3-year descent in home prices appears to be at end #realestate #VRN #VA

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According to recent reports and forecasts by housing analysts, the three-year descent in home prices appears to be at an end. Eight cities, including San Francisco, showed price increases in May, up from four in April, and one in March, according to Standard and Poor’s/Case-Shiller Index. For the first time since early 2007, the index of 20 major cities was virtually flat, rather than down.

KEEP THIS IN MIND

• Earlier reports show that sales of existing homes nationwide rose last month for the third consecutive month, while sales of new homes increased in June by the largest percentage in eight years, according to the NATIONAL ASSOCIATION OF REALTORS® (NAR) and the U.S. Commerce Dept., respectively.

• Although some skeptics believe the market is pausing before home prices decline further, the median price in California’s housing market appears to be stabilizing. June marked the fourth consecutive month of rising home prices and the second largest gain on record for the month of June, based on statistics dating back to 1979. The year-to-year decline in June also was the smallest in the past 16 months.

• The S&P/Case-Shiller price index for 20 cities showed a half-percent gain when May was compared with April. It was the first month-over-month increase in the index in 34 months. “It is very possible that years from now we will say that April 2009 was the trough in home prices,” said Maureen Maitland, vice president for index services at Standard & Poor’s.

• One explanation for the increase in median prices is the rise in demand from buyers, especially first timers taking advantage of the $8,000 federal tax credit, which expires in December. The NATIONAL ASSOCIATION OF REALTORS® (NAR) is lobbying for the tax credit to be extended and to be replaced with a $15,000 credit for all buyers.

• Another factor in the market’s resurgence is the prevalence of foreclosures, which make up about a third of all existing home sales. “Although another surge of foreclosures is expected later this year, demand remains strong, so the market may be able to absorb more distressed properties without significantly impacting the median price,” said C.A.R.’s Chief Economist Leslie Appleton-Young.

To read the full story, please click here.

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Going solar: Is it right for your home? #realestate

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Just a short time ago, saving the planet took precedence over saving a dollar. Times have changed, but in today’s economy homeowners are still trying to find ways to do both. Just ask John Shipman, an energy analyst at Energy Efficiency Management (http://www.energyefficiencypro.com/) and a green home performance contractor with Energy Star (http://www.energystar.gov). Shipman states that his company’s “whole-house energy audits have increased three folds” since President Obama has taken office. The President’s stimulus package has made energy conservation a priority with initiatives that focus on energy-efficiency upgrades to homes and businesses.

One of the most hyped government energy-conservation initiatives is the use of solar energy. In fact, the stimulus package was signed after the President visited the Denver Museum of Nature & Science, which boasts 465 solar panels on its rooftop. The federal government’s stimulus package helps with the cost to install solar panels on existing homes, with the hope that this cost savings will help stimulate energy conservation and boost employment in the industry. With the new stimulus package, homeowners will receive a federal tax credit of 30 percent off the total cost of installing solar panels on their homes. According to the Energy Star Web site, the tax credit is also good for geothermal heat pumps, solar water heaters, small wind energy systems, and fuel cells.

This federal tax credit is in addition to any tax credits or discounts a homeowner might receive from the state. Each state has its own rebate programs, including California. If a homeowner in California wants to install solar panels, a good place to start is by checking out the website created by the California’s Public Utilities Commission and Energy Commission. The California Solar Initiative Web site (http://www.gosolarcalifornia.org) “provides consumers a ‘one-stop shop’ for information on rebates, tax credits, and incentives for solar energy systems in California.” In a nutshell, existing homeowners that choose to install solar panels would receive an up-front rebate from the state government. The rebate would be “based on expected performance, and calculated by equipment ratings and installation factors (geographic location, tilt and shading).”

