Particularly in Los Angeles if you’ve been looking for that elusive foreclosure deal you may have noticed a lot of competition.  Of the last four offers I’ve written for buyers, four have been in multiple offer situations… not enough houses for the buyer demand out there.

From the recent Forbes.com article here’s an insight into Los Angeles from the article subtitled “Ten cities where the Recession is Easing”.

Hope Where Housing Markets Stay Afloat California was perhaps hit hardest by the housing crisis. In spite of that, Los Angeles rises above the rest of the state, and other big cities in the country, to No. 9 on our list. Although the Golden State’s real estate woes began earlier and were more pronounced than in large parts of the country, they began easing sooner. Los Angeles has strong banking and finance industries and a housing market that, while it suffered from a major pricing bubble and bust, has seen a resurgence of demand. After falling to a median $311,100 in the second quarter of 2009, home sale prices there jumped 11% in the third quarter and another 2% between the third and fourth quarter of 2009 to a median $342,700, according to the National Association of Realtors, making number four in sales price improvement out of our 40 cities.

Are you still waiting for the other shoe to drop?

Real Estate can be bought for a discount now at historically low interest rates in a market where development is hampered by law…. Los Angeles!

A Bank Owned Foreclosure in the Hollywood Hills – A Bungalow adjacent to Beechwood Canyon with all the entertainment that Hollywood offers.

A Warm Fireplace.  Spacious.  Exclusive Neighborhood.  Today is the second day it has been available for sale to the public and you may get the idea that at $549,900 … it is not going to last.

GET MORE INFO HERE

The Deusenberg was an opulent automobile built by hand, considered to be the best of its’ kind in its’ day.  Forward almost one hundred years and the word stands out as an expression that means something like “an excellent example” or “one that stands out remarkably”.  The Real Estate Bubble that this country in in has got to be a real doozy… for the news of a new wave of foreclosures continues to come.  In the Banking industry the term “moral hazard” has made its’ way through those corridors.  The moral hazard refers to a point at which a homeowner decides it’s no longer worth it to keep their home, whether they’re behind on their payments or not.  A new story reveals that this kind of thinking is leading to a greater default rate on mortgages, a steady increase of 21% last year, and a 120% increase from the year previous.

Add to that the fact that Congress wants to spend more and has asked to increase our National Debt limit by another $1,900,000,000,000 – One Point Nine Trillion – and the spectre of rising interest rates will not long wait outside the door.

Interesting times indeed.

Speaking with the head of the short sale department for Wachovia’s Southern California region last week, it became clear that in his words, “2009 was the year of the loan modification.  2010 will be the year of the short sale.”

Wachovia has 50,000 loans in California that are going to change this year from the forget about it payment to the this is serious payment.  Anticipating this pressure on some of their clients this bank decided to streamline the process and is able to make decisions about these potential short sales in 48 hours, and close them in 45 days.  This is good news for those buyers who have navigated the bank involved short sale waters and made offers on homes, only to have them linger for months and months.

This also has the benefit to the struggling home owner who is in trouble that they will be able to get things done fast – no lingering doubt and worry – their fresh start can be had quickly.

What this may cost the region in pricing is another question.  If this influx of homes must sell and must sell quickly the balance between supply and demand may tilt toward supply and lower prices.  The stall in the market has kept demand high and buyers have been finding the market rife with buyers of late.  In certain price ranges in the Los Angeles area it is like the four and five year ago market where to get a home you need to first through the door and bidding over list price.  These homes that will hit the market will initially meet with plenty of buyers who have been sidelined by the competition… it’s the lingering supply that will continue through the coming spring and summer months that will cause the real pricing pressure.  Couple that with the spectre of rising interest rates and there is a definite window in the here and now.

If you’d like a free guide to Los Angeles real estate prices send an email to

findingthehomebeautiful@gmail.com

Or simply visit www.findingthehomebeautiful.com and start your search.

With the churning fears of stagflation, the looming deficits, the spectre of inflation and the rising price of gold, what will happen to Southern California Real Estate prices?  Largely, the westside of Los Angeles has been sheltered from the bottom scraping that many of its’ sister neighborhoods have fallen prey to…

There is continued demand for the starter homes and the townhomes and condos that fall into the “affordable” range for Angelenos.  Yet there continues to be a quickening flow of short sale predictor data – the “Notice of Default” numbers that show persons late on their mortgage payments in L.A. County.  Continuing the mini-alarm are the few million dollar plus homes that are coming up for sale as “bank owned” REO properties.  A weekly survey of these homes for sale can be found at

http://www.bankownedweekly.com/hollywood/

Still without the Chicken Little mantra (sky is falling) it may be worth paying attention to some of the brighter minds and their takes on what is in the pipeline for the economy of 2010.

