Wednesday, September 29, 2004

California housing market report for August is in!

Recently we reported on the national housing market for August home sales. Now the California Association of REALTORS® (C.A.R.) reports that "The median price of an existing home in California in August increased 16.8 percent and sales declined 8.5 percent compared to the same period a year ago."

As far as the actual numbers are concerned, C.A.R. states "The median price of an existing, single-family detached home in California during August 2004 was $474,370, a 16.8 percent increase over the revised $406,140 median for August 2003, C.A.R. reported. The August 2004 median price increased 2.6 percent compared with a revised $462,140 median price in July."

Wow! What prices! People who are moving into the state are still suffering from "sticker shock", wondering if it can possibly continue. People moving out of state are wondering if they will be able to afford to return.

To read the article by the C.A.R., please go here.

Monday, September 27, 2004

Thoughts on L.A. Times article

Sunday's L.A. Times Real Estate section featured a front page article titled "Like it? It's from my agent". The article details alternative compensation to real estate agents from sellers AND buyers.

The article describes rebates from agents to sellers and buyers, as well as compensation to real estate agents on other than a commission basis. The article contends "But an increasing number of agents and brokers are competing with one another by experimenting with rebates, hourly rates and flat fees as alternatives to the 5% to 6% commission typically charged."

It's quite an interesting concept, from a realtor's point of view as well as from the client's point of view.

Several issues to consider:
1. Amount of legwork performed by client and agent
2. Amount of paperwork performed by client and agent
3. Negotiating of contract and contingencies
4. Legal liability of client and agent
5. Amount of money paid for services rendered
6. Marketing
7. Multiple Listing Service listing
8. Experience of agent and client

While we will not debate the issue in this forum, we would be happy to post your comments and feelings. Let us know what you think, and we will post comments on our blog. Send us an email. We will post your comment, first name and city.

To read the article online, go here. It's online now, but may go in the "archives" soon.

Saturday, September 25, 2004

Report on August housing market

The National Association of REALTORS® reports that August home sales were off slightly, but still remain at record levels.

The report states "Existing-home sales declined 2.7 percent in August to a seasonally adjusted annual rate of 6.54 million units from a level of 6.72 million units in July. Last month's sales activity was 2.3 percent above the 6.39-million unit pace in August 2003."

It is our opinion that the national market closely mirrors what is happening in the Los Angeles market as well. Historically, fewer homes are on the market in August than in July. Also, buyers who are trying to move before the school year starts would ideally purchase in rather than in August.

To read the entire press release, go here.

Thursday, September 23, 2004

Mortgage Bankers Association (MBA) reports on loan applications

For the week ending September 17, the MBA reports that loan applications are up slightly.

"The Market Composite Index of mortgage loan applications - a measure of mortgage loan applications - was 690.7, an increase of 1.8 percent on a seasonally adjusted basis from 678.2 one week earlier. On an unadjusted basis, the Index increased by 26.4 percent compared with last week but was down 1.5 percent compared with the same week one year earlier."

To read more, go here.

Tuesday, September 21, 2004

Federal Reserve raises interest rate

The Federal Reserve raised its "target for the federal funds rate" by 25 basis points to 1.75%. It is the third time the Federal Reserve has raised rates since June of this year.

To read the press release, please go here.

Saturday, September 18, 2004

How is the housing market where you are?

Our market is in it's usual September slowdown. The rush to get settled before school starts has ended, and now it's 'back to school'! While this is typical for the season, what remains to be seen is what will happen in the coming months. Will the "hot" LA housing market continue to rise in value, or will decreased demand force a correction of prices?

What's your opinion? Send us an email!

Thursday, September 16, 2004

Mortgage volume down slightly

The Mortgage Bankers Association (MBA) reports that "The Market Composite Index of mortgage loan applications - a measure of mortgage loan applications - was 678.2, a decrease of 2.0 percent on a seasonally adjusted basis from 692.0 one week earlier." The was for the week that included Labor Day, ending September 10, so there was one less business day.

To read the online article, go here.

Tuesday, September 14, 2004

Housing Affordability in California is down from last year

According to the California Association of REALTORS® (C.A.R.), "The percentage of households in California able to afford a median-priced home stood at 18 percent in July, a 9 percentage-point decrease compared to the same period a year ago when the Index was at 27 percent."

