Tuesday, July 31, 2007

Hot New Doormat



I suspect that this doormat will become a hot seller among Valley home owners this holiday season. Get yours here!

Wordock in denial.

So I was reading this article in MarketWatch and was thrilled to come across a recorded interview with Robert Shiller. You know? From Case-Shiller! Click on the link to hear it yourself.

Anyhoo, if you don't have time to listen to it, here's a pithy summary by yours truly (Read: This is not an actual transcript!)

Shiller: "Some markets have enjoyed an increase month over month..."

Wordock: "So the market is turning around?"

Shiller: "Well, it's all speculation, so that could happen but I'm not saying it will."

Wordock: "What about Boston? The bust is over in Boston, right?"

Shiller: "No...."

Wordock: "Well the bust COULD be over?"

Shiller: "I wouldn't put stock in the month over month numbers alone..."

Wordock: "Great! So the bust is over!"

Seriously, Wordock hears only what he wants to hear. He must own a home in Boston. Despite everything Shiller says to the contrary, Wordock writes this amusing headline and summary on the java player:

"Robert Shiller: Seeing positive signs on home front"
"With home prices now higher in eight of 20 cities on a month-to-month basis, there's a chance we may be seeing a recovery. So says Robert Shiller, Yale University economics professor and chief economist at MacroMarkets. He tells John Wordock that Boston has now seen home price increases two months in a row and that could be a sign of a turnaround."

Despite the fact that the associated MarketWatch article says this:

"'At a national level, declines in annual home-price returns are showing no signs of a slowdown or turnaround,' said Robert J. Shiller, chief economist at MacroMarkets LLC., and the co-inventor of the price index. Futures markets predict further declines, he said."

Un-freaking-believable, Mr. Wordock.

So Valley!

Here in the Valley, yards are a bit small and privacy is at a premium. So people tend to put cinder block walls around their back yards. Cinder block walls are approximately as hideous as they are ubiquitous. And people do all sorts of things to camouflage them. They cover them in stucko, they cover them in ivy, and they even put wood fences in front of them. But, before today, I had never seen a cinder block wall peeking out from behind a huge "natural" rock formation replete with waterfall.


The waterfall itself is a bit of a head scratcher because I can't imagine that any snow falls on the formation let alone enough snow to melt and form a waterfall. But setting aside logic (physics and aesthetics) this magic waterfall flows into a small creek and creates (what else?) a charming little swimming hole. Behold:

But that is not all. No. In addition to the "natural" rock formation, magical waterfall, creek, and refreshing swimming hole, there is also what I think of as a jacuzebo (half jacuzzi and half gazebo).
I know what you are thinking: "Is it for sale?" Thank your lucky stars, Gentle Readers, this home is indeed available! Priced to move at $599k.

9612 QUAKERTOWN AVENUE, Chatsworth, CA 91311
MLS #F1723579

Still thinking about Case Shiller.


I've been getting some emails about when I think Los Angeles prices will drop and how far (as if I know!). All I can tell you is that I've been basing my gut feelings on the Case Shiller index and so I kind of graphed it out above (click graph to enlarge). The blue line is the actual CS index for Los Angeles. The redline is my half-hazard attempt at graphing out what the normal growth would've looked like if there were no booms. (I fully admit that my methods are less than scientific, but I still think they have at least cocktail-party-chat value). I'm sure there are people who would've drawn that redline more steeply and others who would've drawn it less steeply. I was attempting to graph from valley to valley in the cycle.

You can see that in the last boom it took approximately 3 years to peak and 6 years to bottom out. At the low point, homes didn't roll all the way back all the way back to pre-boom pricing; they rolled back about 50%.

Depending on how you look at the current boom (what I like to call the "Great Boom"), you might say it will take six years to drop 50%. That would assume that you believe real estate follows certain fixed cycles that are not dependent on the individual boom. Or you might think it will take twice as long to bottom out as it took to peak, assuming you think real estate follows a trend that is dictated by the boom itself.

To me, the interesting aspect of this graph is that the current boom peak didn't lie flat as long as the last boom. It also climbed at a much faster clip. This could indicate that our current boom is more volatile and will fall more quickly than the last. I think I subscribe to this faster-collapse theory because of all the fraud that went on in lending. I believe the fraud is more widespread than say the volume of aerospace employees who were laid off in the 90's.

The point on which virtually nobody disagrees, is that the current pricing is unsustainable. There's just no reason to pay three-quarters of a million dollars for 1,700 sq. ft. tract house in the Valley. Don't do it, People. That house will easily be sold for $400k in the next year or two.

