Cash buyers, investment uptick boost Southern California median home price 20 percent

By Gregory J. Wilcox, Staff Writer

Posted:   01/15/2013 03:12:16 PM PST

Updated:   01/15/2013 09:04:30 PM PST

An influx of cash buyers has helped boost the median home price in Southern California by 20 percent in December over the previous year. (Michael Owen Baker/Staff Photographer)

Southern California’s median home price jumped 20 percent in December from a year ago, driven by strong investment activity, a record number of cash buyers and a continued shift to mid- and high-end sales, a market tracker said Tuesday.

Sales also showed strength, increasing 5 percent from December 2011 and hitting their highest level for the month in three years, said La Jolla-based DataQuick.

Last month the median home price across the region increased to $323,000 from $270,000 a year earlier. The median made double digit percentage gains in all six counties.

“The question when the year started was would the market find a (price) bottom. I think there are far fewer people worried now about prices falling and significantly more concerned about prices going up,” said DataQuick analyst Andrew LePage.

“We’ve answered the question: Yeah, we found a bottom.”

For all of Southern California, sales of new and previously owned houses and condominiums increased to 20,274 last month from 19,247 in December 2011.

Riverside and San Bernardino counties were the only ones with declining sales, DataQuick said.

For the full year, sales increased 10 percent to 235,119 properties from 214,362 in 2011.

“The housing market had more to offer in 2012 than many anticipated. A lot of markets … started to see their first meaningful gains in nearly two years,” DataQuick President John Walsh said in a statement.

Buyers were drawn back into the market by record or near record low mortgage rates and a brighter job outlook, he noted.

“Last year should also be remembered as the year the move-up market awoke. If these upward trends hold, which requires a sustained economic recovery, we should eventually see more inventory hit the market,” Walsh said.

Rising prices would also bring more sellers into the market.

The company’s report showed that:

• In Los Angeles County the median price of a previously owned house increased 15 percent to $352,000 from $305,0000 in December of 2011. Sales increased 9 percent to 7,198 properties from 6,591 a year ago.

For the full year sales increased 12 percent to 80,954 properties from 72,305 in 2011.

• In San Bernardino County the median price increased 20 percent to $180,000 from $150,000 a year ago. But sales fell 12 percent to 2,135 properties from 2,418 in December 2011.

Full-year sales were flat – 28,548 versus 28,318 in 2011.

• Riverside County’s median price rose 19 percent to $231,000 from $194,000 a year ago and sales declined 9 percent to 3,248 properties from 3,584.

Full-year sales were also flat – 40,369 versus 40,312 in 2011.

• Ventura County’s median price increased 14 percent to $370,000 from $325,000 and sales increased 12 percent to 866 from 771. For the full year sales were up 19 percent to 9,989 from 8,383.

Cash buyers accounted for 34 percent of sales in December, tying the November and February record level, DataQuick said. A year ago cash buyers accounted for 30 percent of sale.

Distressed properties continue to have a diminished role in the market.

In December foreclosure resales accounted for 15 percent of the Southland sales, flat from November and down from 32 percent a year ago.

Last month’s level was the lowest since foreclosure resales had 14 percent of the resale market in September 2007. In the current cycle, foreclosure resales hit a high of 57 percent in February 2009.

Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 26 percent of resales last month. That was also flat from November and a year ago.

A separate report from the California Association of Realtors showed a similar trend. (The association calculates sales on an annualized rate and does not include transaction numbers.)

During December sales of previously owned houses increased 1 percent to an annualized rate of 522,510 units, the Los Angeles-based group said.

In Los Angeles County sales increased 5 percent from a year earlier (the association does not provide numbers). But sales fell 15 percent in San Bernardino County and 9 percent in Riverside County.

The association also had prices increasing by double digit percentages across Southern California from a year earlier.

And the year ended in encouraging fashion.

“The positive fundamentals in the housing sector continued to attract potential homeowners and investors, which resulted in strong housing sales in the fourth quarter,” said Leslie Appleton-Young, the association vice president and chief economist.

greg.wilcox@dailynews.com

Today I earned the certification of a Government Housing Programs Specialist. I was trained in the intricacies of all of the newest government housing programs, many of which few people know about.

Did you know that you could qualify for special down payment assistance if you earn up to $76,800 per year in Los Angeles County?

Or did you know that buyers of properties up to $823,308 can qualify for special government assistance in Los Angeles County?

Thinking that now would be a good time to buy a home?

