2010 - More Of The Same...

As we near the end of the 2009, it is worth looking back at the year in an attempt to predict what is in store for next year. Clearly, that while the nation maybe out of recession technically, consumers as a whole do not seem to be feeling all that much better yet. With unemployment relatively high and loan qualifications still tight, the number of home buyers in the marketplace will probably not increase too much in the coming months.

My humble opinion for Glendale and the LA metropolitan area as whole for 2010 (based on articles I have read, the California Association of REALTORS housing forecast and my experience selling real estate) is that things will not change much for the better in terms of home sales activity and certainly not pricing. While there are fewer buyers out shopping, there are also fewer sellers putting their homes up for sale so while transaction numbers maybe down, the market is fairly stable in terms of price/values.

For most of 2009, there were 2 very different real estate markets in our area. The foreclosure/REO market and the traditional sale market. In 2009, these two facets worked independent of each other. Initially the banks were eager to unload their inventory by slashing prices and in many cases not doing much to improve their often neglected properties. On the other end of the spectrum were the traditional, non-crisis sellers who had lovely, well-cared-for, character-rich homes. Despite the fears many had that the foreclosure market would drag the traditional market to its knees, that hasn't really happened in Glendale or its immediately surrounding communities.

As I have pointed out before, the housing stock in the greater LA area and Glendale in particular is so diverse that what may happen to the one house down the street that goes into foreclosure does not necessarily predict what will happen with every house on the block. In the planned community areas of Santa Clarita or Riverside county where all of the houses are of roughly the same age, style and amenities and the number of foreclosures in a neighborhood could reach high double digits, there is little hope for the family that needs to move for happy reasons and not distress. Yes, values have come down across the nation, including in Glendale, but not at equal rates. Given how high prices had gotten, this is a good thing.

I think that 2010 will bring a renewed approach from the banks who have finally accepted that foreclosures, short sales and loan modifications will be a part of their business model for years to come. I know B of A has implemented a new, more automated system to handle the flood of short sales that continue to pour into their loss mitigation department in attempt to streamline and speed up the process of approval. Many banks have been holding off on bringing to market their foreclosed homes in an attempt to stabilize prices. The 2 markets will begin to come together in 2010. The banks will do better to keep the properties nice and clean, trickle them to market instead of opening the flood gates and fall more in line with traditional home sellers. It makes good business sense because while the banks are now sellers in a market area, they continue to become mortgagors as well. In some cases making the new loan on a foreclosed house they just sold. It behooves them to protect their investment.

The number of transactions will not increase and may even decrease in 2010 if the buyer incentive programs the government has been offering are not renewed and if FHA's true colors continue to show, revealing it to be the new Sub-Prime market that it is. As a REALTOR, I am in favor of the government's willingness to throw money at the problem, knowing that while it is housing that got us into the current situation, it is housing that will pull us out. My fear is whether they are doing it correctly.

I was happy to see them expand the home buyer credit to include folks that have already owned a home. I think it is important to invest in experience and the expansion of the credit to those that currently own a home but haven't bought within the past five years is great because those people have proven that they can handle a mortgage and have been able to hold onto their home in this rocky time. I was not really sure that first-time home buyers alone were the answer to our problems. Getting current home owners out into the market is just as important so that they can free up inventory for the first-timers to buy.

Fortunately for Glendale, FHA has not been the loan of choice for most of our buyers. I do not see that program continuing to expand at the rate it has over the past year. Defaults on FHA loans are rising as first-time buyers putting very little down find themselves struggling to keep up on payments or see values falling more and having put little skin in the game find it easy to walk away. Whatever the reason, FHA is struggling to stay afloat and will therefore have to cut back some to stay relevant.

The next year will continue to be an adjustment for everyone dabbling in real estate. Agents, lenders and consumers, we will all have to be patient as we find the new normal. Things will probably not get worse, but they will also not take off and soar either. More of the same is expected for next year, which under the circumstance is just fine.

Happy New Year Everyone!!

INVENTORY IS STILL VERY LOW IN GLENDALE

Things haven't changed all that much since I posted these same graphs in mid-July. Inventory is still quite low overall. The important thing to consider here is that while today there maybe 133 homes available for sale in Glendale (see side bar with current Glendale MLS stats) the bulk of those homes are not properties the majority of buyers want to buy. This brings the actual number of available and desirable homes to an even lower number. The nice properties are getting scooped up fast (see my previous post highlighting our new inventory that went into escrow within a week).