As for E & I, we might jump in before the market totally bottoms out. But we've definitely decided that we won't buy before summer ends. And it seems unlikely that we will buy before the holidays are over. I am still looking everyday because I think it's important to have a strong knowledge of the market and value -- but I am still not seeing the kind of value that I believe is sustainable.

Monday, July 30, 2007

Case Shiller can tell no lies.

You guys know about the Case Shiller Index, right? They make these graphs that tell you what is going on with home values in certain local markets. There's a lot of math that you can read about if you are so inclined but, if you like, you can just look at the pretty graphs below (click to enlarge).

Things are kind of sucky for buyers in SEATTLE:


Y'all know that it has been a bit easier to buy in BOSTON lately:


I've said it before, DETROIT is in what we call a recession:


But, lo! What do we have here? LOS ANGELES is coming down too:


I feel like the clouds just parted and the angels started to sing.

Never give up the dream! (On Ben Ave.)

This is a really cute little house (click to enlarge image) that has been sitting on the market vacant for 252 days without a sale and counting. They say there are only three things that can interfere with the sale of a house: (1) condition; (2) location; and (3) price. So let's see if we can figure out which one it is, shall we?

"Condition" includes a lot of things. It's not just the aesthetics, it's the roof, a/c, paint, windows, electrical and plumbing. I have personally seen this house and can say that it is in move-in condition. It looks to me like it has a new electrical panel, new central air, new interior and exterior paint, a new bath, a newer roof, and a new kitchen (not a top of the line kitchen, but a very tasteful new kitchen). I would replace the louvered windows, but that is really a very minor change. In sum, I'm pretty sure condition is not the problem.

The location of this house is a bit of a mixed bag. I really like the neighborhood a lot. But, as you can see from the Zillow aerial photos, the house is, well, freeway close. That said, there is a sound wall with lots of trees so the noise is minimized and you can't see the freeway. Thus, I don't think the location is the real problem either. (You see where this is going, don't you?)



In my humble opinion, the only possible reason this house has not sold for nearly a year is ... waaaaait for it ... The Price! At $750k, this is the lowest-priced house in the neighborhood, but apparently not low enough. The records show that it was purchased for $650k a year ago, however, Zillow is currently estimating the house at $638k. It's not exactly confidence inspiring. I mean, you expect a really low Zestimate when the house hasn't changed hands in decades, but this house just sold a year ago. And even if you toss Zillow out the window all together, the MLS shows that right now you could buy a 1,600 sq. ft. 3 bed/2 bath on the edge of Sherman Oaks for that.

So that's what I'm dealing with day in and day out for the last six months. It's like the whole city was playing musical chairs, the music stopped, and certain people grabbed two, three or four chairs. Which left buyers like me standing around, scratching our heads, and wondering: "What the hell are you going to do with all those chairs?"

Note: This house went inactive and then came back up at the same price but with a new MLS #: F1724606.

Linkage and Whatnot

I am not alone! According to Manhattan Beach Confidential, lots of buyers feel just like I do.

Only in Hollywood: Pigeon's are on the pill. Yes! That pill.

I've been seeing this a lot: neighboring sellers undercut each other in a pricing war.

Whenever I see exclamation points in an MLS description, it gets my hopes up about a buyer's market. And if this isn't an exclamation point incarnate, I don't know what is.

Friday, July 27, 2007

Take heart house hunters!

Thanks to Reader Greg for directing me to an article on TheStreet.com that should give hope to my fellow forlorn house hunters. (People, I have a day job; I cannot read everything by myself. I am not a machine!)

Here's an excerpt:

"In essence, prices are poised for a fall far steeper than the 2.2% year-over-year drop in the median home price reported Thursday.

"Home-sellers are clearly not happy with the offers they are receiving -- if they are receiving offers at all -- and the disconnect between presumed valuations on the parts of buyers and sellers remains fundamentally hung up.

"The bubble disbelievers (aka cycle deniers), soft-landing lubbers and those who talk confidently of "containment" as if subprime lending was a virus that could be quarantined (or, perhaps, a rogue government meant to be invaded and toppled), all share a shocking blind spot: they refuse to acknowledge that all lending, as Countrywide itself conceded earlier this week, is interdependent.

"Debt itself is no longer 'contained,' but has actually been unfettered to allow the freer flow of investment dollars. Actions aimed at minimizing the perception of risk levels for investors and borrowers have created the unintended consequence of enabling those unprepared for bad news to walk right into it.

