Terra Firma LA - The Los Angeles Real Estate Blog

Home Remodeling Tips to Sell Your Home Faster

chrishain@hotmail.com (Christopher Hain) — Tue, 05 May 2009 07:51:00 +0000

In any market, one of the things I'm constantly asked is how best to improve the way a property looks to potential buyers. It's even more essential in this market when you must do anything and everything you can to sell your property at any price. So here are a few of the tips I consider with my clients to help make a property sell quicker and for more money:

1) PAINT -- Inside or outside, fresh paint is most important to me (and it must not be sloppy). Here's a link to A Primer on Exterior Painting. And here's a link to some suggestions on Interior Color Choices.

2) ODORS -- You may not think of this because you may have lived there long enough that you don't smell the odor. So must definitely get an outside opinion on this one. But I know from first-hand experience that it's extremely difficult to sell a house that people want to leave as fast as possible to get a breath of fresh air.

3) CURB APPEAL -- Anybody's whose watched HGTV has this one drilled into their brain. But what exactly does curb appeal mean. Here's a few tricks (summarized from a recent Realtor magazine article):

Add Splashes of Color -- "It's best to use one or two colors and repeat them," according to Landscape designer Michael Glassman.

Size Trees and Shrubs to Scale -- Don't block windows, doors and other architectural features of the home. And while you may love a dense canopy of trees, many buyers worry about maintenance.

Maintain a Perfect Lawn -- Nobody wants to buy a home AND a project lawn.

Light Up the Outside -- Have you ever noticed how almost every home looks better at night? A few well-placed lights (but not too bright) can work wonders.

Let them Hear the Water -- A water feature really puts buyers in a relaxing mood when they're at the house, and more likely to want to come back -- permanently.

Use Decorative Architectural Elements -- Examples include: new mailbox, planted window boxes, a low fence wraped in vines, a few well placed colors.

4) REDUCE CLUTTER -- Chances are if you're selling your house before you've moved out, you're going to have to alter your lifestyle. That is, if you want to sell quickly and for top dollar. This is because there are many things that almost everyone keeps in their home for everyday life that make a home less attractive to most buyers. This is going to mean removing personal photos, removing some of your favorite art, eliminating some furniture, even reducing what's in your clostes and more.

OK, those are my Top 4, but there's so many things you can do to so here's links to even more tips:

HGTV's 10 Best-Kept Secrets for Selling Your Home

6 Affordable Staging Tips

A Whole Bunch of Ideas from Other Realtors

Design*Sponge Before and After

Excellent Local Interior Designer #1

Excellent Local Interior Designer #2

How to Sell a Luxury Home When Nobody's Buying

noreply@blogger.com (Christopher Hain) — Mon, 04 May 2009 06:27:00 +0000

For the past six months, people wanting to sell luxury homes have had to realize a cold, hard fact: Nobody's buying.

While the real estate market at the bottom of the spectrum has seen increased sales activity, things have been different for luxury properties. This is for three primary reasons: 1) The decline in the market hit the most expensive properties in earnest beginning in late 2008, 2) The global financial market hit the wealthy hard, 3) Large loans have become extremely difficult to get.

Still, there are ways to increase your chances of selling even when no one's buying (like now). I'm going to group them as three "P"s. (It seems almost anything in life can be boiled down to three "P"s, huh?):

1) PRICE -- In this market "Price," may seem like the only "P" that matters. That's almost -- but not entirely -- true. If you are a seller justifying your price because you think your house is better than something on the market or better than some recent sale, then you are thinking wrongly about your price. With this frame of mind, you likely won't sell your home, or you'll sell for less than you could by pricing it more competitively. I'm sorry. That's just the reality of this market. However, if you happen to think your price is lower AND a better home, then you've got the right frame of mind.

2) PRESENTATION -- With luxury homes, you can't just be priced better, you have to look better, too. Think about it. If you've got a good amount of money, and you're going to buy a house in this market, you're not going to buy something that isn't ALREADY in good shape. Nobody wants fixers these days -- espcially the few-to-almost-zero luxury buyers out there.

3) PEOPLE -- OK, this is where the real challenge comes in. Getting your home -- instead of all the other luxury homes on the market -- in front of the most number of potential buyers. There are very good ways to do this, but many luxury agents don't do them. I'm talking more than just advertising in the same old places. Also, with so few people actual buyers out there for luxury homes, you also must consider getting your home in front of people who don't even know they're buyers right now but have the means to buy. This is extremely important, and dare I say, a specialty of mine.

Christopher & TerraFirmaLA featured in LA Times

chrishain@hotmail.com (Christopher Hain) — Mon, 04 May 2009 04:44:00 +0000

Chip Jacobs' excellent story in today's Los Angeles Times about the current real estate market featured quotes from myself as well as a recommendation for this blog.

Welcome to all the new readers!

Here at TerraFirmaLA, we try to bring an unbiased and analytic approach to the Los Angeles real estate market. We do a lot of research with the intention of putting our clients -- whether buyers or sellers -- ahead of the competition when it comes to finding the right property, or selling for the most money. TerraFirmaLA is a way to share some of that research and insight.

I felt the LA Times story gave a very accurate account of some of the dynamics buyers and sellers are encountering in the current real estate market. Basically, no one is happy. Many buyers in the nicer areas of LA aren't getting the crazy good deals they had hoped for. It's something we've been chronicling here at TerraFirmaLA for quite some time.

My only issue with the story was very minor. One of my quotes was erroneously attributed to Burt Slusher. Here's the passage, which ends up with the quote that should have been attributed to me (I have corrected it here):

In classic economics, buyers should have a decided advantage in neighborhoods in which supply dwarfs demand. Where there's typically a six-month inventory of houses for sale in coveted Beverly Hills, Pacific Palisades and West Hollywood, for instance, there's a year to two years' worth today, agent Christopher Hain said.

