What are these investors going to do with the properties? Give it to charity for taxbreak? or try to sell it? ONE PLUS ZERO = ONE not TEN.
Time to wake up and smell the coffee (not the starbucks.)
Who wants to buy my AIG stock? Don't you think it is very cheap now? People will always need insurance! Homes need insurance! Cars need insurance! Pay me only $50 /share. It is a long term investment. Dont try to time the market. Market always goes up......................
Property prices will never go down. It has never happend. Not where I live becasue the schools are the best there (and are free).
Remember DOT COM?
I think the shadow inventory got moved someone in a ghost town cuz I haven't seen it anywhere. I think they wised up and were shocked at how it hit their pocket books. A lot is going to flippers because flippers are good for the banks because they want top dollar and help keep prices up. At this point I will believe it when I see it, I kept hearing it was going to be released and nada.... so on we go doing the best we can under the circumstances. If they would just release a little, it would not hurt them and it would be a little less frustrating. Crazy days for the history books... there will be people saying... I coulda bought when prices dropped by 50%.
There are two types of sellers now a days - First who purchased the houses during th boom period. They are underwater and can not sell lower than what they owe to the bank. Second are the ones who regret not selling during the boom period and dream about someone foolish enough to pay them boomtime price.
Banks are going to take a bath on non-conforming mortgages in next 6 months to a year. Government is trying very hard to allow these million dollar mortgage holders to stay in their homes for next ten years for FREE. In Miami, we have people living in these million dollar homes for past three years without paying mortgage or taxes. Can you believe the windfall disposable income if you did not have to pay your mortgage or rent for three years or more?
If you see the area where there is low inventory - check out how many houses are underwater! At the moment, Los Angeles is about 30% overvalued, where as Detroit is about 50% undervalued. CA, FL, NY, MA, DC markets have between 30 -50 % to correct.
Longterm appreciation is about 3% for realestate. If you put 10K down on 100K house, you can not get 10K appreciation each year.
Check this back after a year.
IMO, in my area... prices have mostly bottomed out. Homes are now affordable for first time home buyers and there are alot of them. To boot all the investors are jumping in so that accounts for the lower inventory.
Currently, we see some movement toward interest rate and home prices:
The average interest rate offered by lenders on 30-year fixed-rate home loans rose this week, topping 5% for the first time in three weeks, Freddie Mac said Thursday.
Home prices gained for the seventh consecutive month in December, with Los Angeles and other West Coast cities posting the biggest rises, according to a closely watched index released Tuesday.
The Standard & Poor's/Case-Shiller index of 20 metropolitan areas scored a modest 0.3% increase on a seasonally adjusted basis.
But don't forget First Time Buyer's Tax Credit $8,000.00 and $6500.00 for existing home owners: Dead line April, 2010. Call me if I can be of further service to you. (323-464-5431)
Hope this helps! MC Campbell: Broker #:01819507: Coldwell Banker
In Los Angeles, pushed by the federal government's first time home buyers' tax credit, home prices inched up as sales rose. The free-fall in housing prices leveled out, but a glut of properties in the foreclosure pipeline are adding to problems that threaten stabilization. Housing Predictor forecasts average housing prices in Los Angles to deflate an additional 8.9% in 2010.
Yes, interest rates going up should bring prices down. When rates go from 5% to 6% to 7% you lose 11.9% and 23.9% buying power from the change in interest rates. I can not see how prices can not go down even more when that happens.
The Federal reserve is buying mortgage backed securities because no one else would. They are going to stop buying them in March. That will increase interest rates.
Due to our massive deficit spending the government is going to be selling (or trying to) $100 Billion of bonds each month. The combination could raise mortgage rates a lot.