Now more than ever both buyers and sellers should be working with an agent who's got their finger on the pulse of Glendale's fine neighborhoods. Truly serious and motivated Buyers and Sellers are succeeding in this marketplace. There is no time for uncertainty. Waffling leads to heartache and disappointment when inventories are low and competition is fierce.

It's hard to believe this is the situation we are in given what the media reports about the state of our economy, but the numbers don't lie and neither does the look on a buyer's face when he or she finds that their dream house has already been snatched up or when a seller has to start packing a week after their home is listed. Again, this doesn't ring true for everyone, but it does for those who have sat on the sidelines for months and watched it all unfold.

Still-low inventory numbers which in reality are even lower when you consider how many of the homes are not something most buyers would even consider purchasing.

Typically August is a slow month all around with not many new listings hitting the market and fewer buyers out offering, but check out how many properties went into escrow. 57, 12 more than in July while the number of available homes dropped overall. That's interesting. I think it shows that buyers are definitely anxious to get settled and to take advantage of the low interest rates and 1st time home buyer credit of $8000 before it expires at the end of November.

The statistics highlighted in this post were taken from the iTech Multiple Listing Service and are deemed reliable but not guaranteed.

3 WONDERFUL NEW LISTINGS

Well activity is definitely brisk. We debuted 3 new listings over the past two weeks and 2 of them are already in escrow and the 3rd has 2 offers at the moment.

BUYERS: If you are truly serious about buying a home then you must be ready and able to act fast. There is not much out there at the moment and when something nice hits the market it sells fast. There is no time to dilly dally.

SELLERS: The buyers are pent up and ready to buy. If your property is a nice home and/or has unique and quality features (ie. big yard, functional floorplan, etc.) and you are anxious to move on, then get your home on the market at a fair price and it will sell fast.

AVAILABLE NOW
704 PATTERSON AVE, 91203
$529,000
Charming 3+2 Spanish of approx. 1500 sf on a 5327 sf lot. Conveniently located near Fremont Park, shopping, fwys, etc. Great opportunity to get into a character Spanish in a nice neighborhood.

SOLD IN 1 WEEK
921 VERDUGO CIRCLE, 91206
Sold Price - $700,000
Adorable meticulously updated 3+2 Traditional of 1,637 sf on a HUGE 11,779 sf flat lot. The homeowner spared no expense when restoring this lovely home. The spacious granite and stainless Kitchen has newer cherry floors and access to the patio and yard.
THERE IS NO WONDER THIS HOUSE WENT INTO ESCROW IN LESS THAN A WEEK.

SOLD IN 1 WEEK
2309 Sylvan Lane, 91208
Sold For Full Price - $945,000
Tastefully rebuilt approx. 10 years ago to create a wonderful, modern open floorplan within a lovely Traditional style framework. 3+2 of approx. 2200 sf on a HUGE 16,640 sf flat lot with a pool. These homeowners spared no expense when rebuilding this wonderful home and property. The open Kitchen/Family Room opens onto the vast patio, yard, gardens and pool. All of this and it's located in the coveted Verdugo Woodlands Elementary school district.
THERE IS NO WONDER THIS HOUSE WENT INTO ESCROW IN LESS THAN A WEEK.

LA TIMES: "Southern California home sales and prices rise in July"

Obviously we are all cautiously optimistic about the latest sales data and as I've previously written, I think that the Median Home Price is not always the best gauge of the temperature of the market, but since it seems to be the consistent measure of choice then perhaps there is something to the latest numbers reported in this LA Times article from August 19th.

The main point I was looking for and that was made by one of the sources cited is that while there are a lot more foreclosure properties in the pipeline, banks are likely to trickle them out rather than flood the market with them to help retain the modest gains made this summer.

LA Times Article, August 19, 2009: "Southern California home sales and prices rise in July"

What A Difference Six Months Make...

We hear a lot in the news about the "months of supply" of homes on the market. Nationally it is being reported that there are 12-13 months of supply with hundreds and hundreds of homes sitting for sale in some communities. That is a very unbalanced, Buyer's Market indeed. These days we are finally hearing a lot from economists and the such that real estate markets are local and that the numbers touted on the national news are way too generalized and should not be taken as fact for all communities in the country.

To that point, I have prepared 3 graphs that illustrate just how far Glendale has come with regard to available inventory vs. sales which translates to months of supply and then average sold price vs. list price over the first 6 months of the year.