What does that mean to the average homeowner? If you live in the Pacific Gas and Electric Co. (http://www.pge.com/myhome/saveenergymoney/solarenergy/) area, for example, the state rebate would be $1.55 per watt for existing homeowners (you can check out your local electric company’s Web site for their cost savings). According to Vote Solar (http://www.votesolar.org), a non-profit initiative, “a typical home solar system generates about 3 kilowatts of power.” The installation cost in California averages roughly $8.10 per watt. The state rebate is currently $1.55 per watt for homeowners in Pacific Gas and Electric Co. territory. Therefore, the average state rebate is worth $4,650, in addition to the 30 percent cost savings from the federal government. That means the original estimated cost would be around $24,000, but after the rebates a homeowner could pay under $14,000.

Shipman thinks homeowners need to go one step further before going solar. “Solar is a fantastic renewable energy and there are a lot of advantages to it, however you need to do the basics before you put solar panels on a house. It’s like cooking the turkey with the oven half open.” What he and others in the industry believe is the first step to energy conservation in existing homes is to consider the “whole house approach.” For instance, installing energy-efficient windows is just one of the many ways a house can conserve energy before going solar. The effort to save money and the planet by a well-intentioned and discounted solar installation can be thwarted by old windows that leak heat and cool air.

If any homeowner is thinking about installing solar panels or doing any type of energy-efficiency upgrades, it is important to do the homework. There are several companies, both profit and non-profit that can do a home evaluation, as well as Web sites that discuss solar installation. For more information, visit the CALIFORNIA ASSOCIATION OF REALTORS® Green Web Site (http://green.car.org/).

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Stevie Wonder home in Los Feliz sells for $2,407,000 #latimes #realestate

Stevie Wonder via last.fm

By Lauren Beale
July 21, 2009
A Los Feliz home owned by singer-songwriter Stevie Wonder has sold for $2,407,000.

The four-bedroom, three-bathroom Mission-style house of 4,511 square feet was built in 1928. A tiki room on the bottom level of the two-story home leads to a swimming pool with a large yard, gated parking and a one-bedroom guesthouse. There are hardwood floors, a family room fireplace and city light views. Arched windows look out onto the less-than-half-acre of grounds.

The record producer, instrumentalist and winner of 22 Grammy awards performed in January at a concert in Washington, D.C., the weekend before President Obama’s inauguration and earlier this month at Michael Jackson‘s memorial service at Staples Center.

Wonder, 59, received the Library of Congress Gershwin Prize for Popular Song in February. Among his early Motown hits were “Signed, Sealed, Delivered I’m Yours” (1970), “Superstition” (1972) and “You Are the Sunshine of My Life” (1973). He appeared on “American Idol” in 2006 and this year on “Extreme Makeover: Home Edition.”

Public records show Wonder is the owner of about a dozen residential and commercial properties in the Los Angeles area.

The listing agent was Melody A. McCully of Universal Realty, according to the Multiple Listing Service. The buyer was represented by Dorothy Carter and Michael Orland, both of Keller Williams Realty, Los Feliz.

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Gov Regulation Clogs Pipes w/ Home Valuation Code of Conduct #HVCC #realestate

It’s no secret that many facets of lending and real estate have changed as a result of the credit crisis. In addition to tightened lending practices that resulted from rising mortgage delinquencies, Washington has been heavily involved in altering the way lenders do business today.

Two individual pieces of legislation impacting our business need to be taken into account when determining closing dates for purchase transactions.

Home Valuation Code of Conduct – The Home Valuation Code of Conduct (HVCC) went into effect May 1, 2009. Intended to shield appraisers from undue influence from loan officers and lenders, this legislation installed a “firewall” between those individuals directly involved in the origination of the loan from the selection of and contact with appraisers.

HVCC also requires that borrowers receive a copy of the appraisal a minimum of three days in advance of closing. Part of the kicker here is that “received” is considered, in effect, three business days after the appraisal has been mailed to the borrower.As HVCC requires a firewall between the originator and the appraiser, the time to receive an appraisal has increased, in some cases by as much as two weeks or more. While this may not always be the case, it is important to take into consideration when considering closing dates. Today, conservative closing dates are mandatory to properly manage expectations of all parties.

Housing and Economic Recovery Act – The Housing and Economic Recovery Act (HERA) amends and impacts several aspects of obtaining a mortgage, the disclosures required for borrowers, and the timing of their delivery. This impacts the minimum time required to close, and should any changes be made to a loan application that could impact the Annual Percentage Rate (APR), this could impact the closing date.

