Friday, February 23, 2007

My "new house"! (Y1/M10/D23)

So my agent called and said: "I'm standing in your new house! You have to leave work and come see it right away!"

"Where is it?" I asked.

"Right near that one we saw last week..."

"Oh. I know what one you are talking about. It's lovely. But I think it's about $75k overpriced. Zillow estimates it at $654, which is admittedly low but it's not $150k off. No two-bedrooms are selling in the low eights over there."

"So you're not coming?"

"No, it'll be open this weekend."

"It'll be gone!"

"Well, let's bet on it. I think it will sit on the market for two or three months."

Then I read this article. And I just can't help but think that the real deals are coming next winter. When you'll actually have to have a down payment and proof of income to buy a freaking house and the universe returns to normal a bit.

UPDATE: "My new house" link above is fixed. Also, agent wrong. House did not sell this weekend. Indeed, there were no offers at all.

Wednesday, February 21, 2007

Foreclosures ---> Stricter Lending Guidelines (Y1/M10/D 21)

Yes, I'm still hopping mad about the prices of real estate in the San Fernando Valley. But this cheered me up:

"The main factor that will lower prices are lending guidelines, not foreclosures. As investors start to say "enough!" to 0% down, stated income, negative amortization loans, and buyers have to qualify for homes based on their income rather than on a hope and a dream of repaying someday somehow, home prices will have to drop back to their fundamental value. We will return to a historic multiple of an area's income." Read more.

Of course, the rate of foreclosure is what will drive the lending guidelines to be revised. So I'm crossing my fingers for a 10% drop by median home prices by this summer.

Tuesday, February 20, 2007

Open letter to Valley sellers (Y1/M10/D20)

Well, people, I've battened the hatches and we're settling in for the storm. (Okay, I'm not even sure what I'm talking about there). But here's my point: I will not pay three quarters of a million dollars for your crappy tract house in the valley.

First off, I cannot believe that you put a granite counter on the original rickety 1940s cabinets to save costs and now you want me to pay for the "upgrade" even though I will have to tear it out to replace said cabinets.

What were you thinking when you converted your garage into a living room and then made your entire front yard into a carport? Something like: "Man, the Motel 6 is purty. I want my house to look like a Motel 6!"

When you expanded your living room and dining room and kitchen WITHOUT expanding the actual square footage of your house, did it occur to you that not everybody likes bedrooms that have the same dimensions as a solitary-confinement prison cell? Hi! People want closets in their bedrooms not bedrooms in their closets. Maybe you were confused?

Why did you remodel your kitchen in such a way that there is NO PLACE FOR A REFRIGERATOR? Raw diet?

Holy mother of Jesus, People. I'm only going to say this once: a three-quarter-million dollar house must have more than one damn bathroom.

And, unless you are a licensed contractor who pulled permits, your house should not have any additions that YOU built.

Thursday, February 15, 2007

House Number The 2nd: REVEALED! (Y1/M10/D15)

Okay, at long last, here is the "transitional neighborhood" house I wrote about earlier. It was purchased at $655k just six months ago, when the front looked like this. The current owners took out that tree. Changed the garage door (at an estimated cost of $1,000). Added a redwood fence to the yard perimeter and switched out a metal security door for a redwood security door and added a little intercom buzzer to make it look like this:

Once you come through the security door, you are in a little courtyard which originally looked like this. There are nice French doors that open into the front bedroom, the living room (pictured), and the kitchen.

The current owner built a nice redwood pergola to cover the courtyard, and he added a little koi pond with fountain.

Heres how the kitchen looked originally. It was clean and in good shape. The current owner took at that wall to open up the space but it resulted in moving the washer and dryer into the garage, which is slightly less desirable.

But notice that the counters, cabinets and appliances are all the same.

Here's what the backyard and deck looked like when he bought it. He added a nice little redwood pergola here too.

I have to say that his improvements were all lovely. Unfortunately, they didn't increase square footage and none of the changes actually upgraded the kitchen or bathrooms in a meaningful way. Which basically means that the appraisal of the home was not improved by his changes and the market price for this neighborhood actually dropped during the few months that he owned the home. Nevertheless, he wanted an additional $40k for the home. I offered to pay an additional $10k over what he paid, even though I had serious misgivings about the neighborhood and even though this price would've been the highest ever paid for the neighborhood. He refused and now the house has been delisted. Either he has pulled it (a smart move if he is planning to wait for spring) or he actually found a buyer who cares very little about actual market value. Time will tell.

Thursday, February 08, 2007

Stinky Studio City House (Y1/M10/D8)

As mentioned below, this house is in a fairly desirable part of Los Angeles. It was once priced at just under one million dollars but, after 200+ days on the market, it is listed at $750k. (For those of you keeping score at home, that's more than a $200k reduction). Do you want to know what is wrong with this lovely home? Okay, I'll tell you.

