Please see my new blog

For technical reasons, I’m retiring this blog.

My new real estate blog is http://santamonicarealestatebyjimbrunet.wordpress.com/

All future posts will be to that blog though I will be retaining this blog as an archive

for the time being.

 

August 17, 2011 at 10:09 am Leave a comment

Portrait of a curious market in stats

I run stats every week (and should probably post them here).    The current snapshot is thus:

Single-Family Homes:   1 foreclosure, 5 short sales, 84 total.

Including:

15 2-bedroom, median asking price $949,000.

31 3-bedroom, median asking price $1,595,000.

 

Condos & Townhomes:  5 foreclosures, 9 short sales,  160 total.

93 2-bedroom, median asking price $720,000.

37 3-bedroom, median asking price $859,000.

First, this is a low inventory.  Last summer, which was already low, peaked in early July around 120 single-family homes and 224 condos.    There is  no way that we’re going to get anywhere near there, the numbers have been bouncing around the current range for weeks.

Second, prices seem to be edging *up*, dire headlines notwithstanding.  I want to see the numbers for a couple of more months before I say “trend” instead of  “blip,” but for single-family homes in particular, the rolling average is now more than $100K higher than it was a few months ago.

Interesting times.

 

 

June 7, 2011 at 4:23 pm Leave a comment

Santa Monica Real Estate: Headlines versus Reality

I read the real estate related articles in the popular press as much as anyone and probably more…if nothing else, I want to know what my clients are reading.   Today’s LOS ANGELES TIMES has a front page story that proclaims, HOME PRICES SLUMP TO NEW LOWS.   Sub-head:  A gauge of housing in 20 metro areas declines in 3.6 percent in March, confirming a U.S. ‘double dip.’

First of all, this is a year over year measurement, not a one month decline as one might infer from the sub-head.   More importantly, only when you jump to page A13 do you read that one year decline in prices for the Los Angeles metro area is only 1.7 percent.    Folks, the LA metro area includes a wide range of neighborhoods, markets, and economic conditions:  from Encino to San Pedro, Santa Monica to Santa Clarita, San Marino to Compton.   Within the LA metro area, the Westside has one of the strongest real estate markets.   While the market isn’t exactly gang busters, prices seem to be edging up, with quite a few properties in the entry range ($500,000 to $1,200,000) going in multiple offers even as other properties sit on the market for a while.

The market could be fairly described as “choppy” or “uneven”…but not the “stagnant” or “declining” picture conveyed by the newspaper headlines.

So, particularly to would-be Buyers, before you head out to the Open Houses with the LA TIMES article fresh in your mind, exercise some caution and don’t count on the newspaper headlines reflecting the local reality.

June 1, 2011 at 9:45 pm Leave a comment

Short Pay transactions: a view from each side

Ordinarily, I give Buyers information and then suggest that they avoid “Short Sale” listings.   First, a definition:  a “short sale” is where the Seller owes more on a property than the current market value of the property.   In selling it, he is “short” of what he owes his Lender(s).    Most lenders will at least look a facilitating a Short Sale transaction because it is faster and less expensive to the Lender than the alternative of Foreclosure if the Seller is having problems.

So when you make an offer and get it accepted by the Seller of a property that is a Short Sale, that is only the first step.   You also need the approval of the Lender.  Sometimes there is a second loan or a credit line as well as first loan, in which case you need approval of both Lenders.   As part of that process, the Seller is required to submit a whole array of financial statements and documentation of the circumstances of their hardship, such as a lost job, a divorce, etc.   Just wanting “out” from the property isn’t going to cut it, the Lender will most likely go ahead and foreclose in that circumstance.