Other than paying for a credit report, lenders may not accept any additional fees from a borrower until four business days after disclosures have been provided to or mailed to a borrower. This has the potential to delay several aspects of the application process.

Finally, upon making application, a borrower is provided a Truth in Lending (TIL) statement, detailing the total expected costs that could be incurred over the life of the loan. Should anything change in the loan application that could change the APR by more than .125%, a new TIL must be reissued to the borrower a minimum of 3 business days before closing. Items impacting the APR could include a borrower accepting a higher interest rate than initially qualified by floating their rate at application, a change to the loan amount, a change in product, a change in closing date, and any changes to fees.

What Now? – While there is more we can discuss on the specifics of these legislative implications, I felt it important enough to let you know now that I would not recommend you write purchase contracts with short closing time frames.

This video can provide both my buyers and sellers the rationale behind not scheduling closing dates in advance of 30 days at a minimum and ideally not less than 45 days. If you want to see some Pres and Media on HVCC look here and if you wish to just sign the petition against it click here. You can also view signatures here.

This whole matter is a knee jerk reaction to abuses in the system, causing too much regulation and hence the clog, besides being generally impractical. Thanks for reading and commenting and, please pick up the phone and call me if you have more questions.

Sincerely,
Carlo

Greenspan: Financial Normalcy In 2011 #alangreenspan

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Greenspan: Financial Normalcy In 2011

Monday, July 13, 2009 8:11 AM
By: Dan Weil

One of Alan Greenspan‘s favorite credit-market indicators now shows that the financial system will return to normal by mid-2011.

The gauge trumpeted by the former Federal Reserve Chairman is the Libor-OIS spread. It measures the premium of Libor (the London interbank offered rate) over the OIS (overnight indexed swap) rate.

On Wednesday, the spread narrowed to 32 basis points, its lowest level in more than 17 months, Bloomberg reported.

Forward contracts imply that the spread will drop even further, to 25 basis points by June 2011, according to data compiled by Tullett Prebon.

That 25-basis-point level would indicate that credit markets have returned to normal, Greenspan said a year ago.

“Greenspan’s right,” David Keeble, head of fixed-income strategy at Calyon in London, told Bloomberg. “If you get down to 25 basis points, you can say that’s a normal level. However, normality also depends on the activity in the interbank market as well as the level, which has been rather artificially induced.”

The Libor-OIS spread averaged 11 basis points in the five years prior to August 2007, when the financial crisis began. It peaked at 364 basis points Oct. 10, 2008.

While credit markets may be calming, investors still are worried.

“The start to the third quarter marks a sharp turn in investor sentiment from the risk tolerance of last quarter, as economic fears were re-ignited,” Bank of America strategist Jeff Rosenberg wrote in a note to clients, cited by Dow Jones.

Source

Buyers demand $500 security deposit with Title co. as part of inspection Addendum #realestate

DEAR BENNY: We are selling a $620,000 home. As a part of the inspection addendum, the buyers are demanding that we put down a $500 security deposit with the title company, refundable if there is no damage to the home between now and move out. Our home is in superb condition. The refund of our money would be based on the buyer’s subjective opinion, because they included no specifics on how they would determine if we would receive the money back. (They also have asked for every single nit-picky item that the inspector found to be remedied). What are the pitfalls of agreeing to put down this deposit and how do we protect ourselves? –Shelly

DEAR SHELLY: If that’s the only way to save the sale — especially in today’s market — I would go along with their request. You could have an attorney prepare an escrow agreement, spelling out the terms and conditions by which the moneys would be returned, but the legal fee involved would not be worth it.

Put the money in escrow and know in the back of your mind that you probably will never get any of it back.

However, you should insist that the buyer has a walk-through of the house the morning of settlement, to determine the condition of the house. You or your real estate agent should be present to observe.

Benny L. Kass is a practicing attorney in Washington, D.C., and Maryland. No legal relationship is created by this column.