Call me for more information. No obligation. Robert Jonez, 323-387-0001.  DRE Lic.# 01759487.

How to Inspect Windows, Doors to Stop Air and Water Leaks

From Houselogic.com

By: Lisa Kaplan Gordon

Published: January 7, 2011

Inspect windows and doors regularly to stop air leaks and water seeps that create high energy and repair bills. We’ll show you how.

Big picture inspection

A home air pressure test sucks air into the house to reveal air leaks that increase your energy bills. To inspect windows and other openings:

• Seal the house by locking all doors, windows, skylights, and shutting all vents.

• Close all dampers and vents.

• Turn on all kitchen and bath exhaust fans.

• Pass a burning incense stick along all openings–windows, doors, fireplaces, outlets–to pinpoint air rushing in from the outside.

Windows and the outside world

Air and water can seep into closed widows from gaps and rot in frames, deteriorating caulking, cracked glass, and closures that don’t fully close.

To stop air leaks, pinpoint window problems.

• Give a little shake. If they rattle, frames are not secure, so heat and air conditioning can leak out and rain can seep in. Some caulk and a few nails into surrounding framing will fix this.

• Look deep. If you can see the outside from around–not through–the window, you’ve got gaps. Stop air leaks by caulking and weather stripping around frames.

• Inspect window panes for cracks.

• Check locks. Make sure double-hung windows slide smoothly up and down. If not, run a knife around the frame and sash to loosen any dried paint. Tighten cranks on casement windows and check that top locks fully grab latches.

Door doubts

• Check doors for cracks that weaken their ability to stop air leaks and water seeps.

• Inspect weather stripping for peels and gaps.

• Make sure hinges are tight and doors fit securely in their thresholds.

Inspect skylights

Brown stains on walls under a skylight are telltale signs that water is invading and air is escaping. Cut a small hole in the stained drywall to check for wetness, which would indicate rot, or gaps in the skylight.

To investigate skylight leaks, carefully climb on the roof and look for the following:

• Open seams between flashing or shingles.

• Shingle debris that allows water to collect on roofs.

• Failed and/or cracked cement patches put down the last time the skylight leaked.

Writing the ‘Hardship Letter’

Mortgages

The New York Times

By LISA PREVOST

Published: January 3, 2013

HOMEOWNERS having trouble paying their mortgages may try to elicit sympathy from their lenders in long, emotional letters laden with woe.

“As though the institution you’re applying to has a heart,” observed Kelly Snitkin, a former housing counselor whose Manhattan law practice specializes in real estate. “It does not.”

Still, lenders do look for what is known as a hardship letter when a borrower applies for a loan modification. Such a letter is a requirement for modification applications under the government’s Making Home Affordable program.

A hardship letter is not the basis for modification approval — that depends on the borrower’s financials and the intricacies of the various government and in-house lender programs. Rather, the purpose of the hardship letter is to explain upfront, in simple language, why borrowers missed payments, and what they propose as a solution.

Ms. Snitkin advises her clients that less is more when it comes to writing a hardship letter. The lenders’ loss mitigators, faced with mountains of modification requests, are unlikely to spend time reading more than the first few lines of each letter. And there is always the risk that borrowers who go on at length could unknowingly trip themselves up with unnecessary details that raise red flags for a mitigator.

“I am a firm believer in giving them exactly what they need and nothing more,” Ms. Snitkin said.

The hardship letter should open with a succinct explanation of why the borrower stopped paying the mortgage. The letter should cite a specific hardship, like a lost job, illness or reduced income.

“It can be anything, really, as long as it’s reasonable and not, ‘I did it on purpose,’ ” Ms. Snitkin said.

Owning up to the hardship may be uncomfortable, but a solid reason is essential if the modification is to proceed, said Allison B. Crain, a real estate lawyer in Brentwood, N.Y. She recalled clients who didn’t want the bank to know that they had lost rental income from an illegal tenant who had moved out of their house.

“It was still a factor,” Ms. Crain said, “because the income was part of how they were making their mortgage payments.”

Next, the letter should briefly cite any steps the borrowers took to avoid defaulting on their loan, like cutting household expenses or tapping into savings.

If their financial situation has since improved, or is likely to, borrowers should mention that as evidence that their hardship was temporary and won’t hamper their ability to make payments on a modified loan.

Finally, the letter should state exactly what borrowers are applying for. Is their proposed solution a lower interest rate, for example, or a principal reduction?

