Up2Date

Pasadena Home Sales for September

Doug Willis — Fri, 23 Oct 2009 23:54:20 +0000

Beginning this month I am going to change how the monthly sales results are reported for the Pasadena Real Estate market. Instead of just looking at median prices, we are now going to overlay the price per square foot for the same period.

Pasadena Single Family - Price per Square Foot & Median Price

Anytime you hear how sales are being reported in the media the focus is always on median prices. This year has been a very unusual year in the sense that sales of foreclosed homes in Pasadena have been a much bigger segment of the market. As a result the increased unit sales resulting from distressed properties tend to over exaggerate the decline in property values.

The advantage of adding the price per square foot is this measurement will trend along the same lines as the median price of homes sold, but the peaks and valleys are not as pronounced. By eliminating the highs and lows, you will see the natural progression of pricing as we move through the year and seasonality that Pasadena home sales experience. Now having said that the month of May price per square foot of $522 seems way out of line. I went back and checked my numbers and it appears to be at least $100 too high.

Pasadena Single Family Homes - Inventory and Sales Levels

Pasadena’s Leading Housing Indicators

Units Sold – The fact that unit sales rose quickly and seem to be declining just as fast is probably not cause for concern. It’s not uncommon for home sales to peak in July or August and then slowly decline through the end of the year.
Inventory Levels – With a current inventory level of 4.4 months based upon the current rate of sale, inventory levels are very moderate if not on the low side. I wouldn’t anticipate much change as we approach the holiday season unless we begin to see more foreclosed inventory hitting the market. This could be more of a factor this year due to the moratoriums that were placed on banks foreclosing last year during the fourth and first quarters.

Summary

Single Family, Townhome and Condominium Inventory and Sale Units

Overall the outlook for the Pasadena real estate market at least where residential is concerned is much more favorable than this time last year. The forecast for next year could be quickly forthcoming as Congress may or may not extend the $8000 home buyer tax credit. Since we may see the fed begin to withdraw from purchasing mortgage bonds, some type of incentive may be needed to continue the momentum in the housing market. Consumers have become accustomed to interest rates in the low to mid 5% range and without any incentive from Uncle Sam may be contented to sit on the sidelines and wait for the next program to come their way.

And now you’re up2date on Pasadena real estate.

The source for the market data used in the graphs is from TRENDGRAPHIX,INC.

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Pasadena Housing Statistics

Doug Willis — Tue, 13 Oct 2009 21:15:35 +0000

Its time to check the pulse of the Pasadena housing market and analyze what changes are taking place along with what we might expect for the next several months. On one hand it seems the housing market is performing better than expected. Very attractive mortgage rates are encouraging people to purchase a new home. On the other hand, many commercial establishments and the space they once occupied are now vacant. The recent closings of several Old Town restaurants within the last week came as a surprise.

The source of the data used in the graphs is only properties that are or were listed for sale. It does not track closed transactions.

Pasadena Single Family Homes

We have been intently watching and reporting on median home prices in Pasadena. While the median price is a good “at a glance” type measurement, two other keys are prices per square foot and the number of homes that are having to take price reductions to get sold.

Looking at the differences in the two markets (single family and townhome & condominium) we see that the price per square foot measurement for single family homes reached a low point around the first of May, while the price per square foot for condos and townhomes has been falling most of the year and might have just recently begun to show signs of leveling off.

We also see that the number of homes taking price reductions began to subside earlier in the year as demand started picking up. Currently the price per square foot on a single family home is around $417 and $389 for a condo/townhome. The month of May appears to have been a turning point and a benchmark month as visible differences began to occur and a market shift seemingly took place.

Pasadena Condominium / Townhome

Inventory Levels and Percent of Property Re-Listed

Again in the two graphs below (single family top & condo/townhome below) inventory levels began to drop early in single family and much, much later in the condo category. The condo market was very slow to build any momentum at all. Now with inventory levels around 230 units and the number of units being re-listed declining, expect to see more of a balanced market with buyers losing some of their previous advantage over sellers.

What to Expect

There has been much speculation about what will happen with the $8000 first time home buyer credit expiring on November 30. At this point most think that some form of it will continue. Aside from that I believe the next six months will be positive in the housing market with interest rates remaining low, inventory levels running at about 5 months supply, and the number of sold units along with median prices flattening for a while.