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RENTERS REJOICE: Consumer Price Index Drops; No (0%) Annual Rent Adjustment for 2009-2010 #realestate

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At its June 25, 2009 meeting, the Rent Stabilization Commission announced that the annual rent adjustment for West Hollywood tenants subject to the City’s Rent Stabilization Ordinance is 0% (no allowed increase) for the period beginning September 1, 2009 and ending August 31, 2010.

The 0% (no allowed increase) amount was required under the City’s Rent Ordinance, which sets the annual general adjustment by looking at the change in the Los Angeles-Riverside-Orange County Consumer Price Index for all urban consumers from May to May each year.

As of May 2009, the Los Angeles CPI, which is calculated by the Department of Labor’s Bureau of Statistics, showed a decrease of 1.82% over the May 2008 number.

West Hollywood Municipal Code Section 17.36.020 states that: “In the event that the CPI decreases, no increase or decrease in rents shall be authorized pursuant to this chapter.”

For more information about the CPI, visit the Department of Labor, Bureau of Statistics web site: www.bls.gov/cpi or call (202) 691-7000.

“No rent increases may be given to any tenants between Sept. 1, 2009 and Aug. 31, 2010.”

General Adjustment: Questions & Answers

Q. With the 0% general adjustment, can rent be raised for any tenants?

A. No. No rent increases may be given to any tenants between Sept. 1, 2009 and Aug. 31, 2010.

Q. What if the landlord missed a general adjustment in the past. Can it be taken now?

A. Since 1996, annual adjustments are available on a “use it or lose it” basis. They are forfeited if not given during the year they are available. Any post 9/96 adjustments not given have been lost.

Q. Do landlords need to give tenants any written notice even though the rent isn’t going up?

A. No notice is necessary, that is why the Department did not enclose the blank rent increase form as is the standard practice.

Q. Can rent increases be given if the effective date is before Sept. 1, 2009?

A. Only if the tenant has lived in their unit at least 12 months and at least 12 months have passed since the last rent increase, if one was given. The increase available through August 31, 2009 is 2.75%. Remember, tenants must receive at least 30 days written notice under California law for any rent increase to be legal.

Q. Why is the West Hollywood general adjustment 0% when other rent control jurisdictions allow different amounts? Doesn’t everyone look at the same CPI statistics?

A. The rent ordinance for each rent controlled district determines what CPI data is used and how the data translates into the annual adjustment. West Hollywood takes 75% of the rise in the CPI from May to May and rounds to the nearest 1/4 of 1%, unless the CPI decreases, then no increase is allowed. Los Angeles Rent Stabilization averages the monthly CPI increase from September to September each year to determine the increase allowed the following July. Los Angeles also has a minimum adjustment of 3%, even when the CPI data is below that amount. Santa Monica does an annual study of landlord expenses. CPI data is included in the study, but not relied on as the sole determiner of the increase amount.

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What Happened to the Stimulus?

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Construction workers on the site of an infrastructure project at the junction of Interstates 490 and 77 in Cleveland, Tuesday 30 June 2009. The project is being funded by government stimulus money as part of the American Recovery and Reinvestment Act. Greg Ruffing / Redux for TIME

When Congress passed the stimulus bill in February, it came as both good news and bad news to the Obama White House. The good: never before had an Administration had so much money to spend on voters in need — to rebuild public buildings, save jobs, weatherize homes and fund community health centers. The bad: rarely has the passage of a measure been accompanied by such skepticism about the government’s ability to spend the money wisely or well.

And ever since, public doubts about the stimulus have, if anything, deepened. The economy deteriorated faster than economists expected, with unemployment now predicted to exceed 10% next year, higher than the White House had projected in January. While that might under normal circumstances make any stimulus more popular, voters have been spooked by the enormous deficits Washington is running up as it tries to right the economy. In 2009 alone, the U.S. government will take on debt equal to about 13% of its economic output, and by 2016 the U.S. debt is projected to top 70% of GDP, twice the 2000 level. Poll after poll has shown a steady erosion of confidence in the stimulus measure; one survey found that 45% of voters believe it should be abandoned midstream.

Read More

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