Hain has a theory about why all that supply hasn't translated into blocks full of delirious new homeowners. He calls it the "sucker syndrome," in which buyers are nervous about overbidding when nobody truly knows whether Southland home values have reached their bottom.
Said Hain, "Nobody wants to be the sucker who paid too much, so they combat that fear by offering unrealistically low amounts. But if you're trying to time the bottom, you're going to end up with junk. It's always the best houses and cheapest houses that sell first."

New List of Top 10 Real Estate Deals in Los Angeles

chrishain@hotmail.com (Christopher Hain) — Sat, 02 May 2009 21:48:00 +0000

Once again, I've updated my list of the Top 10 Best Real Estate Deal in Los Angeles.

Several homes sold from our last list, including the $31.5 million Beverly Park residence that was a steal at that price, the second Sherman Oaks fixer we've featured in a row, a beautiful home in Cheviot Hills, the two downtown condos we featured, and a Marina Del Rey condo.

The prizes this month are:

1. The Best Venice Canal Deal ... Ever

2. Our Third Sherman Oaks Fixer Deal

3. The New Best Deal in Beverly Hills

To check out the entire list of the Top Ten Real Estate Deals in Los Angeles, CLICK HERE

Buyers and Sellers Still Far Apart

chrishain@hotmail.com (Christopher Hain) — Wed, 29 Apr 2009 07:01:00 +0000

One of the things that's still keeping the real estate market slow is the disconnect between buyers and sellers.

And the folks at Trulia have come up with a great new tool to measure this: Search By Price Reduction.

Price reductions are all too commonplace in today's market.

Many sellers still have unrealistic expectations about the values of their homes. Or many are in denial about how far the market has fallen.

Many buyers, meanwhile, are afraid the market could still go significantly lower. They don't want to be the "sucker" who paid too much for a property while it was still going down. So if they do make an offer, many times it's much lower than the asking price.

This disconnect makes it hard to get deals done.

Trulia's new tool tracks these price reductions. They have found that 25% of homes on the market had at least one price reduction. And in the country's three heavyweight real estate markets -- New York, Los Angeles and San Francisco -- the average price reduction was 13-14%.

That's the average.

We asked Trulia to break things down even further for the readers of TerraFirmaLA and they did:

LOS ANGELES AREA PRICE REDUCTIONS*

Location Listings With Price Reductions Average Listing Price Average Reduction Average Reduction Off Original Price
Beverly Hills 28% $3,900,983 $680,725 15%
Los Angeles 33% $1,054,715 $143,135 13%
Manhattan Beach 25% $2,107,261 $240,468 10%
Burbank 28% $619,838 $69,200 10%
Santa Monica 28% $1,499,881 $147,219 9%
Pasadena 31% $1,053,590 $101,712 9%
Culver City 29% $625,900 $56,486 8%

*As of April 21, 2009
SOURCE: Trulia.com

And of course that average reduction off original price -- 13% citywide -- is just the asking price. With almost nobody but nobody offering asking price these days, I'd guess most properties are selling upwards of 20% below seller's original expectations -- or more.

That's a big gap between buyers and sellers.

Very Few Bright Spots

chrishain@hotmail.com (Christopher Hain) — Tue, 28 Apr 2009 07:01:00 +0000

Only six zip codes in the areas of Los Angeles we are regularly tracking showed an increase in sales in the First Quarter of 2009 compared with the Fourth Quarter of 2008.

This is pretty surprising to me, especially given that the holidays are a slow selling period and we had a near total economic class in the fourth quarter.

But the numbers don't lie. Here are the areas with the best average monthly sales increase in Q1 2009:

1) 90210 - Beverly Hills - 29% increase
2) 90068 - Hollywood Hills - 10% increase
3) 90026 - Silver Lake/Echo Park - 10% increase
4) 91601 - North Hollywood - 5% increase
5) 90064 - Cheviot Hills/Rancho Park - 4% increase
6) 90039 - Silver Lake/Atwater - 3% increase

That's it.

No other zip codes in the areas we cover saw increases. Maybe home buyers in the best areas of Los Angeles are still too afraid. Or prices are too high. Or both.

Areas in Los Angeles with Relatively Low Housing Inventory

chrishain@hotmail.com (Christopher Hain) — Mon, 27 Apr 2009 07:01:00 +0000

There are a few areas in the core Los Angeles area where single family housing inventory is currently relatively low.

Now, we’re not talking rapid selling hot spots like the good ole days. But these areas all currently* have housing inventory of 5-7 months:

90026 – Silver Lake/Echo Park – 5 months
91601 – North Hollywood – 5 months
91607 – Valley Village – 5 months
90039 – Silverlake/Atwater – 5 months
90004 – Hancock Park – 7 months
91316 – Encino – 7 months
90035 – S. Robertson/S. Carthay – 7 months
90064 – Cheviot Hills/Rancho Park – 7 months

*Active SFRs as of April 22, 2008
SOURCE: Original Research from CLAW MLS

Californians Using Up Housing Tax Credit

chrishain@hotmail.com (Christopher Hain) — Sun, 26 Apr 2009 07:01:00 +0000

Eight weeks into the $10,000 State of California tax credit – and the money is rapidly being used up.

Homebuyers have apparently flocked to the tax credit. According to the California Franchise Tax Board, already $40 million of the $100 million allocated for the tax credit has been spoken for.

At this rate, the tax credit will be completely gone by July 15th.

The great thing about this tax credit is that it can actually be combined with the $8,000 tax credit the federal government is giving out.

