With the high inventory of homes on the market, and an average time on the market of about 50 days for an existing single-family home in California, buyers have more room to negotiate. Although sale price is a large factor during the negotiation process, many REALTORS® are advising their clients that the motto of “it doesn’t hurt to ask” can be used to negotiate other contingencies, such as inspection reports, closing costs, and the like.

KEEP THIS IN MIND

• While there are many homes to choose from, buyers should understand that homes in many affluent neighborhoods are still selling quickly, and in some cases also are garnering multiple offers. Experts advise that a buyer work with their REALTOR® when negotiating the sale price, and also to ensure the offer is realistic when serious about purchasing a home in one of these communities.

• Buyers who are looking for the best-deal possible should consider homes that have been on the market for longer than is typical for their area and whose listing price has remained unchanged. Buyers also should consider making second offers on homes that the seller may have initally rejected. Due to seasonality and the length of time the home has been on the market, some sellers may accept a lower offer than they originally planned.

• In addition to the sale price, some REALTORS® are advising sellers to negotiate on inspection reports. In today’s market, some sellers may be more willing to pay to repair, or negotiate credit for repairs that arise during the home inspection.

To read the full story, please click here:
http://www.sfgate.com/cgibin/article.cgi?f=/c/a/2008/09/07/RE8812NL7U.DTL&hw=Marni+Kottle&sn=001&sc=1000

Three Bedrooms
1.75 Baths

Living Room
Dining Area
Family Room
Breakfast Bar
Patio
Laundry Area
Large 2-Car Garage

Square Feet: 1,755 (Per Assessor)
Lot Size: 7,632 sq.ft. (Per Assessor)
Year Built: 1962

Lovely traditional 3-bedroom, 1.75 bath home on quiet, friendly street. Beautiful double door entry door. Beautiful hardwood floors in living room, family room, dining area, all bedrooms, and hallway. Living room and family room ceilings wired for future ceiling fan, recessed lighting, etc. Master suite has mirrored closets, closet organizers, spacious dressing area, 3/4 bath. Family room has warm paneling, built-in bookshelves, and new sliding glass door to backyard. Dining room has large picture window with view of backyard. Updated kitchen has lots of storage cabinets, granite countertops, refaced cabinets (including cabinets for vertical storage), stainless electric range and refrigerator, large double sink, breakfast bar, extra-large broom closet. Oversized two-car garage with new garage door opener. New vinyl windows throughout, new copper plumbing, new electrical, new rain gutters, bolted foundation. Spacious backyard has gazebo with swing, wisteria vine.

KEEP THIS IN MIND

• New housing starts fell to 975,000 in April, from a peak of 2.27 million in January 2006. In the past 35 years, new housing starts have dropped from more than two million to less than one million only three other times. In each of those cases, the housing market rebounded within one quarter, according to Karl Case, co-developer of The Standard and Poor’s S&P/Case-Shiller Home Price Indices.

• Although home prices decreased 15.8 percent year-over-year in May, they have only decreased 0.9 percent on a month-over-month comparison. This is the smallest monthly decrease since September 2007 and another sign that the housing market is in recovery mode, according to Case.

To read the full story, please click here:

http://www.reuters.com/article/reutersEdge/idUSN0448581620080812

KEEP THIS IN MIND

• Although California leads the nation in foreclosures, the state’s foreclosure process is more efficient than other states, which likely will lead to a quicker rebound. Foreclosed properties are receiving multiple bids and financial institutions are selling these homes quicker than the market would typically allow.

• The Unsold Inventory Index in June decreased to 7.7 months from 10.2 months a year earlier, demonstrating that the market is improving.

To read the full story, please click here: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aAL047pyn7t4

“Statewide home sales remained above the 400,000 level for the second month in a row, and up nearly 18 percent from a year ago,” said C.A.R. President William E. Brown. “Following a 30-month string of year-to-year percentage decreases that began in October 2005, sales last month also posted their third consecutive year-to-year gain.

“Sales were driven in part by large shares of deeply discounted distressed sales in many parts of the state,” he said. “With lower prices and favorable interest rates, affordability also has improved significantly in recent months, paving the way for many buyers to purchase their first home.”

