priced homes,” he said, referring to homes under $400,000. “Banks have held back foreclosures because they are under political pressure to work with borrowers to make a deal.”

Southern California’s coastal region might be one of the few bright spots in a state that has nine of the top 20 metro foreclosure rates nationwide and a 12.4 percent unemployment rate. Still, despite the gloomy numbers and mixed reports in recent weeks, some economists see evidence that Western states like California, Arizona and Nevada—the ones hit hardest in the housing crisis—are showing signs of healing. Home prices in Los Angeles, Phoenix, San Diego and San Francisco have risen for at least six months.

“The epicenter of the boom and bust will be the leaders of the recovery,” said Lawrence Yun, chief economist for the National Association of Realtors. “Those three regions went through a big boom and a big bust and I think they overcorrected and are making solid gains compared to the rest of the country.” He sites multiple bids on lower priced properties, prices beginning to stabilize and inventory levels coming down as evidence that the bottom is in sight.

Others aren’t as optimistic. Celia Chen, senior director at Moody’s Economy.com, predicts that housing prices will fall again this year, especially in states where foreclosures have been rampant like California, Nevada and Arizona. Nearly 1 million loans have been temporarily modified over the past year under a federal program to keep people in their homes, and Chen believes many of these will fail in coming months, especially given the nation’s 10 percent jobless rate. “New foreclosures will come onto the market and bring prices down again,” she said.

Housing numbers released over the past week have painted a mixed picture, muddied by a federal tax credit that was set to expire and then was expanded. After a strong growth from September through November, existing home sales plummeted 16.7 percent in December from November, according to the Realtors. Yun and others attribute the swing to first-time homebuyers hurrying to close on properties before the Nov. 30 deadline for an $8,000 tax credit. Congress has since extended the program April 30.

A closer look at the West reveals a few positive signs in three of the hardest-hit states:

Southern California
Andrew LePage, analyst for MDA DataQuick who focuses on the San Diego region, confirms what Leibovitch of Rodeo Realty observed: Higher-priced homes in southern California’s coastal regions are starting to sell.

“The high-end market was comatose in 2008 and 2009, and the spring and summer of 2009 was the only time we saw anything close to normal activity,” said LePage. “Foreclosure resales are down, and there aren’t as many coming through the pipeline.”

Source:Los Angeles Times.

The number of U.S. homes listed for sale rose in January compared to December after 18 consecutive months of decline, according to data released on Thursday by real estate brokerage ZipRealty.

The increase in listings from a survey of Multiple Listing Services can be attributed to the extension and expansion of U.S. home buyer tax credits, which is prompting sellers to list their homes sooner rather than wait for spring, the peak home buying season, according to Emeryville, California-based ZipRealty.

It may also be indicative of banks starting to put foreclosed properties up for sale.

The total number of single-family homes and condos listed for sale increased in January from December by 2.9 percent, bringing the total number of active listings in the 27 major U.S. metropolitan markets to 567,265, the company said.

The rise means more than 15,000 additional homes were listed for sale in January in these markets.

Increased supply could negatively impact the hard-hit U.S. housing market, which remains highly vulnerable to setbacks.

More inventory on the market may hurt what is still a huge imbalance between supply and demand. Stabilization of the housing market is seen as key to an economic recovery in the United States.

The number of home listings year-over-year, however, was down 22.33 percent, with 163,000 fewer homes on the market, it said.

"Serious sellers need to list their home now rather than wait for the spring to capitalize on buyers looking to take advantage of the tax credit extension," Patrick Lashinsky, ZipRealty president and CEO, said in a statement.

"While the number of homes for sale is starting to increase, we are still seeing some markets with a shortage of homes for sale," he said.

The first-time home buyer tax credit was originally set to expire Nov. 30.

In November the Obama administration extended the $8,000 first-time buyer credit, added a $6,500 provision for move-up buyers and increased income limits. The eligible borrowers must sign contracts by April 30 and close loans by June 30, 2010.

The average median list price of $258,634 was relatively flat in January, down 1 percent, or $2,521, the company said.

ZipRealty's Housing Inventory Index for January, compiled from local MLS data, showed that inventory increased in most markets. But some markets experienced a drop in inventory in January compared to December.

Baltimore was one of only two markets where the number of homes listed for sale decreased, at a modest 1.9 percent. In Miami, ZipRealty tracked a decrease of 0.05 percent.

ZipRealty said markets in California tracked significant month-over-month increases in inventory, with Los Angeles up 4.5 percent; Orange County up 8 percent; San Diego up 6.5 percent; and the San Francisco Bay Area saw a month-over-month 10.6 percent increase in home listings, the company said.

On a year-over-year basis, most markets were down.

Markets with the most significant year-over-year inventory declines include San Diego down 48.1 percent; Las Vegas down 47.5 percent; Los Angeles down 45.5 percent; San Francisco Bay Area down 45.4 percent; and Phoenix, Arizona down 36.9 percent, the company said.

Source:Los Angeles Times.

The number of California homes that sold for $1 million-plus declined for the fourth consecutive year in 2009, the result of buyer reticence, a difficult mortgage market and several years of price drops that tugged the value of many homes below the million-dollar threshold, a real estate information service reported.

A total of 18,621 Golden State homes sold for a million dollars or more last year. That was down 23.8 percent from 24,436 in 2008. In 2007 it was 42,506; in 2006 it was 50,010; and in 2005 it peaked at 54,773. Last year was the lowest sales count since 2002, when 15,703 were sold, according to San Diego-based MDA DataQuick.