When you consider these two tax credits, plus the super-low interest rates, in many cases you might be better off to buy a new home now than to wait for prices to fall.

We all know that when you’re buying a home, you’re really signing up for a loan. So your total costs – cost of the loan, tax benefits – when buying a home are more important than small changes in the actual purchase price of the home.

For more information about the California Tax Credit: CLICK HERE

Forbes' New Luxury Housing Index

chrishain@hotmail.com (Christopher Hain) — Sun, 26 Apr 2009 03:12:00 +0000

Forbes Magazine has created a new "Luxury Housing Index" to track the real estate market in the 500 most expensive zip codes in the U.S.

Forbes rightly points out that most housing indexes cover too many segments with too broad of a brush. As we know, all real estate is local. Or as they point out about San Francisco:

The San Francisco MSA, for example, might be down 20%, but that number includes prices in the city of San Francisco, where properties generally hold their value; Vallejo, a bankrupt city in the North Bay; Oakland, which has been devastated by foreclosures, and depending on the index you use, San Jose--a city of over 1 million people on its own.

Forbes says they plan to update it weekly. But as I've repeated time and time again, it really only makes sense to track these things quarterly. Their first chart proves the point. One month moves are totally misleading:

Los Angeles Housing Inventory’s Scary Outlook

chrishain@hotmail.com (Christopher Hain) — Sat, 25 Apr 2009 22:30:00 +0000

For the best areas of Los Angeles, sales in the 4th Quarter of 2008 plummeted – along with the stock market, consumer confidence, the number of Americans with jobs and the entire global economy.

So the massive oversupply of single-family homes in these areas in Q4 ‘08 probably wasn’t surprising. (See HERE.)

But this year, we’ve got a new administration, the banks have almost-free money and some of them (Wells Fargo) are actually using it to make loans.

But how are things going this year in Beverly Hills, Malibu, Bel-Air, Brentwood and the like?

Not good.

That is, at least from an inventory standpoint, for the most part, the supply of unsold homes has grown.

Malibu continues to have the most number of unsold homes on the market relative to the average number of sales occurring per month. There is 40 months of inventory in Malibu. This kind of massive number (6 months is good) typically suggests two things: 1) Prices are still headed down in Malibu, 2) Recovery is still a ways off.

The same can be said for: Santa Monica (especially North of Montana and between Wilshire and Montana), Venice, Bel-Air, Beverly Hills and West Hollywood.

Here are the areas with the most unsold inventory:

CURRENT INVENTORY

Location	Zip	Active Listings*	Months of Inventory*	Months of Inventory (at the end of January)
Malibu	90265	334	40 months	27 months
Santa Monica (N. of Montana)	90402	57	34 months	7 months
Venice	90272	113	31 months	11 months
Santa Monica (Wilshire to Montana)	90403	20	30 months	14 months
Bel-Air/Holmby Hills	90077	109	30 months	20 months
Beverly Hills	90210	231	26 months	26 months
Beverly Hills SE	90211	23	23 months	25 months
West Hollywood	90069	131	22 months	21 months
Hollywood Hills West	90046	155	21 months	10 months
Santa Monica	90405	49	21 months	8 months
Pacific Palisades	90272	174	20 months	13 months

*Active SFRs as of April 22, 2009
**Single Family Residences
SOURCE: Original Research from CLAW MLS

I'm sorry, but those numbers are downright scary.

However, here's a few points to make.

Santa Monica has been hit really hard with an oversupply of houses relative to very few sales. It went from good to bad quickly. At the same time, 90402 and 90403 are small, desireable areas so it's possible for these small areas to turn around quickly. For now, Santa Monica isn't headed in a good direction.

Venice appears to be rapidly climbing up the oversupply, but in my own opinion, having looked at a number of houses in the area over the past year, I think there's fewer desirable properties compared with a year or even six months ago.

Beverly Hills saw a big increase in sales in March and there's been a few high-dollar sales (including what had been the best house on the market, IMO.) We'll see if the positive news in Beverly Hills becomes a positive trend...

Malibu. Oh, Malibu. Prices will have to come down, down, down there. If anyone has any rational argument as to why Malibu prices are not headed off a cliff, please let me know.

Finally, two truisms:

There absolutely are some crazy good deals out there.

There are ways to sell your home even in this market. It just takes some special strategies.

Los Angeles housing inventory rising

noreply@blogger.com (Christopher Hain) — Wed, 22 Apr 2009 07:22:00 +0000

It's time for another quarterly update of single-family housing inventory around the core parts of Los Angeles.

And not surprisingly, there's not much to like in the numbers.

Readers of this blog may know that I like to track real estate numbers on a quarterly rather than monthly basis.

Overall in the core areas we cover -- downtown to the ocean and the southern San Fernando Valley (Toluca Lake to Encino) -- inventory is up 15% over three months ago.

In some areas, the numbers are quite dramatic:

90405 Santa Monica -- up 58%
90024 Westwood -- up 45%
90403 Santa Monica -- up 43%
91607 Valley Village -- up 33%
90210 Beverly Hills -- up 29%
90077 Bel Air/Holmby Hills -- up 28%
91602 Toluca Lake -- up 25%

Obviously, these kind of increases do not bode well for suggestions that prices will stabilize in these areas in the short term. These kind of inventory increases suggest prices may still be headed down in these areas.

In my next post, I'll examine the inventory numbers relative to sales figures for the three months of the year to give even better insight into where the market is headed in the best areas of Los Angeles.

Stay tuned, subscribed, or RSSed.

Christopher in Business Week again...

noreply@blogger.com (Christopher Hain) — Fri, 27 Mar 2009 05:35:00 +0000

Business Week this week outlined the tremendous decreases in luxury housing that has happened in the past six months.