".... Recent reassessments by the National Association of Realtors predict that housing won't recover until at least 2009 are welcome, if a little late."

Read the whole story here.

Linkage and Whatnot

How do McMansions affect a neighborood's value? Find out at the WSJ's Real Estate Journal.

According to Forbes.com, you can buy Paris Hilton's Hollywood Hills pad.

Check out the new Casey Serin on the block.

Another REO in Sherman Oaks...

5209 BUFFALO AVENUE, Sherman Oaks, CA 91401


List Price: $699k
Last Sale: $850k on 11/18/05

Beds: 4
Bath: 4
Sq. Ft: 19,10
Lot: 6,480

MLS # F1726452

Did you want a mortgage with your latte? (Y2/M3/D7)

So I was at Starbucks this morning and I saw a young couple with their little baby and another couple all huddeled over some legal documents. I can't help it, this kind of thing forces me to eavesdrop. Thre's a lot of signing going on when suddenly the young mother in the group says:

"I don't understand why it says 8.7%. You said 8.475% so why is it different?"

And the gentleman (?) who is arranging all the documents for her says:

"Oh, well, it's probably going to go up so I just put in the higher rate."

Whatwhatwhat?! I am in a state of complete and total shock but before I can say anything the young woman responds:

"I am so sick of this! It just keeps going up and up. I just want this to be over."

Her husband says: "Well, are you sure you want to do this?"

And then the gentleman (?) who was arranging the papers says:

"It's only going to be maybe another $10 a month so... you want the house right?"

The young mother nods and they begin signing.

At this point, I needed to be physically restrained. I wanted to scream at this young couple:

"EIGHT POINT SEVEN PERCENT! HE THINKS IT MIGHT GO UP SO HE PUT IN A HIGHER RATE? WHAT ARE YOU PEOPLE DOING?! THIS MAN IS COMMITTING A CRIME! THIS IS NOT THE PLACE TO GET A MORTGAGE! THIS IS NOT THE TIME TO GET A MORTGAGE! THINK OF YOUR BABY!"

In fairness, I do not know the whole story so I did not interfere. But good lord, is there anyway this might end well? So sad.

Thursday, July 26, 2007

The Skittle House

I like color in a house. I do. But not ALL of them at the same time under one roof. Today, I had to shield my eyes when these MLS photos came up. I swear to god, these photos are all of the same house. Yes. They. Are. If you have a weak stomach, you may want to surf away to a more palatable site. The rest of you, looky here:

GREEN:

ORANGE:



YELLOW (even the ceiling!):

PURPLE:

14024 LA MAIDA STREET, SHERMAN OAKS ($825k) MLS #F126094

If you are going to buy this house you should seriously ask for like a $3000 credit to repaint.

And if you are selling this house, it is not going to sit on the market for months with no offers because of the paint. No, it won't. It's going to sit on the market for months because of the price, Silly.

Wednesday, July 25, 2007

Linkage and Whatnot

It's harder than ever to be a first-time homebuyer, accourding to USA Today.

Super interesting three-part article on the last housing boom/bust cycle from Market Watch.

Wacko? Or housing consumer advocate? Read the WSJ's Real Estate Journal article and decide for yourself.

NAR says home sales are down. Yawn.

MLS Photo of the Day (Y2/M3/D25)


Is that jar of pickled peppers supposed to distract me from the filthy grout? Because, uh, it's not working.

13100 Weddington St., MLS #F1725684

Tuesday, July 24, 2007

Sunset Tan: Please! Cut him off!

In case you have been living under a rock, or you have Time Warner cable and so you have basically no access to television, this guy on the left is the CEO of Countrywide Financial.

There's nothing wrong with the image (or every single other image of him). That's his actual color all of the time.

If you work at the tanning salon that is doing this to him, I want you to know that it is not right. You are mean and terrible girls for doing this to him and then giggling hysterically once he leaves the store.


Listen to the Professionals!

Let me start out by saying: I don't know this guy from Adam. He might be the best darn loan officer in the country, for all I know. But while I was reading this Realtor/Loan Officer's post, I was reminded of all the people who have to INSIST that you trust them. It's been my experience that trust is earned, not demanded. Anyhoo, following is one (angry!) excerpt from his blog (plus a wee bit of commentary from me) and at the end I have a mortgage question.

"This is something that comes up in just about every real estate transaction I take on and it never ends up well for my client ... It has more knowledge about your real estate transaction than you or the licensed professional you’ve hired to handle the job. It can be a family member, a coworker, a friend! ... No matter who it is, they all belong to the same group: The Infectious Idiots! The Toxic Talkers! They’re like the wolf in sheep’s clothing only these wolf’s [sic] are disguising themselves with knowledge...

