SOLD
Tuesday, June 30, 2009
Monday, June 22, 2009
Friday, April 3, 2009
Monthly Statistics - Single Family - February 2009
Sales Volume
No. Area Feb 2008 Feb 2009 Jan 2009 2009 To Date 2008 To Date SP/LP SP/OLP
21 Silver Lake - Echo Park $8,976,925 $12,056,400 $9,735,185 $21,791,585 $17,205,000 98.49% 90.96%
22 Los Feliz $7,171,001 $12,055,710 $7,068,000 $19,123,710 $21,327,501 97.29% 92.96%
30 Hollywood Hills East $4,115,000 $4,161,500 $4,073,500 $8,235,000 $13,668,500 94.11% 83.02%
Sales Volume
No. Area Feb 2008 Feb 2009 Jan 2009 2009 To Date 2008 To Date SP/LP SP/OLP
All Selected Areas $20,262,926 $28,273,610 $20,876,685 $49,150,295 $52,201,001 97.31% 90.52%
Median Sales Price
No. Area Feb 2008 Feb 2009 Jan 2009 2009 To Date 2008 To Date
21 Silver Lake - Echo Park $650,000 $600,000 $580,000 $590,000 $705,000
22 Los Feliz $725,000 $818,500 $1,087,000 $950,000 $802,000
30 Hollywood Hills East $852,500 $790,000 $971,750 $790,000 $950,000
Number of Listings and Days on Market
#Sold #New #A #B #P #E #W
No. Area % Mth Dom Ytd Dom % Mth Ytd Ytd Dom Mth Dom Mth Dom Mth Dom Mth Dom
21 Silver Lake - Ec 55.26 21 111 38 81 55.56 35 63 128 112 12 54 14 56 30 96 6 252
22 Los Feliz 58.82 10 93 17 74 45.95 17 37 110 126 9 33 8 52 21 159 6 96
30 Hollywood Hills 55.56 5 81 9 65 67.74 21 31 87 128 9 130 6 121 14 96 7 214
Number of Listings and Days on Market
#Sold #New #A #B #P #E #W
No. Area % Mth Dom Ytd Dom % Mth Ytd Ytd Dom Mth Dom Mth Dom Mth Dom Mth Dom
All Selected Areas 56.25 36 95 64 73 55.73 73 131 325 122 30 72 28 76 65 117 19 187
-
No. Area Feb 2008 Feb 2009 Jan 2009 2009 To Date 2008 To Date SP/LP SP/OLP
21 Silver Lake - Echo Park $8,976,925 $12,056,400 $9,735,185 $21,791,585 $17,205,000 98.49% 90.96%
22 Los Feliz $7,171,001 $12,055,710 $7,068,000 $19,123,710 $21,327,501 97.29% 92.96%
30 Hollywood Hills East $4,115,000 $4,161,500 $4,073,500 $8,235,000 $13,668,500 94.11% 83.02%
Sales Volume
No. Area Feb 2008 Feb 2009 Jan 2009 2009 To Date 2008 To Date SP/LP SP/OLP
All Selected Areas $20,262,926 $28,273,610 $20,876,685 $49,150,295 $52,201,001 97.31% 90.52%
Median Sales Price
No. Area Feb 2008 Feb 2009 Jan 2009 2009 To Date 2008 To Date
21 Silver Lake - Echo Park $650,000 $600,000 $580,000 $590,000 $705,000
22 Los Feliz $725,000 $818,500 $1,087,000 $950,000 $802,000
30 Hollywood Hills East $852,500 $790,000 $971,750 $790,000 $950,000
Number of Listings and Days on Market
#Sold #New #A #B #P #E #W
No. Area % Mth Dom Ytd Dom % Mth Ytd Ytd Dom Mth Dom Mth Dom Mth Dom Mth Dom
21 Silver Lake - Ec 55.26 21 111 38 81 55.56 35 63 128 112 12 54 14 56 30 96 6 252
22 Los Feliz 58.82 10 93 17 74 45.95 17 37 110 126 9 33 8 52 21 159 6 96
30 Hollywood Hills 55.56 5 81 9 65 67.74 21 31 87 128 9 130 6 121 14 96 7 214
Number of Listings and Days on Market
#Sold #New #A #B #P #E #W
No. Area % Mth Dom Ytd Dom % Mth Ytd Ytd Dom Mth Dom Mth Dom Mth Dom Mth Dom
All Selected Areas 56.25 36 95 64 73 55.73 73 131 325 122 30 72 28 76 65 117 19 187
-
Thursday, March 19, 2009
Fed Reserve and Lower Fixed Rates
There was a massive drop in the 10 year note today, in fact it was one
of the largest one day drops in history!! What this will equate to is
lower rates as much as 1/2 (.50) on most fixed rate product. Below is a
press release from the Federal Open Market Committee (Fed Reserve)
announcing what they did to cause the drop. This is welcomed good new,
and I thought it was good information for everyone have.
Press Release
Release Date: March 18, 2009
For immediate release
Information received since the Federal Open Market Committee met in
January indicates that the economy continues to contract. Job losses,
declining equity and housing wealth, and tight credit conditions have
weighed on consumer sentiment and spending. Weaker sales prospects and
difficulties in obtaining credit have led businesses to cut back on
inventories and fixed investment. U.S. exports have slumped as a number
of major trading partners have also fallen into recession. Although the
near-term economic outlook is weak, the Committee anticipates that
policy actions to stabilize financial markets and institutions, together
with fiscal and monetary stimulus, will contribute to a gradual
resumption of sustainable economic growth.
In light of increasing economic slack here and abroad, the Committee
expects that inflation will remain subdued. Moreover, the Committee sees
some risk that inflation could persist for a time below rates that best
foster economic growth and price stability in the longer term.
In these circumstances, the Federal Reserve will employ all available
tools to promote economic recovery and to preserve price stability. The
Committee will maintain the target range for the federal funds rate at 0
to 1/4 percent and anticipates that economic conditions are likely to
warrant exceptionally low levels of the federal funds rate for an
extended period. To provide greater support to mortgage lending and
housing markets, the Committee decided today to increase the size of the
Federal Reserve's balance sheet further by purchasing up to an
additional $750 billion of agency mortgage-backed securities, bringing
its total purchases of these securities to up to $1.25 trillion this
year, and to increase its purchases of agency debt this year by up to
$100 billion to a total of up to $200 billion. Moreover, to help improve
conditions in private credit markets, the Committee decided to purchase
up to $300 billion of longer-term Treasury securities over the next six
months. The Federal Reserve has launched the Term Asset-Backed
Securities Loan Facility to facilitate the extension of credit to
households and small businesses and anticipates that the range of
eligible collateral for this facility is likely to be expanded to
include other financial assets. The Committee will continue to carefully
monitor the size and composition of the Federal Reserve's balance sheet
in light of evolving financial and economic developments
Voting for the FOMC monetary policy action were: Ben S. Bernanke,
Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles
L. Evans; Donald L. Kohn; Jeffrey M. Lacker; Dennis P. Lockhart; Daniel
K. Tarullo; Kevin M. Warsh; and Janet L. Yellen.
of the largest one day drops in history!! What this will equate to is
lower rates as much as 1/2 (.50) on most fixed rate product. Below is a
press release from the Federal Open Market Committee (Fed Reserve)
announcing what they did to cause the drop. This is welcomed good new,
and I thought it was good information for everyone have.
Press Release
Release Date: March 18, 2009
For immediate release
Information received since the Federal Open Market Committee met in
January indicates that the economy continues to contract. Job losses,
declining equity and housing wealth, and tight credit conditions have
weighed on consumer sentiment and spending. Weaker sales prospects and
difficulties in obtaining credit have led businesses to cut back on
inventories and fixed investment. U.S. exports have slumped as a number
of major trading partners have also fallen into recession. Although the
near-term economic outlook is weak, the Committee anticipates that
policy actions to stabilize financial markets and institutions, together
with fiscal and monetary stimulus, will contribute to a gradual
resumption of sustainable economic growth.