And they turned to me to add insight to their story:

Christopher Hain, real estate agent for Ramsey-Shilling in Hollywood, said high-end buyers are starting to drop prices because very few big-ticket homes are selling.
"When things don't sell, there is downward pressure on prices," Hain said. "But at least you don't have the added pressure that you have in the lower-end markets of a flood of foreclosures, which can become a double whammy…. A lot of these people can wait things out."
Read the full story: Luxury Homes Are Lingering on the Market

Indeed, for much of 2008 as housing prices headed down, down, down, prices and sales in the nicest areas remained relatively stronger. And TerraFirmaLA chronicled this. But we also chronicled the dramatic halt in sales of Los Angeles' most expensive luxury homes that ocurred when the banking crisis deepened in late 2008:

Eight-Figure Home Sales Crater

As always, we remain on top of the larger trends in luxury housing as well as the even-more-important, neighborhood-by-neighborhood micro trends.

The meltdown of America

chrishain@hotmail.com (Christopher Hain) — Tue, 17 Feb 2009 08:28:00 +0000

If you are concerned about how bad things really are in this country, watch or set your DVR to record FRONTLINE tonight on PBS.

I often hear people complain about the billions (soon to be trillions) being spent by the government on banks, propping up Wall Street or the auto industry, or all the money in the stimulus package and I assume these people must not understand what has happened to the financial system -- and thus the economy -- of the good ole U.S. of A.

If they did understand, I think they would complain, instead, that it's not enough.

We all know the country is suffering, jobs are being lost, stock market is falling, but unless you understand what has happened to the financial system, you don't quite understand how serious this situation really is.

The major banks of this country no longer exist.

At least, they no longer exist in the way you've thought about a bank most of your life. The major banks are essentially insolvent. The ones that haven't failed, will fail. The only money left is government money and it's not enough to keep them going.

We have kept them alive for a few months. We had to. We needed to give ourselves a chance to save things by trying to come up with some kind of economic stimulus, plans to fix the financial system (or have the government take over) and maybe start to do something about the problem that started it all: housing. It's all going to get worse if more isn't done.

The economy of this country was on the brink of total collapse when Lehman Brothers failed, the first round of TARP kept that from happening ... for a while.

Don't believe me? Watch the show tonight. Here's a preview below:

Top 10 Real Estate Deals in Los Angeles

noreply@blogger.com (Christopher Hain) — Tue, 10 Feb 2009 06:35:00 +0000

I just finished my first monthly post for an interesting website called TopTenRealEstateDeals.com. They asked. I figured: Why not? I like making lists anyway.

Here's my debut: Los Angeles Luxury Real Estate and Condos

But if you're too impatient to click, here's the Top 3 of my Top 10:

1. Downtown condo with designer furniture included – $499,000 – 1155 S. Grand Avenue, Unit #913, Los Angeles – Studio, 1 BA, 726 sq. ft EVO, the new luxury, green downtown high-rise near the Staples Center has put together a great deal on one of their studio condos. They lowered the price $50,000 and are throwing in $45,000 worth of designer furniture.

2. Downtown loft from resort developer – $364,900 – 510 S. Hewitt St., Unit #416, Los Angeles – Loft, 1 BA, 916 sq. ft. – This is the best bargain in the best selling downtown project, Barker Block. And the Arts District is undergoing an amazing transformation – an Urth Caffé just opened up across the street from the Barker Block.

3. Luxury Home in the Heart of Cheviot Hills – $1.649 million – 10326 Walavista Rd., Los Angeles – 5 BR, 5.5 BA, 4,500 sq. ft. – This home has been completely remodeled and is going for an amazing price. Honestly, it’s worth more than this even in this market. Cheviot Hills is a great neighborhood just south of Beverly Hills and Century City that is close to FOX Studios, freeways and is very quick to the ocean. This house is spectacularly finished. Really, buy this and the woman in your life will feel like a princess. It’s near the freeway but totally shielded from it. It’s got a pool and is really underpriced for a home of this quality in this part of time.

Los Angeles Housing Value Reality

noreply@blogger.com (Christopher Hain) — Wed, 28 Jan 2009 08:51:00 +0000

OK, let’s talk some tough reality about real estate values, Los Angeles.

If you bought residential real estate in 2008, 2007 or 2006 in California, your property is most likely worth less than what you paid for it. (This happens to be true for most locations between the Pacific Ocean and the Atlantic Ocean, too.)

That goes for good neighborhoods and bad – Beverly Hills or Pacoima.

And if you didn’t have a large down payment on your house, your property is quite likely worth less than what you owe on the property.

(Sigh.)

This is precisely why our economy has collapsed. (Heavier sigh)

OK, so let’s deal with this reality. How long will it take until you get back to the break even point?

It won’t happen this year.

2010? Probably not.

2011? Maybe.

Our best hope for this year is that housing prices in Los Angeles stop going down.

Then, it will take some time for housing values to get back to where they were in 2006 and 2007. Time measured in years – not months.

I say this because if you are trying to sell your house, you need to be realistic about what it’s worth. If you’re not realistic – and you really, truly do need to sell your house – you are simply going to lose money by holding out hope that you can sell for more than the market will bear. This is not the market to “hang on.” This is the market to cut your losses.

And many agents who want to list your home will not tell you this truth.

They will prey upon your hopes. They will tell you that you can sell your house for more than reality. You will probably listen. And then you will have to cut the price on your home. But that price cut won’t be enough. And then you’ll have to cut more. And maybe that price cut will be enough, but probably not. And you will end up selling your home for less than you could have in the beginning by pricing your home smartly and aggressively.

