Timely Real Estate News………………………………………………15 January 2013
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Happy New Year!…. I hope you all had a wonderful holiday and are looking forward to a great year, I know I am!
Some fun facts about the Award Season
As we head into the awards season, I thought I would share some fun facts with you. Did you know that the Oscar weigh 8.5 lbs, and the Golden Globes comes in at 5.5 lbs? According to a recent article in Vanity Fair, the Academy Awards show is âbest known for fitting two hours of entertainment into a four hour showâ, and the Golden Globes for âthe open bar all night longâ.. There are some other fun facts in the article.
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New Mortgage Standards Unveiled by Consumer Bureau
In sweeping new rules aimed at fixing the home lending market, the Consumer Financial Protection Bureau has “redefined” what is a “qualified mortgage” â one a borrower can actually be expected to pay back â while, in effect, banning many of the loans at the center of the financial crisis.
As reported in the Los Angeles Times last week, the regulations, among the most important handed down yet by the 18-month-old agency, also aims to loosen the choking loan standards that have prevailed since the housing crash. They do so by limiting bankers’ liability for prime loans that can be sold to government-backed mortgage giants such as Fannie Mae.
The rules, to be phased in over the coming year, aim to improve access for creditworthy borrowers to today’s historically low-interest loans and to create a stable and predictable housing finance system for banks and their customers alike. Complying with the rules would provide a “safe harbor” shielding lenders from being sued for one of the most frequent and bitter complaints of the subprime era: sticking borrowers with unaffordable loans, then selling off the loans â and the risk.
The new rules met with relief from mortgage bankers, who feared Draconian restrictions from the bureau. Consumer bureau Director Richard Corday, who was scheduled to formally unveil the rules this week, said the aim was to achieve “the true essence of ‘responsible lending.'”
The qualified mortgage rules rest on the principle of ability to pay, the goal Congress told the bureau to implement in the regulatory reform law passed after the financial crisis. The rules notably limit a potential borrower’s total payments, including those for property taxes, fire insurance and non-housing debt such as credit cards, to 43% of gross income.
During the housing boom, aggressive lenders had set the bar at 50% or higher for mortgage payments alone â disregarding other debt â and then allowed borrowers to qualify by merely stating their incomes, with no documentation. The new rules simultaneously aim to ban mainstream use of the riskiest practices of the housing bubble, such as loans made without checking tax returns and pay stubs; loans with payments so low that the loan balance rises instead of falls; and qualifying borrowers based on low “teaser” rates instead of fully adjusted payments.
Certain subprime loans to borrowers with credit problems could be qualified mortgages, but not the loosely underwritten loans that helped fuel the housing boom and bust. Lenders would still have to determine that borrowers could afford to repay such loans, which would carry significantly higher interest rates than prime mortgages.
Lenders are expected to continue lending outside the guidelines in some cases. For example, jumbo mortgages â those too big for purchase by Fannie Mae and Freddie Mac. The entire program is being tweaked and will be rolled out starting this coming week.
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New laws that will positively affect real estate in California
Hold on….we actually have some good news that could brighten your day. California Attorney General Kamala D. Harris
announced last week that the California Homeowner Bill of Rights, a landmark package of legislation that extends key mortgage
and foreclosure protections to California homeowners and borrowers, took effect on January 1, 2013. Will you be protected? Well, it depends.
Here’s what the new laws say: The new laws restrict dual-track foreclosures, guarantee struggling homeowners a reliable point of contact at their lender and impose civil penalties on fraudulently signed mortgage documents. In addition, homeowners may require loan servicers to document their right to foreclose. This is just further clarify often cumbersome and confusing language and documents that homeowners face when trying to figure out what the “real intent” of the documents they sign when seeking re-financing (or new loans).
.” As a result:
â˘Â   There is a restriction on dual-track foreclosures, where a lender forecloses on a borrower despite being in discussions over a loan modification to save the home.
â˘Â   Struggling homeowners are guaranteed lenders who will provide them a single point of contact with knowledge of their loan and direct access to the banksâ decision makers.
â˘Â   The statute of limitations to prosecute mortgage-related crimes is extended from one to three years, allowing the Attorney Generalâs office to investigate and prosecute complex mortgage fraud crimes.
â˘Â   The AGâs office can use statewide grand juries to investigate and indict the perpetrators of financial crimes involving victims in multiple counties.