In light of increasing economic slack here and abroad, the Committee
expects that inflation will remain subdued. Moreover, the Committee sees
some risk that inflation could persist for a time below rates that best
foster economic growth and price stability in the longer term.
In these circumstances, the Federal Reserve will employ all available
tools to promote economic recovery and to preserve price stability. The
Committee will maintain the target range for the federal funds rate at 0
to 1/4 percent and anticipates that economic conditions are likely to
warrant exceptionally low levels of the federal funds rate for an
extended period. To provide greater support to mortgage lending and
housing markets, the Committee decided today to increase the size of the
Federal Reserve's balance sheet further by purchasing up to an
additional $750 billion of agency mortgage-backed securities, bringing
its total purchases of these securities to up to $1.25 trillion this
year, and to increase its purchases of agency debt this year by up to
$100 billion to a total of up to $200 billion. Moreover, to help improve
conditions in private credit markets, the Committee decided to purchase
up to $300 billion of longer-term Treasury securities over the next six
months. The Federal Reserve has launched the Term Asset-Backed
Securities Loan Facility to facilitate the extension of credit to
households and small businesses and anticipates that the range of
eligible collateral for this facility is likely to be expanded to
include other financial assets. The Committee will continue to carefully
monitor the size and composition of the Federal Reserve's balance sheet
in light of evolving financial and economic developments
Voting for the FOMC monetary policy action were: Ben S. Bernanke,
Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles
L. Evans; Donald L. Kohn; Jeffrey M. Lacker; Dennis P. Lockhart; Daniel
K. Tarullo; Kevin M. Warsh; and Janet L. Yellen.
Sunday, March 8, 2009
Home Sales up 13% from Jan 2009 to Jan 2008
Breakdown By Region
Here's how the PHSI fared across the country:
* Northeast: dropped 12.7 percent to 57.8 in January and is 19.7 percent below a year ago.
* Midwest: declined 9.2 percent to 72.6 and is 13.8 percent below January 2008.
* South: fell 11.9 percent to 82.2 in January and is 9.1 percent below a year ago.
* West: rose 2.4 percent to 103.6 and is 13.5 percent higher than January 2008.
TO READ THE ENTIRE ARTICLE FOLLOW THE LINK TO READ:
http://www.realtor.org/RMODaily.nsf/pages/News2009030301?OpenDocument
All my best,
Greg
Here's how the PHSI fared across the country:
* Northeast: dropped 12.7 percent to 57.8 in January and is 19.7 percent below a year ago.
* Midwest: declined 9.2 percent to 72.6 and is 13.8 percent below January 2008.
* South: fell 11.9 percent to 82.2 in January and is 9.1 percent below a year ago.
* West: rose 2.4 percent to 103.6 and is 13.5 percent higher than January 2008.
TO READ THE ENTIRE ARTICLE FOLLOW THE LINK TO READ:
http://www.realtor.org/RMODaily.nsf/pages/News2009030301?OpenDocument
All my best,
Greg
Tuesday, March 3, 2009
LAPD COMMUNITY ALERT NOTIFICATION
LOS ANGELES POLICE DEPARTMENT
OFFICIAL PUBLICATION OF THE NORTHEAST CRIME ANALYSIS DETAIL
NORTHEAST DIVISION
VEHICLE BURGLARY ACTIVITY
*ATTENTION* NORTHEAST COMMUNITY MEMBERS
RECENTLY THERE HAVE BEEN A RASH OF VEHICLE BURGLARIES IN GRIFFITH PARK.
DON'T GIVE THIEVES A CHANCE
HERE'S WHAT YOU CAN DO TO PREVENT CAR BURGLARIES AND THEFTS
1. Never leave valuables in PLAIN VIEW in your car. Thieves know that you
hide your property under towels, sweaters and packages. Secure items in
your trunk prior to arriving at location. Thieves are watching you.
2. Use some type of anti-theft device (alarm system, or steering lock).
3. Park in well-lighted or high-traffic areas.
4. Permanently mark your property with identification.
(We suggest your driver license or ID card number).
5. Keep serial numbers of electronic equipment, such as computers, IPODS, GPS,
and cellular telephones.
6. Never leave your car running unattended.
7. Keep your car doors locked and windows rolled up.
8. Don't leave personal identification documents in car (Vehicle Ownership Title,
credit cards etc.) Keep copies of license plate and vehicle identification number
with you.
9. If your car is stolen or burglarized, immediately report it to the police.
10. Report suspicious activity or people loitering in the area.
This public safety information is provided by LAPD Northeast Auto Detectives. If you have any
information on auto related crimes or on auto related crimes or on suspects committing these crimes
in your neighborhood, call Detectives at (213) 847-4265.
If you see any type of crime in progress, call 911.
TOGETHER WE CAN MAKE THE CITY A SAFER PLACE
OFFICIAL PUBLICATION OF THE NORTHEAST CRIME ANALYSIS DETAIL
NORTHEAST DIVISION
VEHICLE BURGLARY ACTIVITY
*ATTENTION* NORTHEAST COMMUNITY MEMBERS
RECENTLY THERE HAVE BEEN A RASH OF VEHICLE BURGLARIES IN GRIFFITH PARK.
DON'T GIVE THIEVES A CHANCE
HERE'S WHAT YOU CAN DO TO PREVENT CAR BURGLARIES AND THEFTS
1. Never leave valuables in PLAIN VIEW in your car. Thieves know that you
hide your property under towels, sweaters and packages. Secure items in
your trunk prior to arriving at location. Thieves are watching you.
2. Use some type of anti-theft device (alarm system, or steering lock).
3. Park in well-lighted or high-traffic areas.
4. Permanently mark your property with identification.
(We suggest your driver license or ID card number).
5. Keep serial numbers of electronic equipment, such as computers, IPODS, GPS,
and cellular telephones.
6. Never leave your car running unattended.
7. Keep your car doors locked and windows rolled up.
8. Don't leave personal identification documents in car (Vehicle Ownership Title,
credit cards etc.) Keep copies of license plate and vehicle identification number
with you.
9. If your car is stolen or burglarized, immediately report it to the police.
10. Report suspicious activity or people loitering in the area.
This public safety information is provided by LAPD Northeast Auto Detectives. If you have any
information on auto related crimes or on auto related crimes or on suspects committing these crimes
in your neighborhood, call Detectives at (213) 847-4265.
If you see any type of crime in progress, call 911.
TOGETHER WE CAN MAKE THE CITY A SAFER PLACE
Sunday, March 1, 2009
Today's Open House March 1, 2009 1 - 4pm
This charming home w/ separate guest house is OPEN TODAY (3/01) from
Tuesday, February 17, 2009
Final score: $8,000 for homebuyers First-time purchasers get a tax credit windfall if they buy before December.
NEW YORK (CNNMoney.com) -- There's a nice windfall for some homebuyers in the economic stimulus bill awaiting President Obama's signature on Tuesday. First-time buyers can claim a credit worth $8,000 - or 10% of the home's value, whichever is less - on their 2008 or 2009 taxes.
A big plus is that the credit is refundable, meaning tax filers see a refund of the full $8,000 even if their total tax bill - the amount of witholding they paid during the year plus anything extra they had to pony up when they filed their returns - was less than that amount. But there has been a lot of confusion over this provision. Adam Billings of Knoxville, Tenn. wrote to CNNMoney.com asking:
"I will qualify as a first-time home buyer, and I am currently set to get a small tax refund for 2008. Does that mean if I purchased now that I would get an extra $8,000 added on top of my current refund?"
The short answer? Yes, Billings would get back the $8,000 plus what he'd overpaid. The long answer? It depends. Here are three scenarios:
Scenario 1: Your final tax liability is normally $6,000. You've had taxes withheld from every paycheck and at the end of the year you've paid Uncle Sam $6,000. Since you've already paid him all you owe, you get the entire $8,000 tax credit as a refund check.
