Tuesday, October 21, 2008

Home Sales Skyrocket in Southern California

Home sales in southern California rose 65 percent in September compared to the same month a year ago.

A total of 20,497 new and existing houses and condominiums sold last month in Los Angeles, Riverside, San Diego, Ventura, San Bernardino, and Orange counties. It was the largest increase MDA DataQuick has recorded in the 20 years it has been keeping records, the company said Monday.

The increase was fueled by foreclosures, which drove down prices, MDA DataQuick said, pushing the median price down 33 percent from a year earlier to $308,500.
Sales so far this month appear to have been slowed by bad financial news, says Andrew LePage, an analyst with MDA DataQuick.

Source: Bloomberg, Daniel (10/20/08)

Richard's notes: Bank owned homes are selling very quickly here in the San Fernando Valley. This wasn't the case early in the year or last year as banks were not as eager to unload the properties. I believe the government's financial bailout and the banks eagerness to unload properties as huge discounts is causing home prices to plummet.

Monday, October 20, 2008

Encino Real Estate Market Update

Real-time market research for Encino

FREE RESEARCH REPORT - Encino Real Estate

Tuesday, October 14, 2008

Government Takes $250 Billion Stake in Banks

The U.S. Treasury announced plans today to purchase up to $250 billion in preferred stock from the nation's top banks. The move is part of a plan that President Bush says will help prevent recession and preserve the free market.

"Government owning a stake in any private U.S. company is objectionable to most Americans – me included," Treasury Secretary Henry Paulson said in a statement. "Yet the alternative of leaving businesses and consumers without access to financing is totally unacceptable. When financing isn't available, consumers and businesses shrink their spending, which leads to businesses cutting jobs and even closing up shop."

Nine major financial institutions have already agreed to the voluntary plan. Combined, these institutions will receive $125 billion in capital from the government. The banks are:
Goldman Sachs Group Inc.
Morgan Stanley
J.P. Morgan Chase & Co.
Bank of America Corp.
Citigroup Inc.
Wells Fargo & Co.
Bank of New York Mellon
State Street Corp.

As part of the voluntary program, the government will buy stock "on attractive terms that protect the taxpayer," according to a joint statement by the Treasury, Federal Reserve, and FDIC.

The shares be non-voting, unless the matter directly affects the government's rights as a shareholder. Banks that agree to be part of the program will accept restrictions on executive compensation while the government is holding the stock.

Paulson said taxpayers should expect a "reasonable return" from the stock and said the government will also receive warrants to buy additional stock from institutions participating in the program.

"The actions today are aimed at restoring confidence in our institutions and markets and repairing their capacity to meet the credit needs of American households and businesses," Federal Reserve Chairman Ben Bernanke said in a statement.

Source: U.S. Treasury, Wall Street Journal

Monday, October 13, 2008

Sen. John McCain is Right About Reducing Principal Balances on Home Loans

McCain Mortgage Buyout Proposal Rouses Critics

Presidential contender Sen. John McCain stepped into a political hornet’s nest Tuesday night when he proposed that the U.S. Treasury department "buy up the bad home-loan mortgages in America and renegotiate at the new value of those homes at the diminished value of those homes."

In subsequent explanations, McCain’s economic adviser Douglas Holtz-Eakin said McCain is proposing that the government would buy mortgages from banks and investors at the original value of loan, no matter how inflated that it now appears to be, and then give the home owner a new mortgage at current value at a more affordable interest rate. “Obviously, the taxpayer is on the hook for the difference,” Holtz-Eakin said.

Barack Obama’s top economic advisor Austan Goolsbee was among those highly critical of the idea. "This proposal, if enacted, would be a massive government subsidy from taxpayers to the most irresponsible banks, including the ones that committed fraud," Goolsbee said, adding, "This proposal would give the taxpayer all the risk, with no gain."

Source: BusinessWeek.com, Jane Sasseen (10/09/2008)

Thursday, October 09, 2008

Sherman Oaks Real Estate Market Update

Real-time market research for Sherman Oaks

The chart above represents the most up-to-date market statistics for the Sherman Oaks area. This chart is updated every week so please bookmark this link. If you own a home in Sherman Oaks, be sure to sign-up for our market snapshot report.

Sherman Oaks is one of the most popular area of the San Fernando Valley. Other popular areas are Burbank, Studio City, Toluca Lake, and Encino. If you are relocating to the San Fernando Valley, please Richard Johnston, Rodeo Realty, Inc. 818-730-4128.

Wednesday, October 08, 2008

Rodeo Realty, Inc.


I am pleased to announce that I have joined Rodeo Realty, Inc. in Sherman Oaks, CA.
How will this move benefit my sellers?
1. All homes will be advertised in the Los Angeles times every weekend (except short sales)
2. 500 Postcards will be mailed to nearby home-owners.
3. The home will be featured on Realtor.com until sold.
4. You'll be working with a prominent real estate broker here in the San Fernando Valley.
5. We have 11 offices to serve you. What this means you don't have to go far to get great service.
6. Free market snapshot report is available to homeowners.

How will this move benefit my buyers?
1. In-house mortgage brokers are available to get you pre-approved.
2. You can search for properties in the San Fernando Valley with no sign-up required.
3. Market research reports available every week.