A question we ask our clients all the time is what is your motivation for buying a home right now? Are you looking for tax relief, tired of renting, is this a long term buy and hold? There is a buying strategy for every market. Who knows what the banks are really going to do, will interest rates go up? Probably. Will more homes be going into default, YES. There are so many factors that affect the housing market, the economy, supply vs. demand. Right now you are experiencing limited supply with high demand due to low interest rates and buyer tax incentives. If there is a larger housing supply and the qualified buying pool shrinks then home seeker prices will come down. There are more adjustable interest rate mortgages set to recast this year read this:
An Article published by AUSTIN KILGORE, dated Monday, February 1st, 2010, 3:40 pm, outlines a report by SIGTRAP that warns of a possible Second Housing Bubble
The Special Inspector General for the Troubled Asset Relief Program(SIGTARP), which oversees the federal government's economic recovery program, called for reform to prevent government bailouts in the future and warned of a government-induced second housing bubble.
The report warns the government's efforts to stabilize the housing market may create a second bubble. "The government has done more than simply support the mortgage market, in many ways it has become the mortgage market, with the taxpayer shouldering the risk that had once been borne by the private investor," the report said.
The report also notes that despite TARP's other stated goals - preserving home-ownership and promoting jobs - nearly 16 months later, foreclosures remain at record levels, the TARP foreclosure prevention program has only permanently modified a small fraction of eligible loans, and unemployment is the highest it has been "in a generation."
Please take the time to follow this link; http://www.housingwire.com/2010/02/01/sigtarp-warns-of-secon
I will always go back to my original question, what is you motivation to buy a home right now? Trust me I am not trying to discourage you from buying a home but you asked the question 'Buy now or wait?' I give everyone the information and let them make their own informed decisions. This business is all about relationships I do not want our clients to feel like they did not have all the facts. I would love to hear from you Home Seeker!
Jennifer Ricco CDPE, PSC, WCR, e-PRO, Retired LAPD
Keller Williams VIP Properties
25124 Springfield Court
Valencia, Ca 91355
'Quality Consulting Through Continuous Improvement' http://www.Pre-ForeclosureSpecialists.com
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Additionally, other considerations drive pricing in Silver Lake and Los Feliz, as everywhere. For instance, both areas are blessed with high caliber public schools. A family faced with a dozen years of private school tuition will find value in this area even if rates go up significantly over the next few years. There's also the simple beauty of both areas and the general vibe, not to mention centrality with regard to the large Los Angeles area.
and interestingly enough.... he was given the same advice back then.......buy, buy. buy!
same advice he is being given in 2013.............
Ooops - I guess looking back, he might have made out better if he waited to buy!
Inventory is lower than it might be at another time, but two things make it a super time to buy.
Prices will never be lower and loan rates will never be lower.
We work with Buyers often and while you will have to be a bit more flexible in this process, it wont get better. LA is a super place to live and there are many great areas.
If you are ready to buy, let's get you pre-approved by a qualified lender and let's go find you a home.
I am an expert in both areas and would love to help you with anymore questions you may have. Call or email and we can discuss further all of the details of what property is best for you.
Do you have a Realtor that you are working with? I highly recommend having your own buyers agent, they will be able to help you find the deals you are looking for.
Have a great day,
Heather Paul, Realtor
Properties priced at or below market will sell relatively quickly to an investor as a rental or a buyer who is willing to commit to the purchase instead of waiting for the deal of the century (which to my knowledge has not happened or we would have heard about it by now).
The interest rate is just one factor when it comes to prices. Supply and demand also play a part. So if you are serious about buying now don't hesitate. Rates are at record lows and prices are still low (and slowly rising in some areas) and there is still major competition when it comes to a well priced property in a desirable neighborhood.
Monica Hernandez - REALTOR, SFR, CDPE
Bankers Realty Exclusive, Inc
CA DRE License #01239118
Keller Williams Realty
I'm currently involved in 2 deals where the homes are not actively on the market (I'm representing the buyers - I've never represented both sides of a transaction). My clients love the service that they are seeing homes and investment property not on the market and in my experience it has always been a win-win for the buyer and the seller.
