An Energy Rater conducts an air leakage test by blowing air through the house

Consider many of the homes in Pasadena, built in the early 1900’s with no insulation, original windows and probably the original knob and tube wiring running through the attic, which every home inspector will tell you not to cover with insulation.

Are you beginning to understand the increased costs you could incur when selling your home?

From Congressman John Boehner’s website:

“Home Sellers Beware. Having a hard time selling your home? Here’s one more hurdle to jump: all homes sales are conditioned upon an energy audit and a new energy rating assessment and energy labeling program for your home that’s outlined in the Democrats’ bill. And if you thought you could improve your property with a fresh coat of paint and some granite counters? Think again! Now your home will be subjected to a new energy rating assessment and energy labeling program that will penalize you for older windows, original fixtures, and dated appliances. So the Democrats’ bill would bring down the value of your home”!

Deja Vu All Over Again

It was just a little over one year ago in May 2008, when the California Assembly narrowly passed AB 2768, a similar bill that would also mandate energy audits for California home owners at point of sale. The California Association of Realtors projected it could add thousands of dollars to the cost of a home, not to mention the estimated cost of $400 for the inspection. Through the lobbying efforts of the Realtor organization the bill failed in the senate.

Additional costs and regulations. Not exactly the cure for energizing the real estate market.

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What is the future of Pasadena Home Prices?

Therefore, I thought I would rebut some of the assertions and defend the honor of our fair city. I realize some of the naysayers will point out the fact that I am a Pasadena real estate broker and therefore subscribe to the National Association of Realtor motto that “It’s Always a Good Time To Buy” campaign and credo of never speaking negatively about the housing market. I can assure you I don’t. Projecting a false sense of optimism to mask reality is not in the kool aid around here.

The Dr. states that Pasadena prices will be coming down late this year and into 2010 due to a several factors:

Distressed Property & Housing Inventory - The Housing Bubble website states that distressed property (preforeclosure, auction and bank owned) in Pasadena now exceed 600 units. That is correct according to Foreclosureradar. However, the bubble states that these homes are now making their way into the market, but goes on to say only 11 homes are listed as foreclosure in the MLS.

Distressed Property in Pasadena

There have been rumors that banks were going to turn loose of their repossessed property, flood the market and drive down prices. This isn’t happening. It’s also not likely to happen. If you are a homeowner in foreclosure on a second home or investment property, you may be less likely to receive any lender leniency. However if your primary home is in foreclosure, the empirical data I am seeing doesn’t suggest that banks are in any hurry to take the property. Data does suggest that banks are taking as long as 5-6 months after the first payment is late to issue the NOD. Additional data also shows that some properties have been in the auction stage now for 5-6 months. Furthermore banks seem more willing to work with sellers and approve short sales as an alternative to foreclosing.

Actively Listed Inventory - As discussed in the Pasadena May sales report, the current months supply of single family inventory is about 6.75. As you can see from the enclosed chart, inventory has come down significantly in the last year and prices have also been on the increase beginning in March. Two indicators that do not support buyer reluctance.

Inventory is down and Prices are up in Pasadena

One last thing regarding home buyer apprehension; our office just made an offer on a house listed in the mid $800’s. There were 22 offers. Evidently some people believe opportunities do exist.

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The reason it was drafted is as follows:

SEC. 2. The Legislature finds and declares all of the following:
(a) California is facing an unprecedented threat to its state and local
economies due to skyrocketing residential property foreclosure rates in
California. Those high foreclosure rates have adversely affected property
values in California, and will have even greater adverse consequences as
foreclosure rates continue to rise.
(b) It is essential to the economic health of California for the state to
ameliorate the deleterious effects that will result from the continued high
rate of foreclosure of residential properties by modifying the foreclosure
process to provide additional time for borrowers to work out loan
modifications while providing an exemption for mortgage loan servicers
that have implemented a comprehensive loan modification program.

If you will recall Governor Schwarzenegger ask lenders to place a 90 day hold on foreclosure proceedings before the holiday season began in late 2008. There was some speculation that foreclosures would begin to escalate in April or May this year as the Obama Housing Plan was announced and the temporary moratoriums expired.

Are Federal Programs Helping Californians?

One of the key components in the Obama Housing Plan called for a laundry list of qualifications but the kicker was that your newly modified mortgage must not exceed 105% of the current market value. Isn’t that like telling the poor “since you have access to a dumpster you are not entitled to food stamps”? Depending on where you live and when your house was purchased, there is a good chance it has lost 30% to 40% of its value over the last few years. Translation, you are not a candidate for a modification and foreclosure is inevitable.