Scenario 2: Your final tax liability is $6,000, but you've overpaid by $1,000 through your payroll witholding. Normally you would get a $1,000 refund check. In this scenario, you get $9,000, the $8,000 credit plus the $1,000 you overpaid.
Scenario 3: Your final tax liability is $6,000, but you've underpaid through your payroll witholding by $1,000. Normally, you would have to write the IRS a $1,000 check. This time, the first $1,000 of the tax credit pays your bill, and you get the remaining $7,000 as a refund.
To qualify for the credit, the purchase must be made between Jan. 1, 2009 and Nov. 30, 2009. Buyers may not have owned a home for the past three years to qualify as "first time" buyer. They must also live in the house for at least three years, or they will be obligated to pay back the credit.
Additionally, there are income restrictions: To qualify, buyers must make less than $75,000 for singles or $150,000 for couples. (Higher-income buyers may receive a partial credit.)
Applying for the credit will be easy - or at least as easy as doing your income taxes. Just claim it on your return. No other forms or papers have to be filed. Taxpayers who have already completed their returns can file amended returns for 2008 to claim the credit.
Lukewarm reception
The housing industry is somewhat pleased with the result because the stimulus plan improves on the current $7,500 tax credit, which was passed in July and was more of a low-interest loan than an actual credit. But the industry was also disappointed that Congress did not go even further and adopt the Senate's proposal of a $15,000 non-refundable credit for all homebuyers.
"[The Senate version] would have done a lot more to turn around the housing market," said Bernard Markstein, an economist and director of forecasting for the National Association of Homebuilders (NAHB). "We have a lot of reports of people who would be coming off the fence because of it."
Even so, the $8,000 credit will bring an additional 300,000 new homebuyers into the market, according to estimates by Lawrence Yun, chief economist for the National Association of Realtors.
The credit could also create a domino effect, he said, because each first-time homebuyer sale will lead to two more trade-up transactions down the line. "I think there are many homeowners who would be trading-up but they have had no buyers for their own homes," Yun said.
Who won't benefit, according to Mark Goldman, a real estate lecturer at San Diego State University, are those first-time homebuyers struggling to come up with down payments. The credit does not help get them over that hurdle - they still have to close the sale before claiming the bonus.
One state, Missouri, is trying to get around that problem by creating a short-term loan on the tax credit of up to $6,750. The state would loan borrowers the money so they could use it at closing as part of the downpayment. Then, when the buyers receive their tax credit from the IRS, they pay back the state. Other states may follow with similar programs, according to NAHB's Dietz.
Many may look at the tax credit as a discount on the home price, according to Yun. A $100,000 purchase effectively becomes a $92,000 one. That can reassure buyers apprehensive about purchasing and then watching prices continue falling, he added.
And it provides a nice nest egg for the often-difficult early years of homeownership, when unexpected repairs and expenses often crop up. Recipients could also use the money to buy new stuff for their home - a lawnmower, a rug, a sofa - and, in that way, help stimulate the economy.
CORRECTED: An earlier version of this story incorrectly stated how much taxpayers who were owed a refund would receive under the credit.
Friday, February 6, 2009
Senate OKs $15,000 Bonus for Home Buyers
Senate OKs $15,000 Bonus for Home Buyers
Housing could get a big boost from the latest addition to the mammoth stimulus bill working its way through Congress.
Senate legislators unanimously approved a proposal Wednesday that would allow a tax credit for home buyers of 10 percent of the value of new or existing residences, up to a $15,000 limit. Current law provides for a $7,500 tax break but only for first-time homebuyers.
"It is time to fix housing first," said Sen. Johnny Isakson, R-G.
Isakson's office said the proposal would cost the government an estimated $19 billion. In all, the stimulus is now topping an estimated $920 billion.
In an op-ed that appears in Thursday’s Washington Post, President Barack Obama painted a dire picture if Congress fails to move quickly to pass the stimulus bill.
"This recession might linger for years. Our economy will lose 5 million more jobs. Unemployment will approach double digits. Our nation will sink deeper into a crisis that, at some point, we may not be able to reverse," Obama wrote in the op-ed titled, "The Action Americans Need."
Source: The Associated Press, David Espo (02/05/09)
Housing could get a big boost from the latest addition to the mammoth stimulus bill working its way through Congress.
Senate legislators unanimously approved a proposal Wednesday that would allow a tax credit for home buyers of 10 percent of the value of new or existing residences, up to a $15,000 limit. Current law provides for a $7,500 tax break but only for first-time homebuyers.
"It is time to fix housing first," said Sen. Johnny Isakson, R-G.
Isakson's office said the proposal would cost the government an estimated $19 billion. In all, the stimulus is now topping an estimated $920 billion.
In an op-ed that appears in Thursday’s Washington Post, President Barack Obama painted a dire picture if Congress fails to move quickly to pass the stimulus bill.
"This recession might linger for years. Our economy will lose 5 million more jobs. Unemployment will approach double digits. Our nation will sink deeper into a crisis that, at some point, we may not be able to reverse," Obama wrote in the op-ed titled, "The Action Americans Need."
Source: The Associated Press, David Espo (02/05/09)
It even happens here, be alert, be safe, stay happy.
Silver Lake Community Meeting Addresses Muggings
Councilmember LaBonge encouraged Silver Lake residents to hang together as a community in the wake of ten street muggings between December 30th and January 31st. More than 200 residents of the Silver Lake area turned out for a community meeting last night to hear information and express concern about ten recent street muggings.
Councilmembers and Los Angeles Police officials sought to assure residents that the incidents were crimes of opportunity and NOT hate crimes, as some had feared.
Between December 30th and January 31st, ten men were mugged while walking alone in the Silver Lake/Echo Park area. Each man was approached by several Hispanic males who demanded their wallets and threatened them with either a gun, knife or bodily force. No weapons were discharged in these incidents, although four victims were unfortunately assaulted. Police believe the crimes are gang-related.
The officials encouraged residents to go out in groups, remain aware of their surroundings and be extremely cautious when out on the street. Anyone with information about these robberies should contact the Northeast Gang Detectives at: (213)847-4263.
Fred Bronson's Interview with Paul McCartney
http://www.sirius.com/firemanradio
My Client and friend Fred Bronson interviewing the legend Paul McCartney.
Short, but very cool.
My Client and friend Fred Bronson interviewing the legend Paul McCartney.
Short, but very cool.
Friday, January 30, 2009
First Time Home Buyers may get a $7500 tax credit
Home buyers get a bonus in the stimulus bill
http://money.cnn.com/2009/01/29/real_estate/tax_credit_near/index.htm?postversion=2009012907
http://money.cnn.com/2009/01/29/real_estate/tax_credit_near/index.htm?postversion=2009012907
Wednesday, January 14, 2009
Thursday, January 8, 2009
U.S. Banks Offer Mortgages Below 5% After Fed Action
Jan. 8 (Bloomberg) -- The largest U.S. banks are starting to offer fixed home loans below 5 percent after the government began buying mortgage securities to bolster the housing market.
JPMorgan Chase & Co. is advertising 30-year mortgages as low as 4.75 percent on its Web site, Wells Fargo & Co. has an offer for 4.875 percent and Bank of America Corp. has rates at 5 percent. The offers are for borrowers with excellent credit who put 20 percent down.
The Federal Reserve earlier this week began purchasing $500 billion of mortgage securities backed by Fannie Mae, Freddie Mac and Ginnie Mae to help lower mortgage costs. While the lower rates may lead more borrowers to refinance, it may not spur home buying in the second year of the recession after more than 2 million jobs were lost in 2008.
“I don’t know if there is a magic number now that everyone is freaking out about the economy,” said Paul Miller, a mortgage industry analyst with Friedman Billings Ramsey & Co. in Arlington, Virginia. “The home buyer is scared out of the market.”