1) This first graph charts the decline in the monthly supply by showing how many homes were available each months vs. how many homes either went into or closed escrow. It is interesting to note that the number of homes for sale has declined significantly either by fewer homes coming for sale or by sellers deciding to pull their house of the market after having tried for a couple of months. Either way, inventory is getting gobbled up fast, so despite the current economic situation, Glendale has a very healthy real estate market.

2) This graph shows the "Months of Supply" since Jan 2009. You can see a peak in February of 9.6 months, but since then there has been a steady decline to the point where we are basically at "Seller's Market" levels again. 4-5 months of supply is considered balanced. In June we were at 2.6 in Glendale!
3) This last graph shows the average price of for sale homes vs. the average price of the sold homes from January to June of 2009. As you can see, the lower end of the market is dominating sales, but with an average price (not median price) of $698,000 Glendale is still holding its own through this storm.

What should one take from these stats? Well that's in the eye of the beholder. Buyers can take away that you are not alone if you are feeling frustrated by what you hear on TV vs. what you experience out on the streets of Glendale. Really nice properties are few and far between and they sell fast. That doesn't mean you can't get one, you just have to be ready and not be afraid to ignore what the TV maybe telling you.

Sellers can take away that while prices have softened overall the market is still healthy and if you are priced right your home will sell unlike in some communities where there really are rows and rows of available properties and not nearly as many buyers to snatch them up.

For both buyers and sellers, Glendale and surrounding communities are still a thriving real estate marketplace and now more than ever is a great time to jump in.

The statistics highlighted in this post were taken from the iTech Multiple Listing Service and are deemed reliable but not guaranteed.

Kenneth Village Farmer's Market... A Huge Success!!

Well, after all the hoopla and back and forth the Farmer's Market finally arrived. It was a great afternoon and a really wonderful market. There was plenty of fresh, local produce, yummy tamales and grilled meats and yes of course kettle corn. There were also some eco-friendly products for the body and the earth and some charming nick-nacks and things from some local Village merchants.

The concern was that with the 4th of July being tomorrow the turn out would not be much, but it was quite busy and it was especially nice to get to greet all of our friends and neighbors and wish them a happy holiday weekend. It was like a big block party!

Be sure to come out next week Friday from 3-7 PM to support the new Farmer's Market at the Historic Kenneth Village at the intersection of Kenneth Rd and Grandview in the heart of Northwest Glendale.

I Was Quoted in the San Fernando Valley Business Journal!

Eric Billingsley recently interviewed me for an article he wrote in the San Fernando Valley Business Journal about the prices coming down at the Excelsior Homes at the Americana At Brand. Click below to read the article.

Condo Prices Cut Drastically At Americana, article of 6/22/09.

Appraisals Are The New Black...

With the recent passage of the Home Valuation Code Of Conduct (HVCC) the home purchase negotiation process is rapidly being reordered. It used to be that an appraisal was one of the first contingencies a buyer would remove. While they are inspecting the property and the underwriter is preparing their loan package, an appraiser would visit the property, usually within a day or two of an offer's acceptance. The appraisal report would be completed within 48 hours of that visit and so within just a few days all parties would know where they stand with regard to the agreed upon purchase price. Not anymore.

Created after Freddie and Fannie had to settle with the state of New York over the mess that is the mortgage meltdown, the HVCC removes the loan officer's/broker's direct access to the appraiser and inserts another level of bureaucracy to the process, the Appraisal Management Company (AMC). So now simply ordering an appraisal, which used to take the loan officer mere minutes, now takes days and receipt of the completed appraisal which used to be instantly after the appraiser finished it also takes days because the loan officer/broker must now go through an AMC that distributes the appraisal work to the appraisers and manages the process. By the way, I know that one of these AMC is conveniently based in Massachusetts, the one used by B of A.

This is how it works. The loan underwriter/closer contacts the AMC and places an order. The clerk at the AMC scrolls through its vast nationwide database of appraisers and contacts one of them based mostly upon the area code of their phone number. Let's presume that appraiser accepts the work, they contact the listing agent and schedule an appointment to come to the house. They complete their report within 48 hours and send it to the clerk at the AMC, not to the loan underwriter/closer or the lender/broker as in the past. The clerk at the AMC gives the appraisal to their manager who reviews the appraisal for whatever their guidelines require and if there are any discrepancies they contact the appraiser and request corrections. Once that is done, the appraisal is finally forwarded by the clerk at the AMC to the loan underwriter/closer and it is not distributed to anyone else without the buyer's permission. All told this process is taking in excess of 2 weeks as some banks won't even place the order for the appraisal until they have the rest of the buyer's loan file in order.