Again, this is not the market to stubbornly hold to what you “need to get” from your home. This is the market to get what you can.

You don’t have to believe me. But there are many other people who didn’t want to believe, and they ended up getting nothing for their home.

Am I trying to scare you?

Yes.

I also believe there are smart things you can do to improve your chance of selling your house, to sell your house sooner, and yes, to get more money for it than you otherwise would.

It involves first and foremost: Confronting reality with a competitive pricing strategy. Then, it involves a smart marketing plan that gets more people in to see your house. Finally, it involves savvy but not stubborn negotiating. All these things are what I help you do.

Finally, if you’re in a buying mood, there is a bright side if you’ve got money. The massive declines in home values mean there’s some bargains at a time when interest rates are really low. Some people are starting to notice this and take advantage. From Business Week (1/27/09):

But in the worst markets, including Miami, Phoenix, Los Angeles, San Diego, and Las Vegas, the year-over-year price declines—though deep—have remained relatively flat since the summer. A wave of foreclosures has depressed prices so much in those markets that investors and other first-time home buyers have moved in to scoop up bargains. According to a survey released on Jan. 26 by the National Association of Realtors, sales of existing single-family homes jumped an unexpected 7% in December from November's seasonally adjusted annual rate.

It may even be a smart move to sell a smaller house and buy a bigger one. The hope is that you can get enough of a bargain on the bigger house to more than make up for what you’re losing on the smaller house.

But first and foremost, you have to be realistic about the value of what you’re selling.

President Obama, Fix Housing First

chrishain@hotmail.com (Christopher Hain) — Tue, 27 Jan 2009 08:05:00 +0000

Dear President Obama,

I feel that you are off to an excellent start in your first week and believe you are well on your way to successfully addressing a host of problems facing this country and the world.

However, I am afraid much of your work will be undermined if you do not first address a problem that is the root cause of many of the economic problems our country is now facing: The declining U.S. Housing Market.

We have gotten to a point where the prospect of significant further free-market correction in the U.S. housing market is not only too painful to American society but has damaging effects on the entire world. One of the big three banks -- Citi, B of A or JPMorgan Chase -- is almost assured to fail given the declining mortgage assets on their books. And that will make the failure of the other two even more likely. Serious intervention must be undertaken to stabilize the housing market, which is the root cause of these bad assets.

The reason we're in this position is because the government failed to regulate and protect American investors -- and citizens -- from the outrageous financial derivitives that were created. Government action must be taken to compensate for previous inaction. That's you now!
First, President Obama, you should take action on an idea that is gaining popularity -- except with your newly approved Treasury Secretary -- to create a "First National Bank of Bad Assets" with that remaining TARP money (which is kind of what we all thought TARP was going to be used for in the first place, and why many people supported it).

Secondly, you should support an idea that I heard suggested today by CNBC's Jim Cramer, and is sure to be a big hit with those pesky Republicans: A tax credit to stimulate purchases of existing homes to clear the excess housing inventory.

OK, President Obama, there's my two cents. My sense is you have about two minutes to get this done.

Warmest regards,
Christopher Hain
Los Angeles, CA

Where sales are strong right now in Los Angeles

chrishain@hotmail.com (Christopher Hain) — Mon, 26 Jan 2009 10:31:00 +0000

After crunching the numbers on single-family home sales and inventory for the 4th Quarter of 2008 (and peeking at how January is going), I’ve spotted a few areas of Los Angeles that have some encouraging signs.

All five of these five zip codes seem to have good sales trends going for them in recent months and have low unsold housing inventory relative to other areas of town.

1) 90048 – Beverly Grove/West Hollywood – Still the best, most consistent neighborhood in town. Sales were up Q4 over Q3. Sales were up December over November. January is looking good. A normal six months of inventory.

2) 91607 – Valley Village/North Hollywood – Up sharply in December and in the 4th Quarter. It has only two months of inventory, but sales are very slow in January.

3) 90064 – Cheviot Hills/Rancho Park – Sales were up in December and are looking great in January. 4th Quarter overall was down. A manageable 7 months of inventory.

4) 90035 – S. Robertson/Carthay – Sales up strong in December and look strong in January. 4th Quarter was barely down over 3rd quarter. A good 5 months of inventory.

5) 90027 – Los Feliz – A huge spike in sales in December has cooled thus far in January. The 4th quarter was down minimally compared with Q3. Inventory is 7 months.

The biggest overall conclusion I think you can draw from this is that the areas east and south of Beverly Hills – 90048, 90035, 90064 – are holding up quite well. People are buying in these areas despite the economy. This is just a tremendously desirable area to live and is still affordable relative to other areas nearby.

Where NOT to buy right now in Los Angeles

chrishain@hotmail.com (Christopher Hain) — Mon, 26 Jan 2009 06:11:00 +0000

Once again, I’ve crunched the numbers on single-family housing inventory in the prime zip codes of Los Angeles. And the numbers are very clear. The areas of town with the most unsold homes are unequivocally the very best areas of town.

For much of this real estate downturn, the best areas of Los Angeles were less impacted. But in the second half of 2008 – and especially the 4th Quarter of 2008 – that no longer remained the case. I wrote in December about how sales of the city’s $10-million-plus homes had dropped off a cliff since the end of July. (See HERE). But now there’s even more evidence that the best areas of town are suffering the most right now.

Here are the areas with the most unsold homes* calculated by the number of months it will take to sell them:

1. Malibu (90265) – 27 months of inventory
2. Beverly Hills (90210) – 26 months of inventory
3. Beverly Hills SE (90211) – 25 months of inventory
4. West Hollywood (90069) – 21 months of inventory
5. Bel Air/Holmby Hills (90077) – 20 months of inventory
6. Brentwood (90049) – 17 months of inventory

I hate to say it, but this kind of excess unsold inventory can only mean one thing: Downward pressure on prices.