Freddie Mac today reported that the U.S. average rate on a 30-year mortgage dropped for the 10th straight week to the lowest on record. The fixed rate dropped to 5.01 percent from 5.10 percent a week earlier, Freddie Mac said. That’s the lowest in data that goes back to 1971, according to the McLean, Virginia-based mortgage buyer.
Lower Yields
The Fed’s purchase program, which also includes buying $100 billion in direct debt, is intended to lower consumer rates by reducing the supply of agency mortgage bonds issued by Fannie, Freddie and Ginnie. That would boost their prices and lower yields, in turn reducing the interest rates banks charge on new mortgages to ensure sales of the securities are profitable. Agency bonds now facilitate almost all new home lending.
Jill Pfeiffer, a mortgage broker in San Diego, this week obtained a 4.875 percent rate on a 30-year fixed loan for a homebuyer with a credit score above 750, she said in an interview.
“It’s the lowest I’ve ever locked in on a 30-year fixed” since she began her business in 1996, she said.
The loan, with Sun Trust Mortgage Inc., had no origination fee or points, a percentage of the loan amount that lenders charge, Pfeiffer said. At least two other lenders could have matched the rate, she said. She also had four inquiries from homeowners looking to refinance mortgages.
Prices Declining
Rates are dropping as home prices in 20 major U.S. cities declined 18 percent in the year through October, the fastest rate on record, as tighter lending standards curbed sales and foreclosure sales pushed down values.
Sales of single-family homes declined 7.6 percent in November from the prior month, the most in two decades, according to the Chicago-based National Association of Realtors. Resale prices fell 13 percent, the most since the Great Depression in the 1930s.
The Mortgage Bankers Association’s index of applications to purchase a home or refinance a loan dropped to 1,143.8 for the week ending Jan. 2, from a five-year high of 1,245.7 the prior week, as consumers held out for lower rates. The group’s purchase gauge rose 7.3 percent and the refinancing measure decreased 12 percent.
Applications for home-loan refinancing and new purchases may increase as rates drop below 5 percent and exceed the five- year high of two weeks ago, Jay Brinkmann, chief economist for the Washington-based Mortgage Bankers group, said in an interview.
Lower Rents
“We would expect that activity to continue,” Brinkmann said of increased mortgage applications.
Lower rates may not encourage some buyers because U.S. apartment rents are falling and landlords are offering concessions such as free rent to avoid higher vacancies.
Apartment rents fell in the fourth quarter from the third as the national vacancy rate climbed to a four-year high of 6.6 percent, Reis Inc. said yesterday in a report.
Asking rents fell 0.1 percent from the previous quarter, to $1,052 on average, their first quarter-to-quarter decline in almost six years. Effective rents, what tenants actually paid, fell to an average $996 last quarter, down 0.4 percent from the prior quarter.
“Even if rates go low enough, if you got married, you’re 28 years old with no kids -- the typical first time buyer -- you’ll wait a year and continue to rent because there are good deals out there,” said Miller, the mortgage analyst.
At HomeStreet Bank in Seattle, consumers were being offered a 30-year fixed mortgage rate of 4.75 percent this week, according to Rich Bennion, vice president of residential lending. Flagstar Bank in Troy, Michigan, had rates below 5 percent that may include some costs to customers, spokeswoman Susan Cherry said.
“This is the lowest that I’ve seen,” Bennion said.
To contact the reporter on this story: Dan Levy in San Francisco at dlevy13@bloomberg.net.
JPMorgan Chase & Co. is advertising 30-year mortgages as low as 4.75 percent on its Web site, Wells Fargo & Co. has an offer for 4.875 percent and Bank of America Corp. has rates at 5 percent. The offers are for borrowers with excellent credit who put 20 percent down.
The Federal Reserve earlier this week began purchasing $500 billion of mortgage securities backed by Fannie Mae, Freddie Mac and Ginnie Mae to help lower mortgage costs. While the lower rates may lead more borrowers to refinance, it may not spur home buying in the second year of the recession after more than 2 million jobs were lost in 2008.
“I don’t know if there is a magic number now that everyone is freaking out about the economy,” said Paul Miller, a mortgage industry analyst with Friedman Billings Ramsey & Co. in Arlington, Virginia. “The home buyer is scared out of the market.”
Freddie Mac today reported that the U.S. average rate on a 30-year mortgage dropped for the 10th straight week to the lowest on record. The fixed rate dropped to 5.01 percent from 5.10 percent a week earlier, Freddie Mac said. That’s the lowest in data that goes back to 1971, according to the McLean, Virginia-based mortgage buyer.
Lower Yields
The Fed’s purchase program, which also includes buying $100 billion in direct debt, is intended to lower consumer rates by reducing the supply of agency mortgage bonds issued by Fannie, Freddie and Ginnie. That would boost their prices and lower yields, in turn reducing the interest rates banks charge on new mortgages to ensure sales of the securities are profitable. Agency bonds now facilitate almost all new home lending.
Jill Pfeiffer, a mortgage broker in San Diego, this week obtained a 4.875 percent rate on a 30-year fixed loan for a homebuyer with a credit score above 750, she said in an interview.
“It’s the lowest I’ve ever locked in on a 30-year fixed” since she began her business in 1996, she said.
The loan, with Sun Trust Mortgage Inc., had no origination fee or points, a percentage of the loan amount that lenders charge, Pfeiffer said. At least two other lenders could have matched the rate, she said. She also had four inquiries from homeowners looking to refinance mortgages.
Prices Declining
Rates are dropping as home prices in 20 major U.S. cities declined 18 percent in the year through October, the fastest rate on record, as tighter lending standards curbed sales and foreclosure sales pushed down values.
Sales of single-family homes declined 7.6 percent in November from the prior month, the most in two decades, according to the Chicago-based National Association of Realtors. Resale prices fell 13 percent, the most since the Great Depression in the 1930s.
The Mortgage Bankers Association’s index of applications to purchase a home or refinance a loan dropped to 1,143.8 for the week ending Jan. 2, from a five-year high of 1,245.7 the prior week, as consumers held out for lower rates. The group’s purchase gauge rose 7.3 percent and the refinancing measure decreased 12 percent.
Applications for home-loan refinancing and new purchases may increase as rates drop below 5 percent and exceed the five- year high of two weeks ago, Jay Brinkmann, chief economist for the Washington-based Mortgage Bankers group, said in an interview.
Lower Rents
“We would expect that activity to continue,” Brinkmann said of increased mortgage applications.
Lower rates may not encourage some buyers because U.S. apartment rents are falling and landlords are offering concessions such as free rent to avoid higher vacancies.
Apartment rents fell in the fourth quarter from the third as the national vacancy rate climbed to a four-year high of 6.6 percent, Reis Inc. said yesterday in a report.
Asking rents fell 0.1 percent from the previous quarter, to $1,052 on average, their first quarter-to-quarter decline in almost six years. Effective rents, what tenants actually paid, fell to an average $996 last quarter, down 0.4 percent from the prior quarter.
“Even if rates go low enough, if you got married, you’re 28 years old with no kids -- the typical first time buyer -- you’ll wait a year and continue to rent because there are good deals out there,” said Miller, the mortgage analyst.
At HomeStreet Bank in Seattle, consumers were being offered a 30-year fixed mortgage rate of 4.75 percent this week, according to Rich Bennion, vice president of residential lending. Flagstar Bank in Troy, Michigan, had rates below 5 percent that may include some costs to customers, spokeswoman Susan Cherry said.
“This is the lowest that I’ve seen,” Bennion said.
To contact the reporter on this story: Dan Levy in San Francisco at dlevy13@bloomberg.net.
Monday, January 5, 2009
Interest Rates crazy low, good!
Interest rates have continued to drop and are now hovering between 5.00% and 5.375% for conforming loans with no points.