This is problematic for Glendale and the nation on many levels.

1) With the real estate market in flux, it is ever so important that qualified, experienced appraisers be hired to perform the task of appraising properties in unique diverse cities such as Glendale. When an appraiser has never done an appraisal in one of our fine neighborhoods that person is handicapped with regard to the subtle nuances and differences among our housing stock even from block to block. An inexperienced appraiser drives the streets and maybe checks out the comps, but they don't know that there is a park 3 blocks away or that the grocery store is nearby. Worse they don't know that the foreclosure property down the street didn't have a kitchen when it sold. A good appraiser familiar with the neighborhood knows all of those things.

2) I just referred to "good appraisers." The problem with the HVCC is that in adding the AMC layer, Fannie and Freddie have added another level of cost. This cost is either passed onto the buyer or worse and more frequently is simply taken from the appraiser's fee. So we're finding that the good experienced appraisers, the ones we've been working with for years, the ones that know our neighborhoods are getting paid a fraction of their normal fee. In many cases they are getting out of the business or simply not being as thorough as they once were. At least that is what I presume is happening as the appraisers we usually work with are gone. I haven't seen a familiar appraiser on any of our properties in months.

3) Because of the fickle nature of these appraisals the whole process is slowed down considerably. We recently sold a property that ultimately had 3 appraisals done on it. They came in chronologically at $925,000, $875,000 and $995,000. Because it took so long to get all of them done, it was only a few days before closing that the seller and buyer agreed on a purchase price, the one element that should be somewhat straight forward from the start. Fortunately for the seller and for the buyer who loved the house and understood its value, the bank honored the last of the three ($995,000) and the deal was able to close. This case illustrates that worse than the time delay is the fact that 3 different appraisers came up with 3 vastly different numbers. How do we know who to trust? How do we know that an appraiser who has never done an appraisal in Glendale is going to get it right?

4) This last point is in regards to the usual negotiation process and removal of contingencies. There are 3 contingencies, 3 opportunities for a buyer to change their mind, in the typical home buying process. The physical condition of the home, the appraisal of the property and their overall ability to secure the loan. In order for their offer to be accepted they would have had to show that the bank already approves them for a loan. Because the market was active and there were lots of comps agents were pretty successful at determining the fair market value of a home and so the appraisals were pretty cut and dry. With housing stock that is approaching 80 to 100 years old it was the physical inspection that was the one wild card with some purchases. Seller and buyer simply had to come to agreement on correcting any health and safety issues that might be present and the deal would move forward. Not now.

Today, it is getting harder and harder for buyers to remove any of their contingencies, especially within the agreed upon timeframes. Today, the first thing done is the physical inspection, so now a buyer understands the condition of a home well before they know what an appraiser considers the market value to be. With the wild card of the appraisal still up in the air, sellers are in the awkward position of having to consider a repair request and the money it will take to honor that request without knowing the property's appraised value. There is a chance that the seller will agree to a credit for repair and then be presented later with a request to reduce the purchase price based upon the appraisal. That would be 3 different points of negotiation. Some sellers are finding they do not want to respond to a repair request until the appraisal is complete. Do you blame them?

As you can see, the new HVCC rules adopted by Fannie and Freddie and subsequently any lender or bank who hopes to sell their loan to them (and that's all of them) have changed the landscape of the real estate transaction. Many people are trying to have this new code repealed. If you are one of them, then click here to electronically sign a petition being sent to the New York Attorney General, Fannie and Freddie and the Office of Federal Housing Enterprise and Oversight.

To some it may seem like this is a good thing for consumers, that in a way it protects buyers because if the worst thing that happens is that a house sells for less that its fair market value, then the buyer makes out so why should we care. Remember that the moment escrow closes, that buyer becomes a seller, maybe not right this minute, but someday and any further unnecessary declines in property value will be just as painful for that new property owner as it is for his neighbor up the street trying to sell their home today. Please take a moment to sign the petition and protect the value of our neighborhood's properties.

June Market Stats

As you can see from the Market Stats I posted today to the right the market has remained relatively active over the past 30 days.

There are fewer homes available for sale today than there were on May 15th, more homes in escrow and more closed sales. Spring is traditionally a busy time for real estate sales, but with the pent up need that built last fall through winter, we're all expecting things to stay busy for a while. Recent interest rates hikes might dampen things a bit, but hopefully it will be an active summer.