Keller Williams Realty
It's legal - HOWEVER - most MLS rules require of it's members that any listing that is withheld from the MLS must have, in writing, a specific document that states the reason why. This is pretty rare, and usually happens because of a specific need on the part of the seller - like for example...they don't want some certain other party to know they are selling just yet....
To say, "hey work with me because I have lots of pocket listings" is probably a less than honest approach. The truth is, most full time agents who work the business and network regularly have a certain number of "pocket listings" at any given time - but it's hardly the best reason to work with somebody.
Or is this the way NAR encourages its members from keeping the low price sales out of the system and exclude them - in which case it would be a racketeering. Does it get included in the "COMPARABLES"
There are still deals to be had in Silverlake, Atwater Village, Echo Park, Mt. Washington. If the prices do come down a bit more, the interest rate will go up, so it is better to buy now at the all time low interest rate, plus you may qualify for the first time home buyer's tax credit which expires soon. Also, if you are working with a realtor, we have what is called "pocket listings" which are listings that aren't on the open market.
Best of luck,
Keller Williams Realty
Broker, Preferred Realty and Loan
I my self have been located since 1969 in the Hollywood Foot Hills/ Los Feliz area.
In those years prices for a single family dwelling, 3 Bedrooms / 2 Bath, 1900 sqft $ 30,000.00. Over the years Homes Sold around $1.5 to 2.0 million
I would advise you, to buy now if you can with the lower interest rate, this is a bigger factor than the price it self. With the lower interest rate you will have very comfortable payments.
Web Reference: http://www.ryandreamhomes.listingbook.com
I've had 800 pointers, 125k in the bank, self employed 30 yrs, low cc debt get denied. Or Boeing clients being sent through hoops to get loans to close at BECU...assuming from their announcement Boeing will eventually leave WA.
The good part is sellers and buyers are more willing to get educated now days, they are listening, & for the most part doing a great job pricing the homes, staging them, That definetly helps steer them clear from the ill practices or greedy unethical professionals associated to our business.
I've been having good luck with Well's Fargo this year, smooth closing, solutions brought to me when anything arises in inspections or appraisals.
As for the shadow inventory, I've heard it is going to a 3 yr release, who really knows. If the stategy is working then cool. If they release too much at any given time though it could really hurt some markets. We seem to have quite a bit causing us to flucuate back & forth between last quarter of 04 prices & second quarter of 05. That's a pretty large scale of pricing
I think we got hit first and hard, some areas did not seem to really get hit much at all. Maybe thoses areas most were not living beyond their means. I think people purchased at the the edge of not being able to buy TP so when they lost so much value in their homes, there was no reason for then to stick it out. In the beginning I think there was alot of buy and ditch but then the banks got wise to it.
Many short sales are demanding payouts that the buyers end up paying. It is crazy. Before everyone was low balling the listing price, now there has been a turn and many are listing above the comps. Everytime you think you know what is going on... it changes, so you gotta be on top of things at all times. A list of crazy stuff, lots of cross quals and lets see how many hoops we can jump through.
One was demanding my buyer to rerun his credit, they wanted him to call so they could run his credit on the cross qual. What they were really after IMO was his personal info. They were trying to steal his businesss from his current lender. Ridulous, his FICOS were in the 800's , good job, $150,000 in the bank and only purchasing a house for $205,000. They were given everything to qualify him but refused without rerunning his credit. That is a pile of ...., what if every one made you do this... By the time you find a house you many not have good credit. We said IF this is the final qualification and you are going to give me the house if it pans out then fine... you can run it. oh... they could not guarantee that. MMMM
This market brings out the good ... the bad.... and the ugly (lol)
@ Diane Boy you are fortunate if you have truly hit rock bottom. Let's just hope the banks keep a tight rope on the shadow inventory like you suggest they have been doing. If there is one thing that will correct CA it's home buying & selling. Same goes for FL, as these are the 2 states that were hit the hardest, correct? At least that's what I understand to be true.
