Reducing Property Taxes for Free

Some homeowners have received official-looking letters offering to reduce property taxes ... for a fee. Don't respond! Property tax reassessment is a free service you can do yourself by contacting your local tax assessor's office.

Homeowners in LA County can get started by learning about the process and downloading a Decline-in-Value Reassessment application at the tax assessor's website.

Another Wave of Foreclosures Coming?

One of the things I hear often these days is that there is a another big wave of foreclosures on the horizon, and the wave will drag property values down even further. I DON'T THINK SO!

Banks have gotten a bit smarter. With experience, they now know its much less costly to avoid foreclosing by finding a way to keep people in their homes (read "loan modifications") or allowing them to short sell. This is causing the pace of foreclosures to slow considerably. When foreclosures are absolutely necessary, banks are releasing them gradually to prevent pulling down values in an entire neighborhood.

We still have foreclosures in Long Beach and surrounding communities (more in some areas, much less in others), they are still bargains, and they will be with us for another year or so, but a new big wave? Probably not.

Home Price Trends: Supply and Demand (Part II)

Long Beach and surrounding communities will see a significant increase in housing demand, due to local job growth, in the next few years. The Douglas Park, located near the airport off Lakewood Blvd, is already partially filled. When completed, it will create up to 13,200 new jobs.

Further increasing job growth is the facility, directly across from Douglas Park, formerly used to build the Boeing MD-17. Either a world-class sound studio or a car manufacturer will probably fill the space. Regardless of which business stations itself, it is expected to create some 3,500 jobs.

Last, but certainly not least, is the expansion of the Long Beach port. This $750M project, set to begin in December of 2009, will create some 14,000 local jobs.

That's a total of nearly 31,000 new jobs in Long Beach! Does anyone doubt that a remarkable increase in the demand for housing is on the horizon? Investors will make a killing, current owners will feel much better, and fence-sitting buyers would do well to take stock.

Home Price Trends: Supply and Demand (Part I)

The other day I posted an article explaining price trends since WWII and also predicting the trend for coming decades. It's a good article, but it has a fundamental flaw:

The article never mentions echo boomers, the children of baby boomers. This generation, born between 1982 and 1995, makes up nearly 25% of the country's population and is far bigger than the baby boomer generation. These people are going to start buying homes in 15-20 years. That's a ways off, but it is also a lot of new demand. And price trends (as well as market cycles) is based on supply and demand.

Of course, Long Beach and surrounding communities, like the rest of the country, will see price appreciation from the increased demand. But we are also poised to experience increased demand from local forces far sooner than 20 years. More on these local forces later.

No More Negative Amortization

Negative amortization home loans were crazy to begin with, but we won't see them any more because they have been outlawed. (Negative amortization loans have payments so low that the principle can actually increase over time.)

Another really good idea is the new law that allows buyers of foreclosed homes to choose the escrow company and escrow officer instead of being forced by the seller to use theirs. Nothing like being held hostage.

Last but not least, another new law requires that mortgage documents be written in the same language that was used in oral negotiations. Duh!

These things just make good sense!

Historical Look at Real Estate Prices

There are reasons why prices rise and fall, and this article is one of the best at explaining the forces behind price fluctuations since WWII. But I think the article missed a couple of very important points, especially as they affect outlook regarding Long Beach and surrounding communities. It all boils down to supply and demand. I'll explain my thinking in a subsequent post.

We begin the week of October 12 with the conforming 30-year fixed rate at 4.875%.

Continuing to Pick Up Steam

The local housing market continues to pick up steam with open houses being quite busy and multiple offers being made on the best properties. An obstacle once again (read 2000-2005) facing buyers’ agents is getting their offer accepted in the face of competition for the home.

Next time I blog, we will have ended the month of June so, at that time, I’ll be able to post “months of inventory” through the complete month. This data is critical because it tell us if we are in a buyer’s market, a neutral market, or a seller’s market.

Much of the rise in interest rates in late May and early June was due to concerns about the government’s enormous accumulation of stimulous debt. Didn’t seem to be a problem with both domestic and foreign investors who showed a strong demand for Treasury purchases last week … which reversed some of the recent rate increases.

Click Here to see all rates as we begin the week of June 29.