Also there is a push for banks to become more agreeable in allowing home owners to “short sale” their home as opposed to going into foreclosure. This is a much better option and could help to ease Pasadena’s current count of 700+ properties in some stage of the foreclosure process.

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Bungalow Heaven Home Prices

Doug Willis — Fri, 09 Oct 2009 13:40:04 +0000

The name does live up to its billing. A news announcement this week proclaiming Pasadena’s Bungalow Heaven a great place to live begets the next question…..”How much does it cost to live there”?

Bungalow Heaven In Pasadena CA

While the American Planning Association’s list of “Great Places”, doesn’t quite have the prestige of Money Magazines Best Places to Live it is a very desirable accolade nonetheless. Just drive down the tree lined streets and you quickly realize what a special place it is. The other interesting fact about Bungalow Heaven is that it is a microcosm of the Pasadena real estate market. Home values here run very closely with what Pasadena as a city reports on a monthly basis.

Home Prices in Bungalow Heaven

With the average size home running from 1400 to 1600 square feet along with the homogeneity of the neighborhood, there has not been a lot of fluctuations on home prices as noticed in some other areas of Pasadena. According to the Bungalow Heaven neighborhood web site, the area comprises about 800 homes. Based on an annual turnover rate of only 2.5 to 3%, home prices have held up pretty well. This year look for home sales to hit about 30 units, higher than last years total of 22, but still below the high reached in 2006 of 36 homes. In addition, home prices have sold close to their asking prices indicating desirability over discounting and this trend has been constant over the last four years.

4 Year Home Prices for Bungalow Heaven

Home sales this year have ranged from a 2 bed, 1 bath with a little over 1000 square feet for $225,000 to a 3 bed, 2 bath with 1879 sq ft for $785,000. Just as the rest of the Pasadena housing market has experienced, the market for homes under $500,000 has re-emerged this year with 7 homes selling year to date. Finding a home in BH under $500,000 in ‘06 & ‘07 was almost impossible.

If you are in the market to buy a home and you want to check out the availability in Bungalow Heaven, there are 6 homes on the market ranging from $499,000 to $975,000. Take a drive through the neighborhood and discover what the residents know….it’s a great place!

As Kevin Costner asked in his hit movieThe Field of Dreams “Is this heaven”?, Yes, its Bungalow Heaven.

Want to know more about Pasadena Craftsman Homes? Craftsman Weekend is scheduled from October 16-18.

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Pasadena Home Prices per Square Foot

Doug Willis — Tue, 29 Sep 2009 00:12:54 +0000

Sometimes trying to make sense of the housing market and the accompanying price swings is probably neither an art or a science but an artful science.

Single Family Homes - Pasadena 91104

We can analyze median prices, average prices, days on market, current inventory, houses in escrow, homes taking price decreases, and homes selling over asking price. All of these will point to trends happening in the area but may be undetermined when it comes to a specific conclusion.

The mix of homes being sold can cause big discrepancies on the reporting of the sales data. For instance if there was an area where many homes were purchased with 100% financing and were presumed to be in more of a starter neighborhood, a higher proportional volume of sales in this area can affect the overall mix of homes being sold.

Here in Pasadena we have seen a large amount of home sales under $500,000 in the last year. This was a category that was almost nonexistent in 2005 & 2006. As a result, there was downward pressure on median home prices which had the affect of making the decline worse than it actually was.

Home Prices Expressed By Square Foot

When we look at home prices by zip code we can begin to focus on more specific area’s and more precise data. Graphed and expressed over a two year period you can begin to see the impact of the real estate decline and how it could be impacting your area. Although price per square foot is certainly not a universal indicator, the price swings are typically more consistent and representative of the area in which you live. For instance looking at zip code 91104 for August ‘09 and comparing it to August ‘08, the price appears to be consistent at approximately $375/square foot, indicating that prices have been fairly stable albeit for the normal seasonal swings.

The data provided through our MLS has become much more analytical and offers many more options than just the recent price of home sales. Pasadena zip codes include 91107, 91103, 91106, and 91105.