"Nicole Richie is walking around with an alcohol bracelet on her leg [NOTE: "bracelet on leg" = "anklet" also: Does he mean Lindsey Lohan?]. If she drinks, the bracelet's going to tell her how drunk she is by measuring her sweat or something weird like that. What I wish the genius scientists would come up with is a BS Bracelet so that anytime you uttered some total BS is would shock you! And not just a little shock, I’m talkin’ a take down, I saw it on Cops, Tazer blast of electricity that would leave no doubt in the minds of those you were talking to that you have no idea what you’re talking about..."

I love that in the middle of his rant about people who have no idea what they are talking about, he gets the Nicole Richie bit wrong. I also love that he wants people stunned with an electronic pulse for this very offense. But back to the anger:

"Let me give you an example of how this type of venomous verbalization hurt one of my clients this past week. I was hired to refinance a loan for someone and everything was going great. In one scenario I was saving my client nearly $500 a month. That’s $500 less that they would have to be writing checks for every month. $500 extra in their pocket each month. I thought it was a pretty good deal but, just as everything was falling into place, my client consulted a friend..."

Notably absent from this post is how much it will actually cost the beloved client to save this $500. But back to the rant:

"Well, the friend tells my client that he just got a loan and it only cost him $1,000. I explained that there is no way that I can do a loan for $1,000. It’s not possible ... For one, and this is most important, I don’t work for free. You don’t work for free, so why would you expect me to? I’m a professional. I do a great job and I earn every penny I make. If you want my services, this is what it’s going to cost. If you went through life choosing to hire only those who cost the least, do you really think you’d be getting the best service, the best advice or the best products? Not a chance. A loan for $1,000? ... I can charge you nothing to do the loan, but your interest rate is going to be significantly higher. For the life of the loan. That’s the way it works."

Well, maybe I'm naive, but couldn't the client just go directly to the lender?

"Let’s say the loan is for $400,000 and I was charging 1 point. That’s $4,000. It’s a one time cost and it can be added to the loan amount so that there’s no money out of pocket.

I guess he means "no cash up front" because if you are adding that to the loan amount you will be paying cash "out of pocket" for the next 30 years to cover his fee.

"Let’s say I get you an interest rate of 6.50%. Your monthly interest only payment on $400,000 would be $2,166. Well, if you don’t want to pay my fee of $4,000, I can do that. I can get paid directly from the lender. The only downside is that you’re going to have to pay for it with a higher interest rate on your loan. Let’s say that in order to get my fee of $4,000 from the lender your interest rate would have to be 6.875…6 and 7/8’s…that’s for the life of the loan."

Can somebody explain this to me? Why can't the client get the same rate directly from the lender? Pay the point directly to the lender?

Maybe we should move to Michigan... (Y2/M3/D24)

...at least they have sympathetic Realtors. Don't believe me? You can read about it here.

And People, I am not really moving to Michigan so do not start soap boxing about how stupid it is to live in Los Angeles. I have heard it all before. Many many times. And if you lay into the Valley, god help you, because I will rip your town to shreds. Unless your town is NYC, in which case I don't have much to say except you have no yard. Which is kind of a fair trade off I suppose. (Okay, you got me. NYC is the one other place I'd live. Sue me.)

Also: Today is Sid's first birthday. Huzzah!

Monday, July 23, 2007

Coming soon: RESEDA RANCH


It's a long day living in Reseda
There's a freeway runnin' through the yard...

Those lyrics (from Tom Petty's Free Fallin') make reference to the oft maligned subdivision of the Valley that was home to the lead characters in both The Karate Kid and Terminator 2. Unfortunately, the silver screen depictions of Reseda were no more flattering than Mr. Petty's song.

It's no wonder then that some residents of Reseda are currently lobbying for a name change. The Daily News reports that the wealthier land barons of Reseda (holding individual residential lots that average over 17,000 sq. ft.) are not happy because their subdivision has become synonymous with urban blight. That's an understandable concern. Far less understandable, however, is their proposed new name which is essentially: "Urban Blight Ranch."

I dunno, if they asked me (which they clearly did not) I would have suggested maybe eliminating Reseda from the name all together. Because if you... uh... you know, want people to stop associating you with Reseda well then maybe you should not include Reseda in your name? Just a thought. Anyhoo, you can read the whole Daily News story here. My favorite part is Mr. Carlson's enchanting quote about the area:

" 'It's been proven over and over again that once someone moves into the subdivision, they complain about the noise and smell of the animals, and the city health department comes out and says, `Hey, you can't have animals this close,' said Garth Carlson, chairman of the Reseda Neighborhood Council, which supports the name change."