Closed escrow sales of existing, single-family detached homes in California totaled 420,550 in June at a seasonally adjusted annualized rate, according to information collected by C.A.R. from more than 90 local REALTOR® associations statewide. Statewide home resale activity increased 17.5 percent from the revised 357,890 sales pace recorded in June 2007.

The statewide sales figure represents what the total number of homes sold during 2008 would be if sales maintained the June pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

The median price of an existing, single-family detached home in California during June 2008 was $368,250, a 37.7 percent decrease from the revised $591,280 median for June 2007, C.A.R. reported. The June 2008 median price fell 4.3 percent compared with May’s $384,840 median price.

“The significant declines in the median price over the past several months are largely due to a dramatic shift in the sales mix since the onset of the credit crunch and the increase in the share of distressed sales,” said C.A.R. Chief Economist Leslie Appleton-Young. “A year ago, the under $500,000 price range accounted for 40 percent of sales, the middle segment made up about 45 percent, and the over $1 million segment captured 15 percent of the market. As of June 2008, the shares had shifted to 67 percent, 24 percent, and 9 percent, respectively.”

Highlights of C.A.R.’s resale housing figures for June 2008:

• C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in June 2008 was 7.7 months, compared with 10.2 months (revised) for the same period a year ago. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.
• Thirty-year fixed-mortgage interest rates averaged 6.32 percent during June 2008, compared with 6.66 percent in June 2007, according to Freddie Mac. Adjustable-mortgage interest rates averaged 5.15 percent in June 2008, compared with 5.68 percent in June 2007.
• The median number of days it took to sell a single-family home was 49.1 days in June 2008, compared with 51.5 days (revised) for the same period a year ago.

Regional MLS sales and price information are contained in the tables that accompany this press release. Regional sales data are not adjusted to account for seasonal factors that can influence home sales. The MLS median price and sales data for detached homes are generated from a survey of more than 90 associations of REALTORS® throughout the state. MLS median price and sales data for condominiums are based on a survey of more than 60 associations. The median price for both detached homes and condominiums represents closed escrow sales.

In a separate report covering more localized statistics generated by C.A.R. and DataQuick Information Systems, 2.9 percent, or 11 out of 385 cities and communities, showed an increase in their respective median home prices from a year ago. DataQuick statistics are based on county records data rather than MLS information. DataQuick Information Systems is a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. (The top 10 lists are generated for incorporated cities with a minimum of 30 recorded sales in the month.)

Note: Large changes in local median home prices typically indicate both local home price appreciation, and often, large shifts in the composition of housing market activity. Some of the variations in median home prices for June may be exaggerated due to compositional changes in housing demand. The DataQuick tables listing median home prices in California cities and counties are accessible through C.A.R. Online at http://new.car.org/economics/historicalprices/2008medianprices/june2008medianprices/.

• Statewide, the 10 cities with the highest median home prices in California during June 2008 were: Manhattan Beach, $1,942,500; Los Altos, $1,595,000; Burlingame, $1,575,000; Newport Beach, $1,325,000; Mill Valley, $1,150,000; Los Gatos, $1,143,000; Cupertino, $1,072,500; San Carlos, $1,022,500; Danville, $965,000; Santa Barbara, $950,000.
• Statewide, the 10 cities with the greatest median home price increases in June 2008 compared with the same period a year ago were: Manhattan Beach, 49.4 percent; Cupertino, 33.3 percent; San Luis Obispo, 11.4 percent; Los Gatos, 3 percent; San Carlos, 1.5 percent; Sunnyvale, 1.4 percent; Ridgecrest, 1.4 percent; Campbell, 1.3 percent; Temple City, 0.9 percent; San Rafael, 0.8 percent.