Now, this does not mean there’s not some screaming good deals in these areas. There are. In fact, there are some great deals in these areas precisely because things aren’t selling, and I can point out a few deals, if you’d like.

But this also means you need to pay extra attention to what you’re buying in these areas. Unless you truly are getting a great deal, you might want to wait to buy because the general values of housing in these areas are likely still headed down.

And if you're selling a home in these areas right now, you're likely going to have to both lower your price AND do more marketing to attract attention. (Of course, that's what I do.)

Too many homes. Too few buyers. It’s simple math.
=======================================================================
*To calculate, I gathered the number of active listings for each zip code as of January 25, 2009. I averaged the number of monthly sales in October, November and December, and divided that number into the active listings. The source was the CLAW and SRAR multiple listing services.

Downtown's counter economy

chrishain@hotmail.com (Christopher Hain) — Sat, 24 Jan 2009 21:22:00 +0000

I've been spending a lot of time downtown lately, and maybe I'm crazy, but I seem to be seeing an economic trend that is counter to what's going on everywhere else.

For years, downtown Los Angeles has been the embarassing step-child of the rest of Los Angeles.

But the real estate boom has seemed to create something that hasn't slowed down, and doesn't really seem to be slowing down. And when you think about what's still coming, downtown could really end up being a bright spot in this recession.

Here's what I mean:

1) There was a building boom in downtown condos. Many have now gone rental because they can't sell to people who can't get loans, and prices for the remaining condos have come way down.

2) But regardless -- owners or renters -- this unit boom brought many more residents downtown.

3) There wasn't enough retail to serve these residents. And it was slow to develop. Much of this retail is just coming into downtown, and this retail expansion is continuing unabated despite the economic downturn. That's why:

* More than a dozen restaurants open downtown in the last two months of 2008.

* That's why there's tremendous lines at the L.A. Live restaurants.

* That's why Famima! seems to opening new stores constantly.

That's why Urth Caffe just opened at the Barker Block and has already expanded its hours

4)All this new stuff has really made downtown even more attractive as a place to live. That's why, even in this economy, there seems to be a counter-trend with some buildings in downtown:

* EVO sales strong
* EVO closes priciest dowtown condo ever
* Gas Company Lofts planning to go from rental to sale

5) And downtown residents will invariably tell you there's still a need for more retail downtown.

I don't know about you, but whenever people talked about L.A. Live as the "Times Square of the West," I just rolled my eyes. But when you see things like the following, clearly something has been created downtown and it isn't going away:

* Thousands Turn Out for Inauguration Event at L.A. Live

The truth is, if you believe in this downtown momentum will continue, there are tremendous deals in downtown right now, not only for residential real estate but also for future development projects. If I had the cash, I would buy one of a number of lots for a boutique hotel. But like I said, maybe I'm crazy.

Home Remodeling Costs vs. Property Value Increase

chrishain@hotmail.com (Christopher Hain) — Sat, 03 Jan 2009 03:28:00 +0000

Part of my role when I was doing the show for HGTV was to provide the prospective homeowners with my thoughts on which remodeling projects would have the most benefits when it came time to re-sell their home.

As a real estate agent who sees many homes for sale, many remodeling projects and hears constantly what buyers want and what they don't want, I feel I have a good instinct for this kind of thing.

But it always helps to have numbers to back you up.

In preparing for the show, I used a great report put out by Remodeling Magazine. The report shows the average costs of various remodeling projects in various regions and cities throughout the country. It also reports what percentage of the remodeling cost people generally get back when they go to sell, also broken down by regions and even cities.

During the housing boom, this was great information to know because almost everybody wanted to buy a fixer-upper, put in the time and money and re-sell. But even though fewer people are buying fixer uppers these days, it's still important information to know.

If you must sell your property in this market, you really do want to fix it up, if you can afford to. Buyers these days don't want to buy properties needing a lot of work. Fewer can afford to pay for repairs. Banks are less likely to loan money for repairs. The loan that many used to fix up their home -- the Home Equity Line of Credit -- is all but forgotten in this market. So if you want to sell, you have to fix up. Problem is, you'll get less for your effort and expense.

And that makes a report like the Remodeling magazine Cost vs. Value report even more valuable.

You can get the national or regional information at the Remodeling magazine website, or you can give the company a little information about yourself and download city specific information. Here's the link for: Los Angeles Remodeling Information.

More doom and gloom...

chrishain@hotmail.com (Christopher Hain) — Tue, 30 Dec 2008 07:30:00 +0000

Here's some of the recent dreary, depressing views on the state of the economy and real estate:

1) L.A. is already the worst and will get worse still. According to Fortune magazine, L.A. is the worst housing market for 2009. Well, 2008 wasn't too grand, my friends.

2) In the WSJ on Monday, a Russian professor predicts the end of the old U.S. of A. Hmm, hasn't that long been the dream of many Russians.

3) "The Black Swan" author Nassim Nicholas Taleb (start watching at 15:30) said about the same on Charlie Rose earlier in the month. (To me, he often seems to be making it up as he goes along).

When I start to hear so many people jumping on the doomsday bandwagon, I wonder if some are stretching their ideas beyond the boundaries of reality. There are terrible things and terrible trends going on in this economy. But instead of "irrational exuberance" have we hit the point of "irrational discouragement" with statements like this?

I don't know the answer, but I certainly agree with this quote from a RE developer today in the San Francisco Chronicle: "...in the long-term, we're going to find that real estate in the infill areas of San Francisco and Los Angeles will be harder to penetrate and more valuable."