Makes you want to pick right up and move there, no?

Favorite New Listing (Y2/M3/D23)

In theory, your mortgage payment should be between 25 and 30% of your gross income. So, if a house is $799k, and you have $159,800 laying around for a down payment, then your mortgage (7% for 30 years) would be $4252.61 each month. So your gross monthly income would have to be somewhere around $17k. That's over $204k per year. (Of course, we all know that barely anybody puts 20% in Los Angeles, so the monthly payment would be higher and thus require even higher income). But anyway, let's say you make that kind of dough. Wanna see the kitchen in a house that comes in a house listed for $799k? Here it is:


You love the tile counter, right? No? Well, what about 6" square tile floor? Oh, you don't like that either? Well, how about the slide in range that looks like it's from Home Depot?

Seriously, People. This is the kind of kitchen you expect to see in an apartment. It's not the kind of kitchen that somebody who is pulling down $200k wants.

Also, the agent figures you will love the kitchen so much, that you don't even need to see the bathroom. But if you insist, here's a sideways picture that was apparently snapped when the agent dropped the camera.


4242 GOODLAND AVENUE, Studio City, CA 91604 -- $799k
Bed: 2
Bath: 1.5
Sq Ft: 1,240
Lot 5,266
MLS: F1725341
DOM: 4

(IMHO, They'd be very lucky to get $700k).

Friday, July 20, 2007

DIY Listings (Y2/M3/D20)

The WSJ Real Estate Journal has a nice little how-to feature about selling your home on the Internet.

Here's an excerpt:

"Despite the recent slump in the housing market, many Americans are still paying a walloping 6% commission to real estate brokers.

"At first blush, 6% may not sound like much, but consider: According to the U.S. Census Bureau, the average price of a home is $313,000, which means the average seller has to pony up nearly $19,000 in broker fees. This is a hefty penalty for selling your own home, one that more and more Americans are unwilling to pay.

"Many homeowners are now opting to market their property directly to the consumer using online services such as Yahoo Real Estate and Craig's List. There's good reason for going to the Web: One recent survey, conducted by the National Association of Realtors, found that 80% used the Internet when searching for a new home." (Emphasis supplied).

I think it's great that people are turning to the Internet to manage their own listings. I suspect that, at minimum, most homeowners would do a more conscientious job when writing the description of their property (honestly, it fires me up every time I read a hot mess description, see e.g. the post below). However, as I've said before, I think a listing agent has value.

Sure, there are listing agents who don't truly earn their commissions; they put up lousy photos, they write lousy descriptions, and they are useless at showings (e.g. "Gee, I don't know when they put the roof on, I'm not sure how old the central air is...."). But those are the bad ones. A good listing agent puts up virtually pornographic photos of your home, gets the word out far and wide, and prices the home appropriately. It's been my experience that FSBOs (that's "for sale by owner" pronounced FIZZ-boe) get very excited about saving that 6%, but they don't pass any of the savings on to the buyer. If you aren't offering me a discount, why should I take the chance on you? You could disappear into thin air tomorrow but a brokerage will still be there tomorrow for me to sue (god forbid!).

But what do you guys think? Would you buy a FSBO? Why or why not?

Thursday, July 19, 2007

Great Curd! (Y2/M3/D19)

UPDATE: Gentle Readers, I am so pleased to tell you that this listing was fixed! It now reads:

"
This charming traditional is ready for new owners! Great for large family or one in need of sep quarters with own entrance. Property features a lrg liv rm w/frpl, spacious kit with bk, huge fam rm w/wet bar, 3bdrms, tiled baths, lots of storage, 2 car gar, workshop, large carport, long drive way for rv & more! Upgrades incl copper plumbing, newer central air/heat, newer roof, wood floors, etc huge yard shaded by fruit trees & large patio are great for parties and entertaining!"

But, lest we forget, I am leaving up the original post which follows.

We all make typos from time to time, n'est pas? But I am pretty sure that this REALTOR is not even trying, judge for yourself:

"Great curd leads you in to this lovely sheman oaks home. This home has a wonderful mother-in-law set up that can be used as two family home. Home has newer air/heat. Cooper plumbing,roof. Large living room & family room. This home needs a little cosmetic updating. But built with quality. Nice floorplan. Priced to sell."

