Home sales, July 2010 for the Palos Verdes Peninsula and the South Bay Beach cities

Hermosa Beach 90254, Manhattan Beach 90266,

S. Redondo Beach 90277 and the

Palos Verdes Peninsula 90274 and 90275.

Inventory is up, sales are flat while sales pending (in escrow) are up. Again, if you've read my other posts, you know I believe that low interest rates coupled with some great buying opportunities are still driving current sales.

If you're looking for more specific information on the Palos Verdes Peninsula, South Bay Beach cities or other areas please contact me with the details. Also be sure to become a fan of

Palos Verdes - South Bay Real Estate on Facebook!

Source: Trendgraphix, Inc.

For more information regarding this post or other real estate information contact Robert Dixon at RE/MAX Palos Verdes Realty (310) 703-1848 or email info@robertdixon.net. Content of this or any other post is presumed to be accurate but not guaranteed.

Silver Lake, CA area Home Sales, July 2010

Inventory continues to climb; sales are down by 258 units over June. As you will see in the graph below however, the number of properties "pending" (e.g. in escrow) is relatively flat. This is, no doubt mostly due to continued drops in interest rates. There are some fantastic buys out there right now and with historically low interest rates available on home loans, the savings (over 15 to 30 years) are significant!

If you're looking for more specific information on Silver Lake or other areas please contact me with the details. Also be sure to become a fan of Silver Lake Real Estate and Echo Park Real Estate on Facebook!

Source: Trendgraphix, Inc.

For more information regarding this post or other real estate information contact Robert Dixon at RE/MAX Palos Verdes Realty (310) 703-1848 or email info@robertdixon.net. Content of this or any other post is presumed to be accurate but not guaranteed.

North Redondo Beach, CA - Home Sales July 2010

As mentioned in an earlier post, SOCAL Sales Up 08 to 09, while Prices Level or Fall Off - July 31, 2010 inventory is up, sales are down. As you will see in the graph below however, the number of properties "pending" (e.g. in escrow) has continuted to climb. This is, no doubt mostly due to continued drops in interest rates. There are some fantastic buys out there right now and with historically low interest the savings, over 15 to 30 years are significant!

Source: Trendgraphix, Inc.

For more information regarding this post or other real estate information contact Robert Dixon at RE/MAX Palos Verdes Realty (310) 703-1848 or email info@robertdixon.net. Content of this or any other post is presumed to be accurate but not guaranteed.

Buy or Lease in Historic Angelino Heights!

Live in Historic Angelino Heights!

Angelino Heights is one of LA’s 1st suburbs est. in the late 1800’s. Although known for Queen Anne & Eastlake Victorian landmarks (50+), other architecture includes: Mission Revival, Craftsman/California bungalow, Brownstone & Streamline Moderne. Many of these historic properties have been restored; many more are waiting for that special buyer!

Become a fan of Angelino Heights Real Estate on Facebook

FREE Property List with Photos

Including Short Sales and Bank Foreclosures

Visit

AngelinoHeightsMLS.com

List generated by Robert Dixon, RE/MAX Palos Verdes Realty DRE License #01828273

SOCAL Sales Up 08 to 09, while Prices Level or Fall Off

With the Federal Tax Credit deadline passing, April 30th there has been a very noticeable slow down. For example combined South Bay properties pending (reported start of Escrow April vs. May) were down to 799 in May compared to 1009 in April. Inventory, however has continued to climb from 2674 listed in April, 2845 in May and 3084 reported listed in June. Average price per square foot for South Bay, as a whole is at the lowest level since February however that covers a wide range of prices and demographics. As I continue to say, interest rates (whether buying or refinancing) are the highlight. Falling or level pricing and increased inventory is another.

Please contact me for numbers and prices on specific areas, if you’re considering buying, selling or leasing and especially if you believe you’re upside-down on your loan and fear you may lose your home as there are alternatives to foreclosure.


Southland home sales edge up, prices level off

July 13, 2010

Southern California’s housing market continued its slow crawl toward normalcy in June as sales volume rose and the median price slipped back a notch from May, but remained 13 percent higher than a year ago. Red-hot, fire-sale deals continued to give way to mere bargains in the lower- cost inland markets where first-time buyers and investors have competed fiercely, a real estate information service reported.

A total of 23,871 new and resale homes were sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was up 7.2 percent from 22,270 in May, and up 2.6 percent from 23,262 for June 2009, according to MDA DataQuick of San Diego.

The sales count was the highest since July last year when 24,104 homes were sold. It was the strongest month of June since 2006 when 31,602 homes sold. The average June since 1988 has had 28,086 sales.

“The market was wildly out of kilter a year ago, now it’s just somewhat out of kilter. We’re still seeing lots of bargain hunting, and we’re not seeing much discretionary buying. The single-biggest issue is still mortgage financing. Rates may be at record lows, but that doesn’t mean much if the lender won’t qualify you,” said John Walsh, MDA DataQuick president.

“Still, more money was spent last month buying homes in Southern California than in the past two years, and more money was loaned. The tax credits had something to do with that, though it’s not clear exactly how much. With the impact of the credits fading fast, the next few months will tell us a lot.”

The median price paid for a Southland home was $300,000 last month. That was down 1.6 percent from $305,000 in May, and up 13.2 percent from $265,000 for June 2009. The low point of the current cycle was $247,000 in April 2009, the high point was $505,000 in mid 2007. The median’s peak-to-trough drop was due to a decline in home values as well as a shift in sales toward low-cost homes, especially foreclosures.