Howard R. Gold, executive editor of MoneyShow.com has a sobering couple of lines in his defense against the boogeyman of hyperinflation…

“As I said, I do expect some inflation down the road. Although I think Ben Bernanke will surprise a lot of people by how quickly he and the Fed raise rates at the first hint of a real recovery, there’s too much money sloshing around to fend off inflation entirely. And future U.S. deficits are a huge wild card.”

Thus the question for the Hollywood home buyer becomes, “When is the right time to buy or sell?”

One thing to study is how the velocity of the late 70′s early 80′s real estate markets was hindered by the higher interest rates.  Will we get to 15% mortgage rates?  All the best minds are fighting hard to keep a hold of this tiger by the tail.  The more pertinent question in a few months might be, “What do I do now that rates are at 8%?”

Good news for real estate as a whole… the number of people who owe more than their homes are worth in the United States seems to be declining.  From the second to the third quarters in the U.S. the stats went from 23% down to 21% of people with an upside down mortgage.

This is primarily due to the stabilization of prices in many areas, the strong buying market that will end 2009 with a total units sold number very near the height of the market.  True that many of the sales are going to have been bank involved, and with all the foreclosure and short sale activity that looms there may be a shake out ahead.

What is striking is that this is good news that we can determine will have a measurable effect going forward… stable prices and modest growth are the cycle that we all should hope for… rather than the boom and bust that has wreaked havoc on so many.

There is still blood in the water, though it may not be the apocalypse thought to visit from a few months back.

Green shoots and all that…

For an estimate of your Los Angeles home’s price in today’s market  send an email to findingthehomebeautiful@gmail.com with some details and we’ll get back right away.

For the full story on the “underwater” mortgage stats go HERE

Until April 30th 2010 first times home buyers (and now – move up buyers) will have a chance to enter into a contract to purchase and receive more of the money set to help this economy recover in the form of an $8000 tax credit.  Income limits have been raised for couples to $225,000 and for single buyers to $125,000.  Good times.

The hope is that this will get the money flowing again and the economy will rebound.  It will certainly help the real estate market and in turn other related industries.

The question in my mind is what will it do to prices?  Will the home prices continue to drop as bank owned foreclosures and short sales continue to hit the market?

Certainly the number of people who are late on their mortgages in this country does not point to smooth sailing ahead.

The number of Notice of Default (people who are at least thirty days late on their mortgages) and Notice of Trustee Sales increased from 5,528 in September of 2008 to 7,504 in September of 2009 in Los Angeles County.

Yet, many savvy investors are taking advantage of the low interest rates and low prices.  “Buy Real Estate at a 40% discount” – and lock in a thirty year fixed rate in the fives – for many it’s an easy decision.

For more on the tax credit CNN Money has a great article HERE

Another debacle that points to the housing recovery being far from certain.

Fannie Mae increased the NINJA loans (No Income No Job Approved)- the sub prime mess that catapulted this economy over the edge… and has already received billions from taxpayers to prop it up… and needs more money to keep going…

To describe the spider web of how Fannie Mae continues to be an anchor pulling down the ship of the United States economy would take another three pages.  Some of the more pertinent information of how the bailout hasn’t worked are in a great article on CNN Money. com

Full article HERE.

What makes this story so interesting is that it is pointing out that the “W” recovery pattern spoken of by Dick Morris is at hand.

We had …. Down

We had a little … Up

We may get some more … Down

Before we can go Up …. again.

That’s a “W”.

It was hoped that we would bet the “V”… straight up from down…

It may not look like we had hoped….

Seeing the year to date totals compared to last years’ volume of sales it looks like another steady year for Los Angeles.  With continuing price pressure there are many markets that have leveled off and are even experiencing multiple offers on homes for sale.  A lack of inventory in the first time home buyer market has shown that the nicer homes in these areas are selling quickly.  The proposed extension and expansion of the first time home buyer’s tax credit to include a move up buyer condition will likely expand the recovery of the real estate market in Los Angeles.

With bank owned foreclosures and the many short sales having taken so much of the market for so long there would be a price compromise for many markets.  The interesting thing is the higher priced market segments that are now being included in the world of the bank involved sale and what that may mean going forward in Los Angeles.

Visit any escrow office and you’ll soon come to realize that the First Time Home buyer tax credit that expires on November 30th DID have a big impact.  Statistics just released estimate that of the million plus new homeowners that will receive the $8000, over three hundred thousand of them bought with the tax credit as a primary influence in their decision….

So now what?

Set to expire at the end of this month… where do we go from here?

Congress is expecting to reach a compromise extension that will likely last through Spring of 2010… which continues the $8000 first time buyer credit and adds a $6500 move up buyer credit.

Some highlights of the proposed “move up” program…

If filing jointly, a couple’s income would need to be less than $125,000 and they would have to have purchased their home five years ago or more.  There would also be a limit of $800,000 on the purchase price of the move up home.

HERE is the link to the full story