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Pasadena Condominium Sales Rebound

Doug Willis — Fri, 25 Sep 2009 03:49:12 +0000

Most media reports are stating that home sales declined in the month of August. What the media is not reporting is that it is not uncommon for home sales to dip in August. Compared on a month to month basis, a seasonality does exist in the reporting of home sales. People prepare for back to school, vacations are taken and August is just plain hot.

The bottom is not falling out of the housing market.

Considering the fact that unit sales did decline from July to August, the flip side is the median price rose significantly. Up over $50,000 to $570,000 form July’s $516,800. Plus the median price has increased every month this year. So, despite the fact that unit sales decreased from 104 units last month to 83 units in August (-20%) it is hardly cause for concern.

Condo/Townhomes

You have probably seen some of the newer units around town which are finally beginning to grab consumers attention This segment of the housing market which has been on the doldrums for quite sometime even surpassed the single family market and had a slight increase in the median price in a year over year comparison.

Homes in Escrow

Homes under contract are still at very high levels while the number of homes available for sale continues to decline. The 4th quarter does not typically see a lot of homes coming on the market. If home sales remain strong, we could even see a shortage of homes for sale. Also the housing stimulus targeted at first time home buyers is set to expire November 30. There is speculation that Congress will extend the benefits or even increase them to include a wider home buying public, not just first timers. Lastly, it appears that the Federal Reserve will attempt to keep interest rates low into the first quarter of 2010.

There seemed to be much speculation that the early positive results we were seeing in real estate were built upon a house of cards. It certainly appears to have a stronger foundation than many us initially thought.

Pasadena Home August Home Sales

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Helping Pasadena Homeowner’s Avoid Foreclosure

Doug Willis — Fri, 11 Sep 2009 20:57:45 +0000

The number of homes approaching foreclosure in Pasadena is approaching 700 and has been steadily rising for the past several months. As the moratoriums on foreclosures comes to an end, as homeowners exhaust all possibilities to keep their homes, it seems inevitable that the foreclosure rate will keep rising and rising for some time.

Facinig Foreclosure? We Can Help!

If there is a silver lining to all of this the foreclosure process has overwhelmed the lenders that own the notes and there isn’t enough manpower to expedite all of these in a timely manner. The net result being is that people are usually allowed more time in there homes and in some cases much more time.

Having a “Notice of Default” posted on your door even though you have been expecting it can be a stressful and embarrassing event. At this point you have to decide what course of action you are going to pursue. Many homeowners don’t realize the number of options they have at this point or the consequences that will follow their actions or inaction’s for the next couple of years or the rest of their lives.

You Must Attempt to Avoid Foreclosure

The last thing you want on your credit record is a FORECLOSURE. It will be an albatross around your neck, it will be the equivalent of the scarlet letter. A foreclosure will most likely be a major deterrent to any employer and could very well prohibit your chances of a promotion. If you have a security clearance, a foreclosure may provide irreparable damage.

Now that we have an understanding, what are the best options available to you?

By now, if you have missed a few house payment’s you definitely have the attention of your lender. Find out if you qualify for a loan modification. I have heard of some lenders cutting the interest rate up to 2 points and extending the term of the loan for 40 years in an attempt to make it more affordable for the owners. Maybe a forbearance program can be negotiated, whereby the lender agrees to a major reduction in your payment for a certain time. In most of these programs I have heard about, I am not aware of any principal being written off. Not to say they don’t exist, I am just unaware of it. In many cases the amount you owe or the amount being modified is just added to the back end of you loan. You’re still paying what you have missed, it just now could be over a longer period or amortization.

A Short Sale Can be a Win Win

If you lender is unwilling to renegotiate the terms of your loan, then it may be time to explore a short sale. Mention a short sale to many real estate agents and they will turn and run. Why, because short sales are more time intensive and all of an agents effort may be for naught if the bank is unwilling to approve the sale. Many agents have never done a short sale therefore the learning curve can be long.

Yes, they can be time intensive, and the paperwork necessary to complete the transaction can stuff a filing cabinet. Like most things there is a procedure and a set of steps to follow that can increase the effectiveness and success of your home being approved for a short sale.

Does Your Real Estate Agent Have This Designation?