Foreclosure resales accounted for 33.0 percent of the resale market last month, down from 33.9 percent in May, and down from 45.3 percent a year ago. The all-time high was February 2009 at 56.7 percent, DataQuick reported.

Government-insured FHA loans, a popular choice among first-time buyers, accounted for 39.0 percent of all mortgages used to purchase homes in June.

Last month 20.8 percent of all sales were for $500,000 or more, compared with 22.2 percent in May and 19.3 percent a year ago. Zip codes in the top one-third of the Southland housing market, based on historical prices, accounted for 29.6 percent of existing single-family house sales last month, down from 31.0 percent in May but up from 27.8 percent a year ago. Over the last decade those high-end areas have contributed a monthly average of 33.3 percent of regional sales. Their contribution to overall sales hit a low of 21.0 percent in January 2009.

High-end sales would be stronger, and the overall market recovery more robust, if adjustable-rate mortgages (ARMs) and “jumbo” loans were more available. Both have become much more difficult to obtain since the August 2007 credit crisis.

While 43.9 percent of all Southland purchase mortgages since 2000 have been ARMs, it was 6.6 percent last month, up from 6.5 percent in May and up from 2.7 percent in June last year.

Jumbo loans, mortgages above the old conforming limit of $417,000, accounted for 17.3 percent of last month’s purchase lending, up from 17.2 percent in May and from 14.9 percent in June 2009. Before the credit crisis, jumbos accounted for 40 percent of the market.

Absentee buyers – mostly investors and some second-home purchasers – bought 19.7 percent of the homes sold in June, paying a median of $220,000. Buyers who appeared to have paid all cash – meaning there was no indication that a corresponding purchase loan was recorded – accounted for 23.5 percent of June sales, paying a median $213,000. In February this year cash sales peaked at 30.1 percent. The 22-year monthly average for Southland homes purchased with cash is 14.1 percent.

The “flipping” of homes has also trended higher over the past year. Last month the percentage of Southland homes flipped – bought and re-sold – within a six-month period was 3.4 percent, while a year ago it was 1.9 percent. Last month it varied from as little as 3.0 percent in Orange and San Diego counties to as much as 3.8 percent in Los Angeles County.

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

The typical monthly mortgage payment that Southland buyers committed themselves to paying was $1,251 last month, down from $1,293 for May, and up from $1,193 for June a year ago. Adjusted for inflation, current payments are 44.3 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They were 54.4 percent below the current cycle’s peak in July 2007.

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

Source: DataQuick

For more information regarding this post or other real estate information contact Robert Dixon at RE/MAX Palos Verdes Realty (310) 703-1848 or email info@robertdixon.net. Content of this or any other post is presumed to be accurate but not guaranteed.

SOLD June, Palos Verdes - South Bay Beach Cities

SOLD during the month of JUNE 2010

61 The number of residential properties sold on the Palos Verdes Peninsula, 90274 and 90275.

120 The number of residential properties sold in the South Bay Beach Cities, El Segundo, Manhattan Beach, Hermosa Beach, Redondo and Torrance Beach.

Residential properties SOLD during the month of MAY 2010
 
For more information regarding this post or other real estate information contact Robert Dixon at RE/MAX Palos Verdes Realty (310) 703-1848 or email info@robertdixon.net. Content of this or any other post is presumed to be accurate but not guaranteed.

Good Schools equal Property Value and Stability

Palos Verdes Peninsula Unified and our excellent South Bay Beach Cities school districts failed to get a shout-out in this article, but we all know the significance of good schools and their correlation to property value and stability...

Good Schools, Bad Real Estate
Despite the housing slump, house hunting in good school districts frustrates parents who often have to settle for less house.

The Wall Street Journal
June 25, 2010 by Sarah Max

Oh, the sacrifices parents make.

Kiely and John Adams began their house hunt this spring with grand plans to upgrade from their small home in Cary, N.C., to a larger, four-bedroom house—preferably with an office and a bonus room—about 25 miles away in Chapel Hill, where Kiely plans on starting a Ph.D. program next fall.

They could have gotten all that and more for their $415,000 budget if they kept their search on the outskirts of Chapel Hill. But, determined to stay within the boundaries of Chapel Hill's highly-regarded school district, the parents of 5-year-old twins, Megan and Bevin, and 4-year-old Sean trudged ahead in what they dubbed "an exercise in compromise." Even when they did find a house that showed promise, it was usually snapped up before they could take a closer look. "Most houses seemed to come and go, come and go," Mr. Adams says.

It's supposed to be a buyer's market. Yet, for parents determined to buy in areas associated with top schools, those bargains may be harder to come by. When housing markets go south, "areas with exceptional schools tend to hold their value better than the market overall," says Michael Sklarz, president of Collateral Analytics, a Honolulu-based firm that specializes in real estate data analysis.

In Chapel Hill, where the Adams family was looking, the average single-family home price, based on price per square foot, has declined about 4.8% since the market peaked in 2007, according to Collateral Analytics, but houses there still command about a 48% premium, per square foot, to homes in the Raleigh-Cary metro area.

In other parts the country, home prices have dropped in areas with good schools, but the declines are typically nowhere near the levels in their surrounding metro areas. In Irvine, Calif., a city that regularly gets national attention for its quality schools, average price per square foot has fallen 18% since its 2006 peak, but prices in the greater metro area surrounding Irvine fell 33%. The same goes for Edina, Minn., where prices per square foot are down about 14% since their peak, versus 27% for the greater Minneapolis area. And in the brainy town of Andover, Mass., prices are down just 4%, versus more than 16% for the Boston metro division.