So of course that opened the door to so many that could not previously afford. Too boot, once the investors got the sense we had bottomed they starting buying as well. Cash coming out of the woodworks. It has been many years where when you buy, it is about the same, sometimes less to own than to rent. Rents did not go down by as much because those loosing their homes... now must rent. With that in mind, anyone who can, wants to buy. This has led to mulitiple offers on homes that is mind blowing sometimes. The most I heard was 84 offers on one home. Not all but you can be sure that as long as it is not sitting next a freeway, it more than likely will have multiple offers.
And... to compound matters the banks are just not releasing the inventory. It is a very controlled release which they have done very effectively. I really think that has indeed contributed to the rise. Supply and Demand. I think in areas where to lose of value was not as great, the demand may not be as great (just a thought)
In addition, people are coming from everywhere because it is a great place to live and for California, it really is more affordable living. It has been the craziest market ever! We have more buyers than sellers that is for sure!!!
If you want to buy a home and do not plan on selling in a couple of years you should consider buying now atleast you know rates are low, you may qualify for a tax credit and prices are lower than they were last year. If you continue to rent , will rents go up? Whta will be your net cost of owning if you take tax implications in to consideration.Talk to an accountant .
Thatâ€™s what your friends and family have been telling you anyway, right? But with the recent changes in market conditions is this really a good time for first-time homebuyers? Or is it better to wait until the market has hit rock bottom before you jump in?
The answer may be in the famous words of Latin poet, Horace: â€œCarpe Diem.â€ or â€œSeize The Day.â€ And the caveat: "Make sure it's YOUR day."
First of all, you have sized up your situation and investigated the market. That means you do have an interest in owning your own home. The hidden question-within-a-question seems to be, "If I buy now, will my house depreciate?"
The short answer: No one can tell you. Historically, when interest rates go down, demand goes up, and prices go up. Not so this time. Nothing is "regular" about this market: we have low prices, excess inventory AND low prices. Will the corollary be true this time? (higher interest rates equals lower prices) No one knows. And every market, and micro-market, is different.
But what will be true is this: you will have locked in the REAL COST of your home (the monthly payment) for a period of 30 years (or until YOU chose to sell). Housing prices are irrelevant until the moment you enter the market as a seller, because until it is a commodity, your house is not an investment, it's your home. When you look at it that way, you should buy when the time is right for you, because it's impossible to time the bottom of the market. (See my blog post on Timing the Bounce, http://www.thebremnergroup.com/timing-bounce-2010/ )
Not in more than 50 years have the stars been better aligned for first-time homebuyers. The National Association of RealtorsÂ® reported that the median price of an existing home fell substantially in all markets over the last three years. The combination of lower prices along with historically low interest rates have combined to create even more marked affordability for consumers. According to the Freddie Mac Primary Mortgage SurveyÂ®, the average rate on a 30-year fixed rate mortgage now stands at about 5%, the lowest level in 50 years. (Not to mention the Home Buyer Tax Credits)
When home prices were soaring, many first-time buyers jumped to buy houses believing that they would be shut out of the market if they didnâ€™t act quickly. Now buyers have time to search all of the homes on the market within their price range and have the ability to choose the home that best meets their needs.
While the stars are aligned, history shows that the market wonâ€™t stay like this forever. Sitting on the sidelines might cost you plenty in terms of higher housing prices and interest rates. The 37-year average rate of appreciation for homes in California is 7.75%. Furthermore, any increase of interest rates even by just a half of a percent could decrease your purchasing power and alienate you from todayâ€™s unique market. We live in one of the most desirable areas in the world and regardless of the recent slowing in the market, there is still plenty of pent up demand.
Letâ€™s examine a homebuyer in todayâ€™s real estate market. If in 2000 a person had made the conscious decision to continue to save money while paying high rental costs, rather than purchasing a new home for $250,000 â€“ today that person would have missed out on the net 24-28% average appreciation that the
market has experienced over the last ten years. And, that appreciation would not have just been on the 10%down, but rather on the total cost of his or her home. Had the homebuyer purchased in 2000 in equity, he or she today would have enjoyed a netted $70,000 in equity, in addition to the tax savings on homeowner interest.
