Lots to Learn About Housing Today in the LAT

LATlogoQuite the info-stew in the LA Times today. Let’s see if we can sort this out:

1. Alejandro Lazo reported (yesterday, actually) that US housing starts edged up in August, yet “fell short of expectations.”

2. Andrew Khouri writes today that “sales of previously owned homes rose in August, reaching the highest level in more than six years.” He adds, “the median sale price for resale homes rose 14.7% from last year.”

3. Khouri also reports that “the financial advantage Southern California home buyers hold over renters has rapidly shrunk in recent months as home prices and mortgage rates have risen.” This according to a new report by the real estate website Trulia.

4. Finally, E. Scott Reckard tells us that 30-year mortgage rates have just dropped to 4.5%, due in no small part to the Fed’s decision to continue their stimulus program. That means that “for now, the central bank will continue buying $85 billion a month in Treasury and mortgage-backed securities, pumping money into the economy and pushing down interest rates.”

It’s a mixed bag of news and can be taken as either great, good, or not-so-good, depending of course on where you’re sitting. Sellers sure are happy, with both prices and sales volume on the rise. On the other hand, the data about the cost of ownership vs. the cost of renting is a bit of a concern for some, understandably so. Now consider the following: for the vast majority of our clients, the  intangibles of home ownership cannot be weighed in financial terms alone. Owning might not be for everyone. However our personal experience — reinforced by a number of surveys out there — tells us that the dream of homeownership is alive and well.

So what about buyers, how does todays news play for them? The drop in interest rates is a big positive; you’ll pay less for every dollar you borrow toward the purchase of your home. The flipside is the slowdown in housing starts, a negative given that there’s so little inventory out there and not nearly enough choice. That’s why Tracy Do Real Estate is so excited to present NELA Union, a community of 52 modern, energy-efficient homes that are currently being built in Glassell Park (architects rendering below). Anyone looking for a home to buy now has this cool new option to consider, where 2, 3 and 4 bedroom layouts range from 1,100 to nearly 2,000 square feet. There’s a community garden, a dog run, and available FHA financing. You can learn more and sign-up on our interest list at nelaunion.com.

NELAU

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LAT’s 5 Key Takeaways on Housing

LATlogoFrom Alejandro Lazo of the LA Times: “It is indeed a good time to buy. Home prices are still down considerably, even though they are up from their bottoms. Mortgage-interest rates are still very low despite the recent spike this year.” Read his other four takeaways here, and learn why the news overall is good for both sellers and buyers. We work with both, offering a level of service, experience and style that few LA realtors can match. Contact us anytime at Tracy Do Real Estate.

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Rents Are Up 10% in One Year (!)

LARentsmap

Incredible. According to apartment-finder website RadPad, in partnership with RentMetrics, “one-bedroom rentals have risen almost 10% since August 2012! For the typical renter, that means you’ll be paying almost $2,000 more in rent this year than you were last year.” They’ve provided an infographic of the pain (above). For the LA Weekly’s take on the story, click here.

Renting will always be popular, and for some people it absolutely fits their lifestyle. Others might rent their home as a purely financial consideration, meaning this data is a downer you probably didn’t want to hear. We’ll remind you that, in some cases, it actually costs more to rent than it would to own a home. And we also offer this good piece of news:

A unique opportunity for home ownership is coming soon to the heart of Northeast Los Angeles. It is a modern, earth-friendly design, centrally located and at a price-point that many current renters will find is within their reach. We’ll have more to tell you in the next few days. In the meantime, think about that 10% rise in rent that you may have experienced this year. And check back with us often to learn about this exciting opportunity to own your home; an exclusive offering from Tracy Do Real Estate.

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Graphic courtesy of onradpad.com.

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Sales Rise in July

uparrowFrom Alejandro Lazo of the LA Times: “Sales of previously owned U.S. homes rose in July, as more inventory hit the market and an increase in mortgage interest rates likely motivated buyers. Sales were up 6.5% from the prior month and 17.2% from the same month a year earlier.”

Ricardo Lopez adds that home-improvement retailer Lowe’s saw a spike in 2Q earnings, suggesting “even further evidence that the housing recovery is boosting the economy.”

 

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Inventory Up, Affordability Down, Prices Steady

LATlogoWhat are we to make of this information stew? The LA Times Andrew Khouri reports this morning that “SoCal home prices remained flat in July from a month earlier as more houses went on sale and interest rates rose.” This adds to yesterday’s piece which was inventory-specific, ie. the run-up in prices we saw in previous months has sellers feeling pretty bullish (and they should!) So it’s still a “seller’s market” out there. But more inventory = more choice = good news for buyers.

As for the high cost to own, Alejandro Lazo reported Monday that “California’s post-recession moment for housing affordability appears to be ending fast.” This is never good to hear, but we’ll stay positive for the following reason: Developers who sat out the housing recession are gearing up right now, with major housing projects in the pipeline to meet any taste. We’ll have more to say about this soon, as Tracy Do Real Estate will present a modern and quite affordable home ownership opportunity in the heart of Northeast LA. Check back to this website, or contact us anytime at Tracy Do Real Estate.