There are several factors at play, says Mr. Sklarz. Areas with good schools tend to be more affluent and were less susceptible to the sub-prime mortgage debacle so saw fewer foreclosures. What's more, homes associated with great schools generally sell faster, in good markets and bad.

All of this comes as no surprise to the real estate agents who work with education-obsessed parents. "Schools have a huge impact on home values," says Kathy Beacham, a real estate broker in Raleigh. When schools in her own well-to-do neighborhood were redistricted three years ago, the value of her million-dollar home dropped more than $150,000. "A good education has always been important but I don't remember looking at the numbers like parents do today," she says.

Then again, the numbers have never been so widely available. State assessments, independent ratings from websites like GreatSchools and Education.com and annual magazine rankings of America's top high schools have not only made it easy for parents to factor school test scores and parent-teacher ratios into their buying decisions, they've cemented the relationship between home prices and school quality.

When Florida rolled out its statewide grading system in 1999, the real estate market took note. According to research by David Figlio, who is now a professor of education, social policy and economics at Northwestern University, an A-rated school in Gainesville added about $10,000 to the value of a home there versus a B school.

Once a school is graded, the gap often grows. Strong ratings lead to better community support, which in turn leads to better schools. Today, the difference between an A school and B school might easily be $50,000 on a $300,000 house, he says.

That phenomenon isn't lost on residents of Bellevue, Wash., a Seattle suburb that is home to some of the best schools in the state. "I don't think there's ever been a school levy on the ballot here that's been turned down," says broker Michael Orbino. Even residents who don't have school-age children tend to stand behind the schools. It's not altruism; it's economics. All things being equal, homes in the Bellevue school district fetch as much as a 15% premium to those just outside of it, he says.

"But there's more to it than that," says Mr. Orbino. "Because the land is worth so much more in Bellevue, builders tend to build more expensive homes here," making the school district that much more expensive to begin with. By Mr. Orbino's estimate, the prices for single-family homes are down about 10% since the market peak. "But it isn't a catch-all," he says. Prices for ultra-luxury homes and condos, which generally aren't influenced by schools, are down 30% to 40%, he says. So while prices per square foot in Bellevue have fallen slightly more than the Seattle market overall, prices for more family-friendly abodes haven't necessarily seen the same declines.

The stabilizing effect of good schools is welcome news for those who already own property in school boundaries, but it makes it tough for parents to trade up to better homes. John and Kiely Adams considered themselves lucky to have found a three-bedroom home in a Chapel Hill neighborhood they liked and at a price in their budget. But, alas, they were forced to back out of the deal when their current home came up short in the appraisal. With their daughters' first day of kindergarten fast approaching, the couple will stay put for now and start the process over again next spring. "We don't want them to start kindergarten only to yank them out two months later," says Mr. Adams.

Left with few other options, some parents get creative. Bellevue school administrators have seen all kinds of tactics for skirting the district's policy that students spend at least four nights a week within boundary lines. Common ploys include using a family member's address or taking over a resident's utility bill, one of the documents used as proof of residency. The school district has uncovered 35 cases of enrollment fraud this year alone. Other families jump school boundaries by spending four nights a week in a small apartment and going home to a bigger house in another town for the weekends.

Two years ago, Daniel and Dee Shin used an inheritance from Mr. Shin's father to pay $410,000 for the "cheapest house they could afford" in Bellevue for the sole purpose of securing a spot in the school district for their then 11-year-old daughter, Kayla. The 900-square-foot circa-1955 rambler is "beat up and not insulated very well," says Mr. Shin, adding that he assumed that paying property taxes on the house would be enough to satisfy the school district's residency requirements even if the family actually resided in a 2,326-square-foot, four-bedroom home in the nearby town of Renton. Their new neighbors in Bellevue, evidently, didn't see it that way. They reported the Shins to the school district, and the district gave them an ultimatum: move into the Bellevue district by the time Kayla registers for high school in February, or start the following school year in another district.

The decision was clear for the Shins. They plan to spend the summer insulating the Bellevue home and doing their best to make it livable. Come January, they'll move into that house, and their extended family will move into the house in Renton.

The Shins considered just sending Kayla to a private school, but Mr. Shins says that suggestion triggered "on demand tears" from Kayla, who doesn't relish the idea of going to a different high school than her middle-school pals. After all the trouble the couple went through to get Kayla into Bellevue schools, they're determined to see her graduate from Newport High School, which, Mr. Shin is quick to point out, is consistently ranked among the best in the country.

As the father of three children ages 11, 14 and 16, Northwestern's Mr. Figlio understands the dilemma parents face. When he and his family relocated from Gainesville, Fla., to Evanston, Ill., in 2008, Mr. Figlio vetted the middle schools before making a decision about where exactly he and his family would live. For parents struggling with how to get their kids into the "best" schools at a price they can afford, he recommends considering test scores, state ratings and the like—but not getting too hung up on enrolling your child in an A+ school at all costs when a B+ school might actually be a better fit, academically and financially.

Source: The Wall Street Journal, view online at Good Schools, Bad Real Estate

For more information regarding this post or other real estate information contact Robert Dixon at RE/MAX Palos Verdes Realty (310) 703-1848 or email info@robertdixon.net. Content of this or any other post is presumed to be accurate but not guaranteed.

Rate on 5-year ARM falls to record low

Interest rates continue to be the best single reason to be in the housing market. Whether you're buying or need to sell, historically low financing is a huge benefit...

Rate on 5-year ARM falls to record low
But mortgage rates' weekly move proves minimal: Freddie Mac
MarketWatch June 18, 2010
By Amy Hoak , Real Estate writer

Mortgage rates changed little this week, but the 5-year adjustable-rate mortgage managed to slide enough to break its record low, according to Freddie Mac's weekly survey of conforming mortgage rates, released on Thursday.

