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April 29, 2009

Home sales jump nearly 66 percent in L.A.

Daily News Wire Services

 

Updated: 04/28/2009 12:08:29 PM PDT

 


Home sales jumped 65.6 percent in the Los Angeles area in March, compared to the same period a year ago, while the median home price fell 31.9 percent, according to figures released today.

 

The median price of an existing single-family home in Los Angeles was $295,100 in March, compared to $308,540 the previous month and $433,400 last year, according to the California Association of Realtors.

 

In Orange County, home sales increased 47.4 percent in March, compared to the same month last year, while the median home price was $444,520, down 24.9 percent from $592,100 in March 2008.

 

Home sales increased 63.8 percent in March in California, compared with the same period a year ago, while the median price of an existing home declined 39 percent, according to CAR's report.

 

"The March sales figure of 522,980 homes indicates that the market continues to be very active," said CAR President James Liptak. "All of the regions in the state experienced increases in month-to-month raw sales, with the smallest gain in the Sacramento region at 9.7 percent and the largest gain in the Riverside/San Bernardino region at 32.2 percent."

 

The median price of an existing, single-family detached home in California in March was $253,040, compared to $247,590 the previous month and $414,520 in March of last year, according to CAR.

 

"The statewide median price showed the first monthly increase since August 2007, and has remained in the $250,000 range over the past three months," said CAR Chief Economist Leslie Appleton-Young. "A number of regions around the state also have registered monthly gains for one or more months since the beginning of this year.

 

 

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April 24, 2009

Buyer’s Get Into A Negotiating Position

Bridging the price gap between home buyers and sellers can be a challenge in today's market. Sellers, many of whom have a hard time accepting that their home has lost value, often expect to sell for more than buyers are willing to pay.

Buyers, on the other hand, are concerned that home prices could drop further. So, they're making sure that they don't overpay.

There are exceptions to the rule. Very desirable homes in the best locations sometimes sell for over the asking price, particularly if there isn't much inventory of similar homes on the market. Some foreclosure properties at bargain prices are attracting multiple offers. Prices are rising in select areas. Overall, however, it's a still a buyer's market in most parts of the country.

There's not much you can do to convince an unrealistic seller that he should accept your market-price offer. Many of the listings on the market belong to sellers who will sell only if they get a certain price. They may not be able to sell for less because of the size of the mortgage(s) secured against the property. In some cases, sellers bought at the peak and then improved the property. They can't bear to take the loss they would incur if they sold at market price. In other words, these sellers would like to sell, but they won't sell unless they get their price.

Before you make an offer on a listing that's priced over market, try to find out as much as possible about the sellers' motivation, and if there's any flexibility in their price. A lot of time and emotional energy goes into making an offer. Save your efforts for listings where the sellers are motivated. That is, they don't just want to sell -- they need to sell.

Some sellers want to test the waters at a price that's higher than the market will support. They usually feel that someone will appreciate the added value their home offers and pay more for it. However, these sellers will often negotiate with a legitimate buyer who offers a price that is less than the list price.

HOUSE HUNTING TIP: To put yourself in the best negotiating position, make sure that your financing is in order and that you are able to show the seller that you are capable of closing the deal. The fallout ratio is high in the current market. Many of these transactions fail to close because the buyers couldn't get financing.

It's always a good idea to be preapproved for the financing you'll need to buy a home before you make an offer. Preapproval involves making a formal loan application, having your credit checked, as well as verifying your funds for down payment and closing costs, and validating your income and employment. Lenders often want to know that you have enough surplus cash to make house payments (mortgage, property taxes and insurance) for two to three months.

Buyers who make an initial low offer and who aren't in competition should make as clean an offer as possible. This means omitting anything that's not necessary. However, you should include contingencies for loan and appraisal approval and an inspection contingency.

It's a good idea to include a copy of your preapproval letter with your offer. If you are approved for a higher price than you are offering, ask your lender or mortgage broker to issue a preapproval letter for the price you're offering.

THE CLOSING: Then be prepared to negotiate. It may take several rounds of counteroffering back and forth to reach a mutually acceptable price.

Posted by janiswk1 at 09:57 AM | | Comments (423) | TrackBacks (0)

April 21, 2009

US Economy Could Recover Much Sooner Than Expected

By: Albert Bozzo, Senior Features Editor | 09 Apr 2009 | 11:55 AM ET

 

 

You've heard all the gloom and doom about this recession. Now here's some good news: the economic recovery could happen much sooner—and be much stronger—than anyone thought possible.