You are reading my blog on real estate market trends. Go to my Main Page to search for properties.

Prices Edge Up, Rates Turn Downward

Home prices edged up for the first time in nearly two years in May, but it’s not because the mainstream market is improving: it’s because higher-end home have begun to sell and are edging up the median price. The higher end has been nearly frozen for two years.

California’s economic recovery is now expected to begin in the second half of 2009, but we will continue to shed jobs through 2010. Even so, after 21 weeks of increasing job losses, the biggest decrease in job losses in more than seven years took place the week ending June 6.

Mortgage rates decreased sharply last week. The week ended at 5.38% for 30-year-fixed mortgages, down from 5.59% the previous week. Seven weeks earlier the 30-year-fixed was 4.78%, a record low since it has been tracked starting in 1971. Click here to see all rates as we begin the week of June 22.

You are reading my blog on real estate market trends. Go to my Main Page.

Move-Up Buyers Entering Market

It’s almost official: the $8,000 first-time buyer tax credit can soon be used to increase an FHA loan down payment beyond the required 3.5%, and the credit may be applied towards closing costs as well. HUD has approved it, and lenders are working on how to implement it.
Home sales are up 2.9% in April from March 2009. First-time buyers accounted for 40% of sales in April, down from 53% in March. This tells us that there is rising interest in buying among current home owners.

Click here to see all rates as we begin the week of June 1.

Housing Affordability Best in 18 Years

Mortgage rates have had a very slight increase in the past week, as we begin to enter the “moving season.” The reasons for the slight increase are signs of the economy turning a corner and the stock market at higher levels. While there is pressure for interest rates to edge up, 5% is still incredibly low and it may be decades before we see anything like it again.

Last week, the Wells Fargo Housing Opportunity Index (HOI) reported that nationwide housing affordability jumped 10 percentage points during the first quarter of 2009. This movement placed housing affordability at the highest level since the HOI was created 18 years ago. Of course, the Los Angeles area remains one of the most expensive in the country.

Click here to see all rates as we began the week of May 26.

$8,000 Tax Credit Used toward Down Payment

Here is some great news for buyers, and few of them know about it: the $8,000 tax credit may, in the near future, be used toward a down payment! The way it will work is that the money is given to the buyer by the lender up front, before the transaction is even complete. Can the market do ANYTHING else to encourage buyers to take advantage of depressed home values and amazingly low interest rates?!?

Last week, more evidence showed that the economy is slowing its downward descent. The biggest risk to send mortgage rates upward is a Fed perception that a near-term economic recovery could begin. The brighter the outlook, the greater the potential for rates to start moving upward.

Click here to see all rates as they began the week of May 16.

Good News for Home Owners

When Stimulus Bill details are released a $8,000 tax credit to first time buyers will probably be included. Opinion about the effect of the tax credit among real estate professionals is pretty much unanimous: it should push a big wave of buyers off the fence to take advantage of not only the tax credit, but low prices and low interest rates as well.

The housing market led us into the recession, and the government is doing what it can to have housing lead us back out.

Click here to see all mortgage rates as they began the week of February 9.

$8,000 Tax Credit to Home Buyers

When Stimulus Bill details are released a $8,000 tax credit to first time buyers will probably be included. Opinion about the effect of the tax credit among real estate professionals is pretty much unanimous: it should push a big wave of buyers off the fence to take advantage of not only the tax credit, but low prices and low interest rates as well.

The housing market led us into the recession, and the government is doing what it can to have housing lead us back out.

Click here to see all mortgage rates as they began the week of February 9.

Low Prices, Low Rates

The really big news this week is interest rates: 30-year fixed conforming mortgage rates fell to their lowest level in 37 years. With the Fed dropping its short-term rate to between 0% and .25%, and its purchasing of mortgage-backed securites, long-term rates will very likely fall further in the first quarter of 2009.

For home owners, these rates should compel you to refinance. For potential buyers, it’s time to pick a mortgage program and find your new home: you’ll probably come out ahead, even if the median home price continues to slide.

If you know of someone who is ready to take advantage of low prices (see a December 21 LA Times article entitled “Can You Afford It Now?) and low interest rates, please call me with their name and contact information. I’ll take great care of your family and friends.

Click here to see all rates as they began the week of December 22.