1. I do not want to see the "great curd" that will lead me into this lovely home.
2. "Cooper" must be a famous plumber/roofer.
3. I would like to know how a "mother-in-law set up" "can be used as a two family home."

4712 MORSE AVENUE, Sherman Oaks, CA MLS#F1725166

$716 a sq. ft., are you kidding? (Y2/M3/D19)

UPDATE:
Price Reduced: 07/18/07 -- $925k to $899k
Price Reduced: 08/01/07 -- $899k to $860k (7.03% down; $666/sq. ft.)

Favorite listing of the week:
11357 AQUA VISTA, Studio City, CA 91602 (MLS # F1721707)

2 bed/2 bath; 1,291 sq.ft.

Zestimate: $799k; Last sold in 2001 for $410k.

This house is really adorable. There's not much you could do to make this house cuter. But, People, they want $716 for each little square foot of this house that doesn't appear to have had any upgrades since it last changed hands (but maybe they just left those details out of the MLS description).

Is somebody really going to pay that much for such a small house in this market? Time will tell.

Former Child Star Destroys Valley House (Y2/M3/D19)

Y'all are not going to believe what is going on in Sherman Oaks! The TMZ.com has posted a story about a child actor (whom you no doubt have forgotten) from Tim Allen's Home Improvement. It's just a foreclosure story sans mortgage fraud, but LORD! How insane would you be if you paid a few million for your house and then your neighbor did THIS! <--- Click to see story + video of the wreckage.

Go on. You know you are dying to see "Absolutely the worst house in a prime location" priced to sell at $1.149M.

Wednesday, July 18, 2007

Who's in charge here anyway? (Y2/M3/D18)

I really like public-access television (not to be confused with PBS or "public television"). Public access channels let anybody who is willing to pay the fee come in and broadcast. There used to be this guy who did a show called The Earthquake Show and he would just read reports of tremors and then ask people to call in. Only he wasn't live so, of course, the phone would just sit there next to him not ringing. I guess you had to witness it to understand the comedy gold that it was.

Anyhoo, there are some really interesting little shows springing up on the Internet now and I am currently loving the videos at itstimetomoveup.tv. This week, they talk to an agent who is offering to forfeit 20% of his commission. That got my interest so I watched. Everything was just plodding along as expected and then he mentions that maybe the 20% could be given to the seller's agent to get the deal to close. Whatwhatwhat?! The seller's AGENT? It's the agent that determines whether the deal will close? I mean, I could see giving it to the SELLER... but the seller's AGENT? See it for yourself:

Tuesday, July 17, 2007

Freak-o-riffic (Y2/M3/D17)


Hello Freaks!

Erm... Welcome people who came here from Freakonomics.com?

Okay, whatever the proper salutation, apparently the good people at Freakonomics.com blogged about my commission-cutting-caper post on L.A. Land (the best blog ever!) and now lots of people (Hi!) are finding themselves here. One Gentle Reader spent 120 minutes here. Even I can't spend that much time here but I digress...

While I was perusing Freakonomics, I came across a highly interesting post by Mssrs. Dubner & Levitt (who brought the sexy back to economics) in the NYT on cash-back-at-close real estate deals (one of my favorite topics). They write:

"At first glance, these cash-back transactions, while illegal, might seem a victimless crime. After all, the seller gets his house sold and the buyer gets to move in with his family. The real estate agent, the mortgage broker, the attorney and the appraiser are all paid their commissions or fees. Even the bank that made the loan comes out ahead, since it earned its fees on the transaction before passing along the mortgage to investors.

But Ben-David argues that there are at least two potential losers. The first is the honest buyer who won’t take a cash-back offer and therefore can’t buy a house — all while the illegal cash-back transactions are artificially driving up home prices in his neighborhood.

The second loser is the investor who bought the mortgage-backed securities...

There’s a third potential loser as well: the subprime buyer who does accept the cash-back payment but still ends up defaulting on the loan."

Read the whole article here.




Monday, July 16, 2007

Taking a hit(Y2/M3/D16)

Remember when recent sales were a helpful guideline? These days, not so much.

11476 HUSTON STREET, Valley Village, CA 91601
Last Sold 07/15/05: $750k
Current List: $649k




4425 MORSE AVENUE, Studio City, 91604
Last Sold 01/30/06: $1.03M
Current List: $825k



4943 WESTPARK DRIVE, North Hollywood, CA 91601
Last Sold 06/01/06: $1.1M
Current List: $725k

Linkage and Whatnot

I heart Beth Butler for writing honestly about mortgage fraud. Read it here.

