On paper, 30% of US homeowners are underwater

foreclosure

Real estate website Zillow reported recently that the number of homeowners underwater has improved slightly in the first quarter of 2012. In the first quarter of last year, 32.4% of borrowers owed more on their mortgages than their homes were worth. The number has slightly improved this year at 31.4%, but it's still more than it was three months earlier. It's likely that underwater homeowner percentages remain high because of foreclosure processing delays. And, as the LA Times noted last week, the high percentage of underwater borrows is bad for the overall market:"Negative equity has created a drag on mobility and home-price appreciation as people have gotten stuck in their homes."

On the bright side, 9 out of 10 borrowers are paying their mortgages on time.

In areas like Los Feliz, Echo Park and Eagle Rock, Zillow data shows 13%, 18%, and 19% respectively at the first quarter of 2012. Other areas in Northeast Los Angeles like Highland Park and Elysian Valley show pretty high percentages of underwater borrowers, with the latter at 33%.

Have questions about the foreclosure or short sale process?

HousingPulse survey reports low appraisals are reducing home prices in April

Despite a brief rise in home prices in California in March, nationwide prices in April decreased due to a "glut" or distressed properties. The Campbell/Inside Mortgage Finance HousingPulse Tracking Survey reports that despite reports of bidding wars, prices still declined. It's possible this is due to lower appraisals. The Survey quoted one real estate agent as saying, "...many times the appraisals don’t come in at the [contract] price. The appraisers are keeping the [transaction] prices down even when buyers see the value and are willing to pay more."

It seems appraisers are seeing downward trends from numbers in November, which would account for the low appraisals.

The high number of distressed properties are also dragging down prices, with average sales price to listing price staying at around 95% consistently.

The good news is that in Northeast Los Angeles, we haven't had any personal issues with low appraisals. Our listings are still selling pretty quickly with multiple offers, and some even above asking price, especially in the Echo Park area.

Up to $30,000 in relocation assistance from BofA

After Bank of America announced its relocation assistance program for short sales, which promises up to $30,000 for those eligible, a Massachusetts client was approved for $10,000. Since moving can get expensive, families who are having difficulty coming up with the cash to move out of their short-sale home can receive this assistance. Bank of America reviews each on a case-by-case basis, with factors such as home value and owed amount coming into play.

Bank of America has also said it will respond to short sale requests within 20 days. If you're living in the Urban Hillsides (in Northeast Los Angeles) and considering a short sale, we are certified pre-foreclosure specialists. Contact us today with questions!

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.

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