We had one of our best years ever as far as number of homes sold but we have never worked harder to close each property. Thank you for supporting our family business; we are VERY grateful!
Your property value held its own in 2010 with most homes ending the year still worth the same as the end of 2009. Some homes were down a little but very few were up any measurable amount. We predict 2011 to be the same report, if we are lucky.
A market rebound will occur when the following two events take place: First: we need multiple years of a strong and growing economy, there have been a few glimmers of good news in this area but nothing truly substantial yet. Second: we will need to see a return of easier financing which will allow a greater number of people to get loans and for higher amounts, this is not even close to happening, at this time actually the trend has never been stronger in the opposite direction.
Loan Modification DANGER / Warning. In 2010 we saw many friends lose their homes while moving through the Loan Modification Process. Many of them were speaking to the bank weekly but failed to realize that if their Loan Mod was declined all back payments and late fees would be due immediately. Last year more than 90% of all Loan Modification applications were turned DOWN leaving many home owners only weeks to arrange a Short sale listing or loss to Foreclosure. Please if someone you know is trying to do a Loan Modification and the process has gone on for more than 3 months they should be speaking with us now in case the home needs to be listed on short notice please do not wait.
Foreclosure activity for 2010:
- Default notices, scheduled auctions and bank repossession were reported on a record 2,871,891 U.S. properties in 2010 increase of nearly 2 percent from 2009 and an increase of 23 percent from 2008. 2.23 percent of all U.S. housing units (one in 45) received at least one foreclosure filing during the year.
- Some decline in foreclosure activity was noted 4th quarter of 2010 as many Banks halted all foreclosure actions due to legal problems and issues over paperwork
- Nevada, Arizona, Florida post top foreclosure percentage rates State by State
- More than 9 percent of all Nevada housing units, one in 11, received at least one foreclosure filing in 2010
- Arizona registered the nation’s second highest state foreclosure rate for the second year in a row, with 5.73 percent of its housing units (one in 17) receiving at least one foreclosure filing in 2010
- California, Florida, Arizona, Illinois and Michigan accounted for more than half of national foreclosure total
- California held the record for the highest total number of Foreclosures in a single State in 2010 with 546,669 homes lost
2010 Medium sales Price in LA County up 6.7% to $320,000.00, Glendale up 2.8% to $470,000.00 Burbank up 11.3% to $493,000.00, North Hollywood up 1.5% to $335,000.00, Studio City up 13.8% to $650,000.00 and Sherman Oaks leading the pack with an astonishing 29% increase in median sales price to $748,250.00 These increases are due to a higher volume of more expensive houses finally selling last year but at lower prices than just a few years earlier.
Loosing ground in 2010 were many cities in LA County such as Panorama City down 27%, Sun Valley down 12.2%, Valencia down 11.8%, Van Nuys down 9.2%, Sylmar down 8.3%, Tujunga down 6.8% and Woodland Hills down 6.5%. The Westside / West LA was down on the average about 15% over 2009
Does this mean my property values are up or down?
No, this means that in areas like Studio City or Burbank buyers thought there was more value in homes that were priced at $550,000.00 over homes that were $475,000.00 so more $550,000.00 homes sold in 2010. In general anytime the medium sales price is up in your area it’s good but it does not mean that home values raised by that percent in the area
Safe to Buy and Sell general we believe the market has stabilized for the most part and we also believe you won’t see any significant change in value the next few years. Anytime you buy and sell at the same time you are protected against market fluctuations. You sell high you buy high, you sell low you buy low for the most part its safe to move around and in a lower priced market in general its easier to move.
Lending Trends: 2010 brought some conformity to the lending industry. Finally after several years of lending process chaos we now can generally predict the home loan process for most people about what the lenders will need and who will actually qualify. In most cases a Home Loan will take about 35 days to fully approve and close if there are no issues and because of that the standard escrow is now about 60 days and a “quick close” is 45 days
Appraisals continued to be a challenge this past year. We saw Banks and the Government putting pressure on the appraisers to keep values low; with few exceptions appraisers use the lower comps to appraise your home for purchase transactions.
Private Money Loan is all the rage. With huge segments of our credit worthy society un-able to qualify for loans through Banks and other traditional lending institutions we saw many clients using family and friends to finance their purchases. This makes sense to a lot of people. If you have a large chunk of money in the bank or other locations earning 2% why not loan it to the kids or in-laws at 6.5% to purchase a home, it’s a win-win for both parties.
Seller financing is back, if you’re in a place to carry the note on your property you open yourself to a huge market of well qualified credit worthy buyers who don’t fit for some reason into the small box of people who banks will lend to. The sales we made recently with these terms fetched a better price for the property and well a secured note in the 6-7% range after a large down payment for the owners, try getting that on your CD’s at the bank.
Social Lending is the new Buzz Word around town. This is a different way to borrow and lend money, it’s called Social Lending Groups. In general this would be large clubs or groups of people who get together to either lend money in small amounts or borrow money from each other. If you would like to be a lender you join and lend $25.00 to $100.00 along with a group of 1000 other people to an individual person. This person would be borrowing $5000-15,000.00 to buy a car or pay off credit cards. You would know their credit rating and why they want the money. They would be paying 10-11% and you would be getting 6-8% on your money. As the lender your risk is very small per person as your only lending a small amount and you get to decide based certain information if you want to take part. Now this is being done for smaller personal loans but there is a lot of talk about options like this coming for larger loan to purchased homes sometime in the future. We can’t put links into these emails, but be sure to do an internet search for “Lending Club” to see one of the first sites fully up and running with more coming soon.
Best deals have been in two areas. First we have finally seen a drop in the prices of apartment buildings if the owner needs to sell. Non-owner investment financing requires a lot of financial muscle now but for those who qualify we think its time to start buying in this category of property again. Second is Mid-Valley foreclosures, we sold a lot of homes this year in Van Nuys, Sun valley and North Hollywood in the low 200’s, these rent easily and usually with some type of positive cash flow. Can our team help you find one?
Painters / property owners BE WARE! The government has regulated who can paint your property. If you live in your house then either you or an EPA approved lead based paint contractor may do paint work at the property but no one else. If you don’t live at the property then only an EPA approved Lead based paint contractor may paint at the property, not even the property owner can paint unless they are EPA lead based paint certified. If you’re not careful you can now be sued by property occupants and occupants of adjacent properties if you have paint work done by Non-Certified workers
IRS audits are coming soon! It is estimated that at least one of your tax returns will be fully audited in the next five years in an effort to catch Tax-Cheaters. Be aware of this trend and properly file your taxes, use the best person you can find to file your taxes for you and if you don’t have someone ask us we have a GREAT reference.
Plan to Borrow by taking fewer tax deductions and showing more bottom line income. This will help you a lot if you try to buy or refinance.
Another update will come soon. I’m leaving at the end of next week for my yearly 6 day conference with the best and brightest of the Real Estate industry. I will learn a lot about what’s going on in every aspect of the economic, finance and Real Estate fronts as well as what they predict for the future. I will send some type of update from this event in about a month.
We need work! Someone told us the other day they didn’t list with the Foggs because we were too busy and successful. I almost fell out of my chair. Yes we have diligently studied our craft, we know better than almost any agent how to sell your home in this market and get you a great price but we are NEVER too busy or successful for anyone Please call or email us with any need you have we always want to help you and we NEED work.
Our resources are available to you: Plumber, Painters, handyman, Lawyers, Contractors, Accountants, Pavers, Electricians, anything you might need we likely have a Great person to refer you to.
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Thank you again and God Bless,
Pat and David Fogg
The Fogg Blog 