I also heart Kathleen Madigan explaining, in plain English, why subprime lenders should not be bailed out.

The dual-agency question tackled by MeFites.

Celebrity neighbors here in the Valley.

Not paid enough to do it right, apparently (Y2/M3/D16)

Dear REALTOR:

Today, I read your description of this nice little house in Sherman Oaks:

"Enter past the white picket fence along the brick path to this adorable sprawling ranch traditional..."

I like a sprawling ranch traditional! So I clicked to the photos and, well, there was a wee problem.


If you care (which you probably don't) it's a split rail. And it's a natural wood finish.

Friday, July 13, 2007

Real Estate for Dummies (Y2/M3/D13)

I just came across this video clip. I'm not sure where to start. There's so much information in it. My tiny woman brain might implode. I need a professional to help me understand all the information that is in this video. If only there were a professional video watcher who would watch it and narrow down the information so I could understand it. Woe is me. I am overwhelmed!


What are you saying? (Y2/M3/D13)

There are some MLS photos where I have no idea what the agent is trying to communicate to buyers. They have no caption, no explanation. Just an odd photo. Por exemplar:


What do you think this photo communicates?

"THIS HOUSE COMES WITH A FLOOR!" or

"THERE ARE AT LEAST TWO WALLS PAINTED SAGE GREEN!"

Here's another head-scratcher:


"THIS HOUSE HAS A HALLWAY! IT IS LONG. AND BEIGE."

But sometimes there is a caption explaining the photo. And you are not going to believe the actual caption for this one:

I swear to god, the actual caption for this photo reads: "Side English Garden."

Because nothing says "English Garden" like a Yucca tree and a cinder block wall.

Thursday, July 12, 2007

Taking offers personally (Y2/M3/D2)

Given my post today on L.A. Land was about how exorbitant list prices offend me on a personal level, I feel compelled to share the other side of the coin. Here's a brief excerpt from the listing agent's "vent":

"The problem is that I [the listing agent] know a home's intrinsic value and I know that there are offers that just don't even come close to that. So when a buyer's agent (or in this case some investment company who claims that a family member is in desperate need of a house) knows that they can't afford this certain area but they come in anyway to insult the sellers with their ridiculous offers, I get a little steamed."

I think that making a true low-ball offer (say, 10% or more below list) just isn't going to fly so why make it? Personally, I wait for a price reduction so that my offer is closer to list. But I wonder: is it just a rookie mistake or does it actually fly now and again? Hmmm.

Random Product Endorsement

By now you know that I really like Ziprealty.com's webiste. But what you may not know is that they have added new features that allow you to search for fixers and short sales! Pretty cool.

When you go into the Search Menu, and click either the "City" or "Zip Code" tab, you can scroll down to "Features" and check the "Fixer" or the "Short Sale" box. I love it!

"Reduced! Reduced! Reduced!" Eh. Not so much. (Y2/M3/D12)


The MLS description reads: "Reduced!Reduced!Reduced!Priced to sell-great sherman oaks 3 bedroom+3 bath home w/pool+spa.... blah blah blah ....Electric gate to garage and yard-priced to sell!!!"

Well, let's see if it's really "priced to sell" after being "Reduced! Reduced! Reduced!" Shall we?

Price Reduced: 05/24/07 -- $899,000 to $885,000
Price Reduced: 06/05/07 -- $885,000 to $875,000
Price Reduced: 06/26/07 -- $875,000 to $850,000

Ummm, if it wasn't priced to sell at $899k, it's not priced to sell at $850k. That's less than a 6% reduction. If you really really want it to sell, I'd go to $785k. But what do I know?

Wednesday, July 11, 2007

Fire Sale in Encino Village/Park (Y2/M3/D11)


Today, we venture out of Sherman Oaks to a neighboring area called both Encino Village and Encino Park (click to enlarge). I have driven through this neighborhood and for the life of me I cannot figure out why everybody who lives there suddenly wants to move out. This is an older neighborhood with small but well maintained tract housing. The streets have mature trees and, as you can see, the streets do not go through so there is not a lot of traffic. There are no condos or industry, it is a pure residential area. So what gives?

