Buying a House is Like Dating

Your New HomeEveryone has a wish list for their ideal home. For some people, it might be simply a certain neighborhood plus x number of bedrooms and a home they can afford that doesn’t look like it will fall down. Other people only like a particular style, or only want homes that are new or new-ish. One couple I helped recently was willing to live almost anywhere as long as they would have room for their four beloved dogs at a price they could afford. And then there are the people that are hopeful but unrealistic. Their wish list of criteria is simply unrealistic for the market conditions, because there are so rarely homes available that have their whole list of right number of bedrooms, bathrooms, square footage, in the right part of town, with a view, without any neighbors that look shabby, on a quiet street, in good condition, at the relatively low price they want to pay.

It’s not that it never happens, its just that it happens so very, very rarely. The truth is that if the house had all that, it would probably be priced higher!  And in the meantime, many other homes that they like a lot, but aren’t just absolutely perfect, get sold to other people … and the market prices are increasing. So if they keep on going this way, soon they won’t be able to afford as much house as they could when we started this process! Sometimes I wonder if I actually DO manage to find a home with all the criteria that this client wants, will there just be other criteria that they produce, because they are actually scared of making the commitment to buy a new home?

Buying a home is kind of like dating. Some people keep holding out for Mr. or Ms. Right, trying to find the absolute perfect mate and they end up single forever because they are actually scared of making the choice of one slightly imperfect person. People don’t really fall in love on a first date like a lightening bolt hitting. Homes are like that too. As you go househunting, don’t dismiss each house so quickly. Keep an open mind. Take another look at the home and see if it has the POTENTIAL for you to fall in love with it. Does it have good “bones?” Does it have good traffic flow, or a great location? Maybe it needs to have a wall taken out to improve the light and flow. Or maybe it isn’t even really the house you can love forever, but it’s a great price and one you can tolerate for two years, build some equity and make some money on, and then be able to buy your dream house (unlike dating, it is ok here to begin planning your divorce right from the start ;->). Maybe it just needs new paint and maybe bathroom tile and cabinets and drapes — again, kind of like that TV reality show Beauty and the Geek — sometimes those guys just really need a makeover and some houses do also!

My point here is that if you have been looking and looking for a home and not finding what you want, perhaps your list is unrealistic. Try editing it down between the Must haves (you must have so many bedrooms, for example) vs. the want to have (you WANT to have x number of square feet). Then let your Realtor (hopefully ME!) know the difference between the Musts and the Wants. Pretty soon you’ll be moving into your new home … and falling in love all over again.

Selling Long Distance — Thank You, You Tube!

I recently sold a beautiful home in the  Monte Malaga area of Palos Verdes Estates to a buyer who closed escrow without ever seeing the home!  How could we do this?  With technology!

The clients were people I had worked with since 2005 who now lived in Hong Kong.  Mrs. Buyer had grown up on the Palos Verdes peninsula and still has family there, so they knew the area well.  They had wanted to buy a home for a long time in this area so that when Mr. Buyer’s overseas assignment ends in a few years they would have a U.S. home; they felt that given our current interest rates and the rate of appreciation of homes, that if they didn’t buy something now, they might be priced out of the market in a few years.  Each time they were in town over the many years since I first met them, we would take a day and look at homes, but because they couldn’t agree on where to look, we always ended up not finding the right home.

Then this year, they were both on the same page regarding location, so the search started in earnest.  Once we had identified a few possibilities, I took her Mom out with me to see each potential home, taking LOTS of video with my cell phone and uploading it to YouTube with a private URL sent only to them.  This allowed the buyer and her husband (she was to be the sole buyer to simplify the tax situation) to evaluate the home choices and decide which of the ones they had liked on the internet really met their needs.  Using more technology to do all the signing digitally using Docusign, and with a few late night Skype calls, some Facebook messages, some texts and Google voice calls, we were able to determine what to offer.  We made an offer to close in two weeks and were able to beat out three other buyers.

Then came the fun part — inspections.  This time the buyer’s Mom AND her brother came with, and were able to communicate back to the buyer and her husband what they had heard.  We also did more video and more photos, more Docusigning and more late night calls.  At one point, I stayed up until 3 a.m. Pacific time (which was a busy Saturday morning for my client in Hong Kong) so that I would be available to forward a time critical document on to the listing agent so that he would have it first thing in the morning as promised.