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Media Reports Say Flipping is Back… Meaning What Exactly?

FlipFlop

With all respect to our friends at the LA Times and NPR, they’re a little late with their reporting on the current “home flipping frenzy.” Fact is, rehabbers have been a driving force in LA real estate for months now. Granted, the number of trucks, cement-mixers and porta-potties lining residential streets seems to have peaked of late. But going back over a year, and in some cases longer, house flippers have been acquiring, renovating and re-selling LA homes for profit. The impact on inventory has been significant, and by consequence we’ve seen values appreciate across the board. So what’s next? For all this flipping business, what does it mean for you?

For starters, it means there are lot less fixer-uppers out there. Buyers seeking bargains or a “diamond in the rough” will be challenged to find one, since so many rehabbers are looking for the exact same thing. Secondly, as these buyers who missed out on bargains revise their budgets upward, settling for more “turn key” type homes, it creates competition for dwindling inventory that is downright fierce. Jed Kolko, chief economist for real estate website Trulia, says: “Consumers are worried that mortgage rates and prices will keep rising before they buy, and many are willing to fight over the limited number of homes for sale.” KPCC ran a piece this morning that echoes that sentiment, you can listen to it here.

This might sound a bit bleak for prospective home buyers, but don’t despair: relief may well be in sight. House flippers are indeed active right now and will likely be around for awhile. But with such low inventory, many rehabbers have already packed up and left LA for greener pastures. Furthermore, rising interest rates are having the intended effect of putting the brakes on things. We don’t predict that prices are going to decline anytime soon, and the vast majority of economists agree. But as more potential sellers realize they have regained much — if not all — of their home equity, we can easily envision a scenario where more residences are brought to market. Add to that the new housing developments that are taking shape to meet rising demand… It certainly appears that the clouds are clearing a bit for home buyers. And that’s a very good thing.

To stay ahead of this market, as either a buyer or seller, you will truly benefit from talking with professionals who know LA and Pasadena real estate inside and out. We’d love to hear from you. Contact us anytime at Tracy Do Real Estate.

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“Flip or Flop” (image above) courtesy of HGTV, via the LA Times website.

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Good New for Buyers…

MortRateMortgage rates continue to cool off, as reported by Christina Mlynski at HousingWire. Having jumped nearly a point in recent weeks, this is welcome news. Remember: even if you missed out on the “very best” rate, in historic terms the cost of a mortgage today is still quite low — and prices are only rising (!) Need help understanding mortgage rates and loans? Contact Tracy Do Real Estate for friendly advice and expert guidance in all your housing-related needs.

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Study Says There is No Housing Bubble

Prices rising, packed open houses, bidding wars, all-cash offers… Must be a housing bubble, right? Nope. Andrew Khouri reports in the LA Times: “Real estate information firm CoreLogic said Tuesday that a bubble has not formed in the U.S. housing market, nor in hot regional markets, adding that rising interest rates will put a brake on any danger.” CNBC echoes that analysis, here.

The talk at HousingWire is that “the housing market is still a seller’s market,” with June numbers pointing to more “balance.” Here’s a map of what LA’s housing recovery looks like through the end of 2012…

Map

Is it time to make your move in housing? Whether buying or selling, you’ll find friendly, accessible, highly experienced pros at Tracy Do Real Estate.

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Map data & analysis by Andrew Khouri and Doug Smith.

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Small + Earth-Friendly Home Packs Big Punch

Over on Inhabitat, Tafline Laylin reports on a “micro” home with a secret: it’s actually pretty massive.

Dale1

The Dynamic Augmented Living Environment, aka “DALE” was designed right here in the LA/Pasadena area by students at SCI-Arc (The Southern California Institute of Architecture) and CalTech (California Institute of Technology). As part of this year’s Solar Decathlon competition, the two combined forces to create a “net-zero” living space, capable of existing completely off the grid.

Dale2

What’s different and quite cool about this small, sustainable home is what you can do with it. Two airtight, prefabricated modules are set on rails that allow them to separate, creating a courtyard space with an optional solar canopy. Usable living space goes from 600 sq. ft. to almost 1,800 sq. ft., then slides right back to its original size as needed. The two parts can function individually or as a complete unit, offering the flexibility to change with the weather, for example. Or to allow a bunch of friends to come over and hang out.

Dale3

A sophisticated solar power system provides climate control plus hot and cold water. The stylish, very practical living space isn’t in mass production yet, but that could change soon. See it for yourself at the Solar Decathlon, October 3rd through 13th in Irvine. For more info on the project, click here.

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Buyers are Being Cautious, and That’s Smart

LATlogoExcellent article in the LA Times today. Andrew Khouri writes that “Five years after the financial crisis, a new sobriety among homeowners and lenders has taken hold, tempering economic growth as consumers keep more money in their pockets.” This is very good news and bodes well for the market long-term. But it begs the question: how do you “buy within your means” and still get the house you want in an era of increased competition and bidding wars?

The answer is simple. To protect your own interests, you should work with tireless, experienced realtors who put their clients first and know how to connect them to homes they love. You will find all this and a whole lot more in the friendly professionals at Tracy Do Real Estate.

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