At present, I’m in two Short Sale transactions, one representing a Buyer, the other representing a Seller.   The Buyers made their initial offer more than six weeks ago and got it accepted by the Seller in a matter of days.   Time passed, waiting for the Lender to respond,  and then a little over two weeks ago, the Lender had the Seller issue a Counter-Offer.  Remember, the Seller had already accepted the offer but the Lender re-opened negotiations and said, “We’ll take this transaction but the price needs to be $23,000 more than the Buyers had offered.”  There were some other terms and conditions as well.  Within 48 hours, after reviewing alternative properties, the Buyers accepted the Lender’s counter-offer.  We were told that the final approval of transaction would be “within days” and that we could open escrow as soon as that approval came in.
Two weeks later, today, the bank’s system informed the listing agent, “The Buyer’s documentation of their down payment isn’t in a satisfactory form.”  The Buyers had provided computer printouts of their statements and do not receive printed monthly statements.  Nonetheless, the Lender wants them to go to their bank branch and get statements printed for the last two months.   We’re told that once the Lender receives these, they will proceed within 24-48 hours.

This is the kind of frustrating petty and arbitrary demands that Lenders can and do make in Short Sale situations.   The only reason I suggested that my clients go ahead with pursuing this Short Sake transaction  was that the listing agent had told us that the process with getting the Short Sale approved by the Lender was pretty far along (it was) and that there were very few substitute properties in their price range in the area they were interested in.   I hope we find out in a few days whether the bank is going to go forward because their last Counter-Offer specified a November 30 closing date.

My situation with the Short Sale where I’m representing the Sellers isn’t going much better.   The property was listed for sale in mid-August, we got an offer the first week of September and reached acceptance within a week or so of negotiations.    The Sellers submitted to the offer to their Lender and we  proceeded to wait.   And wait.   And wait.

After four weeks, the Lender had another real estate agent look at the property to render a  price opinion to determine whether the offer was acceptable or not.   More waiting.   A burst of paperwork from the Lender to the Sellers.  More waiting.  Two weeks ago, the Sellers were told that the package was on the asset manager’s desk awaiting final approval.  We’re still waiting.

Short Sales can be good deals.  But participants must have an incredible amount of patience.   The worst cases I’ve heard of involve Short Sales that took nearly a year to complete.   Next to that, 3-4 months is looking good.

 

November 9, 2010 at 6:34 pm Leave a comment

Foreclosures: Santa Monica vs. Southern California

According to an article in the Los Angeles Times, some 34 percent of the sales in Southern California for the month of August were of foreclosed properties.
In contrast, my weekly statistical analysis of Santa Monica on Monday showed that only 2 of 112 single-family homes and 9 of 196 condos & townhomes on the market were foreclosure properties.    Santa Monica in particular and the Westside in general are very different from Southern California as a whole.  Buyers need to calibrate their expectations on the basis of local market conditions, not the newspaper headlines.

September 15, 2010 at 6:49 pm Leave a comment

Counteroffers, asking price, short sales

Representing a Buyer, I just had negotiations fall through on a Santa Monica Condo.

The asking price was $439,000, my Buyer offered $05,000.    Our estimation of a fair price was $415,000 and thus we were disappointed to get a counteroffer of $434,000.  After a second round of counter-offers, negotiations broke down almost $20K apart.  It happens.   My Buyer was determined not to overpay and the comps supported his position as far as I’m concerned.

But here’s the important thing:   the listing agent revealed that the Seller owed nearly $400K on the property.  The break-even point at which the Seller would not have to put money into the transaction or attempt to work out a Short Pay with their lender would be around $425K.

Finding out what Seller owes and whether they can afford to sell at a reasonable market price is becoming an important step to take in this market.     If a Seller simply can’t sell at what seems to be a good market price to the Buyer, the Buyer needs to move on and find another property.

August 31, 2010 at 10:41 am Leave a comment

Number of condos on market drops under 200

For the first time in several months, the number of condos for sale in Santa Monica dropped under 200.  On my weekly market check on Monday 8/23, the number of condos for sale was 195.   For several weeks, the number had peaked in the 221-223 range before slowly receding.  Whether this is a temporary lull or a trend towards lower inventory only time will tell.    Lower inventory, if it comes, should lead to firming prices.

August 24, 2010 at 8:34 am Leave a comment

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