Three Bedrooms
1.75 Baths

Living Room
Dining Area
Family Room
Breakfast Bar
Patio
Laundry Area
Large 2-Car Garage

Square Feet: 1,755 (Per Assessor)
Lot Size: 7,632 sq.ft. (Per Assessor)
Year Built: 1962

Lovely traditional 3-bedroom, 1.75 bath home on quiet, friendly street. Beautiful double door entry door. Beautiful hardwood floors in living room, family room, dining area, all bedrooms, and hallway. Living room and family room ceilings wired for future ceiling fan, recessed lighting, etc. Master suite has mirrored closets, closet organizers, spacious dressing area, 3/4 bath. Family room has warm paneling, built-in bookshelves, and new sliding glass door to backyard. Dining room has large picture window with view of backyard. Updated kitchen has lots of storage cabinets, granite countertops, refaced cabinets (including cabinets for vertical storage), stainless electric range and refrigerator, large double sink, breakfast bar, extra-large broom closet. Oversized two-car garage with new garage door opener. New vinyl windows throughout, new copper plumbing, new electrical, new rain gutters, bolted foundation. Spacious backyard has gazebo with swing, wisteria vine. 

From the Los Angeles Times

The financial burden of longer commutes makes homes in outlying areas that are already reeling even less attractive.

By Roger Vincent
Los Angeles Times Staff Writer

June 17, 2008

Rising gas prices may be the latest ailment afflicting the housing market, as figures released Monday showed Southern California home prices plunging 27% in May from a year ago and falling even more precipitously in distant suburbs.

Outlying areas like the Antelope Valley and the Inland Empire have long appealed to people who were willing to accept a burdensome commute for the chance to own a better house. But buyers are increasingly factoring gasoline costs into their purchase decisions, said Dan Griffith, a Rancho Cucamonga-based real estate agent.

“It seems like the money they can save in housing is being absorbed by higher gas costs, so they are a little reticent to commit,” Griffith said. “Gas is definitely beginning to be a concern.”

The median home sale price in six Southern California counties sank to $370,000 in May, down from $505,000 a year earlier, according to DataQuick Information Systems.

DataQuick said that was the biggest annual decline it has recorded since it began tracking prices in 1988. The last time the median was lower was in March 2004, when it was $364,000.

Price drops were especially steep in far-flung suburbs. The median price fell 38% in Lancaster and 42% in Palmdale, compared with 23% in Los Angeles County overall.

San Bernardino County saw prices drop by 31%, but it was worse in the remote town of Victorville, where values declined 43%.

Christopher Leinberger of the Brookings Institution, a Washington think tank, says home values in these so-called exurbs may continue to languish long after urban markets begin to recover, thanks to higher gas costs.

“Under the old model we have lived with for the past 50 years, you could drive away from major employment concentrations until you could qualify for a house because cheap energy costs made it possible,” Leinberger said. “Now as energy prices go up, the housing prices out there on the fringe take a major hit.”

Lynette Williams, a real estate agent in Pasadena, said the clients she sees these days are more willing than in the past to accept modest homes if they are close to work.

“They’re downsizing what they think their ideal house would be,” Williams said. “Compared to two years ago, they are staying in closer proximity to their jobs. They’re more focused on the neighborhood they want.”

Foreclosures also continue to play a role in falling home values, as buyers default on loans and lenders unload properties at a discount.

Of all the Southern California homes that were resold in May, 37% had been in foreclosure at some point in the prior 12 months, DataQuick said.

Gas prices, however, could even be playing a role in foreclosures, according to real estate agent C.J. Johnson in Tehachapi.

“If someone has to decide between putting gas in the car to get to work and feed their family or [making] the house payment, believe me the house payment is not going to get paid,” she said.

Johnson said most people were better off buying a home within an easy commute of work. Gas is not tax-deductible, she pointed out, but mortgage interest is.

Robert Haywood, 40, says he has seen firsthand the effect of rising gas prices. He commutes from his Lancaster home to his job as a warehouseman in Santa Clarita in a 2001 GMC Yukon, which he says gets about 16 miles to the gallon.

Haywood estimates he is spending $400 more a month on gas than he did a couple of years ago. He plans to sell his Yukon and get a smaller car with better fuel economy.

“I cannot buy myself anything,” he said. “I can’t buy that new barbecue grill or other little things that might keep the economy going.”

The steady decline in home prices over most of the last year, meanwhile, appears to be luring bargain hunters into markets where values have fallen the most, DataQuick said.

In Riverside County, for example, home values tumbled 28.6% from May 2007 to May 2008, DataQuick said. But the volume of home sales in May of this year actually increased by 4.1% from a year earlier, to 3,444.