We also had to solve a tricky problem about funding transfer limits between Hong Kong and the US, but my wonderful escrow officer was able to resolve this and find the “secret sauce” of US banking regulations that allowed the transfer of the funds in a timely manner while still following all the banking rules for international money transfers.

This was an amazingly fast transaction considering that the buyer was thousands of miles away.  The many forms and disclosures that are part of any California real estate transaction were flying through cyberspace on an almost hourly basis for a few days there!    But I can safely say that if it wasn’t for modern technology, we never could have done this.

The buyer and her children are arriving for the Summer soon — I sure hope they like it  :->

 

 

Manhattan Beach Prices are Skyrocketing

Recent sales in Manhattan Beach, especially for the highly coveted “mid-one millions” price point, are getting to be absolutely crazy these days.  Recently there were a couple of unbelievable bidding wars on some homes in this price point.  One, at 1312 Walnut, was a little 3 bedroom plus office 3 bath home on a nice (but not fantastic) location in the Tree Section.  The home was priced at $1.6M and in last year’s market, this would have been overly optimistic.  Instead, in a heavy round of “best and final offer” bidding, over 10 bidders pushed the price up to a rumored over 1.7 Million and some say 1.8Million.  We will see when it closes.

In another recent bidding war, there were over 10 offers for a 4 bedroom 3 bath home on Meadows right near the school.  This home was fully remodeled as a recent flip, and prior to the remodel, even the “flippers” felt it would be priced about 1.4 to 1.5.  Because of the market, they priced it at $1.5M and it ended up going well over 1.7M.

Everyone in our office is talking about these sales and the crazy pricing in Manhattan Beach today.  Even properties at “C” locations such as Marine, Rosecrans, or near Aviation or Sepulveda are getting bid up and snatched up.  If you have a home in Manhattan Beach to sell, now is the time because you don’t even really have to fix things up!

South Redondo Beach Home Prices 2/15/13

 

 

Just as we’ve seen in the Palos Verdes Estates and Manhattan Beach markets, the prices in South Redondo Beach for homes are rising!  The housing market is definitely on a rebound in the South Bay area of Los Angeles county.    The Market Action Index answers the question “how is the market?” by measuring the current rate of sale versus the amount of the inventory.  Index above 30 implies a Seller’s market.  As you can see, South Redondo Beach has just moved into Sellers Market territory.

If you’d like to have this information delivered to you on a regular basis, just contact us!

 

Palos Verdes Estates Area Market Stats

 

 

Here are the latest Palos Verdes Estates PVE Market statistics for the week ending 2/15/13.  Wow — PVE is really taking off as much as the beach cities are.  The lack of housing inventory continues to drive the story in the South Bay/Palos Verdes Peninsula.  I believe that Palos Verdes offers the better value for the money right now over the Beach Cities, though, since for the same money you can get a much larger home, possibly with an ocean view, in Palos Verdes.

Would you like to have this information for your own area?  Just contact me and I will be happy to provide it!

 

Manhattan Beach Market Data 2/15/13

We’ve subscribed to a new tool here at Fabulous South Bay called the Altos Research Market Report.  This report gives us quick access to LOTS of data about the market and what the trends are.  As you can see in the below charts (and as I’ve been telling you for quite a while now)  Manhattan Beach real estate is HOT HOT HOT!  This is definitely a sellers market, so if you’ve got a Manhattan Beach home and are thinking of selling, now is the time!    As you can see from the median price graph below, the median price seems to be headed straight up with no peak in sight.

 

 

 

South Bay Beach Homes for Sale — Inventory Still Low!

beach cities inventoryWe are still suffering from a shortage of homes, which is driving most homes into the good old fashioned “bidding wars”, even homes that have some issues.

For example, in the chart on the left , you can see that in August the number of active listings on the MLS in the three beach cities (Manhattan Beach, Redondo Beach and Hermosa Beach) was 441, but by January 2013 the number is down to 199, less than half!  This is even more remarkable when you consider that in August of 2011 we had 561 listings and in January of 2012 we had 386 — again, we are close to half the normal levels of inventory.

What does this mean for the average person who is thinking about buying or selling real estate?  If you are a seller, it means that now is the time to sell, as you can get the most interest and the fastest sale of any time we’ve seen in a while.  If you are a buyer, it means that you need an agent who can guide you through the multiple bid process and help you win the war without breaking the bank.    It also means that working with an agent like me, who is local, connected to the other top agents in the South Bay, and knows about the hidden “pocket” listings that are not on the MLS but are available for sale, will really help you to get the home you want at the lowest possible price.