4 NEW G&C LISTINGS

We're debuting 4 new listings this week!

COMING SOON

900 E Mountain St, 91207

$659,500

2+1.5+Fam Rm

1,617 sf on a 5,558 sf lot per assr

Listed with Gerri Cragnotti

AVAILABLE - IN MLS

1241 Graynold Ave, 91202

$679,000

3+1.75

1,728 sf on a 6,599 sf lot per assr

Listed with Chris Cragnotti

AVAILABLE - IN MLS

1833 Verdugo Vista Dr, 91208

$787,000

3+1.75+Full Guest House

2,554 sf on a 16,339 sf lot per assr

Listed with Chris Cragnotti

AVAILABLE - IN MLS

1430 Winchester Ave, 91201

2+2+Family Room

2,065 sf on a 6,180 sf lot per assr

Listed with Chris Cragnotti

Check our website for more info and photos!!

www.Character-Homes.com

Current Glendale Real Estate Market Stats Posted - What a difference a couple of months makes!

Well, the market has certainly heated up since the beginning of the year. Check out the number of currently Available Homes today (151) compared to the same number on Feb 18th (228). That's a huge shift. Closed escrows are way up, too. 41 this past month compared to 25 from January to February.

Looking at the In Escrow numbers suggests that this trend should continue. Typically a sale closes within 30-45 days. Short sales take at least double that which is why there can be 130 properties In Escrow last month and 41 closings this month. With 160 properties currently In Escrow we're on track for a healthy number of closings come June 15.

As you can see the real heat is in the <$700k segment while the $1M+ market is really struggling with only 5 $1M Solds since Jan 1, 2009. Rumor has it that the Jumbo mortgage market is supposed to be loosening up some with rates coming down and programs getting more friendly in the coming weeks. That should do the trick.

These numbers indicate that there has really been a pent up need to buy and now that the Fed has greased the wheels things are starting to churn. Yes, Spring is traditionally a busy time of year, but let's put out good vibes and keep this momentum going! Let housing lead the way out of this current downturn.

Terrific Article in LA Times about the myths of the current market

So, the LA Times finally acknowledges that the market in our area is not like what is being reported nationally. Without actually taking direct responsibility they do point out that the media has blown the whole thing out of proportion and created major confusion and frustration for buyers and sellers during this time of transition.

Now more than ever it's important to consult a local Realtor, one who specializes in your micro-market, to navigate you through to a successful purchase or sale.

House hunting? It's not a buyer's market everywhere - Los Angeles Times

4 NEW G&C Listings!

This weeks saw 4 new listings debut at G&C Properties. As always, check out website for more info. www.Character-Homes.com. 205 W. Kenneth and 262 Kempton will be posted soon!

1241 Graynold, NW Glendale - $679,000 - NOT IN MLS










3448 Rosemary, Montrose/Sparr Heights - $729,000




205 W Kenneth Rd, NW Glendale - $619,000 - COMING SOON




262 Kempton Rd, NW Glendale - $819,000 - Rep'd by Leanne Reynolds

Spring is here... Time to buy!?

The traditionally hot spring market is upon us. Blazing hot it is not this year, but there is definitely activity. Since last summer movement in prices above about $700k had really dropped. The rates for Jumbo loans (loan amounts above $729k) were close to 7% and higher and have been very difficult to secure. Lately, however, rates have come down significantly across the board, so that has brought buyers down off the fence in all price ranges.

The struggle many are finding now, though, is getting qualified and/or accepting the pain of what they qualify for which is typically significantly less than last year. So now buyers who thought it prudent to wait for prices to come down are discovering that the very reason prices have dropped is because people like them are no longer qualified to spend what they thought they could or in some cases anything at all. For prices to come down, there must be less demand in the marketplace. Less demand does not always come from less people wanting to buy, but rather their ability to buy.

Unfortunately for buyers, these two decreases are not falling at the same rate. Home prices in our area are falling less rapidly than consumers' buying power. Will they ultimately end up in line with each other? Who knows. The feds are doing everything they can to spur activity and while banks are being extra-cautious things are selling and at a healthy pace again... at least at the moment.