“One can argue that the stage is being set for a bottoming-out in home sales volume in many areas because prices are coming down sharply enough to attract buyers and home builders have stopped adding new supply,” said DataQuick analyst Andrew LePage.

But economist Christopher Thornberg of Beacon Economics thinks home values must fall even lower to come in line with what people can afford to pay.

He and others contend that home values were artificially inflated by the easy availability of mortgage financing in recent years — an era that has now ended.

“We are probably halfway there at this point in terms of price declines,” he said. “I predict prices will be down 40% to 50% [from their peak] in Southern California when all is said and done.”

Home buyers don’t need to be told it’s a buyer’s market, according to Williams, the Pasadena realty agent.

“Buyers are being very aggressive in the offers they are writing,” she said. “They are hearing about foreclosures, hearing prices are dropping and feeling that if they wait long enough the seller is going to come down in price.”

DataQuick sales figures include new homes, previously owned homes and condos. The company tracks the median sale price, the point at which half the homes sold for more and half for less.

roger.vincent@latimes.com

Times staff writer Peter Y. Hong contributed to this report.

Federal Reserve Chairman Ben Bernanke Tuesday signaled he is finished cutting interest rates for now and has turned his attention to concerns about inflation in the world’s foreign exchange markets in the wake of the U.S. dollar’s 16 percent decline against the Euro over the past year. Speaking to the International Monetary Conference, Bernanke stated that, “For now, policy seems well positioned to promote moderate growth and price stability over time. We will, of course, be watching the evolving situation closely and are prepared to act as needed to meet our dual mandate.”

Keep this in mind . . .

• Observers called Bernanke’s statement a “strong defense of the dollar” and a sign that the Fed believes a weaker U.S. dollar would be detrimental. Declines over the past year against the Euro and more recent oil price surges have increased fears of inflation. These fears are one reason the Fed is not expected to pare interest rates further at least through October.

• Bernanke called financial market conditions “strained” and reiterated that U.S. consumers face challenges from declining home prices and stricter mortgage and other lending standards, a weaker job market and higher energy costs. He added that economic growth will remain limited until home prices and the housing market show clearer signs of stabilization.

To read the full story, please click here:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aPYwMe5KGlpM&refer=home

Bargain hunters who bought foreclosed properties in April helped reverse a 30-month decline in homes sales and sent the median home price tumbling by 32 percent compared with a year ago, according to a report issued Tuesday by the CALIFORNIA ASSOCIATION OF REALTORS®. April 2008 home sales were 2.5 percent above the April 2007 level, but buyers looking for bargains were behind a $190,240 drop in the median price from $594,110 in April 2007 to $403,870 this April. The figures were heralded as good news for long-suffering first-time homebuyers.

Keep this in mind . . .

•  Seasonally adjusted existing home sales rose to an annualized rate of 366,720 this April from 357,640 in April 2007. The Association’s Unsold Inventory Index, which measures how many months it would take to deplete the supply of homes at the current pace of sales, fell from 11.3 months in April 2007 to 9.2 months this April. Median days on the market stood at 53.1 days a year ago, compared with 52.1 days this April.

• The vast majority of sales were at the more affordable end of the spectrum. Homes priced under $500,000 accounted for 64 percent of all sales in April, compared with only 40 percent a year ago. Homes from $500,000 to $1 million, meanwhile, accounted for only 26 percent of sales this April, down sharply from 45 percent a year ago. Once-fallow markets like Sacramento and Riverside saw increases in sales of more than 20 percent as bargain-hunters took advantage of favorable interest rates, lower prices and a glut of foreclosures on the market.

• An estimated 30,000 foreclosed homes have been auctioned in California over the past year. Observers say lenders holding repossessed properties have been anxious to sell them at discounts of as much as 40 percent, and that fact is enticing buyers back into the market in greater numbers.

To read the full story, please click here:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aKzbMH2M1azY&refer=home

Southern California homebuyers stepped off the sidelines in April, snatching up foreclosures and homes priced under $500,000 at a rate that was 22 percent higher than in March but down 19 percent from April 2007 and the lowest level since 1995, according to DataQuick Information Services.

Keep this in mind…

•  The median home price for the six-county region was $385,000, unchanged from March but down 24 percent from an April 2007 peak of $505,000. April marked the first time in eight months that the median price did not decline.