Timely Real Estate News………………………………………………..1 March 2010
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Olympic Wonderment….Vancouver does the Winter Games proud….
It started out as the ‘glitch’ Olympics, and it ended on a sense of wonderment and spectacle, all blended together into the magic of Vancouver, one of North America’s favorite city, certainly one of mine. The 2010 Winter Olympics will not soon be forgotten for its majesty of accomplishment of the athletes — many of whom came to these Games with heavy burdens on their backs — could they grab the gold their reputations were pushing toward them? They did — in splendid and spectacular fashion….Lindsey Vonn, Bode Miller, Shani Davis…and who will ever forget the freshness and buoyancy of Shaun White? Apolo Ohno, the US hockey team, the new stars in Nordic Combined, winning gold and silver in a sport where the US has never won anything, it was the magic of South Korea’s Kim Yuna, winning a gold medal in Ladies figure skating in world-record, with seemingly effortless fashion, the beauty of Evan Lysacek’s skating to gain the gold medal for the US in male ice skating for the first time since 1988. I hope you had an opportunity to see the final hockey game between the US and Canada, it was an amazing game, even if you do not totally understand the game. But just as important was the tenacity and perseverance of the Vancouverites who stepped up to the Olympic challenge when it counted. The warmth and hospitality of Canadians, everywhere, overwhelmed everyone — even the sternest critic. Indeed, it was a magical time. Russia is next in 2014. Will it ever be the same?
There are some iconic images of the games and Vancouver that I am sure will stick in our minds for a long time. Knowing that I love gloves and mittens, my family got me these iconic mittens as a Valentines Day gift! They are really great.. Warm too.
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Ever wonder who has the money to purchase a $35 million home in Bel-Air?
That’s exactly what Nicolas Cage was wondering when he finally had to reduce the price of his 11,817-square-foot English Tudor in Bel-Air 50% to $17.5 million. Where were these buyers with the $35 million he originally sought for his mansion? The house finally sold at auction around $10,000,000. Origin ally, he had put the house on the market in 2006 for a robust $35 million, the weakened real estate market came home to roost, so to speak, and Cage was just one of many wealthy homeowners around Southern California who thought their mansions and estates were worth a bundle. When the housing bubble burst several years ago, the most dramatic declines hit the mid-priced and low-end markets, where home sellers had to compete with cheap foreclosures. But today, as the Times reported, even the wealthy are facing the new reality as some luxury homes’ prices have fallen ‘like a rock’ over the last few years and agents are begging sellers to be realistic in setting an asking price. I find that in the price range where I concentrate — $1.5 million to $10 million — many sellers are simply ignoring the economic realities.
“Therein lies one reason for more overpricing in the luxury home market,” said Gary Painter, director of research at the USC Lusk Center for Real Estate in the Times’ article. “What’s different about the high end, compared to the general population, is that people who have substantial resources are able to wait longer” to sell, Painter said. “In the bottom of the market, you see negative-equity situations, loans going up, people must sell. Outside forces force them to ‘price to sell’. Those sorts of outside forces aren’t as present at the upper end.” But that has changed, too.
Currently, there are five properties in escrow in Bel Air Crest, of those five; four are short sales with prices much lower than we have seen for quite a while. None of these prices bode well for homeowner equity. “Every time a bank-owned sale occurs, there is a corresponding lowering of the comps in the marketplace — and this affects your home value, no matter where you live.” And it’s happening all over the Westside — in Beverly Hills, Beverly Hills Post Office, Bel-Air, and Brentwood — the four areas I report to you about.
In response to unrealistic expectations from sellers, I have a simple policy: Price ahead of the market. Where is the market going to be in 30 days? If a seller doesn’t get any offers at the original price, we agree to lower to price to the level when buyers are going to appear. It is ill-advised to over-price a home in this market — buyers are too sophisticated today. There are many free, online web sites that can peg any home’s value, even if it is not on the market. However, a word of caution: Many of these shoot-from-the-hip online estimates are simply wrong — mostly too low to real values, or not accurate information on the property itself, square footage, lot size, etc. While they sometimes work in theory, I have found that they tend not to be that accurate. Nothing replaces an informed agent who knows your neighborhood and the market. Some times, buyers will spot their dream home and pay whatever the asking price is — but that’s rare in this market.
It is not amazing to me to have read the article in the Los Angeles Times two weeks ago – When I have been talking about this issue for months…
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Jumbo mortgages start making a comeback…..
There is good news on the jumbo mortgage rate front. In a boon for borrowers in California’s expensive housing markets, the jumbo-loan market is starting to return to normal.
Rates on jumbo mortgages — loans of more than $729,750 in counties with the highest-cost housing — shot up during the financial crisis as lenders and loan investors shunned anything tainted with even a whiff of higher risk. Rates on big mortgages were especially high relative to those on smaller loans.
Two weeks ago, the average interest rate on 30-year fixed-rate jumbos dropped to 5.79%, a nearly five-year low, according to rate tracker Informal Research Services of Calabasas. It edged up to 5.88%, but is still very attractive by historical standards. The average is down from well above 7% in late 2008. The cutoff for single-family homes was $417,000 from 2006 until February 2008, when lawmakers increased it temporarily to $729,750 in certain high-cost areas, including Los Angeles, Orange and Ventura counties.