So what should a buyer do? That really depends on their motivation to buy. Casual shoppers (and yes there are casual home buyers) should not even bother coming out. Unless there is a specific need to buy (i.e. growing family, job transfer, downsizing) this market will drive a buyer crazy. The constant negative media reports and the prospect of further price declines are mentally crippling for most buyers. To step up to the plate and follow through at this point, it takes a confident, long range planning consumer (who knows things will always ebb and flow) or one without a choice but to settle in now.

This may seem like bad news for buyers, but ultimately it is good news. The integrity of our neighborhoods will remain intact if values hold somewhat strong or if they are going to decline, they do so slowly. The downside to waiting continues to be what will happen with banks and their willingness to lend their cash. Things are getting tighter every day. Each file is tougher than the one before to push through underwriting and while that may ultimately pull prices down further, the pace is not the same and for now there are enough cash heavy buyers to fill the gap.

Market Stats Feature Added

As you can see from the NEW Market Stats report on the right side of this page, the current economic downturn has hit the $1M+ market the hardest. This of course is why the Median Price frequently cited in the likes of the LA TIMES is not the best gauge of market activity or price declines.

With the bulk of the activity happening in the under $700k market, and the Median Price being half sold for more, half sold for less, you can see why the Median Price has dropped. While it is true prices have fallen like for like over the past 18 months, few believe the Median Price is the most accurate amount. The problem with this is that buyers see that percentage drop in the Median Price being reported (be it 15%, 20%, whatever it is this particular month) and they automatically slash a seller's asking price by that much.

At open house pretty much every buyer cites the continuing decline in values as the reason for proffering significantly lower numbers than the asking price. I think the fair response is that a seller today expects to sell his/her home for the price it is worth today. Their response to buyers is that if Mr/Ms Buyer would like to pay the price my home will be worth 6 months from now, then they should start their shopping then.

Hence the standstill in the "move-up" market over $700k. The first-time buyer market under $600k is on fire. Most properties, especially move-in ready homes, sell in multiple offers, not always for over asking but they sell very fast. Ones that need work, take a bit longer, maybe 3-4 weeks, but they end up moving and still with more than one offer being made.

Of course, then there is the issue of appraisals. That is subject for another post...

What I learned at Loan Mod School

Unless you've been living in a cave, you've been hearing a lot about Loan Modifications. I attended a loan mod seminar yesterday and I learned a lot of interesting things. Here are some highlights. If you've got a specific question send me an email, perhaps I can help.



DEFINITION: A loan modification is not a refinance and therefore does not require the same level of qualification. In a loan mod, the bank "modifies" your current mortgage to fit what you can afford. A significant hardship has to have occurred. A serious illness that has kept you out of work, divorce, decrease in pay, or mortgage terms adjusting or recasting are the main hardships to which banks will react.



TYPE OF LOANS MODIFIED: The loans typically modified are the crazy Option ARMs or other adjustable rate mortgages that were popular in the last few years of the bubble. If your loan had a fabulous introductory teaser rate for the first couple of years and then recast to a higher rate or if you had the "option" of paying less each month with the amount you did not pay being added onto the overall balance of the loan, then a loan mod if for you. If you have a fixed rate mortgage at an already competitve rate chances are banks won't work with you, but if you are facing the reality that you may have to give up your house, then it would be worth at least trying.



WHAT DO THE BANKS ACTUALLY MODIFY: Typically the bank lowers the interest rate on the loan to bring down the monthly payment. On the very rare occassion, they will also reduce the principle balance but again this is very rare. By reducing the rate, commonly for 5 years sometimes for the life of the loan, the monthly payment comes down to affordable levels.



WHAT IS THE PROCESS: The process starts by calling your bank and telling them that you are facing a hardship and can no longer afford your monthly payment. Most people have already missed a payment by the time they call and some banks won't even discuss the issue until 1 or more payments have been missed. Second, I recommend hiring an advocate to take over the process for you ($1,500-$3,500). Banks don't like dealing with the borrower. They would rather work with a 3rd party who has experience with and understanding of the process. Also, it is very important to get the paperwork right especially the hardship letter and the profit and loss worksheet and these people know what the banks need to see.



WHAT IS THE HARDSHIP LETTER AND PROFIT AND LOSS WORKSHEET: The hardship letter explains to the lender why you are seeking a loan mod. In it you will detail why you need the modification and how you will be able to keep paying if it is granted. The profit and loss statement breaks down your monthly expenses and income and helps the bank establish what you can afford and therefore how much to modify your loan. Because these are the two most important documents, they really should be prepared by someone who knows what banks want to see.