What on earth is a “Pocket Listing?”

topsecret-smallThese days in the South Bay, you may be hearing about “pocket listings.”  What on earth is this? you may ask yourself.  I thought I’d clear that up for you! Traditionally, a pocket listing is one that the agent does not have a signed listing agreement for, but has some knowledge that a seller is thinking of selling.  This lack of actually having the listing signed may be for seller’s reasons (they are clearing up some estate or title matters, or they are still deciding what to price it at) or it may be because they haven’t chosen their agent yet or even decided whether they really want to sell.  These days, it is also sometimes because they don’t want to sell until they can find a place to move to, since our low inventory situation makes them fear being homeless.  Once in a while, the agent may think the listing is “in their pocket”, but it is actually going to go to another agent.

Another type of listing that is often called a “pocket” listing but really is technically a “listing on waivers” is that there is a signed listing agreement but for some reason the seller doesn’t want it on the MLS.  This can be because they are sprucing the place up to get ready for showings, because the seller is going out of town,  because they think there is a more strategic time to place the property on the MLS, or because, in many cases, they are “testing” the price to see what the reaction is from those agents that they have let in on the secret.  That way, the property doesn’t linger on the actual MLS and get “stale” and “aged” because it was originally priced too high.  By floating the trial balloon of a listing on waiver, they can adjust their pricing strategy.

The reason this matters to the ordinary person is that in our South Bay market, about 10 to 15 percent of all listings in 2012 were sold before they hit the MLS.  In Manhattan Beach, there are so few homes for sale in large part because there are many that are actually pocket listings and therefore not generally known to the average person perusing Zillow, Trulia, Redfin, or Realtor.com.  Some agents think that over a third of Manhattan Beach homes for sale will end up being sold “off market”.  This means that in order to buy Manhattan Beach real estate, you need to work with an agent like me that is connected to the other top local agents and knows about this shadow inventory. In order to stay connected and knowledgeable about the market, I attend at least three meetings every week, am part of some secret Facebook groups and email sharing groups, and am sure to attend the Brokers Open caravans each week.  This is how I stay on top of the real estate market in Manhattan Beach so that I can help my clients find the hidden listings in the area.

Mortgage Debt Forgiveness Act – Fiscal Cliff Brings Short Sale Relief

short sale real estate south bayOne of the most worrisome things about the so-called Fiscal Cliff was that the previous law that granted income tax forgiveness for short sales expired on 12/31/12.  Under the Mortgage Debt Forgiveness Act, if someone had debt forgiven by a bank as part of a short sale settlement, they did not have to pay income tax on the amount that was forgiven, but with this expiring there were a lot of nervous homeowners that were “underwater” and might have not only had to accept a short sale but had a huge income tax penalty besides.

Fortunately, as part of the last possible minute settlement to the “Fiscal cliff”, the Congress passed and President Obama signed a continuation of the Mortgage Debt Forgiveness Act into law.  Therefore, the Act is extended to the end of 2013.

This is great news for everyone, as it will keep the fledgling housing recovery going.

South Bay Short Sales – Are They Still Out There?

Everybody wants a short sale, until they start to figure out that these are really “long sales” based on how long it takes.  However, these can still be quite a good deal if you can afford to wait the many months it takes to get one.  With that in mind, are there any in the South Bay?  My great title representative, Matt Goeglein from Fidelity Title ran the numbers for me and  there are very few Notices of Default (NOD — the ones seriously behind in their mortgage payments), Notices of Trustee Sales (NOT — the ones that are actually going to foreclosure auction), or REO (Real Estate Owned — the ones that are owned by the bank) homes, especially in the more affluent areas of the city.

As would be expected, the areas that have better and higher employment, such as the beach cities and more expensive Palos Verdes area, have lower percentages of short sales than the more inland areas of the South Bay such as Lawndale, Gardena, Hawthorne and Torrance.  Short sales in Manhattan Beach are very scarce, as are other distressed properties in Manhattan Beach.

I am a short sale specialist and a Certified Distressed Property Expert (CDPE), so if you ARE looking for a short sale I can help.  I also can help you if you ARE “underwater” on your home and need to sell your home in Manhattan Beach or anywhere in the South Bay.