Five-year Treasury-indexed hybrid ARMs averaged 3.89% for the week ended June 17, down from 3.92% last week and 4.97% a year ago. It's the lowest the ARM has been since Freddie Mac started tracking it in January 2005.

One-year Treasury-indexed ARMs also fell, averaging 3.82%, down from 3.91% last week and 4.95% a year ago. It's the lowest that the ARM has been since the week ended May 6, 2004, when it averaged 3.76%.

But fixed-rate mortgages inched up this week, with the 30-year fixed-rate mortgage averaging 4.75%, up from 4.72% last week; it averaged 5.38% a year ago. And the 15-year fixed-rate mortgage averaged 4.20%, up from 4.17% last week; it averaged 4.89% a year ago.

To obtain the rates, the fixed-rate mortgages and the 5-year ARM required payment of an average 0.7 point, while the 1-year ARM required an average 0.6 point. A point is 1% of the mortgage amount, charged as prepaid interest.

"Mortgage rates were little changed this week amid preliminary signs that the expiration of the home-buyer tax credit in April may have led to a slowdown in new construction," said Frank Nothaft, Freddie Mac vice president and chief economist, in a news release.

"Starts on single-family homes fell 17% to an annualized pace of 468,000 units in May from April's 20-month high. In addition, permits on one-unit homes fell to the slowest pace since May 2009," he noted. Read story about housing starts.

"Finally, builders became more pessimistic in their near-term outlook in June, according to the National Association of Home Builders/Wells Fargo Housing," he said. Read about builder pessimism.

But Nothaft added that household balance sheets have been improving over the last year: "In aggregate, households gained $6.3 trillion in net worth in the first quarter from a year ago, according to the Federal Reserve.

"In addition, homeowners have regained $1.1 trillion in home equity over the same time period," he said

For more information regarding this post or other real estate information contact Robert Dixon at RE/MAX Palos Verdes Realty (310) 703-1848 or email info@robertdixon.net. Content of this or any other post is presumed to be accurate but not guaranteed.

More on the Home Buyer Tax Credit Deadline Extension

More details of the extended tax credit for first-time and move-up home buyers deadline that the Senate voted to extend to SEPTEMBER 30, 2010.

As part of its plan to stimulate the U.S. housing market, Congress last fall approved the Extended Home Buyer Tax Credit. This extended the deadline for the First-Time Home Buyer Tax Credit from Nov. 30, 2009, to April 30, 2010, and NOW potentially until SEPTEMBER 30, 2010. It was also expanded it to include repeat buyers.

Home buyers may get more time to claim tax credit
MarketWatch June 18, 2010
By Amy Hoak , Real Estate writer

For some people angling to claim the home-buyer tax credit, hiccups in getting to the closing table are threatening to disqualify them from getting the incentive. But a Senate amendment to the American Jobs and Closing Tax Loopholes Act of 2010 would give them more time to finalize the sale.

To qualify for the credit, buyers had to be under contract for a purchase by April 30. But under current law they have until June 30 to close on the sale.

Under the amendment, they would get an extra three months to close -- useful for those who are experiencing delays in getting their mortgages approved or are somehow being affected by the many other issues that can arise and prevent a closing from occurring on time. The amendment would apply solely to buyers who entered a purchase contract by April 30.

"Because of this program's popularity and the time it takes to complete transactions such as short sales, I led the effort today to extend the closing deadline for this tax credit through September of this year -- allowing lenders more time to clear a backlog of 180,000 potential home buyers nationwide," said Senate Majority Leader Harry Reid, in a news release after the amendment passed in the Senate this week.

Still, the measure is only one part of a wide-ranging jobs and tax bill that still needs to be voted on by both chambers of Congress before it would become law.

Many in the industry are concerned that some buyers won't make the current deadline, especially due to the extra time it takes to get a final mortgage approval these days, combined with the high volume of loan applications in process for purchase and refinance mortgages, due to low interest rates.

According to the National Association of Realtors, as many as one-third of qualified home buyers have been told by their lenders their mortgages won't close before June 30 because of the volume of applications being processed.

"These are not buyers who just entered into the market. These are buyers who previously met all the qualifications for the tax credit, but find themselves at the mercy of a work-flow jam with the lenders or other delays and might not be able to complete the purchase of their homes," said Vicki Cox Golder, NAR's president, in a news release. "Since these applications were already in the pipeline and figured into the program's cost, the extension of the closing deadline should not incur any further government costs."

For more information regarding this post or other real estate information contact Robert Dixon at RE/MAX Palos Verdes Realty (310) 703-1848 or email info@robertdixon.net. Content of this or any other post is presumed to be accurate but not guaranteed.

Homebuyer Tax Credits Extended to Sept. 30th

The Senate on Wednesday approved a plan to give homebuyers an extra three months to finish qualifying for federal tax incentives that boosted home sales this spring.

The move by Senate Majority Leader Harry Reid would give buyers until Sept. 30 to complete their purchases and qualify for tax credits of up to $8,000. Under the current terms, buyers had until April 30 to get a signed sales contract and until June 30 to complete the sale.

The proposal, approved by a 60-37 vote, would only allow people who already have signed contracts to finish at the later date. About 180,000 homebuyers who already signed purchase agreements would otherwise miss the deadline.

Reid, D-Nev., added the proposal to a bill extending jobless benefits through the end of November. Nevada has the nation's highest foreclosure rate, and Reid is facing a tough re-election campaign.

