An improving market: Foreclosures and mortgages at new lows

Average rates for 30-year and 15-year fixed mortgages are at a record-breaking low for the third week in a row, as foreclosure filings also dropped. The numbers are a significant sign that the housing market is in fact recovering. Lenders are finding alternatives to foreclosure through short sales (selling underwater property for less than the amount owed) or through loan modifications, thus reducing the number of foreclosures on the market. As a result, there is less inventory that is "propping up prices."

The average rate on 30-year homes is now at 3.79%, while a 15-year mortgage declined to 3.04%. Lower mortgage rates have boosted builder confidence, as construction for both single-family homes and apartments rose. But despite better rates, homebuyers are still having to cough up a hefty down payment of around 20%.

In California (which was severely hit by the housing crisis), home prices rose 0.6% in March from the previous month, while short sales have been preferential to foreclosure.

In Northeast Los Angeles areas such as Echo Park, inventory of both single and mult-family homes are low. There are a lot of buyers, and Los Angeles real estate trends are indicating that sellers are getting multiple offers, and accepting offers above asking price.

Call or contact us today if you're looking for buyers in Northeast Los Angeles, including Atwater Village, Echo Park, Eagle Rock, Glassell Park, Highland Park, Lincoln Heights, Los Feliz, Mt. Washington, Silver Lake, and Montecito Heights.

90026-data

Spacious Ladera Heights Family Home

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Looking for Back Up offers. Spacious family home with a pool and a great floor plan. Property has excellent curb appeal and is located in the desirable Ladera Heights neighborhood. 6 bedrooms with 4-1/2 bathrooms, formal dining room, family room, living room, very large upstairs media room and office. Three bedrooms downstairs including master suite and three bedrooms upstairs. Gated entry to property and attached two car garage with direct access. Large covered outdoor deck off formal dining room. This is a true entertainer’s house.

• Year built: 1954
• 4,436 square feet
• 7,998 lot size
• 6 bedrooms
• 4-1/2 bath

24 hour market watch

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Average price of California homes increase in March

California home prices have increased for the first time in 16 months, according to Los Angeles-based California Association of Realtors. Yesterday we took a look at average prices for the Northeast Area in Los Angeles, which includes an average of $435,500 for a single family home. The California average, however, jumped to $291,080 - a 9.2 percent gain from February, the largest monthly increase since March 2004. Tight inventory seems to contribute to the price jump.

The average number of days on the market for California homes also went from 57 days in March to 53.1 days.

Is the housing crash officially over?

Housing prices are still low, and homebuilders' confidence is fluctuating, but one chief economist claims that the housing crisis is officially over. Mark Zandi, chief economist of Moody's Analytics, told The Daily Ticker, "The housing crash is now over...and by this time next year, housing will no longer be a drag for the economy but a tailwind."

A pretty bold statement, especially since a complete recovery could be hindered by the lagging job market. But since home prices are still low, Zandi is hopeful that investor interest due to low housing prices and rising rents will stabilize the housing market.

Additionally, the low interest rates are very attractive - the average 30-year fixed mortgage is 3.88%.

Zandi also expects mulit-family home sales to surpass single-family homes, as these investors are attracted to purchasing inventory for rentals.

In the Northeast Area of Los Angeles (including areas like Echo Park, Silver Lake, Los Feliz, etc.), inventory is quite low in the month of March, so single family homes are outselling multi-family units.

New March numbers from the National Association of Realtors will be coming out later this week, so stay tuned!

Urban Hillsides / Northeast LA Market review for March

Inventory is very low in the Northeast Area, including Atwater Village, Echo Park, Eagle Rock, Glassell Park, Highland Park, Lincoln Heights, Los Feliz, Mt. Washington, and Silver Lake. With good marketing, quality properties sell very fast and will bring multiple offers. Single Family:

• Properties sold: 134
• Average days on market: 68
• Median price: $435,500
• Average cost per square foot: $349
• Average selling price to listing price: 98.72%

Residential Income (2-4 units)

• Properties sold: 21
• Median price: $418,000

Condo

• Properties sold: 25
• Median Price: $225,000

(Source: The MLS)

Home Prices to Rise in 2013

The Real Estate Consensus Forecast released by the Urban Land Institute this month  by the thirty eight real estate economists and analysts projected improvement for the economy. The already improving housing sector is expected to see housing starts nearly double by 2014 and projects home prices to begin to rise in 2013.

The prediction is that the average home price will stabilize in 2012, followed by a 2 percent increase in 2013, and a 3.5 percent increase in 2014.

New construction of single-family housing is expected to rise from 428,600 starts in 2011 to 500,000 in 2012, and jump to 800,000 in 2014.

The unemployment rate is expected to continue falling, with the rate dropping to 8 percent by the end of 2012, 7.5 percent by the end of 2013, and 6.9 percent by the end of 2014.

But, with the improving economy comes inflation and higher interest rates. These rising rates will increase costs for investors, and those surveyed do not expect substantial increases in real estate capitalization rates.

ULI CEO Patrick L. Phillips advised that while the forecast suggests that economic growth will be steady rather than sporadic, it must be viewed within the context of numerous risk factors such as the continuing impact of Europe’s debt crisis; the impact of the upcoming presidential election in the U.S. and major elections overseas.

“While geopolitical and global economic events could change the forecast going forward, what we see in this survey is confidence that the U.S. real estate economy has weathered the brunt of the recent financial storm and is poised for significant improvement over the next three years.,” said Phillips.