 

Suddenly, a small but growing group of private-sector economists is disputing the idea that the recession will drag on for months and that the rebound will be as weak as those following the the 1991 and 2001 downturns.

“Too many people’s idea of recession have been formed by the last two recessions,” says Robert Brusca of Fact & Opinion Economics, referring to the 1991 and 2001 periods, which were both short and shallow. "I think that's mistaken.”

 

“People have been talking about an L-shaped recession,” adds Michael Mussa, senior fellow at the Peterson Institute for International Economics. “The record shows you come back sharply from deep recessions” like the current one.

 

These economists and others see a V-shaped pattern, similar to that of the recession-recovery periods of the 1970s and 1980s. And they say there is ample evidence to support it.

 

Among the reasons for the new optimism: a significant easing of the credit crunch, improvement in consumer spending—including better auto sales—a potential bottom in housing, a less-grim jobs picture and expectations that the government's massive stimulus spending could start boosting economic growth almost immediately.

 

That doesn’t mean anyone is saying the recession is over yet. But the end is closer than people think.

 

Though the decline in first-quarter growth will be along the lines of the six-plus percent plunge of the fourth quarter of 2008, some economists now expect a flat or slightly negative showing in the second quarter, followed by the beginning of sustained growth in the third quarter. (That’s three months sooner than what many were forecasting several months ago.)

 

Optimists acknowledge that existing headwinds and unforeseen events can quickly derail momentum, which may help explain why a majority of opinions--including that of the the Federal Reserve--still fall into the wait-and-see camp.

 “The velocity of downturn is lessening," says John J Castellani, chief economist and president of the Business Roundtable, who is more cautious than hopeful at this point. “In the initial part of the recovery, people will be very cautious about this being a double dip.”

 Nevertheless, those forecasting a strong recovery point first and foremost to the waning effects of the Lehman Brothers collapse last fall, which roughly coincides with the worst of the credit crunch, and triggered a massive chain reaction in payroll and production cuts.

 

“The initial adjustment tends to be too big, then there’s some reversal of that,” says Ram Bhagavatula, managing director at the hedge fund, Combinatorics Capital. 

 

That dynamic will lead to swifter and stronger recovery in both the economy and employment that many economists are forecasting.

 

Mussa, a former White House and International Monetary Fund economist, says that GDP will be a cumulative 6-8 percent higher six quarter than the bottom, depending on whether the recovery starts in the early or late summer.

 

Brusca is expecting a minimum of 4.5 percent GDP growth over the first four quarters of the recovery

 

All About The Economy

 

Both performances compare favorably with the post-WWII average, and while they may be less than the recoveries of the 70s and 80s they are significantly more than those of the past two recessions

 

In the 70s cycle, GDP shrank two consecutive years then posted GDP growth averaging 5 percent in 1976-1977; in the case of the 80s, the economy contracted 1.9 percent—more than economists expect for full year 2009—then grew 4.5 percent in the first year of recovery.

 

By contrast, the 2001 recession was so brief and shallow, GDP didn’t register a contraction for the whole year. Growth in the 2002-2003 period, however, averaged just 2 percent. Similarly, in 1991, the economy shrank 0.2 percent, followed by 3-percent growth in 1992 and 1993.

 

Economists also cite several reasons for better labor market conditions this time. They expect job losses as well as the unemployment rate to peak close to the time growth bottoms out, as was the case in the 80s and 90s, and thus not resemble the jobless recoveries of the two most recent recessions.

“Once recovery starts, it won’t be long before the unemployment rate begins to decline,” says Mussa, who doesn’t see the jobless rate breaking 10 percent.

 

Though the recession of 2001 ended in November of that year, 12 months later the economy had added just 200,000 jobs. Moreover, the jobless rate kept rising through June of 2003.

 

By contrast, payroll losses bottomed out one month after the recession of 1982 ended in November. Payrolls were 3 million higher a year later.

No one is expecting such robust job growth this time, but economists say the relatively strong showing in productivity during this recession points to lean payrolls, which will have to be fattened up--in some cases, quickly--as the economy improves.

 

"When you have high peaks in jobless claims, you have sharp declines in claims," says Brusca.

 

More broadly, economists also point to a number of economic factors that bode well, despite lingering concerns about he credit crunch.

 

“Cyclical forces trump secular forces,” says Brusca, referring to the massive de-leveraging by both consumers and business. “This is especially true when authorities have stepped in to stabilize it,” after a shocking event like Lehman.