The Realtors group has been pushing hard in Congress for the extension. Mortgage lenders, the trade group says, have been swamped with borrowers trying to get approved by the end of the month. Many potential borrowers are unlikely to make the deadline.

"If Congress fails to act promptly, then prospective homebuyers might not get the benefit of the homebuyer tax credit, even though they have completed contracts," the Realtors said a a letter to lawmakers.

First-time buyers were eligible for a tax credit of up to $8,000. Current owners who bought and moved into another home could qualify for a credit of up to $6,500.

The $140 million cost of the measure would be financed by denying businesses the ability to deduct from their taxes punitive damages paid when losing lawsuits or judgments.

For more information regarding this post or other real estate information contact Robert Dixon at RE/MAX Palos Verdes Realty (310) 703-1848 or email info@robertdixon.net. Content of this or any other post is presumed to be accurate but not guaranteed.

South Bay Home Sales/Prices April 2009 to 2010

No doubt it is difficult to be too serious about the percentage of loss/gain when looking at such a limited number of sales (per city), as one high or low number can dramatically influence the overall. The devil, as they say is in the details…

Below are numbers (from DataQuick) on April 2010 home sales as compared to April 2009. Data includes homes sold and the percentage of change based on median price 2009 vs 2010. Unfortunately there were no numbers in the report for Palos Verdes Estates, Rolling Hills or Rolling Hills Estates.

Entire report at DQNews - California Home Sale Price Medians by County and City, Home Sales Recorded in April 2010

Los Angeles County  6,334  +9.00%

El Segundo  15  +12.46%
Gardena  31  +10.29%
Harbor City  18  +21.20%
Hawthorne  37  +15.24%
Hermosa Bch  18  -26.54%
Lomita  11  -3.87%
Manhattan Bch  40  +11.72%
Rancho PV  39  +4.38%
Redondo Bch  77  +1.98%
Torrance  106  +18.41%

For more information regarding this post or other real estate information contact Robert Dixon at RE/MAX Palos Verdes Realty (310) 703-1848 or email info@robertdixon.net. Content of this or any other post is presumed to be accurate but not guaranteed.

New location: RE/MAX Palos Verdes (Silver Spur)

I’ve recently moved from our Redondo Beach office in the Hollywood Riviera to the office on Silver Spur Road across from the Promenade on the Peninsula in Rolling Hill Estates. Due to the recent acquisition by RE/MAX Palos Verdes & Execs of six new RE/MAX offices (Manhattan Beach, El Segundo, Marina Del Rey/Venice, Santa Monica, West LA and Beverly Hills) there been a lot agents moving within our organization and for me this is a far more convenient location.

Updated contact info:

450 Silver Spur Road
Rolling Hills Estates, CA 90274
Direct (310) 703-1848
Cell (310) 750-5751
info@robertdixon.net

Palos Verdes - South Bay: Distressed Sales verses Standard Sales

156 / 824 - The number Distressed Sales verses Standard Sales closed since January 1, 2010

86 / 715 - The number Distressed Sales verses Standard Sales currently listed (Active) on the MLS

Areas covered: El Segundo, Manhattan Beach, Hermosa Beach, North and South Redondo Beach, Walteria, Hollywood Riviera, West and South Torrance, Southwood and the Palos Verdes Peninsula.

Source: Multiple Listing Service (MLS). Distressed Property defined as properties: In Foreclosure, Notice of Default (NOD), Real Estate Owned (REO), Short Sale or Short Pay or Auction

Palos Verdes Landmarks: The Palos Verdes Beach & Athletic Club

The Palos Verdes Beach Club

The Palos Verdes Bathhouse and Beach Club opened in June 1930 as part of the Palos Verdes Project. Noted architect, Kirtland Cutter, designed this beautiful landmark on the beach in Malaga Cove. In 1939, the newly incorporated City of Palos Verdes Estates assumed ownership from the Palos Verdes Homes Association.

In 1946, the structure experienced a fire that destroyed the upper levels of the facility. The damage was left un-repaired and ultimately became a serious safety hazard. In 1965, the Palos Verdes Bathhouse and Beach Club was re-named in memory of the City’s first mayor, H.F.B. Roessler, who at the time of his death, was serving his twenty-sixth year in office. In 1988, the City of Palos Verdes Estates was faced with a critical decision - demolition or renovation of the historic facility. Fortunately, a plan was formulated to save the facility. Under the auspices of the City, Palos Verdes Beach and Athletic Club Foundation, nonprofit organization, was formed. The Club was renovated and dedicated in July 1993.

Source: PalosVedres.com

Interest rate lower still...

Among the list of reasons for buying a home now verses later are historically low interest rates. Even if the market remains somewhat flat or depreciates again, rising interest rates would help to equalize any loss/gain. 

How low can they go? 15-year fixed rates set new record

LA Times May 27, 2010

By E. Scott Reckard

Anyone out there still have the old-fashioned notion to retire their mortgage sooner rather than later?

Homeowners able to refinance were finding lenders offering 15-year fixed-rate mortgages at an average of 4.21% this week, according to Freddie Mac -- the lowest rate since the mortgage company started tracking the 15-year loan in 1991.

Heavy demand for 10-year U.S. Treasury bonds has pushed their yield to the lowest level of the year. That's the typical benchmark for fixed mortgages -- and boy have rates followed, with Freddie Mac reporting the average for a 30-year fixed home loan falling to 4.78%.

That's down from 4.84% a week earlier and not far from the record low of 4.71% set back in December.

Since the Freddie Mac survey reflects what lenders are offering, not actual contracts for loans, the rates obtained by well-qualified borrowers are often slightly lower, experts say.