The increased upper limits, which have been extended until the end of this year, have created a three-tier system in expensive areas, mortgage professionals say: loans of up to $417,000, which are the easiest to obtain and carry the lowest rates; “conforming jumbos” from $417,000 to $729,750, which are somewhat harder to get and have slightly higher rates; and true jumbos, with the toughest standards and highest rates.
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….and delinquent rate for mortgage loans fall. That’s good news, sort of……
The delinquency rate for mortgage loans on one- to four-unit residential properties fell to a seasonally adjusted rate of 9.47% (of all loans) at the end of the 4th quarter, 2009 — according to the Mortgage Bankers Assn. This is down slightly from 9.64% in the 3rd quarter. “We are beginning to see the beginning of the end of the unprecedented wave of mortgage delinquencies and foreclosures….with the meltdown of the California and Florida housing markets,” so said Jay Brinkmann, the association’s top economist. While delinquencies are leveling off, the portfolio of loans more than 90 days past due, however, are rising to record levels. These troubling trends reflect the long-term unemployment situation in the US.
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405 work update – Now the real fun begins!
The work on the Sunset Bl Bridge, the gateway to and from Brentwood will begin during March 2010, and will continue for 16 to 18 months. The realignment of the traffic lanes on the bridge to the north will start during the second week of March. Following that, the traffic signals will be set up. While the work is going on, the on ramp to the southbound 405 will be closed and the construction will take approximately 16 – 18 months. Access to the southbound 405 will be gained via the on ramp off Church Lane. The on ramp at the east end of the bridge (northbound) will remain open throughout the construction period.
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Baseline Hillside Ordinance
For those of you who have not been following this issue, you might recall that about
two years ago, an ordinance was passed by the Los Angeles City Council dealing with the “Mansionization” of homes south of Sunset Boulevard. Since that time, they have been working on what they are calling the “Hillside Ordinance that will deal with any property north of Sunset Blvd., This issue is now close to be adopted by the Los Angeles City Council, and will impact all of us that live north of Sunset. It will impact the ability to grade a lot, limit ones ability to increase the size of their property, This issue obviously can be somewhat contentious as it limits just want can be done to a property. There are two links that you might want to check out that will give you more information on this issue…. Baselinehillsideordinance.lacity.gov and concernedlahomeowners.com.
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PVC plastic’s environmental impact
Polyvinyl Chloride, more commonly known as PVC or just vinyl, has been in widespread usage since the early-mid 20th century.
PVC is strong, resistant to oil and chemicals, sunlight, weathering and flame resistant. It’s everywhere around us. PVC is an incredibly versatile material use in bottles, packaging, toys, construction materials, bedding, clothing, piping, wire coatings, imitation leather, furnishings and more.
PVC ranks the third in both global plastic output and consumption. Over 33 million tons of PVC is being produced each year and that figure is increasing annually. Around 57% of PVC’s mass is chlorine, so it requires less petroleum than many other polymers.
So, what’s the problem with PVC?
For starters, oil and chlorine aren’t what you’d call “green” substances in regards to their extraction, refining and by-products. So much of our modern life is based on oil that if production were to suddenly cease, it’s not just transport that would suffer – it would affect every aspect of our lives.
PVC’s durability is also its downfall environmentally speaking – it’s not biodegradable or degradable. Items made from PVC will retain their form for decades and the breakdown that occurs is just granulation – the pieces simply become smaller. Animals can ingest these pieces and the plastic can block their digestive tracts.
Greenpeace has pushed for the cessation of PVC production as dioxin is created from the manufacture and incineration of the substance. Dioxin is one of the most deadly of man-made poisons and it’s a cumulative toxin, meaning it stays in the body for a long time, concentrating in food chains at the highest levels in carnivores – which includes us.
It’s often reported that no other plastic presents such a direct environmental and human health threat as PVC does throughout its lifecycle; from manufacture to use to disposal – yet our demand is only increasing.
Recycling PVC
PVC is also difficult to recycle given the presence of additives including heavy metals such such as lead and cadmium; in fact it’s considered a contaminant in other recycling streams. Currently under 1% of PVC is recycled.
Alternatives to PVC
This is a tough one. Some new materials with most of the desirable properties of PVC, without the health and environmental concerns are now being produced. These degradable plastics are engineered to breakdown under landfill conditions (darkness, heat and moisture) within a few years without emitting toxic gases or other pollutants. At this point in time, these sorts of materials aren’t widely available and are quite expensive.
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We are heading into the buying season, and I have some sensational listings for you to share with anyone that might be interested in purchasing a move. I have a 4/3.5 Can yon home in Bel Air Crest at the amazing price of $1,600,000, a magnificent home also in Bel Air Crest with 7/9.5 movie theatre, wine cellar for $6,200,000, and another great home in Marina del Rey with 4/4.5 within a block of the beach for $1,699,000. I also have some listings coming up in the next few weeks in Mountaingate.
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