2008: The Year in Los Angeles Condos

noreply@blogger.com (Christopher Hain) — Fri, 26 Dec 2008 03:30:00 +0000

2008 was not a pretty year for condos in Los Angeles.

It wasn't a pretty year for real estate in Los Angeles in general. But condos were hit especially hard. Among the many reasons for this, two loomed large. One, recent years saw a boom in condo building, many which were just coming available in 2007 and 2008. Two, the ideal buyers for many of these condos would have been buyers with lesser incomes and lesser downpayments -- a market which evaporated when the credit crisis hit in late 2007.

In many prime areas of Los Angeles, condo prices were still holding relatively strong in the early part of 2007, but then dropped once the loan problems hit. Those drops in prices continued throughout 2008, and took another big hit at the end of this year when the rest of the U.S. economy collapsed.

Overall, condos in prime Los Angeles areas* were selling on average at $583 per square foot in the second quarter of 2007. But that number has fallen to $485 per square foot in the fourth quarter of 2008, according to sales reported in the MLS.**

This pattern was true for most neighborhoods. But some neighborhoods were hit harder than others.

I analyzed condo sale prices per square foot in some of Los Angeles' best neighborhoods. I looked at them on a quarterly basis because I think it makes no sense to look at monthly pricing trends. It's too short of a time period to gauge any meaningful changes when the average escrow lasts a month.

The areas that held their prices the best were 90048 (Beverly Grove), 90067 (Century City), 90404 (Santa Monica), and 90064 (Cheviot Hills/Rancho Park).

The areas that were hit the hardest: Downtown and Beverly Hills.

You could read either end of this chart in completely opposite ways. Perhaps, the ones that have fallen furthest are the ones you want to buy in 2009. Or perhaps, the ones that have held their value best are the ones to bet on long-term.

By looking at additional figures to these sales trends -- rate of sales in a given neighborhood, available inventory and the number of foreclosures -- I have my own opinion about which condo markets you might want to consider buying in 2009, and which you might want to wait. But I certainly could be wrong.

Truthfully, nobody knows for sure what's going to happen to condo sales in 2009.

* For this report, prime Los Angeles areas included: Beverly Hills, Sunset Strip, Bel Air, Westwood, Century City, Brentwood, West L.A., Cheviot Hills/Rancho Park, West Hollywood, Venice, Marina Del Rey, Santa Monica, Pacific Palisades, Beverly Grove, Miracle Mile, Hollywood, Silver Lake, Echo Park, Los Feliz, Hollywood Hills, Malibu and Downtown.

**The numbers come from the MLS. This means some new condo sales are excluded as many builders don't list all their condos in the MLS. But I think relying on MLS data gives a good indication of the overall condo market, as it includes both new condos and re-sales.

When will housing prices bottom?

noreply@blogger.com (Christopher Hain) — Sun, 21 Dec 2008 14:49:00 +0000

When will housing prices bottom? When will the housing market recover? Those are the questions everyone who works in real estate, owns a home or wants to buy one wants to know.

Things have gotten so scary in this economy, that answering these questions have become the only way many people would even think of buying real estate right now.

Obviously, there's some good reasons to buy real estate right now. Prices have come down so much that everybody is thinking about it (NY Times Story). But many people are doing nothing more than thinking. Fear is holding them back. True, if you're having trouble qualifying for a loan, that will hold you back, too. But if you have the money and aren't buying amid this severe drop in housing prices and the historically low interest rates, fear must be the only reason.

But it's a very, very good reason. So let's look at some new and some old predictions about where real estate is headed from here.

Let's start with Doctor Doom.

NYU Professor Nouriel Roubini famously predicted the economic problems we're now facing -- even when nobody else was listening to him. He has answered the question in two ways:

1) Because housing (overall) doubled, Roubini says it needs to come down 50%. If you account for inflation, this means a drop in real dollars of 40%, he says. So housing prices have dropped 25%, and Roubini expects another 15-20%. (In the Greater Los Angeles region, prices overall have fallen 44 percent and many things are much more affordable. But this of course means some areas are above and some are below this. Some have farther to fall, some probably don't have much more to go, it's just a question of how long before they rebound. But if you're buying long term, then that's less of a concern.)

2) Roubini has thoughts on just how long this downturn will last: "My view is that that recession is going to continue at least through the end of 2009 ... If our policy reaction is appropriate, by 2010 there will be some recovery of growth." (For more from Roubini, CLICK HERE)

Chris Thornberg, founder of Los Angeles research firm Beacon Economics, predicts that housing prices will fall another 10-15%. As does Patrick Duffy, principal for MetroIntelligence Real Estate Advisors. (MORE)

Then, there's Sam Zell, the beleagured Tribune Company owner, who seems to know little about newspapering, but has an amazing track record with real estate. He's a tad more optimistic on timing than Roubini: "I believe ... we will see the first signs of equilibrium in the housing market in the spring of 2009 and I will expect by spring 2010 the housing market in the U.S. will look a lot better." (MORE) -- (Side note: I wonder if he still goes on his yearly motorcycle trek through Italy. If not, I'll be happy to go to keep his place)

The UCLA Anderson Forecast was previously more optimistic than things ended up. At the height of the real estate market in December 2005, they predicted cooling real estate but no recession. Their gloomier report earlier this month says: "The outlook for California calls for a very weak first three quarters of 2009, with the glimmer of a recovery in the fourth quarter."

OK, so the consensus of these three very different sources is that things may start to get better later in 2009 and very likely get better in 2010.

Wait a second.

Wasn't that the same thing many were predicting before the stock market, banking system, world economy, auto industry, retail sector and everyone else collapsed?