Where were the affordable areas in California? C.A.R. reports "At 42 percent, the High Desert region was the most affordable C.A.R. region in the state, followed by the Sacramento and Central Valley regions at 26 percent. The San Diego region was the least affordable in the state at 10 percent, followed by the Orange County and Monterey regions at 11 percent."

To read the article, go here.

Sunday, September 12, 2004

Luxury Homes Values Set Records in California

Home prices are reaching new highs! According to the Prestige Home Index™ by First Republic Bank, "Luxury home values in Los Angeles, San Diego and San Francisco set new highs in the second quarter of 2004 growing by double-digit appreciation over the past 12 months."

In Los Angeles, the report states "Los Angeles values rose 17.5%, or $256,000, year over year and 3.7% from the first quarter of 2004. Average luxury home values in Los Angeles jumped to $1.72 million."

The Prestige Home Index™ is used to "measure changes in homes valued at more than $1 million in key California urban markets."

To read the article, go here.

Friday, September 10, 2004

National Association of Realtors® (NAR) predicts record home sales

"Greater than expected sales of existing homes in the first seven months of the year will help set a record for annual existing-home sales in 2004, according to the National Association of Realtors®."

With regard to new home sales, the NAR predicts "New-home sales also are expected to rise to a record level this year, to 1.16 million, up 7.1 percent. Housing starts are forecast to increase 4.8 percent to 1.94 million in 2004, the strongest pace since 1978 when baby boomers were entering the market en masse."

"David Lereah, NAR's chief economist, said a continued decline in mortgage interest rates is creating favorable market conditions at a time when household formation is rising. Though NAR projects the 30-year fixed-rate mortgage to slowly rise to 6.0 percent in the fourth quarter, the average rate for the entire year should be 5.9 percent, the second-lowest annual average since the mid 1960s. The lowest rate in recent years was 5.8 percent in 2003."

"Price appreciation is projected to be only slightly higher than historic norms next year, as supply levels come closer to market demand. Although we expect the number of home buyers to continue to exceed the number of sellers, the situation should improve in 2005," Lereah said."

To read the online news release, go here.

Wednesday, September 08, 2004

Real estate property taxes on the rise

While property values have increased, so have property taxes. Property owners have been able to keep their monthly mortgage payments in control through the lower interest rates.

According to an online article in CNN/Money, "homeowners in some cities have seen increases of 20 percent to 50 percent over the last few years."

In California, property taxes are guided by Proposition 13. If you feel your property value is overassessed, there is an appeals process that you can follow. This may be significant IF real estate prices fall.

To read more, please go here.

Monday, September 06, 2004

Mortgage Bankers Association reports mortgage applications virtually unchanged

The Mortgage Bankers Association (MBA) reports for the week ending August 27, "The Market Composite Index of mortgage loan applications - a measure of mortgage loan applications - was 642.7, a decrease of 0.6 percent on a seasonally adjusted basis from 646.3 one week earlier. On an unadjusted basis, the Index decreased by 1.9 percent compared with last week but was up 2.6 percent compared with the same week one year earlier."

To read the entire article online, go here.

Saturday, September 04, 2004

National Association of Realtors® reports home inventory increasing

According to the National Association of Realtors®, "the U.S. housing inventory is still tight, at 4.3 months, down from 4.7 months a year earlier, but some markets have seen a noticeable boost in supply."

"The inventory of homes for sale in Orange County, Calif., for instance, rose from 1.4 months in April to 7.5 months in July; and year-over-year gains have hit the double digits in more than a dozen New Jersey counties as well as in Boston."

"What University of California at Los Angeles economist Edward Leamer calls "a day of reckoning" is expected to arrive slowly, mainly because homeowners would simply stay put if prices dramatically fell."

"While some experts worry about appreciation outpacing incomes and rents, NAR chief economist David Lereah and other industry insiders believe that low interest rates will continue to fuel the housing boom."

To read the entire article, go here.

Thursday, September 02, 2004

Housing market slowing down?

Holiday week? Back to school? Election concerns? Whatever the reason, our real estate market is slower this week. Calls into our office have decreased, and the number of showings on our listings is also decreased. Buyers are taking longer to make a decision on a property, and seem to have less motivation.

We will watch this over the next few weeks and continue to monitor the pulse of the market.