Freddie Mac gathers information about rates available to well-qualified borrowers who make a down payment of at least 20% or have equivalent equity in their homes if they are refinancing. The borrowers in this week's survey would have paid 0.7% of the loan balance to the lenders in upfront fees and discount points, Freddie Mac said.

Last year, the experts expected residential mortgage rates would be rising by now, as federal housing and home-loan support programs expired, home prices stabilized and inflation became more of a concern.

Then the latest default scare reared its head -- this time involving not U.S. home loans but the debt loads carried by Greece and other weaker European economies. And just like that, the flood of money began to the safe haven of debt issued by Uncle Sam.

"Just when we thought we were finally experiencing [the anticipated rate increase] we got the PIGS," said Stew Larsen, head of mortgage banking operations for Bank of the West, referring to an acronym for the nations Portugal, Italy, Greece and Spain.

For those hungry for lower rates, is this the last big chance to head to the trough?

SOLD in May, Palos Verdes - South Bay Beach Cities

During the month of May 2010

76  The number of residential properties sold on the Palos Verdes Peninsula, 90274 and 90275.

156  The number of residential properties sold in the South Bay Beach Cities, El Segundo, Manhattan Beach, Hermosa Beach, Redondo and Torrance Beach.

South Bay area Real Estate Sales for 2010

As reported May 18, 2010 on DQNews.com (DataQuick) in Southern California as a whole, homes sales volume dipped slightly last month (see first 3 paragraphs and link to entire report below).

Here in the South Bay sales held steady, significantly ahead of March and April 2009 (see chart below) and the number of pending sales is higher than at any point in the past 18 months. Days on market are down and properties are holding, on average about 95% of their list price (based on 2674 sales in April).

Low interest rates, tax breaks and perceived bargains on homes are still the leading reasons for a percentage of buyers, low interest being the most compelling. Contrary to what many people (not in the market) believe, there are transactions happening. Banks are lending and buyers are closing deals and here locally the majority of properties purchased are not REOs or Short Sales. Of the 416 Single Family Residences, Condominium or Townhomes sold since January 1, 2010 (sample area: Walteria, the Hollywood Riviera, Southwood, West Torrance, North and South Redondo Beach) only 57 were classified as In Foreclosure, Notice of Default, Real Estate Owned or Short Pay.

Southern California home sales dip, median price rises from ’09

Southern California’s housing market leveled off last month as sales activity migrated ever-so-slightly from inland bargain areas toward entry- and mid-market neighborhoods closer to the coast. The overall median price was unchanged from the month before, but it jumped compared with April 2009’s low point, a real estate information service reported.

Sales of new and resale homes totaled 20,299 in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was down 0.9 percent from 20,476 in March, and down 1.0 percent from 20,514 for April 2009, according to MDA DataQuick of San Diego.

It’s possible that a significant number of sales that would otherwise have closed escrow in April were delayed until May as buyers tried to take advantage of new state tax credits effective May 1. In addition, those who rushed to sign a sales contract last month before the April 30 deadline for a federal home buyer tax credit would likely close escrow in May or June.

This report covers the entire Greater South Bay area. If you are interested in similar information on a more specific segment or multiple areas, please contact me with you needs.

The full report includes charts and data on: the Number of Homes For Sale vs. Sold vs. Pended, Average Price per SQFT, Average Days On Market and Sale Price/Original List Price Percentage, Average Price of For Sale and Sold.

Big Banks want MORE!!!

Big Banks and Financial Companies, the same institutions that set the stage for our current downturn, got billions in tax-payer bail-outs and are already becoming profitable (while many American’s continue to struggle or worry) would like yet another pound of flesh from those caught in the cross-fire.


It’s important to note that most of the recent and pending foreclosure activity IS NOT subprime, but prime loans and mortgages. These are A-paper borrowers succumbing to extreme economic challenges.


The piece below, from the CALIFORNIA ASSOCIATION OF REALTORS® provides information and background.


When is Enough, Enough?
The Big Banks are Opposing C.A.R.'s Bill to Protect Borrowers

C.A.R. is sponsoring SB 1178 (Corbett) to extend anti-deficiency protections to homeowners who have refinanced "purchase money" loans and are now facing foreclosure. Most homeowners didn't even know that when they refinanced they lost their legal protections, and now may be personally liable for the difference between the value of the foreclosed property and the amount owed to the lender. SB 1178 will be voted on soon by the entire Senate.

One can't help but think, "when is enough, enough?" Banks have already foreclosed upon a family's home and now lenders can continue to hound them for additional payment. How much more money can today's families afford to pay when they've already lost their homes and most likely their jobs? Are they never to have the opportunity to begin again?

Action Item
Call Senator Rod Wright Today at 1-800-672-3135
Urge him to vote "Yes" on SB 1178.
Non-C.A.R. members enter PIN number -- 182003468

Background

California has protected borrowers from so called "deficiency" liability on their home mortgages since the 1930s, but the evolution of mortgage finance requires the statute to be updated.

Current law says that if a homeowner defaults on a mortgage used to purchase his or her home, the homeowner's liability on the mortgage is limited to the property itself. The law has worked well since the 1930s to protect borrowers, ensure the quality of loan underwriting and allow borrowers who are brought down by financial crisis to get back on their feet.

Unfortunately, the 1930s law does not extend the protection for purchase money mortgages to loans that re-finance the original purchase debt -- even if the re-finance was only to gain a lower interest rate. Recent years of low interest rates have induced tens of thousands of homeowners to re-finance their mortgages, yet almost no one realized that by re-financing their mortgages to obtain a lower rate, they were forfeiting their protections. These borrowers became personally liable for the balance of the loan.