â˘Â   Purchasers of foreclosed homes are required to give tenants at least 90 days before starting eviction proceedings. If the tenant has a fixed-term lease of one year or less, the new owner must honor the lease unless the owner can prove that exceptions intended to prevent fraudulent leases apply.
The Mortgage Fraud Strike Force, which was headed by AG Harris, was created in May 2011 to investigate and prosecute misconduct at all stages of the mortgage process. In February 2012, The Strike Force secured a commitment from the nationâs five largest banks of up to $18 billion for California borrowers
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Mortgage Debt Relief Bill of 2007 Extended
It is now official: The so-called “fiscal cliff bill” passed at the eleventh hour, and as an added attraction it included an amendment extending the Mortgage Debt Relief Bill of 2007 for one more year (December 31, 2013). This is good news for homeowners who remain “underwater” on their primary residence and are considering a short sale. As you may recall, the Mortgage Debt Relief Bill of 2007 provided tax liability exemption for certain taxpayers who received a forgiveness of debt from their lender. Please remember not all taxpayers qualify under the terms of aforementioned bill, for that reason consultation with a CPA / Tax Advisor / Accountant remains a prudent course of action for any homeowner evaluating options. The IRS website www.irs.gov features a very comprehensive analysis of the Bill which can be very helpful for sellers who are contemplating a short sale as an option to foreclosure.State tax liability is a horse of another color, for that reason homeowners must be investigate whether or not the state has or intends to pass a bill with similar/parallel protection.
It’s wonderful see that we are getting the kind of legal “teeth” necessary to curb the practices of banks and mortgage lenders, and that those who need it can now get the much needed help they have been waiting for.
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2012 — It was a very good year…..real estate sales volumes up!
In real estate, we always look for ‘signs’ — not just on the front lawn of one of our listings, but for signs (as in “omen”) that we have finally turned the corner. I’m not going to tell you we have rounded the corner, but we are definitely moving in the right direction. And one of the best signs is to see the continued strength in our residential sales. At the end of 2011, the sales volume reported in the MLS was just over $2 billion, and as of December 31, 2012, we are logged in more than $2.473 billion, a 21.5% jump over the previous year for the four communities I report on: Beverly Hills, Beverly Hills Post Office, Bel-Air, and Brentwood. The previous year (2011) experienced a 9% increase over 2010, so you can see the trend line is steadily moving upward.
In terms of what area generated the most sales, on the Westside, Beverly Hills was by far the big winner for all of last year — kicking in with $869 million in total sales, a 45% increase of total sales volume for the previous 12 months (2011). Brentwood has really made a comeback after treading water for the past several years in sales volume — it was up 55% in total sales compared to 2011, with nearly $700 million. Beverly Hills Post Office was third, with $400 million in sales, a 3% jump, and Bel-Air was at $506 million, a 19% drop in sales volume.  You also need to remember there have been a fair amount of âprivateâ sales, that means there were agents involved, but for one reason or another, they were not listed in the MLS, so the numbers you are reading here are just those from the multiple listing service.
So what’s missing? What’s missing is inventory. It’s that simple. We are seeing great turnouts at open houses; an open house in
Brentwood Park this last weekend generated 100 groups (the house is listed for over $6,000,000). We still have sellers who are waiting for the market to really come back to the original prices of 2007, when the recession officially started (it ended in June 2009 you know). We have the buyers, but sellers are not as anxious to put their homes on the market if they don’t have do….and
the old law of supply and demand still applies. Houses that were on the market a few years ago that had âissues (not the best location, etc), are coming back on the market now and are selling very quickly.. I used to work for Fred Sands, and he had a wonderful expression⌠âwe wonât hear the bell ringing when the market is changingâ.. Well, I can tell you, the bell is ringing Loud & Clear!
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Median Sales Prices — Beverly Hills leads the way….others follow?
 Beverly Hills has always been one of the bellwether areas for beautiful and expensive homes. As noted above, it made incredible progress in terms of volume and prices in 2012. Year over year, the median sales price for a home in Beverly Hills was $4.000 million, vs. $2.847 million in 2011, a 38% increase.