The bottom line is that this may be a very good market for first-time homebuyers. And, while you may not
be able to afford the newly remodeled four bedroom, three bath dream home, the purchase of your first home might serve as a three to five year stepping stone towards that ultimate dream home and as the inception of your financial portfolio.
If youâ€™d like to learn more about the current state-of-the-market, including details on determining your
purchasing power in todayâ€™s market, please contact me today.
Certified Short Sale Professional
Certified Home Retention Specialist
Blogging at: http://TheBremnerGroup.com/blog
Weigh your options and look at the future. If you buy now, there is the tax credit that you may qualify. If you wait until later, financing options may dry up.
There is talk about raising score limits on qualifying for a loan, so consider that also as you are considering the purchase.
You may also want to compare rents and home prices in the area you like.
Compare the rent versus ownership costs (mortgage payments, insurance, taxes, HOA, maintenance etc.) between a similar house in the same neighborhood. It may be a good indicator if home prices are just right or too high.
To give you an idea, please read my blog on Cerritos Living:
However why wait you receive tax benefits for up to $8K, and annual tax write offs owning a home
If you keep leasing you don't own a home, appreciation, tax write off, you are making your property owner rich. set mortgage payment for years, vs. increase in renting, having to move, risk of property owner foreclosures... just a few negatives.
Guess you are missing something
I would encourage you to buy now while interest is low, even if prices drop a bit, the hike in interest rates expected to come will most likely equal harder qualification which you'll end up spending the same or more in the long run anyways.
Silver Lake and Los Feliz are highly desirable areas that as mentioned by several others, has not been as affected as other areas. I'm guessing your price range is $650k and below where there are a flurry of buyers looking to buy in these areas. If inventory stays low I would not expect prices to drop far, however if people are not able to hang on to their homes, foreclosures will drag the price of homes down and higher interest rates will make it harder for buyers to get into the market. If you find a place you love and can afford I would buy for the long term.
Good luck to you!
Keller Williams Realty
As you have seen, inventory is low in Los Feliz and Silverlake. Homeowners in these neighborhoods have been able to better weather the changes in the economy. They are not going to sell until they have to or until the housing market improves, i.e. higher home prices.
The advice I give my clients: buy now if you can afford it and if you find a house that has most of what you're looking for.
Real Estate Consultant
Keller Williams Realty Los Feliz
90039 is a great zip code and I don't see it going down anymore. I've grown up here since I was 3 and it really is a zip code in high demand. Don't try to time the market. If you are qualified to buy and are ready to settle down in a home compare your rent to what a mortgage would be and then factor in the benefits of a tax deduction. You will realize if it's the right time or if you should save up more for a down payment or consider a neighboring zip code.
I've been in the business 20 years and having been through this scenario several times and being able to see things in a historical perspective, I'd buy whenever you're able to do so, just exercise caution and don't pay over the top and don't stretch in every way possible. I've seen too many people who have missed the boat over and over again, waiting for the right time. Get in now and ride this one up, even if prices happen to fall a bit more. Maybe you should expand your boundaries as well. There are so many incredible areas and some have the same feel as Silver Lake/Los Feliz without the sticker shock.
Keller Williams Realty, Los Feliz
20 Years of Sales and Service
Don't get frustrated. People that don't have to sell aren't selling. There is no clear way to look at it but your better off buying at a lower price and a lower rate. I don't know for certain if inventory will increase. It varies from 1 area to the next. However if you are in the lower price points (under 600K) 4 years ago you couldn't even touch a home in some areas of Silverlake or Los Feliz so if you are on the lower price point it's still best to buy now but that is the most competitive price point sadly with the lowest inventory.
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Keller Williams Hollywood Hills
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