MLS# 09-337867 - 501 PALISADES DR # 216, PACIFIC PALISADES 90272
MLS# 09-337867 - 501 PALISADES DR # 216, PACIFIC PALISADES 90272
$232,618.
Actual Price.
Buyer must be 62 years or older.
$232,618.
Actual Price.
Buyer must be 62 years or older.
Sunday, January 4, 2009
More lenders allow 'early workout' loan alterations
Homeowners in financial trouble no longer need to miss two to three months of payments before their mortgage companies can modify their unaffordable loan terms.
By Kenneth R. Harney December 21, 2008
Reporting from Washington -- Here's some good news for homeowners facing tough financial times: You no longer have to miss two to three months of payments before your mortgage firm can modify your unaffordable loan terms. Fannie Mae, the mortgage giant with an estimated 18 million home loans in its portfolio or in mortgage bond pools it guarantees, now will allow borrowers who face financial difficulties to request "early workout" loan alterations, even if they've never been late.
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Fannie's policy change has the potential to help thousands of people who are losing jobs or facing layoffs as the recession crunches onward. Most lenders and loan servicers traditionally have declined to intervene in mortgage problems until borrowers are 60 to 90 days late. So-called loss mitigation staffs may then try to work out solutions through techniques such as rescheduling back payments or extending the loan term.Under Fannie Mae's revised approach, servicers of the company's loans will be required to inform borrowers that if they are "reasonably" certain that changes in their income will cause them to miss mortgage payments, they might qualify for an advance loan modification -- before they fall behind.Borrowers who qualify will enter into a trial period of reduced payments, usually for four months. If they make payments on time during the trial, the modified mortgage terms could be made permanent.
For example, say your spouse loses a part-time source of income, and suddenly you're short $400 a month needed to make your $2,000 mortgage payment. In the past, if you called your loan servicer, you probably would be told that rules prohibit any help to you until you have become delinquent by several months. But by that time you might be thousands of dollars in the hole, racking up big late payment penalties and in the process of wrecking your credit scores.Under the early workout concept, Fannie's servicers can now tell you upfront: We'll try lowering your monthly payments to accommodate the $400 in missing income. If you're current on the lowered payments after a four-month trial, and your income situation has not rebounded, we'll make the change permanent.Officials said servicers would examine the facts in each case individually, checking income, credit reports and other documentation to ensure that borrowers weren't faking income shortages just to get a lower payment.Fannie's new loan modification program puts the company in sync with other large mortgage institutions that are reaching out to borrowers facing economic strains before they end up in serious delinquency or foreclosure.For instance, Jamie Dimon, JPMorgan Chase's chairman and chief executive, says he expects his company to identify and work with as many as 400,000 customers who may be in danger of missing future payments. Bank of America has announced a similar effort.Freddie Mac, which has 12 million loan customers either in its portfolio or in mortgage bond pools it guarantees, has "for years" permitted its servicers to negotiate early modifications in some circumstances, spokesman Brad German said, although Freddie has not aggressively publicized the program to borrowers.With the addition of Fannie Mae, the vast majority of major players in the mortgage market now say they offer some form of early intervention for consumers heading for defaults. But there's a big unknown here: If your servicer modifies the terms of your loan, will you stay out of trouble? Or might you fall behind again?The jury is still out. On the one hand, some recent federal data suggest that more than half -- 53% -- of modified loans end up in re-defaults within six months. Modification advocates such as Sheila Bair, chairwoman of the Federal Deposit Insurance Corp., contend that changes to loan terms that go deep enough to meaningfully deal with borrowers' ongoing financial problems succeed at far higher rates.What should you do if you see financial trouble on the horizon that could push you into serious delinquency? Immediately contact your servicer, and if you find out your loan is owned by Fannie Mae, Freddie Mac or another major lender, request an early workout.Before foreclosures started going off the charts, substantive help in advance would have been almost inconceivable. Now it's part of servicers' marching orders.Kenneth R. Harney is a syndicated columnist distributed by the Washington Post Writers Group.
By Kenneth R. Harney December 21, 2008
Reporting from Washington -- Here's some good news for homeowners facing tough financial times: You no longer have to miss two to three months of payments before your mortgage firm can modify your unaffordable loan terms. Fannie Mae, the mortgage giant with an estimated 18 million home loans in its portfolio or in mortgage bond pools it guarantees, now will allow borrowers who face financial difficulties to request "early workout" loan alterations, even if they've never been late.
Ads by Google
Loan Mods My BUTT
Here is the proven way to mod other people's loans and make money at it
GetLoanModSecrets.org
Fast Foreclosure Loans
We Have The HOPE For Homeowners Program. Free Qualifications Today!
HelpForHomeowners.org
Fannie's policy change has the potential to help thousands of people who are losing jobs or facing layoffs as the recession crunches onward. Most lenders and loan servicers traditionally have declined to intervene in mortgage problems until borrowers are 60 to 90 days late. So-called loss mitigation staffs may then try to work out solutions through techniques such as rescheduling back payments or extending the loan term.Under Fannie Mae's revised approach, servicers of the company's loans will be required to inform borrowers that if they are "reasonably" certain that changes in their income will cause them to miss mortgage payments, they might qualify for an advance loan modification -- before they fall behind.Borrowers who qualify will enter into a trial period of reduced payments, usually for four months. If they make payments on time during the trial, the modified mortgage terms could be made permanent.
For example, say your spouse loses a part-time source of income, and suddenly you're short $400 a month needed to make your $2,000 mortgage payment. In the past, if you called your loan servicer, you probably would be told that rules prohibit any help to you until you have become delinquent by several months. But by that time you might be thousands of dollars in the hole, racking up big late payment penalties and in the process of wrecking your credit scores.Under the early workout concept, Fannie's servicers can now tell you upfront: We'll try lowering your monthly payments to accommodate the $400 in missing income. If you're current on the lowered payments after a four-month trial, and your income situation has not rebounded, we'll make the change permanent.Officials said servicers would examine the facts in each case individually, checking income, credit reports and other documentation to ensure that borrowers weren't faking income shortages just to get a lower payment.Fannie's new loan modification program puts the company in sync with other large mortgage institutions that are reaching out to borrowers facing economic strains before they end up in serious delinquency or foreclosure.For instance, Jamie Dimon, JPMorgan Chase's chairman and chief executive, says he expects his company to identify and work with as many as 400,000 customers who may be in danger of missing future payments. Bank of America has announced a similar effort.Freddie Mac, which has 12 million loan customers either in its portfolio or in mortgage bond pools it guarantees, has "for years" permitted its servicers to negotiate early modifications in some circumstances, spokesman Brad German said, although Freddie has not aggressively publicized the program to borrowers.With the addition of Fannie Mae, the vast majority of major players in the mortgage market now say they offer some form of early intervention for consumers heading for defaults. But there's a big unknown here: If your servicer modifies the terms of your loan, will you stay out of trouble? Or might you fall behind again?The jury is still out. On the one hand, some recent federal data suggest that more than half -- 53% -- of modified loans end up in re-defaults within six months. Modification advocates such as Sheila Bair, chairwoman of the Federal Deposit Insurance Corp., contend that changes to loan terms that go deep enough to meaningfully deal with borrowers' ongoing financial problems succeed at far higher rates.What should you do if you see financial trouble on the horizon that could push you into serious delinquency? Immediately contact your servicer, and if you find out your loan is owned by Fannie Mae, Freddie Mac or another major lender, request an early workout.Before foreclosures started going off the charts, substantive help in advance would have been almost inconceivable. Now it's part of servicers' marching orders.Kenneth R. Harney is a syndicated columnist distributed by the Washington Post Writers Group.
Saturday, January 3, 2009
Los Feliz, Hollywood Hills East - Open House
Today's Open Houses - SATURDAY JANUARY 03, 2009 (1:00 - 4:00P)
1937 Canyon Drive, Los Angeles, CA 90068
*pictures shown below
I look forward to seeing you there, and Happy New Year!