(1) The smell of dog urine literally choked me. Inside AND outside of the home.
(2) That room over the garage is an addition. And it is starting to sink. So badly that if you stand where the addition was joined to the house you can look down through a 2 centimeter crack in the floor and you can see straight down into the garage. Further, if you put a marble on this floor, there is no way it would lay still until it slammed up against the far wall. There's a serious tilt to the floor.
(3) Did I mention the dog urine?
(4) The bathrooms are covered in a black/rust/green marble, the likes of which I have never seen or imagined.
(5) I'm not sure I mentioned the strong smell of urine.

Needless to say, we are still looking. And if the home owners stumble across this and are offended by my dog-urine comments... oh, what am I saying? These people clearly do not find anything about dog urine offensive.

Wednesday, February 07, 2007

Another update on 2nd House (Y1/M10/D7)

Well, these sellers had two offers (ours and another). It looks like they let them both expire. Okay, there's 30 minutes left on my offer but I feel safe in counting this one over. They've only been on the market a few days, so it's no surprise that they weren't ready to accept a loss at this juncture. It's a pity because we were only about 3% apart. Once it goes in escrow I'll post some photos.

I'm off to look at a home south of the boulevard in Studio City. For those of you who don't know Los Angeles, that's like the Bel Air of the Valley. It's about a $100k more than what we've been looking at, but $200k less than the surrounding homes so still a good value. Here's the weird thing, it's been on the market for 250+ days. Part of that is due to the fact that the original list price was $200k higher. (Somebody was smoking some crack, apparently). Then I guess it went into escrow but fell out over a $20k repair job where the seller lost his mind and refused to cooperate in any way. And, you know, I love me the crazy sellers! So I'm gonna give it a look-see.

I'm definitely running out of steam though. I think I might just quit trying and rely on my agent to do all the leg work.

Tuesday, February 06, 2007

Update on House Number The Second (Y1/M10/D6)

Does anybody actually think house hunting is fun? Seriously? It is so stressful. There are so many variables and it is so much money. I guess that's the reason why so many people just buy a house they love and don't do the math.

Anyhoodle, let's review the current house situation, shall we? They listed at $40k above what they paid a mere six months ago. Friday, we offered to pay exactly what they paid six months ago. Yesterday, they came down $10k and asked for a 90 day escrow (waiting for a loan penalty to expire). Today, we countered at $10k above our original offer but agreed to the 90 day escrow. So, currently, we are $20k apart. Allegedly, we are in a multiple offer situation, but I'm not going to overpay just because somebody else might. Their response, if any, is due tomorrow at close of business.

I have to say, though, I don't think I will pay more. If they come back with another figure, I think I will just stay firm on price and offer a right of first refusal (which basically means they have ten days to get a better offer, but I have the option of matching it if I choose). Because their house is priced high for the area, this isn't a very risky proposition for us. Also, it lowers the pressure for them; they have an offer in hand but don't have to pass up a better one that might come along any day.

I have to say that there isn't much on the market right now that is desirable. But I'm in no hurry.

Friday, February 02, 2007

House Number The Second (Y1/M10/D2)

Oops! I did it again! (Sorry, couldn't resist.)

So the new house we're looking at ... the owner did 100% financing just like the owners at the last house. Of course its even worse this time because, like I said, they just bought this house 6 months ago. And I think they paid a tad too much when they bought because they appear to be emotional buyers (recall that the reason they want out is that they just bought yet ANOTHER house). Which basically means that they have no choice but to hold out for another crazy emotional buyer which I am not.

They have one offer in already and we are submitting ours today. I am only offering to pay exactly what the seller paid six months ago and not a dime more. I have no idea what our competition offered, obviously, but if the other bidders are out of their minds and willing to pay $50k over market, well, that's their option. I guess Los Angeles never runs out of people who are willing to lose money in real estate. Personally, I'll just keep holding out until I find a house where I have an ounce of confidence that it will appreciate and not just lay stagnant (or worse) over the next five years.

E really likes this house a lot though, so we at least have to throw in our hat. But I have to say, if it weren't for his interest, I wouldn't make an offer to these sellers. It's a darling house, but I've had my fill of dealing with financially distressed sellers. And, like I said, I'm a bit shakey about this transitional neighborhood. So we should have some idea by tomorrow night if we are in the running but I'll be perfectly happy either way.

Thursday, February 01, 2007

[insert pithy title here] (Y1/M10/D1)

How cute are these glasses? I mean, sure some people will look at this and see a pile of garbage. But not me. These glasses give me happy summertime memories of being in law school and traipsing down to Ole Mexico for lobsters and cerveza mas finas.

No house news today... offer likely to go out tomorrow. Well, there is one thing: I'm a tad nervous about this house because it's in a "transitional" neighborhood. What makes a neighborhood "transitional"? Essentially, low home prices but lots of influx of cash. The city has been dumping money into this neighborhood for the past decade or so. And it's been making a difference. But these kinds of changes are slow and who knows if I'll still own this house when the tide turns. But the upside in a transitional neighborhood can be huge if you are there at the right time. And, most importantly, E really likes this house. And it's the first time he's been remotely interested in a property so that's pretty big. Anyhoodle, probably have more news tomorrow. Cheers!