A FEW LAST DETAILS: Each bank has its own list of supporting documents. The hardship letter and profit and loss statement are common to all banks, but most will also want to see W-2s or bank statesments to prove income. Even tax returns can be requested. If you're self employed have a 1099 and most recent tax return handy. Property tax bills, too, can be requested.



I can not stress enough how this should not be attempted on your own. You can be the most organized, savvy person on your block, but because you're doing all the work and speaking directly to the bank you can ruin any chance you have for approval.



Lastly, but importantly, be leary of anyone asking for money up front. The California Department of Real Estate (DRE) strictly regulates this type of service. Attorneys are allowed to charge up front but the DRE thinks that you should already be that attorney's client and the loan mod should be just one of many other services he/she has provided you over time. Here is a link to the DRE website in which non-attorneys (real estate brokers) have been approved by the DRE to collect advanced fees. If the person you hire is not an attorney, they must be on this list to charge you upfront. DRE Advance Fee Approval List



If you would like a referal to someone who can help with a loan mod, send me an email. I would be happy to assist you.

ZILLOW explains "Median Home Price"

In this article Zillow.com explains why using the median home price is not the best gauge for determining average home values. Since the median is the number at which half of homes sold for more and half sold for less. There has been a sharp decrease in the purchase of higher priced homes and an equally sharp increase in the purchase of lower priced homes. Overall activity was up at the end of last year due to incredibly low interest rates and favorable loan programs especially for buyers shopping in the $800's and under range.

One thing Zillow also says which is somewhat misleading, is that their site factors in more than just price when figuring home value. That maybe true but counting the number of bedrooms and the square footage (based on tax records) hardly makes for a thorough comparison. That does not account for style, a huge component in price determination, or lot characteristics (is it flat, sloped or irregular), or the most important factor, condition.

In places of newer construction tract homes, this might be a bit more effective, but not in areas like Glendale where the home stock is up to 80 years old and each home is unique in terms of upgrades, remodeling and features.

LA TIMES article Feb 3, 2009

Slow Start to the New Year, but Not For G&C!

G&C Properties' 2009 New Year Inventory

Well, Wednesday 1/6/09 was the first caravan meeting of the new year. Surprisingly, there were only 2 homes on the caravan and both were what we call re-caravans, properties that have been on the market for some time and have recently had a price reduction.

I was surprised because our phone at G&C Properties went crazy during the last week of December and we've taken 4 new listings in the last 2 weeks. We're thrilled with our New Year inventory and hope that you will be, too.

All four homes are rich with Character, have been tastefully updated and are in great Glendale neighborhoods. Click the link below to be directed to our website and check out our wonderful new inventory.

http://www.character-homes.com/

FHA - It's Not Just For First-Time Buyers Anymore

With lending criteria tightening and buyers finding it increasingly hard to find traditional financing, FHA (government-backed) loans are becoming all the rage. For decades the loan amount limit was down in the low $300ks so they were not an option for most buyers in our region (not to mention that tradtional financing had become so easy to get there was no need such a program). But now with loan amounts up to $625,500, there are plenty more buyers able to take advantage of the low down payment (3.5%) requirements as well as the relaxed rules about the source of that down payment.

Check out this article from CNN. It clears up some misconceptions about FHA loans.

CNN.com - Best Bet For A Home Loan Now - 1/2/09

If you'd like to speak with a loan officer or broker about FHA, and if you're a buyer today I encourage you to do so, then drop me a line and I can put you in touch with two very qualified people.

WOW! - Cramer Says to Buy Real Estate....

So, I am not a huge fan of Jim Cramer, maybe because he's always bashing real estate, but the rest of the country seems to love this guy. Well, he's finally stood up and encouraged the nation to go buy a house!!

Click this link to watch a clip from his show last night in which he responds very enthusiastically to the Fed's latest rate cut.

Jim Cramer, Mad Money - Dec 16. 2008

Now's A Great Time For Buyers... As Reported in the NY Times!

The New York Times published this article last week encouraging buyers to take advantage of the market now. Their main point is one we've been making for quite sometime... You won't know the real estate market has hit bottom until it's on it's way back up. Some sound logic at a time when there is little being reported that is either sound or logical.

NY TIMES, 12/5/08: It May Be Time To Think About Buying A House

WSJ.com Article About A Possible Rate Cute to 4.5% - Hopeful News For Home Buyers

I found this article helpful in decifering what it means for the current home buyer if the Fed lowers the interest rate to 4.5% which it is seriously considering.