You mean to tell me that maybe all this unprecedented pain, this unheard of economic catastrophe is still on track for the same recovery timeline?

SEE MY POST FROM JANUARY (And remember, this is before any of the credit crisis spread beyond housing.)

Hmm.

I have not been the least bit optimistic about things this year -- particularly, real estate -- SEE MY OWN QUOTE IN THE L.A. TIMES HERE.

But maybe this isn't the end of the world. Maybe there really is light at the end of this tunnel.

And maybe it really is time to buy something -- before it becomes obvious to everyone else.

Hmm.

Blaming the right people for housing ills

noreply@blogger.com (Christopher Hain) — Sun, 21 Dec 2008 04:30:00 +0000

As this country examines the causes of the Great Real Estate Bubble and attempts to place blame on the shoulders of those who acted irresponsibly and led us into the Great Real Estate Collapse, it's important to keep perspective.

There were many things that contributed in small ways and large ways to the Great Real Estate Bubble. But not everything that was done was bad.

A key example comes to mind after reading the recent NY Times article about the role of the Clinton-Republican capital gains tax cut on real estate in 1997: SEE STORY HERE

Clearly, this policy change caused an increased interest in buying real estate. But that's not a bad thing.

Remember, many policy initiatives such as this one, or some revised lending policies by Fannie and Freddie were not done out of greed. These policies were DESIGNED to encourage and promote home ownership. Policy makers believed that increasing home ownership was a good thing and policies should be changed to encourage it. Increasing home ownership is NOT a bad thing. It should be encouraged. And some policies that encourage home ownership are a good thing, a very good, undeniably good thing.

The problems we're dealing with now were not caused because more people DESIRED to buy and sell real estate. They were not caused because more people could benefit tax-wise from buying and selling real estate. They were not caused because more people could make more money in real estate.

The problem with the real estate bubble was caused because people who should not be buying real estate were able to get loans they never should have gotten.

The problem came from lenders and Wall Street. Lenders created unconscionable loan products. And Wall Street found new ways to securitize them. This was the GREED factor. This was where things went wrong. Promoting increased home ownership and giving a tax break to do so is not a bad thing. Selling crazy loans that borrowers could never really pay back and re-selling them as securities is bad thing.

That was greed. That was dishonesty. That was wrong. That, my friends, was the problem.

8-Figure Home Sales Crater

noreply@blogger.com (Christopher Hain) — Sun, 14 Dec 2008 03:26:00 +0000

The mega mansions of Los Angeles have taken a big hit.

In an indication of just how far and how fast our economy has fallen, sales of 8-figure homes – those priced $10 million and above – have fallen tremendously in the second half of this year.

For much of the year – while the rest of the world suffered – the mega-mansions of L.A. continued selling. Through the first quarter of 2008, sales of $10 million homes were on a record pace. Even through the first half of this year, sales of $10 million+ homes were still on record pace. But since July 29th, just one home has sold for $10 million or more, according to the Combined Los Angeles-Westside MLS. This includes the prime areas of Beverly Hills, Bel-Air, Malibu and Brentwood.

That home was the unfinished mansion at 37 Beverly Park, which was originally listed for $49 million but ended up selling for $36.7 million.

One other home – “The Esquire House” at 1859 N. Doheny in the Sunset Strip – sold but didn’t report a price. (It was listed at $11.5 million.) One home – 12300 Mulholland – just went into escrow this week (listed at $15.9 million).

Even with those, it’s a sad case of the Nobody’s Buying Blues for L.A.'s most expensive homes.

To emphasize, January through July of 2008 there were 26 sales of $10 million or more. August 1st to today: there were 2 (and 1 more pending). 26 vs. 2. Whoa!

The upside of this is that (and I don't mean to sound like a real estate agent here, but...): There’s some great deals out there. Seriously. You'll see.

The people I talk with frequently already know that I think there’s one very special mega mansion that happens to be caught in this crazy market and is a downright steal right now at $35 million. There are others beyond that. There are still more where frustrated owners have taken their homes off the market (or tried to lease them) but would like to sell.

Want some numbers? My blog readers always want some numbers. So here goes. There are 106 separate properties in the CLAW-MLS areas listed at $10 million or more. At the rate they’ve been selling the last 5 months (3 total), it’s going to take nearly 15 years to sell them all. And if you include the outlying areas of L.A., there’s more than 100 more properties. Is this the end of the world?

No. There’s still a lot of people with a lot of money in this town. And still more who want to live in the greatest city on earth. Sales will pick up again. But these kind of irrationally slow sales can only suggest that, yes, there are some real deals to be had among even the highest priced homes in L.A. There I go, sounding like a real estate agent again. (Hey, at least there’s some numbers to back it up.)

And I even believe there are ways to increase your chances of selling your home in this market -- even when it appears nobody but nobody is buying. But to do that, your agent will have to do more than the usual to get your home sold. It involves some very simple but very effective (just not cheap) strategies that most luxury real estate agents don’t do. And a few things homeowners might not like, too.

So yes, write it down, things are dismal right now, even for the most expensive homes. But it simply can’t stay this bad for long.

Location	Listings With Price Reductions	Average Listing Price	Average Reduction	Average Reduction Off Original Price
Beverly Hills	28%	$3,900,983	$680,725	15%
Los Angeles	33%	$1,054,715	$143,135	13%
Manhattan Beach	25%	$2,107,261	$240,468	10%
Burbank	28%	$619,838	$69,200	10%
Santa Monica	28%	$1,499,881	$147,219	9%
Pasadena	31%	$1,053,590	$101,712	9%
Culver City	29%	$625,900	$56,486	8%