“We have massive monetary and fiscal stimulus in the pipeline,” says Macroeconomic Advisers President Chris Vavares.

 

Macroeconomic Advisers, whose economist forecast for 2010 is more optimistic than that of the White House, estimates the government fiscal stimulus package will add 2 percent to GDP in the second quarter, one reason why the firm expects the economy to shrink by only 0.5 percent during the period. The consensus is for a 2.0-percent decline.

 

Then there are a handful of cyclical elements on the verge of being positives.

Consumer spending is growing again, while inventories are being wound down.  Housing and autos, in particular, says economists, hint at both pent-up demand and a production rebound.

 

“Housing will be an important element of the upturn right from the start,” says Mussa, who notes housing starts have been “beaten down” so much that supply will have to be added simply to accommodate demographic demand from new households.

 

The auto sector, which posted a surprise increase in sales in March, also has the potential to be a driving force.

 

“We all focus on what lousy shape they are in and not on that they have been cutting production,” says Varvares. “When you look at how quickly motor vehicles sales fell off the table last year--that big decline had a lot to due with the lack of financing.”

 

Varvares says automakers are starting to feel better about the credit environment and will offer better financing deals.

 

Macroeconomic Advisers' analysis makes a strong case for the role of housing and autos.

 

The two sectors erased a combined 2.5-3.0 percent from first quarter GDP, says Varvares. Autos, however will add 0.7 percent to GDP in the second quarter. Housing is expected to add 0.5 to 1.0 percent to GDP in 2010.

 

So, if the optimists are right, it's a case of gloom and boom.

 

"People were very gloomy in late '74 and '75," says Mussa. "They were gloomy in 1982."

 

© 2009 CNBC.com

 

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April 16, 2009

Six Big Banks May Get $10 Billion for Loan Modifications


 By: Reuters | 15 Apr 2009 | 05:14 PM ET
 
Six large U.S. banks could pocket nearly $10 billion in federal subsidies if they modify troubled home loans and are able to save homeowners from foreclosure, the Treasury Department said on Wednesday.

Current DateTime: 02:16:12 15 Apr 2009
LinksList Documentid: 30229972
The mortgage speciality arms of Citigroup, JPMorgan Chase and Wells Fargo would each earn over $2 billion for modifications that have long-lasting success, according to the Treasury's formula.
The money is available through a $50 billion program to encourage mortgage servicers to ease the terms on troubled loans. Many more mortgage servicers will be eligible for the subsidies, the Treasury said.
Copyright 2009 Reuters. Click for restrictions.

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April 03, 2009

BUYERS PROTECTION FOR THEIR MORTGAGES!

March 31, 2009

 

BUYERS PROTECTION FOR THEIR MORTGAGES!

 

I am very pleased to announce that this Thursday, April 2, C.A.R. will launch a new program designed to provide peace of mind to first-time buyers who are hesitant to enter the housing market due to concerns about potential job loss, and subsequently being unable to meet their monthly mortgage obligations.

 

Through the C.A.R. Housing Affordability Fund Mortgage Protection Program (C.A.R.H.A.F. MPP), first-time home buyers who lose their jobs due to layoffs may be eligible to receive up to $1,500 per month for up to six months to help make their mortgage payments. A qualified co-buyer also can participate in the program, for a reduced monthly benefit of $750 per month for up to six months in the event of a job loss. Program benefits also include coverage for accidental disability and a $10,000 death benefit. C.A.R.'s Housing Affordability Fund is dedicating $1 million to the program this year, and estimates that as many as 3,000 families will benefit from the program throughout 2009.

 

To qualify for the Mortgage Protection Program, applicants must:

. Be a first-time home buyer -- someone who has not owned a home in the last three years . Open escrow April 2, 2009, or later, and close on or before Dec. 31, 2009 . Use a California REALTOR. in the transaction . Purchase the property in California . Be a W-2 employee (cannot be self-employed or military personnel)

 

The Mortgage Protection Program is a proactive approach by C.A.R. to address consumers' concerns about the real estate market and their ability to make their mortgage payments should they loose their jobs. I encourage you to take full advantage of this new program by sharing information about the C.A.R.H.A.F. Mortgage Protection Program with your clients. There is no cost to either you or your clients to participate.

 

Sincerely,

 

James Liptak

2009 C.A.R. President

Posted by janiswk1 at 11:27 AM | | Comments (60) | TrackBacks (0)


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