In Glendale and surrounding communities this will have a profound affect on buying power. Since our region has not seen the massive drop in prices that some other areas have over the last 12-18 months, a significant rate cut such as this will go a long way to help buyers get into a home that fulfills their needs.

WSJ.com - Lower Rates Help Sell Houses...

2009 Fannie/Freddie Loan Limits Announced

This week the Fed announced the 2009 conforming loan limits by county. They have dropped slightly nationwide including here in Los Angeles and Orange Counties.

Starting Jan 1, 2009 the new residential loan limits are as follows:

1-Unit (single-family, condo) - $625,500

2-Unit - $800,775

3-Unit - $967,950

4-Unit - $1,202,925

This means that to get a competitive "Conforming Jumbo" rate (the mid-level rate) on your mortgage with a 20% down payment you can buy a home for $781,800 or less. This is not great news. As you can see there is currently a more than .5% jump in the rate from Conforming Jumbo to Jumbo 30/30. Check CS Financial's Rate Sheet for rate comparison at today's limits.

The 3 levels of rates in 2009 for single-family residences in LA & Orange Counties will be:

Conforming - ($0 - $417,000)

Conforming Jumbo ($417,001 - $625,500)

Jumbo 30/30 ($625,501 - $3,000,000)

WHAT DOES THIS MEAN FOR YOU??

I asked Jobe Whelan, a loan specialist at Countrywide, if there was a way for today's buyers to lock in at the current, higher limit. This is her response. It looks complicated but it's quite easy, so if you're SERIOUS about buying a house, then you should consider moving fast while you've still got higher buying power. FOR THE BEST DEAL YOU'VE GOT TO LOCK BY TOMORROW!

Jobe said:

"Here are my guidelines for locking/funding at the previous amounts:

Lock BY 11/13/08 with funding BY 12/10/08 - Existing pricing/loan limits

Lock BY 11/13/08 with funding AFTER 12/10/08 but BEFORE 12/31/08 - 1.75 point pricing add-on

Lock AFTER 11/13/08 with funding BY 12/10/08 - we have to submit loan for an exception, but no additional pricing add-on

Lock AFTER 11/13/08 with funding after 12/10/08 but before 12/31/08 - we have to submit for an exception and have a pricing add-on of 1.75 points

Lock AFTER 11/13/08 with funding AFTER 12/31/08 - new 2009 pricing applies"

THANKS JOBE FOR THE RUNDOWN.

For further explanation or to secure a lock on not only a competive rate, but also a higher loan limit, call Jobe Whelan, C0untrywide, at (818) 550-2232 or your prefered lender. I can't guarantee what your lender may be doing so check in with them and find out.

Recent NY TIMES Article

On October 15, the NY TIMES published this article about the housing market.

Point of the story??? BUYERS: Don't miss the boat! With rates still very low, banks still able and willing to lend and sellers anxious to move on with their lives, now is your chance to get the deal for which you've been waiting.

It only makes sense that in order for home prices to come down, for the market to turn favorable for buyers, the news would have to be pretty bleak. By the time the media reports that things are on the mend, it will be too late and that ship will have sailed.

Alongside the dismal foreclosure properties there are plenty of nice homes owned by families relocating or downsizing or taking advantage and moving up. If you're truly serious about buying and have the courage to do so despite the doom and gloom on TV and in the papers, then now more than ever is the time to step it up!!

http://www.nytimes.com/2008/10/16/business/economy/16housing.html?_r=1&ei=5070&emc=eta1&oref=slogin

ALSO CHECK OUT 3 NEW G&C LISTINGS. I'D BE HAPPY TO GIVE YOU A PREVIEW. JUST GIVE ME A CALL OR SHOOT ME AN EMAIL.

http://www.Character-Homes.com

Chris Cragnotti
(818) 244-5499
chriscragnotti@mac.com

943 E. Mountain St - Price Reduced

943 E. Mountain St, 91207

$1,060,000

OPEN SUNDAY 2-4

This is a lovely home, tastefully remodeled in 2005 with a granite Kitchen/Family Room combo, Master Suite w/ 2 walk-in closets and VERY LOW MILLS ACT TAXES of <$3400 p/yr. Yes, the annual property tax bill is less than $3400 per year through 2015 at which point it can be renewed for another 10 years and then another 10 years and so on.

It's a great value and a beautiful house.

Here's a link to the properties' profile on our website:

http://www.character-homes.com/listing324.html