The explanation provided in the article I read stated that if you lived in a state such as Nevada, Florida or Arizona where home prices have plunged there is a good chance you won’t be eligible Where do they think ground zero occurred in the housing bubble? There is no mention of California, just might as well forget that. So the program designed to ease the financial burden of homeowner’s will not help the ones for whom it is intended. If you live in one of the top 4 states which have experienced the greatest crisis, well you are just SOL my friend.

We even have adjustments in the FHA guidelines to address the high cost areas such as LA County which increase the loan limits that can be insured. Why did it just seem to end there? Is California just so far removed from Washington that we are a forgotten people out here? The first time homebuyer credit of $8000 means much more to the young couple in Kokomo, Indiana buying their first house than it does to the same couple in Pasadena, CA. If the median price in Indiana is $100,000 that 8% credit is now worth $40,000 on a $500,000 median priced home here in Pasadena. Where is the equality?

Whle Rome burns we watch the sunset.

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Pasadena Real Estate Guide

We created this video to showcase our great City and to also give you a glimpse of upcoming material on the new Pasadena Real Estate Guide!

The Pasadena Real Estate Guide will feature:

If there is anything you would like to see please let us know. We welcome your comments and suggestions.

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Unit sales along with the median price make positive gains in May, continuing an upward trend in 2009.

Predictability, which was absent in the Pasadena real estate market during the last two years appears to be making a return. Predictable that is, when the seasonal home buying months once again become the months of May thru August. The median price of a Pasadena home exceeded $500,000 for the first time since November 2008.

The housing market which has exhibited some positive trends of late still offers a few inconsistencies. For example, the market for single family homes is outselling the condo/townhome market by a ratio of 2:1. In terms of months of supply, single family is about 6.75 months, and the condo market is closer to 10 months. Also sellers of condos and townhomes are having to be more aggressive in marketing their properties, evidenced by the final sales price achieving only 90% of the original asking price.

The catalyst for this market remains homes under $500,000. One of the most telling statistics is how the market has changed. As an example in May of 2008, only 13 homes sold at a price below $500,000. In May of this year that number increased to 28.

In the market for homes over $1,000,000 there were 18 homes selling in May 2008 and the number dropped this year to 11. Whereas “declining” used to be the adjective of choice to provide a one word label that summed up the Pasadena real estate market, I think the new word now becomes “shifting“.

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Credit is Becomming Harder to Obtain

We went to the ATM too many times pulling money out of the house and quickly discovered paper gains can quickly become actual cash losses. If the economy were a student driver, the brakes have been applied hard to the American consumer, but the pedal is to the floor and the car is in the acceleration lane known as federal borrowing.

The Taxpayer is the New ATM

If the lending guidelines applied to consumers were somehow miraculously applied to the federal government, could Uncle Sam qualify for a loan?

He Who Has the Gold Makes the Rules

The Chinese are the primary customer for all of our newly issued debt. Why wouldn’t they support their best customer? They loan us the money and we in turn spend the money to buy the goods that keeps their factories going.

Since the Chinese are so altruistic, what would happen if they opened banks in this country? What if they made mortgage loans allowing us to finance real estate, and in turn our real estate markets began to recover and much of the value that was lost would be replaced? Evidently they do have a propensity for risk and if default would occur, they would just own a bigger piece of the American dream. I seriously doubt that their lending standards would be anywhere as severe as their US counterparts. If capitalism thrives on competition, I say we increase the competitive playing field and let other countries vie for our business.

I think we should enjoy the same opportunities that “we as a people” have, even though “we as a people” don’t.

Post from: Up2Date

Just as you begin to visualize where the furniture will go and how many things you must do in the next 30 days, you receive the following disclosure…. “Someone died in the house”.

Now what?

There is usually a rebuttal to most any objection that someone has. Many times they refer to a lack of understanding or misconception that might exist. This one however does not. It is just such a personal issue and how someone perceives it should not be open to discussion.

Understandably, this information may create an array of emotions that teeter back and forth for a few days. There are a couple of things you can hopefully find out to decide if this is still the house for you:

1. What were the circumstances? - the manner in which the deceased departed will more than likely have a bearing on your eventual decision. Did the person pass peacefully from natural causes or was tragedy involved?
2. Where in the house did it occur? - If you are still in the transaction after answering the first question, chances are this will be the follow up.

According to this study, most people with a terminal illness choose to be at home when that time comes. Almost anything in a real estate transaction can be fixed, repaired, replaced, torn down, credited or removed. I had a boss once who said “You can get anything done for money”. This is one of those rare instances when you simply can’t.

There is no other advice you can seek, no other research you can do and nobody else’s opinion that matters. All that really counts is what you think.

Post from: Up2Date

I guess John McCain was correct when he told Detroit auto workers that these jobs were not coming back.

