Los Angeles home prices up 12% in January

C&P Home Price Index

Nation-wide, home prices are improving by leaps and bounds year-over-year, according to the new January Case-Shiller Home Price survey.

Year-over-year, the 10-city Home Prices Index rose 7.3%, while the 20-city index rose 8.1% (economists had forecast an 8.2% rise).  Phoenix led the nation with home prices rising 23.3% alongside its sharp drop in the unemployment rate.

Los Angeles home prices rose 12.1% in the last year, and 1% month-over-month.

All of these numbers are part of a larger trend that saw home price gains in all 20 metros for the first time in over two years.

The market is improving, but is it time to sell?

Is it safe to sell your house now?

It's been seven years since the start of the housing market collapse, but finally things are starting to look up. Mortgage rates remain at record lows, new home construction is starting to go up, and home values are improving.

So if you're looking to sell your home, is now the right time?

A new survey by Fannie Mae reveals nearly one in four homeowners are confident that now is a good time to sell, a number which is up 11% from a year ago. And even though home values are improving, they are still 27% below 2006 highs.

If you're thinking about selling, give me a call. I can help you determine if it's the right time and what is the right price.

FHA mortgage premiums about to go up

For those who qualify for low interest loans, things are about to get a little more pricey. Earlier this month, the government accounted the FHA Mortgage Insurance Premium will increase 10-15 points (0.10% on mortgages under $625,000, 0.15% for that amount or more), raising concerns that those affected will be lower income and first-time home buyers. Although one of many increases that have occurred over the past few years, this increase will become permanent and will require insurance for the life of the loan, but is mainly aimed at long-term housing market stability by making loans less risky. However, many rely on FHA loans for low down payments (15.41% of homes in 2012 were purchased using an FHA loan), and making home loans less affordable could put a damper on market recover.

The rate increases are set to go into effect on April 1. In the past, the insurance would fall off at 22% equity, but now monthly insurance payments will be required for 30 years on a 30 year FHA loan, unless a 10% down payment is made at the outset.

Looking to buy a home in Northeast Los Angeles? Contact Urban Hillsides today!

Housing inventory in Los Angeles at decade lows

California and especially Southern California real estate numbers have been largely affected by low inventory, with Los Angeles seeing a whopping 60% fall from 2010 inventory numbers. The high demand (we are seeing multiple bids on properties in areas like Echo Park) and lower inventory is bringing up home prices – good for homeowners needing to sell, not as good for those looking for the lower-priced deals. Strangely enough, the modest increase in sales we have seen does not appear to match up with the significant drop in inventory (meaning a home sold means a home no longer for sale), however investor money and low down-payment buyers are the ones buying, according to DoctorHousingBubble.com.

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A look at the Northeast Los Angeles real estate market

Communities included: Echo Park, Silver Lake, Atwater, Highland Park, Glassell Park, Eagle Rock, Mt. Washington, Montecito Heights. Single Family: December/January

• Properties sold: 111 / 85
• Average days on market: 50 / 69
• Median price: $484,169 / $514,105
• Average cost per square foot: $344 / $359

Residential Income (2-4 units)

• Properties sold: 24 / 24
• Median price: $582,941 / $487,792

Condo:

• Properties sold: 7 / 4
• Median Price: $197,500 / $319,350

(Source: The MLS)

Also see our last market review for September/October 2012

Mortgage Debt Relief Act extended through the new year

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According to a survey by YouWalkAway.com, the extension of the Mortgage Debt Relief Act of 2007 will drive more short sales in 2013.

The act was set to expire at the end of 2012, but Congress voted to extend it another year, thus providing debt forgiveness for underwater homeowners who choose a short sale, loan modification, or foreclosure rather than defaulting on their loan.

While the report doesn't see a new wave of mortgage defaults this year, the extension of the act will provide tax relief for those homeowners who are currently in foreclosure. New foreclosure applicants, however, can only expect to have that tax relief for a year (which is how long the act has been extended) – a time period that may not be enough because of how long some foreclosures can take.

As an alternative to defaulting on your loan, a short sale or loan modification may be the best route.