Total California home sales - including all price levels -increased 16.9 percent last year, to 460,166 from 393,703 in 2008. One in 25 homes sold for a million dollars or more last year, while the year before it was one in 16, and in 2006 it was one in nine.

"Prestige home sales are a unique sub-category of the real estate market. The buyers and sellers respond to a different set of motivations. In the multi-million-dollar price ranges, decisions are largely discretionary and aren't as dependent upon jobs, prices and interest rates the way they are for most buyers and sellers," said John Walsh, DataQuick president.

"Traditional million-dollar markets are holding up relatively well, while expensive markets that emerged four or five years ago are not," he said.

Million-dollar home sales in Riverside County dropped 48.6 percent last year, while they dropped 13.3 percent in Los Angeles County.

Statewide, there were 332 sales for more than $5 million last year, 228 sales were in the $4-$5 million range, 590 in the $3 million range, 1,902 sales in the $2 million range, and the rest - 83 percent - between $1 million and $2 million.

About 1,900 of the homes that sold statewide last year for less than $1 million had previously sold for $1 million or more. The median date of the prior sale was April 2006; the median price decline between the 2009 sale and the previously $1 million-plus sale was about $420,000. The median percentage decline was about 35 percent.

MDA DataQuick is a division of MDA Lending Solutions, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. MDA DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.

The numbers include home sales where it could be determined from public records that there was a buyer, a seller, that money changed hands, and that there was a legal transfer of property ownership. Not included were property swaps, sales of multiple lots, sales where no price or loan amount was available, teardowns, and large farm or ranch properties. Sales to companies and trusts were included.

The most expensive confirmed purchase last year was a 22,721-square-foot, 9-bedroom, 10-bathroom Bel Air house built in 2008 which went for $26,500,000 in July. It was also the largest million-dollar home sold last year.

The communities where virtually all home sales were in the million-dollar category were Portola Valley and Atherton in San Mateo County, Newport Beach in Orange County, Ross in Marin County and Rancho Santa Fe in San Diego County.

Newly-built homes accounted for 1,457 of last year's $1 million-plus sales, down 50.3 percent from 2,933 for 2008. There were 1,542 condo sales in the million-dollar category, down 34.7 percent from 2,362 the year before. Most $1 million-plus condos were sold in San Diego, Los Angeles and San Francisco.

The median-sized million-dollar home was 2,646 sq.ft., with 4 bedrooms and 3 bathrooms. The median price paid per square foot for all million-dollar homes was $605, down 10.1 percent from a revised $672 in 2008. For the overall market, the square-foot median declined 20.7 percent from $188 in 2008 to $149 last year, DataQuick reported.

Last year 4,925 Notices of Default, the first step of the formal foreclosure process, were recorded on homes that previously had sold for a million dollars or more. The number of Trustees Deeds, or the actual loss of a home to the foreclosure process, totaled 2,698 for those homes that previously sold for $1 million-plus.

Around 29 percent of the $1 million-plus buyers paid cash, up from 24 percent in 2008. In the over-$5 million category, two thirds of the purchases were cash. Of those who did finance their purchase, the median down payment was 39.4 percent of the purchase price. The lending institutions most willing to provide mortgage financing for $1 million-plus homes were Bank of America, Wells Fargo and Union Bank.

There are 8.52 million homes in California. Of those, 241,456 are assessed for more than a million dollars by county assessor offices, down 5.2 percent from 254,745 in 2008, DataQuick reported.

Source:Los Angeles Times.

The number of Los Angeles County homes slipping toward foreclosure increased by 15.2 percent in the fourth quarter of 2009, compared to the same period in 2008, a real estate information service reported today.

Lenders sent default notices to 16,595 homeowners in Los Angeles County in the fourth quarter, up from the previous year's fourth-quarter total of 14,410, according to La Jolla-based MDA DataQuick.

In Orange County, default notices were sent to 5,555 homeowners, up 24 percent from the 2008 fourth-quarter total of 4,481.

Statewide, default notices were sent to 84,568 homeowners in the fourth quarter of the year, DataQuick reported. That was a 24.3 percent decrease from the previous quarter's 111,689 notices and up 12.4 percent from the same quarter in 2008, when 75,230 default notices were sent.

"Clearly, many lenders and servicers have concluded that the traditional foreclosure process isn't necessarily the best way to process market distress, and that losses may be mitigated with so-called short sales or when loan terms are renegotiated with homeowners," said John Walsh, MDA DataQuick president.

Default notices do not always lead to a home foreclosure, according to DataQuick. Some homeowners emerge from the foreclosure process by bringing their payments current, refinancing or selling the home.

Source:Los Angeles Times

Although short sales are likely to increase in 2010, the jump in these transactions is unlikely to have any real impact on the housing market, according to a new study by Housing Predictor.

While more at-risk homeowners are turning to short sales as an alternative to foreclosure, Housing Predictor says the small number of short sales that are actually approved by banks represent less than 1 percent of all homes facing foreclosure. In the first half of 2009, only 40,000 short sales were completed, according to the most recent data available from the Office of the Comptroller of Currency shows.

In addition, Housing Predictor said only an estimated 8 to 12 percent of all homeowners who request short sales accomplish a completed transaction. Because lenders only write off short sales as a loss when a property is sold, this small percentage of completed transactions leaves a gaping hole in the troubled banking industry’s problem with short sales.

In possibly the first indication of a growing second wave of foreclosures, an increase in distressed properties listed for sale is already beginning to develop in Southern California. Dana Point has seen its inventory of foreclosures and short sales jump to more than 24 percent of all homes listed for sale, and nearby Laguna Beach and San Clemente have seem similar increases. While this rise

in troubled properties indicates that lenders have increased foreclosures, it may a