Greg
1937 Canyon Drive, Los Angeles, CA 90068
*pictures shown below
I look forward to seeing you there, and Happy New Year!
Greg
Sunday, December 28, 2008
1937 Canyon Dr - Sunday 12/28/08 (1-4pm) $879k Today's Open Houses
1937 CANYON DRIVE, LOS FELIZ, CA 90068
3 bedroom, 1.75 bathroom, sq ft 1426, lot 6750
$879k - today's open house is 1:00p - 4:00p
Saturday, December 20, 2008
1937 Canyon Dr - Sunday 12/21/08 (1-4pm) $879k Today's Open Houses
3 BEDROOM, 1.75 BATHROOMS
CRAFTSMAN ROW CHARMER, CIRCA 1919. THIS VINTAGE BEAUTY HAS JUST BEEN FRESHLY PAINTED AND OFFERS 3 BEDROOMS, 1.75 NEWER "VINTAGE LOOK" BATHS, LARGE UPDATED KITCHEN, SUN FILLED LIVING ROOM, FORMAL DINING ROOM WITH BUILT-IN CABINETS, LOVELY FRONT PORCH, HUGE BACK GARDEN AND MUCH MORE. CLASSIC EARLY CALIFORNIA LIVING AT IT'S BEST!
Friday, December 19, 2008
Ryan Brown of Flipping Out, Ryan's latest LA project.
GREAT HOLLYWOOD HILLS HOME. CONFRADULATIONS TO RYAN AND HIS TEAM.
http://www.nbclosangeles.com/around_town/real_estate/Real_Estate_Porn__Zen_Palace_in_the_Hollywood_Hills_All__National_.html
http://www.nbclosangeles.com/around_town/real_estate/Real_Estate_Porn__Zen_Palace_in_the_Hollywood_Hills_All__National_.html
The Charitable Foundation
The Charitable Foundation.net
Because our business connects us very closely to the communities where we live and work, our agents and employees care deeply about making those communities better places to live. I’m proud to say that through our regional foundations, our people have given a combined total of over $3.5 million to hundreds of local organizations focused on health, education, community, and the environment.
All foundation grants are funded by personal contributions from our agents and employees; many agents automatically donate a portion of every transaction to the foundation. A board of representatives meets monthly to review funding applications and award grants. They also recruit and coordinate company volunteers for efforts large and small across the Southland.
Because our business connects us very closely to the communities where we live and work, our agents and employees care deeply about making those communities better places to live. I’m proud to say that through our regional foundations, our people have given a combined total of over $3.5 million to hundreds of local organizations focused on health, education, community, and the environment.
All foundation grants are funded by personal contributions from our agents and employees; many agents automatically donate a portion of every transaction to the foundation. A board of representatives meets monthly to review funding applications and award grants. They also recruit and coordinate company volunteers for efforts large and small across the Southland.
Monday, December 15, 2008
Wells Fargo CEO: Housing May Be Bottoming Out
Wells Fargo CEO: Housing May Be Bottoming Out
Topics:Mergers & Acquisitions | CEOs and CFOs | Subprime Lending | Mortgages | Housing | Real Estate | Consumers
Sectors:Banks
Companies:Washington Mutual Inc | Wachovia Corp | JPMorgan Chase and Co | US Bancorp | Wells Fargo and CoReuters | 10 Dec 2008 | 10:30 AM ET Text Size Wells Fargo Chief Executive John Stumpf said on Wednesday the U.S. housing market may be bottoming, a development that could ease his bank's pending acquisition of Wachovia.
Stumpf's comments, at the Goldman Sachs U.S. Financial Services Conference, reflected his optimism that Wells Fargo [WFC 25.92 -0.80 (-2.99%) ] will continue to avoid the credit problems that have caused billions of dollars of writedowns industrywide since the credit crisis began last year.
Stumpf said rising unemployment is the biggest threat to housing. But even in California "more stuff is selling," he said, and multiple bidders have begun to make offers on foreclosed properties. Wells Fargo is based in San Francisco and is the nation's second-largest U.S. mortgage lender.
"We're not at the end," Stumpf said. "My suspicion is there is some more to go. But we're starting to see some early signs that maybe we've reached the bottom in housing or close to it."
Wells Fargo agreed on Oct. 3 to buy Charlotte, North Carolina-based Wachovia [WB 5.09 -0.20 (-3.74%) ] after the latter was felled by soaring losses on "option" adjustable-rate mortgages it took on when it bought California lender Golden West Financial Corp in 2006.
The all-stock transaction, valued Tuesday at $13.1 billion, is expected to close by year-end. Wachovia shareholders will vote on the takeover on Dec. 23. Wells Fargo would become the fourth-largest U.S. bank, with $1.4 trillion of assets and $774 billion of deposits, and more than 6,600 banking offices.
RELATED LINKS
Current DateTime: 10:46:34 15 Dec 2008
LinksList Documentid: 28157631
US Mortgage Applications Dip after Big Surge
Whitney: Banks On Life Support Next 18 Months
Wells Fargo Economists to Offer 2009 Outlook
Auto Bailout Is In Jeopardy As GOP Opposition Mounts
Wells Fargo has said it expects to write down $71.4 billion of Wachovia loans, including $36 billion of option ARMs and $9.6 billion of commercial real estate.
Stumpf expects at least $5 billion of annual cost savings, and expects the takeover to boost earnings per share by 20 percent or more in 2011, and by higher amounts thereafter.
"I can't tell you how much I like this deal, despite the fact things are getting worse. But we expected that," he said, referring to economic conditions.
He said Wells Fargo does not make and still does not like option ARMs, and will run off Wachovia's portfolio.
Stumpf also said Wells Fargo remains a beneficiary of a "flight to quality" among deposits seeking stable banks.
The situation has become easier following the disappearance in the last six months of troubled lenders with large California operations that chased deposits with big yields.
Mortgages
30 yr fixed 5.57% 5.74%
30 yr fixed jumbo 7.07% 7.16%
15 yr fixed 5.26% 5.55%
15 yr fixed jumbo 6.38% 6.51%
5/1 ARM 5.89% 5.48%
5/1 jumbo ARM 5.98% 5.49%
Find personalized rates:
Bankrate.com
Countrywide Financial was bought by Bank of America [BAC 14.19 -0.74 (-4.96%) ], while Washington Mutual, IndyMac Bancorp and Downey Financial failed.
Washington Mutual's operations were bought by JPMorgan Chase [JPM 29.09 -1.85 (-5.98%) ], and Downey's by U.S. Bancorp [USB 24.22 -1.62 (-6.27%) ].
"There is no WaMu, there is no IndyMac, there is no Countrywide, there is no Downey. Who is paying the crazy rates?" Stumpf said. "That's hopeful to us."
Shares of Wells Fargo closed Tuesday at $30.50 on the New York Stock Exchange. They have risen 1 percent this year, while the KBW Bank Index [.BKX 41.59 -1.60 (-3.7%) ]<.BKX> is down 46.7 percent.
Copyright 2008 Reuters.
Topics:Mergers & Acquisitions | CEOs and CFOs | Subprime Lending | Mortgages | Housing | Real Estate | Consumers
Sectors:Banks
Companies:Washington Mutual Inc | Wachovia Corp | JPMorgan Chase and Co | US Bancorp | Wells Fargo and CoReuters | 10 Dec 2008 | 10:30 AM ET Text Size Wells Fargo Chief Executive John Stumpf said on Wednesday the U.S. housing market may be bottoming, a development that could ease his bank's pending acquisition of Wachovia.
Stumpf's comments, at the Goldman Sachs U.S. Financial Services Conference, reflected his optimism that Wells Fargo [WFC 25.92 -0.80 (-2.99%) ] will continue to avoid the credit problems that have caused billions of dollars of writedowns industrywide since the credit crisis began last year.