Borrowers who are underwater — that is, owe more on their mortgage than their property is worth — may ask their lender to consider a short sale, in which the house is sold to another buyer for less than the amount owed. John Fitzgerald, the president of Realty Connect USA in Hauppauge, N.Y., advises that homeowners considering a short sale apply before putting their house on the market.

The fact that a home has lost considerable value should not be cited as the sole hardship. The borrower might include that information in the hardship letter, but he or she must also explain the inability to pay the mortgage, Mr. Fitzgerald said. In the case of a short sale, the hardship might be the borrower’s need to sell right away because of a job transfer or long-awaited employment opportunity elsewhere.

“It should be a very clear and honest letter of what exactly is going on,” Mr. Fitzgerald said.

And more important, regardless of whether the borrowers are working with a lawyer, they should write the hardship letter themselves. The letter need not be written by hand, but, Ms. Snitkin said, “it definitely has to be in their words.”

A version of this article appeared in print on January 6, 2013, on page RE2 of the New York edition with the headline: Writing the ‘Hardship Letter’.

HAFA Certification

By Robert Jonez, Broker DRE Lic# 01759487

Today I earned my Home Affordable Foreclosure Alternative (HAFA) “Certified HAFA Specialist” Designation Certificate.

In early 2009, the national “Making Homes Affordable” program was launched by the Obama administration. The program was specifically created to assist homeowners in financial distress and hardship avoid foreclosure. Creating housing market stability through a number of specific programs was an additional goal. These programs include the Home Affordable Refinance Program (HARP) and the FHA Short Refinance Program, which were created to focus on allowing underwater borrowers to refinance their existing loans, reducing the interest rates and lowering their mortgage payments to a more affordable amount.

The Home Affordable Foreclosure Alternative Program (HAFA) was created for those homeowners who did not qualify for a HAMP loan modification or preferred to go directly to a foreclosure alternative such as a short sale, where an attempt is made through negotiations with the lender to sell the property for less than what is owed, or a deed-in-lieu of foreclosure, where, under certain conditions, the homeowner surrenders the deed to his property to the lender and has no more liability.

HAFA short sales benefit the homeowner in that the homeowner has more control over his or her housing transition, making the process much easier than a traditional short sale. Under HAFA, first lein (first mortgage) debt is forgiven, and incentives are given to the investor or lender who holds the note to help in the process of negotiation with subordinate lein holders,( second, third, etc. mortgages), who, to gain their incentive, have to agree to release their leins and waive all future claims against the homeowner. In addition, the homeowner will receive a $3,000 relocation benefit when the transaction closes.

A HAFA short sale on a Fannie Mae loan can possibly allow for a “fresh start”, because a borrower may be eligible to borrow to own a home sooner through a short sale as compared to a foreclosure. Because Fannie Mae’s lending guidelines favor a borrower who proactively addresses their situation rather than avoiding it, borrowers may be eligible for a Fannie Mae backed loan by re-establishing a credit history as soon as two years for a short sale as opposed to seven years or more for a foreclosure.

These programs are new, and their rules change rapidly. A HAFA specialist has to be constantly updating his or herself to keep abreast of the current changes in policy and regulations. That is why a person who wishes to take advantage of these programs, which offer many more benefits than traditional short sales, should seek out a HAFA specialist who can provide the expertise and knowledge  to bring a short sale to completion.

I’m Cross at the Crosswalk – 5.5 Years Later

by Robert Jonez

On May 22, 2007, five and a half years ago, I posted an article in the West Hollywood Guide entitled “I’m Cross at the Crosswalk” and on May 23, 2007 I posted a second article “I’m Cross at the Crosswalk Continued”. Both of those articles were about the busy crosswalk in front of the Starbucks Coffee Shop that people used to cross Santa Monica Blvd. to go to the 24 Hour Fitness Center and the stores nearby. The first article dealt with the potential danger of the unregulated crosswalk and the second article dealt with the flippant attitude of the City of West Hollywood at the time concerning the dangerous situation.

Finally, thanks to the efforts of Councilmember John Duran, as of the first of the year there are finally warning lights installed at that crosswalk. They have been installed on two tall poles, one on each side of the street, with bright LED lights high up under the solar panels that power them, and buttons to press that make them flash long enough for a person to cross the street. The lights are amber, and do not require traffic to stop unless someone is crossing, so the traffic flow is not affected to a large extent. They do draw attention to anyone who is crossing the street, however.

Thanks, Mr. Duran. It is nice to see that you are working for your community.