The Mighty Have Fallen

Both California and General Motors forgot one basic principal and that is that spending has to be controlled by revenue. More cannot go out than what comes in. Assets must exceed liabilities. Multinational corporations and states with the 8th largest economy in the world do not go bankrupt overnight. There is a pattern that leads to failure, and it is typically because the hard choices and decisions cannot be made when they should, since the concerns of the few are put before the welfare of the many.

Will California Follow GM’s Path?

The comparisons that can be drawn between a public company and a state government are usually nonexistent. A public company reports to its shareholders while state government reports to no one the voters. If state government needs revenue they raise taxes, very seldom do they make budget cuts. If a public company needs more revenue they have to sell more of something or cut spending.

Blame the Unions? Management? Our Elected Officials?

Are the labor unions the primary reason that GM was uncompetitive? Did their labor rate reported at $85/hour make them uncompetitive? Did their additional vehicle cost of $4000 compared to Japanese models prohibit them from making money? Did all of the federal government restrictions mandating clean air, minimum miles per gallon along with social security taxes and corporate income taxes place to heavy a burden on the manufacturing process and ultimately the consumer? Were executive bonuses paid on performance or handed out because you were a member in the club?

And how about the great state of California. Are the labor unions with their cost of living increases along with the fat retirement programs placing an unrecoverable burden on the state’s finances? What about our elected officials who seem to abuse the perks and stick the entertainment and travel expense reimbursement back to the taxpayer. Everybody cannot be “entitled”, or maybe they can and that’s just how we got here.

What about a property tax system that punishes the new homeowner with higher taxes while your neighbor who has been there for 25 years pays 80% less than what you pay. And what about a state that thinks the way to prosperity is to tax the hell out of everything, not realizing the higher the tax the less utility something has. Those who can afford to simply refuse to play along and may decide to leave the state. What about the incentives for business to come here and provide jobs that employ people so that they can buy houses and in turn put money back into the local economy.

If Not Me, Who? If Not Now, When?

One thing everybody has is lots of questions. Its answers which are in short supply. More and more questions beget tougher answers. The next time we ask ourselves who is responsible; we should be standing in front of the mirror. If we are a government of the people, for the people and by the people I have one more question.

What happened to all of the people?

Post from: Up2Date

The Dalton on Arroyo Pkwy

It was several weeks ago when I wrote about FNMA’s new lending requirements and began to question what was going on with this project. The gates were locked, nobody answered the phone and if they did, they didn’t know anything about the building or if any units were for sale. Trying to sell a new condominium project in a financial crisis when banks are tightening their lending standards and underwriting guidelines is not the ideal time to market a new development. All of that is now just a memory as they have secured a new lender and sales seem to be outpacing the somewhat slow demand we have seen on previously owned townhomes and condominiums.

The Dalton Amenities

The floor plans include studio units and up. They have a 2 bed 2 bath unit with 1042 sq ft listed for $539,000, as well as a 2 bedroom unit on the 4th floor with just an incredible wall of windows @ $639,000. The units feature polished concrete floors, Euro Style kitchens with stainless steel KitchenAid Appliances. If you really want to treat yourself, some of the 4th floor units include outside decks with gas fireplaces. Our man Hef, would be happy in this unit, sans the grotto.

Most all of the units feature two parking spaces, some side by side, some tandem and it is underground with a nice big parking garage. HOA fees are reasonable including gas, water, trash and maintenance and were $374/month on a 1077 square foot unit.

A Great Walk Score

We recently wrote about the meaning and convenience associated with a great walk score in Pasadena and The Dalton comes in with a 94. If you’re commuting to downtown LA, the train station is just a grande coffee away. That’s an “A” in my book!

Post from: Up2Date

From the data presented, two of the charts offer reasons for optimism. The first is the Monthly Supply of Inventory. Housing units available for sale are basically at their lowest levels in two years indicating one of two things, 1) there is beginning to be some balance in the market or 2) many sellers have taken their homes off of the market because prices don’t provide them the opportunity to sell.

The other chart that portends a bottoming or the beginning of a turnaround is the Homes in Escrow. Again the number of homes that have an accepted purchase contract is near a two year high.

Lastly, one of the more puzzling charts is the How Many Days to Sell. This trend is coming down slowly within the last year but spiked considerably in April. If the housing downturn is in remission, the number of days it takes to sell a house will have to decline. Also with fewer homes on the market, I would think the number of days required to sell them would be less.

The only factor that might be contributing to this is the way this number is calculated. It can be easily manipulated, depending on the manner in which the listing agent changes the status. After an offer is accepted, if the status changes to “pending” the days on market stops counting. If it is changed to “back up,” the meter continues to run.

One last note of irony. In May 2007, the median listing price of a single family home in Pasadena was $769,500. In April 2009, the median price of all homes listed for sale that month were $769,000.

source Clarus REsource

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