The advantages are many. It is much less likely to cause the severe damage to your credit file like a foreclosure would. The term “short sale” is probably not going to show up in your credit report and it is quite possible that an entry such as “settled in full” will be the only explanation.

Many banks are much more agreeable to doing short sales these days. Believe me, banks do not want your house back. They would much rather sale what has now become a non performing asset and get it off of their books. The other nice thing about this process is you , the homeowner are in charge of the process. You will decide which offer to accept and present to the bank. While the bank will make the final decision as to the price, you have most of the decision making up to that point.

If you decide to investigate the possibilities of a short sale, speak to an agent who has earned the “Certified Distressed Property Expert” designation. This is not the time to be providing on the job training to an inexperienced agent.

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Pasadena Housing Market Tea Leaves

Doug Willis — Fri, 21 Aug 2009 18:45:20 +0000

In recent posts I have speculated and provided my opinion about the direction of home prices in the Pasadena housing market and which way they are headed. Questions always arise about the direction the market is going and is this a long term trend or short term manifestation?

Prices per Square Foot Are Up & Price Decreases Are Declining

Are home prices increasing or decreasing? We can look a median home prices all day long which are easily manipulated by the mix of homes being sold, we can examine “units sold”, “inventory levels”, “the number of homes in escrow”, but most of these will not provide the conclusive data necessary to chart the direction in the future.

I ran a quick report analyzing the number of home sales so far that have recorded in August. I found an interesting fact showing the number of homes which have sold to date through August 19 were 66 units. Of those, 25 (38%) have sold at 100% of their asking price or higher and the number increases to 36 (55%) units selling at 98% of their asking price or higher.

To make an actual determination regarding home prices, the enclosed chart plots “price per square foot” and the number of homes that have taken price reductions. It only looks at homes currently listed for sale and does not take into consideration the actual selling price. Prices per square foot are increasing while fewer homes are having to take price reductions. An important indication that buyers are more eager to enter the market.

I recently attended a conference in which the speaker stated the stock market tends to look 5 months into the future and provides a glimpse of economic news to come. Might we also look at “price per square foot” and see if this increasing or declining trend will portend the direction of the housing market?

Our monthly recaps of the Pasadena Real Estate market include a page on how many homes are listed, and in escrow. The “listed” homes always show higher median prices than homes in escrow. Are prices headed higher? At this point when a long term trend reverses itself and begins to head on the other direction, that to me is compelling evidence that a change is occurring. Stabilization precedes a recovery.

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Pasadena’s July Home Sales Are Highest Since 2006

Doug Willis — Wed, 12 Aug 2009 00:40:40 +0000

I don’t think there should be any doubt left in the minds of local residents, the seasonal home selling season has returned. Little did we know or realize that it was going to be 3 years to the day when the market started to fall, or that it would correct itself 36 months later.

It was July 2006 when real estate markets began to soften. A gradual decline eventually turned into a market free fall. However, all of that appears to be behind us as we head into the back half of 2009. The good news if you are a property owner is to look at the median price. In August, months of anguish will soon come to an end as the median price scenario will correct itself. This will probably produce more of a psychological lift than a monetary, but since home buying has much to do with people’s perceptions and where they think the economy is headed it should be treated very positively. If you are in the market to buy a house, the last thing you want to hear is that home prices keep dropping. News like this could very easily make you decide to postpone your purchase. Why buy now if you feel that in a few months you can save some money?

July’s positive news about the Pasadena housing market includes

a 26% increase in unit sales from June
a single family median home price of $600,000
a strong August based upon the homes in escrow
and another strong performance in the townhome and condominium market

The presentation below includes a 5 year pricing history in terms of median prices and unit sales for the Pasadena real estate market.

Pasadena Homes July '09 Analysis

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Buying Real Estate? Buyer Beware

Doug Willis — Tue, 04 Aug 2009 18:43:19 +0000

The purchase of a home in California can be a fairly complex process as evidenced by the purchase agreement. A lengthy 8 page document before any attachments, or addendum’s are included. The standard purchase agreement developed by CAR covers most of the transactions in California and will apply most of the time on existing construction.