C.A.R. is Sponsoring SB 1178 Because:

SB 1178 is fair. Home buyers, and lenders, entered into the purchase with the idea that the mortgage would be non-recourse debt, and that the lender would look to the security (the house) itself to make good on the debt if the borrower cannot. It meets the legitimate expectation of the borrowers, who have no idea that they are losing this protection by a re-finance. Homeowners didn't know that their re-finance exposed them to personal liability, and new tax liability, on the note. It would be unfair to allow a lender, or someone that has purchased a note from a lender, to pursue the borrower beyond the value of the agreed upon security.

SB 1178 is consistent with the intent of the orginal law and simply updates it for modern times. Current law was intended to ensure that if someone lost their home to foreclosure, they wouldn't be liable for additional payment. Since the law was passed over 70 years ago, homeowners re-financing from the original loan to lower their interest rate has become commonplace. The 1930s legislature didn't anticipate how mortgages would change over time.

Lenders could pursue families to collect this "deficiency" debt years down the road. Under current law, lenders have up ten years to collect on the additional debt after a judgment has been entered on the foreclosure. Years after a family has lost their home, they could find themselves in even more financial trouble. Lenders could even sell these accounts to aggressive collection agencies or even bundle them into securities. The end result would be banks who didn't lend responsibly in the first place coming after families for even more money that they don't have.

SB 1178 does NOT apply to "cash-out" re-finances, unless the money was used to improve the home and it doesn't apply to HELOCs.

California Foreclosure Activity Declines in Q1 2010

California Foreclosure Activity Declines Again
April 20, 2010

Lending institutions started formal foreclosure proceedings on fewer California homes last quarter. It is unclear how much of the drop can be attributed to shifts in market conditions, and how much is because of changing policies, a real estate information service reported.

A total of 81,054 Notices of Default ("NODs") were recorded at county recorder offices during the January-to-March period. That was down 4.2 percent from 84,568 for the prior quarter, and down 40.2 percent from 135,431 in first-quarter 2009, according to San Diego-based MDA DataQuick.

The year-ago number is the highest in DataQuick's statistics, which go back to 1992 for NODs. The quarterly average is 44,041, while the low of recent years was 12,417 in third-quarter 2004, when housing market annual appreciation rates were around 20 percent.

"Several factors are at play here and it's hard to know how they play into each other right now. A year-and-a-half ago the subprime loan mess was the black hole. Now, playing catch-up, is the financial distress households are experiencing because of the recession. Add to the mix shifting policy decisions, both by lending institutions and in public policy," said John Walsh, DataQuick president.

"We are seeing signs that the worst may be over in the hard-hit entry-level markets, while problems are slowly spreading to more expensive neighborhoods. We're also seeing some lenders become more accommodating to work-outs or short sales, while others appear to be getting stricter about delinquencies. It's very noisy out there," Walsh said.

The state's most affordable sub-markets, which represent 25 percent of the state's housing stock, accounted for 47.5 percent of all default activity a year ago. In first-quarter 2010 that fell to 40.9 percent.

California's mid- to high-end housing markets were more likely to have seen a rise in mortgage defaults last quarter, though the concentration of default activity - measured by defaults per 1,000 homes - remained relatively low in those areas.

For example, zip codes statewide with median home sale prices of $500,000-plus saw mortgage defaults buck the overall trend and rise 1.5 percent last quarter compared with the prior quarter, while year-over-year the decline was 19 percent (versus a 40.2 percent marketwide annual decrease). Collectively, these zips saw 4.5 default notices filed for every 1,000 homes in the community, compared with the overall market's rate of 9.3 NODs for every 1,000 homes statewide.

In zip codes with medians below $500,000, mortgage default filings fell 5.8 percent from the prior quarter and declined nearly 43 percent from a year earlier. However, collectively these zips saw 10.5 NODs filed for every 1,000 homes - more than double the default rate for the zips with $500,000-plus medians.

On primary mortgages, California homeowners were a median five months behind on their payments when the lender filed the NOD. The borrowers owed a median $14,066 in back payments on a median $330,147 mortgage.

On home equity loans and lines of credit in default, borrowers owed a median $3,897 on a median $64,422 credit line. However the amount of the credit line that was actually in use cannot be determined from public records.

While many of the loans that went into default during first-quarter 2010 were originated in early 2007, the median origination month for last quarter's defaulted loans was July 2006, the same month as during the prior four quarters.

San Diego-based MDA DataQuick is a division of MDA Lending Solutions, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. MDA DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts. Notices of Default are recorded at county recorders offices and mark the first step of the formal foreclosure process.

Although 81,054 default notices were filed last quarter, they involved 79,457 homes because some borrowers were in default on multiple loans (e.g. a primary mortgage and a line of credit). Multiple default recordings on the same home are trending down, DataQuick reported.

Following a historical pattern, mortgages were least likely to go into default in Marin, San Francisco and San Mateo counties. The probability was highest in Merced, Stanislaus and San Joaquin counties.

The number of Trustees Deeds (TDs) recorded, which reflect the number of houses or condo units lost to the foreclosure process, totaled 42,857 during the first quarter. That was down 16.1 percent from 51,060 for the prior quarter, and down 1.7 percent from 43,620 for first-quarter 2009. The all-time peak was 79,511 in third-quarter 2008.

In the last real estate cycle, Trustees Deeds peaked at 15,418 in third-quarter 1996. The state's all-time low was 637 in the second quarter of 2005, MDA DataQuick reported.

There are 8.5 million houses and condos in California.

