Existing home sales in August exceed expectations

The National Association of Realtors reported recently that the sales of existing homes rose nearly 8% in August (that’s 4.82 million homes), the highest level since May 2010.  This number exceeded economists’ expectations at 4.5 million. Foreclosures and short sales accounted for 22% of August sales, selling at a discount of 19% below market value for foreclosures, short sales at 13% below. The median home price in the Western United States rose to $242,000, up 16.3% from August 2011.

While some economists think the existing home sales numbers are not improving fast enough, economists in a survey expect housing prices to continually rise in the next four years.

Housing prices expected to rise in the next four years

lsenomicsHomePriceExpectationsbySurvey092012

A survey conducted on behalf of Zillow in August and September has found that the majority of economists in the survey are increasingly optimistic that home prices will continue to rise steadily over the next four years.

From Realtor Magazine: “The economists surveyed expect home prices to rise 2.3 percent this year over the fourth-quarter of 2011, according to the survey conducted on behalf of Zillow. In 2013, they expect prices to rise 4.7 percent; 8 percent in 2014; 11.4 percent in 2015; and 15.2 percent in 2016.”

The survey also reveals that more than half favor the elimination of mortgage interest tax deduction.

The optimism is a very good sign that we’re on the road to recovery. Stan Humphries, Zillow's chief economist, says "It's refreshing to see this optimism at a time when the market seems to be making an organic recovery, in the absence of an artificial stimulant like the tax credits."

Underwater homeowners still have some refi options

CoreLogic has estimated that 1.8 million underwater homeowners own homes that are a mere 5% less than what they owe on their mortgage. And while home prices are rising, giving many US homes back some of their equity, there are still options for those struggle to get out of being underwater. Refinancing with today’s low interest rates (3.7% for 30 years) may not be a viable option, but two programs offered by lenders may help. Under the Home Affordable Refinance Program (HARP), it’s possible to refinance to a lower rate and payment, or a shorter term. Depending on your lender, you may not have to worry about an upper limit for the loan-to-value ratio. Be sure to check with your lender to see if you qualify. Fannie Mae borrowers can visit knowyouroptions.com/loanlookup, or visit freddiemac.com/mymortgage if Freddie Mac is your lender.

FHA mortgage borrowers have the option of reducing their monthly payment (must be by at least 5%) or switching to a fixed rate. To qualify, you must have had your loan for at least 210 days and made at least six payments.

Foreclosure sales in decline as servicers seek alternatives

According to a recent Core Logic report, the number of completed foreclosures saw declines in monthly and yearly sales. These numbers were down by 16% compared to a year ago, as servicers rely more on alternatives like short sales and loan modifications. The inventory of homes in the foreclosure process is also down to 3.2% from 3.5% one year ago. The decline in completed foreclosure and in foreclosure inventory is a sign that the housing market is closer to stabilizing. The Los Angeles/Long Beach/Glendale areas accounted for 19,599 foreclosed homes over a one year period.

Percentage of distressed sales in June are lowest since June 2008

According to Radar Logic’s monthly housing market report, June sales of homes at foreclosure auctions and REO sales fell to its lowest level since 2008. The statistics are derived from 25 metropolitan cities throughout the country. The report also showed concerns over a large backlog of inventory including bank inventory, underwater homes, and homes in the process of foreclosure.

More California Homeowners Rights pass state legislation

I recently reported on bills AB278 & SB900, which focused on dual-track foreclosure restrictions. The state legislature is continuing to stay busy with additional "California Homeowner Bill of Rights." The new laws are:

SB1474: Grants CA Attorney General the ability to convene statewide grand juries to investigate and indict perpetrators of financial crimes involving victims in several counties.

AB1950: Extends the statute of limitations for mortgage-related crimes from one to three years.

AB2314: Gives local governments and receivers various tools to fight neighborhood blight caused by foreclosed homes.

Tiny homes on the market in Echo Park

We've been seeing a trend in these tiny, tiny homes being listed in the Echo Park area. While some of potential homebuyers in the need for lots of space might be turned off, there's also a lot of charm and great potential in the classic designs that are largely part of Echo Park's past.

1633 Landa Street, Echo Park

1633 Landa St

This 1929 cottage is only 484 square feet, but sits on a sizable 5,334 square foot lot. You can see city lights as well as hills and treetops, and the original Douglas Fir floors gives it that rustic charm. At $375,000 it's also an affordable price for Echo Park, especially since it has some modern upgrades. Contact me if you're interested in setting up a showing.

2232 Lake Shore, Echo Park

2232-lakshore

Lake Shore Avenue is a great street to own a property in Echo Park - we've actually had quite a few sold listings throughout the years. This one is a 1923, one-bedroom, 432 square foot cottage sitting up above the street. Because it's nice and high up, you've got city views and Elysian Park treetops for your views. The listing also boasts french windows, mahogany doors, antique details, and a private deck. The asking price is also affordable for Echo Park homeowners, they are asking $299,000. Contact me if you're interested in setting up a showing.

1942 Bungalow, Echo Park

1940s-bungalow

This 1942 Bungalow in Echo Park was actually listed as a rental on Craigslist in August. The stainless steel appliances, washer/dryer unit, storage, sliding glass doors, deck, fountains, and garden were the attractive elements that made this house sound just perfect for any Echo Park renter. But at 540 square feet, the $2,491 per month rental price tag felt a bit steep.