Make sure you read and understand your real estate contract

If you are buying into a new development chances are the builder will have their own contract that will specifically apply to that particular project. At this point you have two options, you can read it before you sign it or you can just sign it like the folks in Congress do. There is one big difference though, this is your money. Your understanding of what you are signing will go along way towards your ultimate satisfaction with your purchase.

My intent is not to explain the contract to you point by point but to alert you to some red flags that may arise due to today’s environment in the lending and real estate markets. These new situations were uncommon when the market was experiencing rapid appreciation, but due to tougher lender requirements you owe it to yourself to thoroughly investigate the property and ask questions along the way.

It doesn’t matter whether you are buying a condo, townhome or single family residence, the contract the offer is made on is the same. With a single family house you may spend more time and money on physical inspections and the appropriate professionals so that you have an idea of the possible remaining life or potential repair expense.

With a condo or townhome the physical inspection is just as important however you are going to receive a lot more reports and disclosures on how the units are governed and managed. You should also receive financial statements that indicate the condition of the budget, minutes of the homeowners meetings which would include anticipated or upcoming expenditures that may not have been planned. These may be covered by special assessments which are incremental to your monthly dues.

In addition to what you receive your lender will usually require a special document that will have to be completed by the homeowner association or management company that oversees that particular project. This document may ask suck information as the number of units that are non owner occupied as well as the number of units that are delinquent in their monthly dues.

First of all, as a buyer you typically have a 17 day contingency period (which is negotiable). You may have satisfied all of your lender requests and provided all of the documentation that your lender needs to process and approve your loan. The appraisal may have been completed and everything seems in order. However there is a potential red flag out there which you need to be aware of.

Beware the Red Flag

Before you sign off on your contingencies and potentially put your deposit at risk, ask your lender if they have received the homeowner certification. If not, you may want to discuss your options with your agent. Due to the economic situation we are in, some associations are finding that they have an unusually high number of delinquent dues. Why is this important? If you sign off on your contingencies and then find out a week before closing that your lender has just received a statement showing an unacceptable level of uncollected HOA fees, your loan may be in jeopardy. There are Fannie Mae underwriting guidelines that lenders adhere to which state the number of allowable units past due.

You definitely don’t want to assume your loan is on tract only to be derailed at the last minute.

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Was June the Turning Point for Pasadena Home Sales?

Doug Willis — Tue, 28 Jul 2009 04:38:54 +0000

It had appeared the momentum in the Pasadena real estate market had been building. Sales were increasing, buyer’s were becoming increasingly optimistic, and sales were beginning to move away from just the lower end of the market.

The number of homes in escrow was increasing and stories were developing of multiple offers and quick sales. And we are not just referring to distressed properties. There is really no other term to describe the month of June than just an old fashioned “blow out”.

Almost every indicator showed a positive increase. the number of home sales increased 45%, the median price of a single family home was up almost $50,000 over last month. Even the townhome / condominium market which has been a major drag on reporting, sprang to life with approximately a 50% increase in the median price and unit sales over May.

Now that Newsweek has finally declared the recession over, I guess we have cause for celebration. Housing inventory, a closely watched barometer regarding the health and trends in the market is now down to about a 5.5 months supply.

It seems very puzzling to me that our local housing market can be so strong. Considering the local and national economic situation, what is it that is creating the demand for housing? Consumer confidence is not exactly at its highest levels but there is something that is driving people to buy houses.

What do you think it is?

Pasadena Homes June09 Aalysis

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Up2Date

Pasadena Home Sales for September

Pasadena’s Leading Housing Indicators

Summary

Pasadena Housing Statistics

Pasadena Single Family Homes

Pasadena Condominium / Townhome

Inventory Levels and Percent of Property Re-Listed

What to Expect

Bungalow Heaven Home Prices

Home Prices in Bungalow Heaven

Pasadena Home Prices per Square Foot

Home Prices Expressed By Square Foot

Pasadena Condominium Sales Rebound

Condo/Townhomes

Homes in Escrow

Helping Pasadena Homeowner’s Avoid Foreclosure

You Must Attempt to Avoid Foreclosure

A Short Sale Can be a Win Win

Pasadena Housing Market Tea Leaves

Pasadena’s July Home Sales Are Highest Since 2006

Buying Real Estate? Buyer Beware

Beware the Red Flag

Was June the Turning Point for Pasadena Home Sales?