On average, homes foreclosed on last quarter spent 7.5 months winding their way through the formal foreclosure process, beginning with an NOD. A year ago it was 6.8 months. The increase could reflect, among other things, lender backlogs and extra time needed to pursue possible loan modifications and short sales.

Foreclosure resales accounted for 42.6 percent of all California resale activity last quarter. It was up from a revised 40.6 percent the prior quarter, and down from 57.8 percent a year ago, the peak. Foreclosure resales varied significantly by county last quarter, from 13.8 percent in San Francisco to 67.7 percent in Merced.

At formal foreclosure auctions last quarter, an estimated 24.6 percent of foreclosed properties went to investors and others who do not appear to be lender or government entities. That's up from an estimated 17.6 percent a year ago.

The lenders that originated the most loans that went into default last quarter were Countrywide (7,282), World Savings (6,459), Washington Mutual (6,371), Wells Fargo (5,204) and Bank of America (3,851). These were also the most active lenders in the second half of 2006, and their default rates were well below 10 percent.

Smaller subprime lenders had far higher default rates for that period: ResMAE Mortgage, Ownit Mortgage, Master Financial, First NLC Financial Services and Fieldstone Mortgage all had default rates of more than 65 percent of the loans they originated in the second half of 2006. These and most other subprime lenders are long gone.

Most of the loans made in 2006 are owned or serviced by institutions other than those that made the loans. The servicers pursuing the highest number of defaults last quarter were ReconTrust Co., Cal-Western Reconveyance and NDEx West, MDA DataQuick reported.

Notices of Default (first step in foreclosure process)
houses and condos

Trustees Deeds Recorded (signal homes were lost to foreclosure)
houses and condos

Source: DQNews.com (DataQuick Information Systems)

Southern California Home Sales for March 2010

More Incremental Gains for Southland Real Estate Market

April 13, 2010

Home sales and prices continued their steady but pokey climb up from the bottom in Southern California last month as buyers scrambled to take advantage of low prices and low mortgage interest rates. The market is still tilted toward low-cost distress sales, but not by as much as previously, a real estate information service reported.

A total of 20,476 new and resale homes sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was up 33.3 percent from 15,359 in February, and up 5.0 percent from 19,506 in March 2009, according to MDA DataQuick of San Diego.

Sales always go up from February to March. Last month was the 21st in a row with a year-over-year sales increase. The March sales average is 24,936 going back to 1988, when DataQuick’s statistics begin.

“It’s a reflection of just how grim things got, that we’ve now had almost two years of sales gains and we’re still 18 percent below the sales average. The market won’t rebalance until mortgage lending patterns normalize, and that’s just not happening yet. Some of the best deals out there right now are happening when the buyer comes in with cash,” said John Walsh, MDA DataQuick president.

The median price paid for a Southland home was $285,000 last month, up 3.6 percent from $275,000 in February, and up 14.0 percent from $250,000 for March 2009.

The median peaked at $505,000 in mid 2007 and appears, so far, to have bottomed out at $247,000 in April last year. The peak-to-trough drop in the median was due to a decline in home values as well as a shift in sales toward low-cost homes, especially foreclosures.

Foreclosure resales accounted for 38.4 percent of the resale market last month, down from 42.3 percent in February, and down from 54.8 percent a year ago. The all-time high was in February 2009 at 56.7 percent.

As sales of lower-cost foreclosure properties have waned over the past year, activity has picked up from very low levels in many high-end areas. Last month sales of homes priced at $500,000 or more made up 19.4 percent of all Southland transactions, compared with 18.5 percent in February and 14.9 percent in March 2009. Over the past five years, $500,000-plus deals averaged 35 percent of monthly sales, while over the past 10 years they averaged 26 percent of all transactions.

Higher-end sales are still hampered by the troubled jumbo loan market, which has improved only modestly over the past year. Jumbo loans, mortgages above the old conforming limit of $417,000, accounted for 15.7 percent of last month’s purchase lending, up from 14.8 percent in February and from 10.5 percent in March 2009. However, before the credit crisis in the fall of 2007, jumbos accounted for 40 percent of the market.

Adjustable-rate mortgages (ARMs) haven’t come close to recovering from the credit crunch, either. While 44.6 percent of all Southland purchase mortgages since 2000 have been ARMs, last month they represented just 4.8 percent, up from 4.0 percent in February and 2.1 percent in March last year.

Meanwhile, Uncle Sam continues to prop up lending for many low-to mid-priced homes. Government-insured FHA loans, a popular choice among first-time buyers, accounted for 38.6 percent of all mortgages used to purchase Southland homes in March.

Absentee buyers – mostly investors and some second-home purchasers – bought 21.3 percent of the homes sold in March.

Buyers who appeared to have paid all cash – meaning there was no indication that a corresponding purchase loan was recorded – accounted for 27.1 percent of March sales. In February it was a revised 30.0 percent – an all-time high. The 22-year monthly average for Southland homes purchased with cash is 13.8 percent.

The “flipping” of homes has also trended higher the past year, though it eased a bit in March. Last month the percentage of Southland homes flipped – bought and re-sold – within a three-week to six-month period was 3.2 percent of total sales, down from 3.5 percent in February but up from 1.6 percent a year ago. Last month flipping varied from as little as 2.6 percent of total sales in Riverside County to as much as 3.9 percent in Los Angeles County.

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

The typical monthly mortgage payment that Southland buyers committed themselves to paying was $1,220 last month, up from $1,180 for February, and up from $1,074 for March a year ago. Adjusted for inflation, current payments are 45.2 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They were 55.1 percent below the current cycle’s peak in July 2007.

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

Source: DQNews.com (DataQuick Information Systems)