Stumpf said rising unemployment is the biggest threat to housing. But even in California "more stuff is selling," he said, and multiple bidders have begun to make offers on foreclosed properties. Wells Fargo is based in San Francisco and is the nation's second-largest U.S. mortgage lender.
"We're not at the end," Stumpf said. "My suspicion is there is some more to go. But we're starting to see some early signs that maybe we've reached the bottom in housing or close to it."
Wells Fargo agreed on Oct. 3 to buy Charlotte, North Carolina-based Wachovia [WB 5.09 -0.20 (-3.74%) ] after the latter was felled by soaring losses on "option" adjustable-rate mortgages it took on when it bought California lender Golden West Financial Corp in 2006.
The all-stock transaction, valued Tuesday at $13.1 billion, is expected to close by year-end. Wachovia shareholders will vote on the takeover on Dec. 23. Wells Fargo would become the fourth-largest U.S. bank, with $1.4 trillion of assets and $774 billion of deposits, and more than 6,600 banking offices.
RELATED LINKS
Current DateTime: 10:46:34 15 Dec 2008
LinksList Documentid: 28157631
US Mortgage Applications Dip after Big Surge
Whitney: Banks On Life Support Next 18 Months
Wells Fargo Economists to Offer 2009 Outlook
Auto Bailout Is In Jeopardy As GOP Opposition Mounts
Wells Fargo has said it expects to write down $71.4 billion of Wachovia loans, including $36 billion of option ARMs and $9.6 billion of commercial real estate.
Stumpf expects at least $5 billion of annual cost savings, and expects the takeover to boost earnings per share by 20 percent or more in 2011, and by higher amounts thereafter.
"I can't tell you how much I like this deal, despite the fact things are getting worse. But we expected that," he said, referring to economic conditions.
He said Wells Fargo does not make and still does not like option ARMs, and will run off Wachovia's portfolio.
Stumpf also said Wells Fargo remains a beneficiary of a "flight to quality" among deposits seeking stable banks.
The situation has become easier following the disappearance in the last six months of troubled lenders with large California operations that chased deposits with big yields.
Mortgages
30 yr fixed 5.57% 5.74%
30 yr fixed jumbo 7.07% 7.16%
15 yr fixed 5.26% 5.55%
15 yr fixed jumbo 6.38% 6.51%
5/1 ARM 5.89% 5.48%
5/1 jumbo ARM 5.98% 5.49%
Find personalized rates:
Bankrate.com
Countrywide Financial was bought by Bank of America [BAC 14.19 -0.74 (-4.96%) ], while Washington Mutual, IndyMac Bancorp and Downey Financial failed.
Washington Mutual's operations were bought by JPMorgan Chase [JPM 29.09 -1.85 (-5.98%) ], and Downey's by U.S. Bancorp [USB 24.22 -1.62 (-6.27%) ].
"There is no WaMu, there is no IndyMac, there is no Countrywide, there is no Downey. Who is paying the crazy rates?" Stumpf said. "That's hopeful to us."
Shares of Wells Fargo closed Tuesday at $30.50 on the New York Stock Exchange. They have risen 1 percent this year, while the KBW Bank Index [.BKX 41.59 -1.60 (-3.7%) ]<.BKX> is down 46.7 percent.
Copyright 2008 Reuters.
Tuesday, December 9, 2008
Time to Think About Buying a House?
December 6, 2008
Your Money
It May Be Time to Think About Buying a House
By RON LIEBER
Five or 10 years from now, when the financial crisis has ended and housing prices are up smartly once more, we will look in the rearview mirror and realize that we missed a golden age for first-time home buyers.
Then, everyone who sat on their down payment savings accounts for a few years too long will kick themselves for not taking advantage of what may turn out to be the buying opportunity of a lifetime for those who can qualify for a mortgage.
Unfortunately, we do not know when this golden age will begin, because we will be able to identify a bottom to the housing market only with the benefit of hindsight. But as it does with the stock market, the moment will probably arrive when everyone is feeling the most pessimistic.
That moment is certainly getting closer. Housing prices have fallen drastically from their peak levels in many areas of the country. Rates on 30-year fixed-rate mortgages are already close to 5.5 percent, and this week there were suggestions that the federal government might try to drive them down to 4.5 percent, a truly incredible figure to be able to lock in for three decades.
Meanwhile, first-time home buyers have the same advantage they have always had, which is that they do not have to sell their old place before buying a new one. That is an added advantage in areas where many available houses simply are not moving, because the people trying to sell them will not be bidding against you.
If you’re hoping for a recovery in the housing market, you ought to be cheering on the first-time home buyers. When they purchase homes, their sellers are free to move on or move up, stimulating further sales.
But if you are a potential first-time buyer yourself, or lending or giving the down payment to one, you are probably as frightened as you are tempted by all the “For Sale” signs that have become “On Sale” signs. So let’s quickly review some of the still-grim pricing data in certain areas — and consider the reasoning offered up by first-time buyers who have forged ahead anyhow.
As is always the case with real estate, much depends on location. One study, “The Changing Prospects for Building Home Equity,” tries to predict where today’s first-time buyers in the 100 biggest metropolitan areas may actually have less home equity by 2012 as a result of continued price declines. The verdict was that buyers in 33 of the markets could see a decline by 2012, including potential six-figure drops on an average home in the New York City, Los Angeles, San Francisco and Seattle metropolitan areas.
This is obviously scary. (I’ve linked to the study, a joint effort of the Center for Economic and Policy Research and the National Low Income Housing Coalition, from the version of this article at nytimes.com/yourmoney.) It’s worth noting, however, that these predictions came before the government made its most recent move to reduce borrowing costs.
Also, the price projections in the study are based, in part, on the fact that the ratio of purchase prices to annual rents is still higher in many areas than the historical average, which is roughly 15 times rents. While past figures may well have some predictive value, I have never been convinced that first-time buyers compare a home that they could own and one that they would rent in purely or even primarily economic terms.
When Jaime and Michael Proman moved this fall to Minneapolis, his hometown, from New York City, they craved a different sort of life after two years together in a 450-square-foot studio apartment. “We didn’t want a sterile apartment feel,” said Mr. Proman, who is 28 (his wife is 26). “We wanted something that was permanent and very much a reflection of us.”
The fact is, in many parts of the country there are few if any attractive rentals for people looking to put down roots and enjoy the sort of amenities they may spot on cable television home improvement shows. Comparing a rental with a place that you may own seems almost pointless in these situations, especially for those who are now grown up enough to want to make their own decisions about décor without consulting the landlord.
Still, for anyone feeling the urge to buy, a number of practical considerations have changed in the last year or two. The basics are back, like spending no more than 28 percent of your pretax income on mortgage payments, taxes and insurance. Even if a lender does not hold you to this when you go in for preapproval, you should hold yourself to it.
You will also want to start now on any project to improve your credit score because it may take several months to get it above the 720 level that qualifies you for many of the best mortgage rates.
John Ulzheimer, president of consumer education for credit.com, a consumer credit information and application site, suggests starting to pay down and put away credit cards months before you apply for a loan. That is because the credit scoring system could penalize you if you use a lot of credit each month, even if you always pay in full. Also, check your three credit reports (it’s free) at annualcreditreport.com and dispute errors.
While no one can easily predict the likelihood of losing a job, Friday’s startling unemployment figures suggest the need for caution if you think you might be vulnerable. A. C. Panella, who teaches communications at Pasadena City College in California, waited until she had a tenure-track job before buying a home in the Highland Park section of Los Angeles with her partner, Amy Goldman, a lawyer for a nonprofit organization. “We could afford the mortgage payment on one salary, were something to come up,” Ms. Panella, 31, said. “It’s really about being able to stay within our means.”
For many first-time home buyers, that philosophy stretches to the down payment, too. Ms. Panella and her partner put down 20 percent when they bought their home in September, as did the Promans when they bought their home in the Lowry Hill neighborhood of Minneapolis.