After an exhaustive (trust me, it was) review of the listings, they break down thusly:

Held for less than 5 years: 15 listings
Held since the 90s: 3 listings
Held since at least the 70s: 11 listings

It looks to me like you have a fairly even split between people who were flippers (or nearly flippers) and people who are trying to cash out of their long term investments. But still, I don't get what's going on here. Sorry, but I just don't think that 29 people in this small neighborhood suddenly had a big life change and needs to sell their house. Disagree? Well then let's just go a few blocks away to Lake Balboa and see what's listed there:


Tuesday, July 10, 2007

Stage Your Fridge (Y2/M3/D10)

Today I stumbled across this home-selling tip from a Michigan-based blog. Michigan, for those of you who are unfamiliar, is in a veritable one-state recession. Things are, how you say? Not so good. Anyhoodle, the tip is (you better have a seat): STAGE YOUR REFRIGERATOR. I kid you not, Gentle Readers. The tip is NOT lower your price, NOT improve the condition of your home, nope! They think that a half gallon of fake milk (you wouldn't want it to spoil) is going to sell your house. NEWSFLASH: The fake milk aint gonna do it, Honey.

For real home-selling tips, please consult with my new favorite Realtor: LEO NORDINE. And this isn't just a shameless plug for LA LAND. I really want you to consult with Mr. Nordine. Go on. Shoo.

Oh, also, in case you hadn't heard, I am now being dubbed "an agent's worst nightmare." That's not very nice. Just because I refuse to commit mortgage fraud and have opinions about what a house is worth does not make me Evil Incarnate. It's the virgin sacrifices. Duh.

Monday, July 09, 2007

Nearly House Number the Seventh (Y2/M3/D9)


UPDATE: Inactive as of 7/11/07
UPDATE The Second: Back on market as of approx. 8/29/07

Bedrooms: 2
Full Baths: 1
Partial Baths: 1
Square Feet: 1,590
Lot Size: 5,650 Sq. Ft.
DOM: 146

Price Reduced: 03/27/07 -- $1,200,000 to $887,000
Price Reduced: 06/26/07 -- $887,000 to $750,000

While the price reductions look fantastic, it's a tad deceptive. The original $1.2M price included an adjacent lot (now separately priced at $250k). The $887k price represents the price of the home sans adjacent lot and the current $750k price represents a $137k reduction (15%) for this home. The Zillow estimate is currently at $740k (up $18k over the last 30 days).


So, we thought long and hard about this house over the weekend. This is a lovely example of Los Angeles Minimalist design (not a Neutra, but cool nonetheless). It's on the market for the first time in over 40 years. The outdoor hardscapes are nice including a large front deck and two separate patio areas in the back. I wouldn't be surprised to see this house renovated and featured in Sunset magazine soon. It's in a prime location in Sherman Oaks and is the cheapest thing in neighborhood (by about a $100k). So why did we decide against it?

(1) Flat roof;
(2) Slab foundation;
(3) Loads of stairs;
(4) No garage per se (it's just a carport);
(5) Not really 2 bedrooms, more of a one bedroom + office deal;
(6) Not much of a view (just some trees really);
(7) Fear of coyotes harassing El Sid; AND
(8) Two offers already on the table with a few more expected.

Just goes to show that if a property is perceived as being just a bit below market, the crowd still goes wild here in the Valley. Crazy.


Monday, July 02, 2007

4421 Noble Ave (Y2/M3/D2)

UPDATE:
Price Reduced: 07/10/07 -- $849,900 to $824,900
Price Reduced: 07/17/07 -- $824,900 to $799,900
Price Reduced: 07/28/07 -- $799,900 to $769,900


This listing just came up Sunday (click to enlarge). These people bought this house in November for $705k. They have not increased the square footage at all but they think the house is now worth $850k. What could they have done to the house to justify that increase? Let me tell ya, for the additional $145k I could've put in a whole new kitchen, two new baths, a brand new jacuzzi out back, central air, a new electrical panel and all new windows in this 1,385 square foot house.

But the MLS description doesn't mention any of that:

"This charming mid-century home is just steps from the blvd. With easy access to 101, 405 & pub trans. Harwood floors, smooth ceilings, crown molding, whitewashed wood plantation shutters, french doors, updated kit with custom cabinets w/glass fronts, updated bathrooms, eating in kit, indoor laundry area, newer light fixtures and recessed lighting. The beautifully landscaped and lighted back yard has a covered brick porch and plenty of room for entertaining."

I'm pretty sure "updated" and "newer" are code words for "the previous owner did this work."
It'll be interesting when the pictures come up.

UPDATE: And the pictures are up! It's just as described. Sort of.
UPDATE: So, maybe the agent was reading this? Because on 7/10 the MLS description was updated to read "mid-century ranch."




Don't get me wrong, this looks exactly like the kind of house I would buy; it's a very sweet little house. But, Honey, it just aint no $849k house. Who would pay that for this house? Seriously.