Saturday, October 04, 2008

San Fernando Valley Market Update

Home Sales Surge 21% in the San Fernando Valley During August

Sales of existing single-family homes surged 20.7 percent during August throughout the San Fernando Valley, the Southland Regional Association of Realtors reported Thursday, Sept. 25.
Realtors closed escrow on 666 homes, up 114 transactions from a year ago August.

“The increase in sales activity occurred before news of the financial meltdown on Wall Street, but even though we won’t know for some time how that crisis will be resolved, there still are many buyers out there sorting through a solid selection of homes for sale at the best prices in years,” said Mary Funk, president of the Southland Regional Association of Realtors, which serves the San Fernando and Santa Clarita Valleys.

“Interestingly, the inventory is not all that high,” she said, “but soft resale prices, especially on the Valley’s relatively limited selection of bank-owned properties, continue to lure more and more buyers into the market.”

With the purchase of a single-family home now within reach of more buyers, condominium resale activity has not picked up as much momentum. A total of 172 condos changed owners, down 8.5 percent compared to 188 condo sales in August of 2007.

The median price of homes sold last month fell 34.1 percent to this August’s median of $425,000 – down $220,000 from the figure reported in 2007, a steep drop from last year, although from month-to-month the rate of decline appears to be flattening out.

The August median was in a range not seen since 2004 when prices were increasing at a 26.3 percent annual pace.

The condo median price of $275,000 was off 29.3 percent from August 2007.
“Assuming current rescue efforts in Washington stabilize the economy and replenish the supply of mortgage funds for new loans, Realtors expect prices will stabilize in 2009 and sales activity will post further gains,” said Jim Link, chief executive officer of the Southland Regional Association of Realtors.

“Uncertainty breeds opportunity for astute buyers,” Link said. “The best homes will be purchased before the herd gets back into the market. Come Spring, prices may still be favorable, but the selection may be smaller and interest rates higher, perhaps negating any price discounts.”

There were 6,447 active listings throughout the San Fernando Valley at the end of August. That was down 16.3 percent from a year ago and off 7.2 percent from July of this year.
At the current pace of sales, the inventory represents a 7.7-month supply, just above the 5- to 6-month supply indicative of a balanced market.

Pending escrows – a measure of future resale activity – increased 82.6 percent from a year ago, supporting the conclusion that more people are taking advantage of the best buyers’ market in decades.

The Southland Regional Association of Realtors®

Friday, October 03, 2008

President Signs $700 Billion Rescue Bill


President George W. Bush signed a historic economic rescue bill on Friday, which sets out to revive the U.S. financial system by allowing the federal government to buy up to $700 billion in failed mortgaged from banks and other financial institutions.

The president signed the bill shortly after the U.S. House of Representatives voted 263-171 today to pass the far-reaching legislation.

"This legislation is critical to stopping the economic turmoil that millions of Americans are facing," NAR President Dick Gaylord said in a statement. "Today's action will go a long way toward ending the current economic crisis crippling the housing and financial markets."
The legislation will help restore liquidity to the mortgage market, which will stabilize the housing market and protect home owners, Gaylord said.

President George Bush, along with congressional members, had lobbied throughout the week for the support of spending billions of dollars to buy bad mortgage-related securities from troubled financial institutions, as a way to ease the credit crisis.

The bill was tossed a setback earlier in the week after the House voted it down, which sent stocks plunging 777 points, the biggest single-day drop in U.S. history.

The Senate revived the bill on Wednesday by making changes to the $700 billion measure, which was aimed at garnering more bipartisan support. The revised bill extended bank deposit insurance and expired tax breaks. The Senate passed its version of the bill in a 74-25 vote on Oct. 1. (see NAR Applauds Senate Stabilization Action).

Earlier in the week, NAR had called on its members to contact Congress to support the bill. NAR also teamed up with eight other business organizations to run an ad in major newspapers across the country that urged Congress to pass the recovery plan.


Source: REALTOR Magazine Online (10/3/08)


Thursday, October 02, 2008

House Could Pass New Stabilization Bill

Daily Real Estate News October 2, 2008House Could Pass New Stabilization Bill
The Senate on Wednesday night approved a plan to support the U.S. financial system and the House is expected to take a second vote on the measure today.

The bill that passed the Senate calls for spending up to $700 billion to buy bad assets from faltering financial institutions. But also it would extend an array of tax breaks worth $108 billion to businesses and families and temporarily increase the limit on federal insurance for bank deposits to $250,000 from $100,000.

Other sweeteners include: energy-related provisions, business tax breaks, a one-year fix of the alternative minimum tax and tax relief for victims of recent disasters. Supporters hope these changes will curry favor in the House, and for some, it appears to be working.

Rep. John Shadegg (R-Ariz.), an influential conservative, said the new bill was "materially better" than the one that failed in the House.

"Much as I would like to see much more dramatic changes, there comes a point in time where we've got to send the signal to the U.S. markets, U.S. consumers and world markets that we're dealing with this," Shadegg said. "I'm inclined to hold my nose and vote yes."

Source: The Washington Post, Lori Montgomery and Shailagh Murray (10/02/2008)

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