Alison Nowak, 29, put just 3 percent down on a Federal Housing Administration-backed loan last month when she and her partner, Lacey Mamak, bought a $149,900, 800-square-foot home several miles south of where the Promans live. “Anything that is an opportunity also has a bit of risk,” she said. Her house was in foreclosure before a plumber bought it and fixed it up. “One way we mitigated it was that we bought a really tiny house in a very good neighborhood.”
One other strategy might be to buy new instead of used. Ian Shepherdson, chief United States economist for the research firm High Frequency Economics, says he believes that a steep drop-off in inventory of new homes is coming soon, thanks to a rapid decrease in home builder activity.
Since prices generally soften in the winter, it may make sense to start looking seriously once the mercury bottoms out. “If you look at new developments next spring, you may not have the choice you thought you would have or be in the bargaining position you thought you would be,” Mr. Shepherdson said. Also, if you wait after June 30, you will miss out on a $7,500 federal tax credit for income-eligible first-time home buyers that works like an interest-free loan.
Finally, allow yourself to consider how it would feel if you bought and then prices dropped another 10 or 15 percent. It might not bother you if you plan to stick around. Plenty of people seem to be making a longer commitment to their homes. According to a survey that the National Association of Realtors released last month, typical first-time buyers plan to stay in their home 10 years, up from 7 last year.
Perhaps people are more aware that they will not be able to build equity as rapidly as others did in the real estate boom. Or they simply have more confidence in hard, hometown assets now than in other markets.
“We wouldn’t let another decline bother us,” said Michael Proman. “You can never time a bottom. This is a long-term investment for us, and it truly is the best investment we have in our portfolio right now.”
Your Money
It May Be Time to Think About Buying a House
By RON LIEBER
Five or 10 years from now, when the financial crisis has ended and housing prices are up smartly once more, we will look in the rearview mirror and realize that we missed a golden age for first-time home buyers.
Then, everyone who sat on their down payment savings accounts for a few years too long will kick themselves for not taking advantage of what may turn out to be the buying opportunity of a lifetime for those who can qualify for a mortgage.
Unfortunately, we do not know when this golden age will begin, because we will be able to identify a bottom to the housing market only with the benefit of hindsight. But as it does with the stock market, the moment will probably arrive when everyone is feeling the most pessimistic.
That moment is certainly getting closer. Housing prices have fallen drastically from their peak levels in many areas of the country. Rates on 30-year fixed-rate mortgages are already close to 5.5 percent, and this week there were suggestions that the federal government might try to drive them down to 4.5 percent, a truly incredible figure to be able to lock in for three decades.
Meanwhile, first-time home buyers have the same advantage they have always had, which is that they do not have to sell their old place before buying a new one. That is an added advantage in areas where many available houses simply are not moving, because the people trying to sell them will not be bidding against you.
If you’re hoping for a recovery in the housing market, you ought to be cheering on the first-time home buyers. When they purchase homes, their sellers are free to move on or move up, stimulating further sales.
But if you are a potential first-time buyer yourself, or lending or giving the down payment to one, you are probably as frightened as you are tempted by all the “For Sale” signs that have become “On Sale” signs. So let’s quickly review some of the still-grim pricing data in certain areas — and consider the reasoning offered up by first-time buyers who have forged ahead anyhow.
As is always the case with real estate, much depends on location. One study, “The Changing Prospects for Building Home Equity,” tries to predict where today’s first-time buyers in the 100 biggest metropolitan areas may actually have less home equity by 2012 as a result of continued price declines. The verdict was that buyers in 33 of the markets could see a decline by 2012, including potential six-figure drops on an average home in the New York City, Los Angeles, San Francisco and Seattle metropolitan areas.
This is obviously scary. (I’ve linked to the study, a joint effort of the Center for Economic and Policy Research and the National Low Income Housing Coalition, from the version of this article at nytimes.com/yourmoney.) It’s worth noting, however, that these predictions came before the government made its most recent move to reduce borrowing costs.
Also, the price projections in the study are based, in part, on the fact that the ratio of purchase prices to annual rents is still higher in many areas than the historical average, which is roughly 15 times rents. While past figures may well have some predictive value, I have never been convinced that first-time buyers compare a home that they could own and one that they would rent in purely or even primarily economic terms.
When Jaime and Michael Proman moved this fall to Minneapolis, his hometown, from New York City, they craved a different sort of life after two years together in a 450-square-foot studio apartment. “We didn’t want a sterile apartment feel,” said Mr. Proman, who is 28 (his wife is 26). “We wanted something that was permanent and very much a reflection of us.”
The fact is, in many parts of the country there are few if any attractive rentals for people looking to put down roots and enjoy the sort of amenities they may spot on cable television home improvement shows. Comparing a rental with a place that you may own seems almost pointless in these situations, especially for those who are now grown up enough to want to make their own decisions about décor without consulting the landlord.
Still, for anyone feeling the urge to buy, a number of practical considerations have changed in the last year or two. The basics are back, like spending no more than 28 percent of your pretax income on mortgage payments, taxes and insurance. Even if a lender does not hold you to this when you go in for preapproval, you should hold yourself to it.
You will also want to start now on any project to improve your credit score because it may take several months to get it above the 720 level that qualifies you for many of the best mortgage rates.
John Ulzheimer, president of consumer education for credit.com, a consumer credit information and application site, suggests starting to pay down and put away credit cards months before you apply for a loan. That is because the credit scoring system could penalize you if you use a lot of credit each month, even if you always pay in full. Also, check your three credit reports (it’s free) at annualcreditreport.com and dispute errors.
While no one can easily predict the likelihood of losing a job, Friday’s startling unemployment figures suggest the need for caution if you think you might be vulnerable. A. C. Panella, who teaches communications at Pasadena City College in California, waited until she had a tenure-track job before buying a home in the Highland Park section of Los Angeles with her partner, Amy Goldman, a lawyer for a nonprofit organization. “We could afford the mortgage payment on one salary, were something to come up,” Ms. Panella, 31, said. “It’s really about being able to stay within our means.”
For many first-time home buyers, that philosophy stretches to the down payment, too. Ms. Panella and her partner put down 20 percent when they bought their home in September, as did the Promans when they bought their home in the Lowry Hill neighborhood of Minneapolis.
Alison Nowak, 29, put just 3 percent down on a Federal Housing Administration-backed loan last month when she and her partner, Lacey Mamak, bought a $149,900, 800-square-foot home several miles south of where the Promans live. “Anything that is an opportunity also has a bit of risk,” she said. Her house was in foreclosure before a plumber bought it and fixed it up. “One way we mitigated it was that we bought a really tiny house in a very good neighborhood.”
One other strategy might be to buy new instead of used. Ian Shepherdson, chief United States economist for the research firm High Frequency Economics, says he believes that a steep drop-off in inventory of new homes is coming soon, thanks to a rapid decrease in home builder activity.
Since prices generally soften in the winter, it may make sense to start looking seriously once the mercury bottoms out. “If you look at new developments next spring, you may not have the choice you thought you would have or be in the bargaining position you thought you would be,” Mr. Shepherdson said. Also, if you wait after June 30, you will miss out on a $7,500 federal tax credit for income-eligible first-time home buyers that works like an interest-free loan.
Finally, allow yourself to consider how it would feel if you bought and then prices dropped another 10 or 15 percent. It might not bother you if you plan to stick around. Plenty of people seem to be making a longer commitment to their homes. According to a survey that the National Association of Realtors released last month, typical first-time buyers plan to stay in their home 10 years, up from 7 last year.
Perhaps people are more aware that they will not be able to build equity as rapidly as others did in the real estate boom. Or they simply have more confidence in hard, hometown assets now than in other markets.
“We wouldn’t let another decline bother us,” said Michael Proman. “You can never time a bottom. This is a long-term investment for us, and it truly is the best investment we have in our portfolio right now.”
Sunday, November 30, 2008
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