Month: August 2012

Westside Market Stats

One of the many things I love about Partners Trust is the market research provided to agents and our clients.  We have a market research team who know the micro markets that make-up the Westside better than anyone.  Click the link below for our latest quarterly market stats for single family homes and condos.  Across the board we have seen healthy price increases through 2012. If you would like specific information about a zip code or area, please feel to contact me and we can make it happen!

Mortgage rates rise for third straight week

Fixed mortgage rates rose for the third straight week after setting all-time lows, with the typical 30-year rate on a loan below $417K increasing from 3.59% to 3.62%.

The yield on the benchmark 10-year Treasury note closed at 1.8% Wednesday after bottoming out at 1.4% on July 24. The average 30-year fixed mortgage rate, hit an all-time low of 3.49% that same week. These rates are based on loans to solid borrowers who have 20% or higher downpayments or 20% equity in their homes if they are refinancing. Borrowers typically paid 0.6% of the loan amount in lender fees and discount points.

Source: LA Times

Sale price above list price?! Such is the case for Mar Vista in July

July 2012: # of sales: 38 DOM 20, SP vs. OLP 100.87%/ SP vs. LP 101.07% SP: 874K

July 2010: # of sales: 30 DOM 32 SP vs. OLP 97.11%/ SP vs. LP 99.37% SP: 844K

(Abbreviation key: DOM= Days on Market; SP vs. OLP= sales price versus the original list price. This calculates the sale price from the beginning it hit the market even if a new agent takes on the listing or it was in escrow for a period of time.; SP vs. LP= sales price versus list price at the time of the sale.)

The Skinny: 24 of the 38 sales sold for at or over the original list price with most of those 24 sales receiving at least 3 offers.  Even though the numbers in terms of sales price vs. list price and DOM in Mar Vista were strong in July 2010, this past months activity was quite a bit stronger. An average of only 20 days on the market coupled with a sales price above the list price shows the strong demand for homes in this quiet community bordered by Venice, Santa Monica and Culver City. Mar Vista has developed a strong niche on the Westside with young families seeking a home with a more palatable entry price point than Santa Monica/Palisades while still having solid elementary schools (Beethoven, Mar Vista and Clover). 

3534 Mountain View

3534 Mountain View Ave, a 3 bed/2 bath, 1,604 sq. ft. home sold for 15% above the list price at $1.135M.  3565 Colonial Ave, a 5 bed/4 bath on 3,642 sq. ft. home also sold for 15% above the list price at $1.375M.  Colonial was a short sale and in 2004 was purchased for $1.5oM.

Market trends of the week and random noteworthy thoughts

Trending: Multiple offers in all price points from $500,000 up to $5,000,000 is the reality of the moment. And yet, as wonderful as that sounds, proper pricing is critical to achieving robust interest in any home. We are not in a market climate that can absorb overpricing. Bottom line: Buyers need to be pre-approved for loans because you are competing with “all cash” offers and Sellers need to be sensitive to recent comparable sales to create the optimal pricing strategy. 

Million dollar home sales continue to climb statewide: According to an article in the LA Times last week, Million-dollar-or-more home sales statewide surged in the second quarter to the highest level since the third quarter of 2007 as the economy and mortgage availability improved.  The 7,763 homes sold at $1 million or more from April to June represented an 18.5% increase from the same period last year. It was the most sales in this price range for a quarter since 2007, when 10,946 closings were recorded.  Though this is good news, we are still at less than half of the highest quarter number of sales for $1-million or up houses which was the third quarter of 2005, when 15,898 homes changed hands.

Be weary of what you read on the internet: I monitor many real estate blogs, especially those that have been bearish about Westside real estate over the past eight years.  They provided good information that I could pass along to my readers, especially from 2005-2010, but many of them have either stopped posting or are providing erroneous information to try and prove the market is unhealthy.  As late as last month one site tried to claim the 90402 zip code is down over 20% compared to last year when in actuality it is up around 10%.  On the end of the spectrum, I appreciate sites like the Santa Monica Distress Monitor who started off writing about inflated real estate prices but has adjusted with the market and gives a balanced look at the market.

Information from a great realtor is key: Some people are weary of hearing information from realtors thinking it will be jaded and that is understandable as some in this business do not have great ethics, but you are far better off finding a trustworthy professional who provides real time info so you can make the right decision.  The media is usually a few months behind what is going on and that difference can cost you tens of thousands of dollars and/or missing out on a wonderful home.

Appraisals causing headaches for refinances and purchases…what can be done to help?

You are not alone if you are in the process of getting your home refinanced or are purchasing and the appraisal is lower than what it should be.  Many people are stuck in the same boat with appraisals trailing the market 3 to 6 months and reluctant to accept the recent upward momentum of Westside real estate.
If you are in the refinancing boat and as long as rates stay low as anticipated, you will be in a solid position to get a higher appraisal in the next 6-9 months so staying patient is key.

Another important aspect with refinancing and purchasing is working with a lending representative with local knowledge.  Banks randomly assign appraisals and you can end up with an appraiser without local knowledge or an understanding of the Westside/South Bay markets.  

A lender with local ties might have a sense the appraiser assigned might not understand the area as well and help you figure out ways to get a different appraiser before they come out to the property.

In terms of a purchase appraisal, it is extremely important the listing agent meets the appraiser at the property and provides them recent comparables and neighborhood tidbits that add value.   Some appraisers will not engage in these conversations but most appreciate the info, especially when it comes to off-market activity. 

Please let us know if you have any questions related to this topic as we know of some excellent loan representatives at different banks we would be happy to put you in touch with.

Traffic nightmare near: California Incline rebuild project approved

The Santa Monica City Council voted in July to move forward with a construction project that will replace the aging California Incline Bridge connecting Pacific Coast Highway and Ocean Avenue.  Construction is expected to start sometime in the fall or winter of 2013!

A major access point into downtown Santa Monica, it is a major artery into the heart of the city.

Under the proposed project, the existing structure will be replaced by a 750-ft.-long by 52-ft.-wide concrete bridge and will require a 12- to 18-month closure of the popular connecting byway.

City staffers are asking that construction take place from 7 a.m. to 10 p.m. Monday through Friday and 7 a.m. to 9 p.m. Saturdays. They estimate the extended hours would expedite construction by about 25 percent above the option of working during standard city construction hours.

Santa Monica Mayor Richard Bloom promised an open dialog with residents, who have aired concerns that construction will bring traffic neighboring areas to a complete standstill.
Articles to read on the topic:

Major redo of California Incline Approved – Santa Monica Patch

Palisades Post Article on Impact of California Incline Construction

*Sources: Santa Monica Patch and Palisades Post
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