Home Prices In Los Angeles Expected To Rise

After two years of gains, home sales in California are expected to fall 10 percent this year but prices should continue to rise.

The California Association of Realtors expects 492,000 sales this year, compared with 564,500 in 2009. C.A.R. predicts that sales activity will rise next year to 502,000 as the recovery regains momentum.

Sales increased by 27 percent in 2008 and 24 percent in 2009 after two sharp years of declines as the real-estate market collapsed.

"We have had weaker economic activity in the second half of this year as we have weaned ourselves from the federal government stimulus programs," Robert Kleinhenz, the association's deputy chief economist, said during a conference call.

The Los Angeles-based trade group expects next year's median to grow a modest 2 percent to $312,000.

The increase follows price decline of 38 percent in 2008 and 21 percent in 2009. Los Angeles County market should closely track the state, Kleinhenz said.

There were 60,000 home sales in the county last year and they should fall 24 percent this year, due in large part to the end of the federal tax credits. Modest gains should return next year, Kleinhenz said. The median price is on track to increase 5 percent this year and make a similar gain next year, Kleinhenz said. There was also word on Monday that the nation's residential housing market remains under pressure. The National Association of Realtors said that its index of sales agreements for previously occupied homes rose 4.3 percent to a reading of 82.3 in August. That's still more than 20 percent below the pace in the same month a year ago. "With underlying economic conditions still so weak, a robust housing recovery remains highly unlikely," Paul Dales, U.S. economist at Capital Economics, told the Associated Press.

California's anti-deficiency protection for "purchase money" mortgages...

On Thursday, Governor Schwarzenegger vetoed SB 1178 (Corbett), C.A.R.'s sponsored bill that would have expanded anti-deficiency protections. In his veto message, the Governor made clear his view that the bill interferes with an existing contract. While disappointed in the Governor's misinterpretation of the bill, C.A.R. is grateful to the almost 13,000 California REALTORS(R) who urged him to sign the bill by responding to the Red Alert.

C.A.R. sponsored SB 1178 to better protect homeowners going through foreclosure. SB 1178 would have ensured that homeowners keep the same "anti-deficiency" protections they have in the original loan after the loan has been refinanced.

California's anti-deficiency protection for "purchase money" mortgages says that if a homeowner defaults on a mortgage used to purchase his or her home, the homeowner's liability on the mortgage is limited to the property itself. The law has worked well since the 1930s to protect borrowers, ensure the quality of loan underwriting and allow borrowers brought down by financial crisis to get back on their feet.

Unfortunately, the 1930s law hasn't kept up with current times. Current law doesn't apply to loans used to refinance the original purchase debt, even if the refinance was only to gain a lower interest rate. Recent years of low interest rates have induced tens of thousands of homeowners to refinance their mortgages. During those years, almost no one realized that refinancing their mortgage to obtain a lower rate, they were forfeiting their protections and were becoming personally liable on the new note.

SB 1178 would have corrected this injustice by extending anti-deficiency protections to those who have refinanced their loans.

Thank you again to everyone who joined C.A.R.'s Government Affairs Team and fought for our clients.

$4,000 Grant !!!!!!

If you are a first-time home-buyer who is a police officer, sheriff’s deputy, firefighter, California Highway Patrol officer or emergency medical technician, the $4,000 grant program for public safety responders is still going and funds are still available. There are only a limited number of grants available, so don’t miss out! For more information call Heather at 818-388-2743

Historic Interest Rates!

The thirty-year fixed rate mortgage (FRM) averaged 4.375% today, with an APR of 4.559%, down from Friday’s average of 4.36%. This rate is much lower than last year around this time when the 30-year FRM was averaging well over five percent. Today’s rates are the lowest recorded since Freddie Mac began keeping track of this type of mortgage back in 1971.

How Far Will They Go?

Lenders’ data mining goes deep. Mortgage makers are going beyond tax returns and bank statements to determine whether you’re a good risk. They’re checking such things as where you have pizza delivered and where you shop online.

Click Here To Read The Entire Los Angeles Times Article

Will You Have To Repair Your Broken Sidewalk Before You Can Sell Your Home?

A year ago I posted about the Mayors Big Plan Could Cost You $7,000! Mayor Villariago wants to take the burden of fixing 4,600 miles of dangerously broken city sidewalks from the city to property owners. The plan is to make it mandatory at the point of sale – Good idea Mr. Mayor, make it even harder and more expensive to sell your home - ever heard the expression "Timing is everything". Villariagosa has recommended in his 2009-2010 budget that the burden of repairing sidewalks land squarely on property owners whenever a home is sold. Click here for the details and information on how to stop this very expensive change. Well IT'S BACK!!!!

CONTACT YOUR COUNCIL MEMBER NOW!!!

The city of Los Angeles may soon stop fixing our broken sidewalks and put the cost squarely on the shoulders of the homeowner. Hmmmm...if the homeowner is responsible for fixing them are they also responsible if someone trips and falls because it wasn't fixed? Will it become another added expense when you want to sell your home?

Mortgage Modification

More underwater homeowners to get cuts in principal balance
For hundreds of thousands of homeowners who are underwater on their mortgages, it’s been a tantalizing question: Is there any way that our lender might agree to lower the amount we owe – not just the monthly payments, but the principal debt itself?

To read the full story, please click here.