That’s one of the largest year-end increases we’ve had in the four areas I report on. December was particularly a ‘hot month” for Beverly Hills, they had a 149% increase in media sales prices, going from $2.228 million MSP in 2011 to $4.900 million in 2012. (November, incidentally, BH’s MSP was over $5.300 million, so it wasn’t a fluke this December.) But it was not limited to just Beverly Hills. The other three areas I report on also had positive December sales — Bel-Air was up 4% for December (over the previous 2011 December)….and Brentwood was up 49% for that same period (there were a few large sales the last week of the year).
In terms of Median Sales Prices for year-end in Beverly Hills Post Office the numbers were 7% compared to all of 2011; and Brentwood was down just 1% in median sales price for the year vs. 2011. Bel-Air, which had been falling behind in MSP, actually ended up in the positive — with a 15% increase in median sales prices over 2011. We also need to remember that a large sale or two will also skew the numbers where ever the house is located.
We have to take all of this, of course, with a “grain of patience” — we’re not always going to be up in every month (we seldom are), and we’re not always going to see huge volume increases. What we experienced in 2012, however, was steady, upward growth in all markets except Bel-Air, which also had a strong increase in median sales price. You give a little here, take a little there — that’s been our modus operandi on the Westside for the past five (going on six) years. Patience works some of the time — but not always.
The profile of a buyer today has changed significantly from a year ago; they have got to be quick and vigilant and have their financial âducks in a rowâ. . I have seen so many times that buyers pause too long before making a decision. While I was on holiday in Vancouver over Christmas, I was incredibly busy working, for example, On Christmas Day while my family was in the living room opening their gifts, I was in my sisterâs home office negotiating with two different buyers on two different properties! On one I represented the seller, and we had four offers on a property that had been on the market for four months; and on the other I was representing the buyer and in this case there were two offers on a property that had been on and off the market for six months, was not the in best location! .Of the five days I was gone, I think there was only 1 day that I did not work at least ½ day! Some holiday!!
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Coldwell Banker…..there is strength in our numbers
I have over 30 years in the real estate business…..not always with Coldwell Banker, but like many other changes in life, the real estate industry went through mergers, consolidations, and expansion in the 1980s and 1990s to where it is today â and now for the past twelve years have been with Coldwell Banker, the nation’s largest residential real estate company. Founded in 1906 by Colbert Coldwell after the disastrous 1906 San Francisco earthquake, Coldwell Banker and its sister companies now account for “one out of every four” real estate transactions in the United States. We now have 600 offices in 43 countries overseas, providing our clients a global network serving the world of residential real estate.
What prompted the formation of Coldwell Banker was that right after the 1906 San Francisco earthquake, it was a common practice for real estate agents to act on their own behalf — buy low, sell high, without regard to the seller’s position. Coldwell felt that this practice was, while not illegal, was wrong and founded his company based on principle of representing both buyer and seller with the utmost transparency in an ethical manner. Benjamin Arthur Banker joined Coldwell in 1913, and in 1914, he was made a full partner. The company celebrated its 100th anniversary in 2006.
Today, Coldwell Banker has 3,100 offices and more than 83,000 sales associates in the United States alone. The Brentwood office — where I work — ranks #13 of offices with over 100 agents, (we have over 120 agents) and volume in the US, which speaks to the strength of what we provide to our Clientsâ. We have a strong management, training program, and for the past 20 years, I have been a member of the Mentor Faculty, providing hands-on training and teaching to our new recruits, regardless of their experience in other real estate companies. We do have the “Coldwell Banker” way. My mentoring has also been a keen window into the strength of the market. A few years ago, I numbered as many as ten mentees (all new to the business). In the last few years, I have had maybe one or two at a time, at the present, I am currently mentoring six new agents again. Â
As we enter 2013, I’m proud to be a key member of the CB Brentwood Team.
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Micro Zap Could Reduce Food Waste
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A technology that has been shown to keep a loaf of bread fresh for 60 days could play a significant role in reducing food waste. .Micro Zap uses pulsed power of radio frequencies in the microwave spectrum. According to the company, this pasteurizes food without damaging or changing its quality .
In addition to destroying mold spores that lurk in bread for example, the process can kill E. Coli, Salmonella and Listeria bacteria as well â all of which pose substantial threats to human health. Micro Zap says their process can be used with a variety of food items; including meat products.
Beyond food, the technology may also have applications in treating bed bug infested linen. Micro Zap has already been implemented by several manufacturers of commercial washers and dryers; where its use has demonstrated a significant reduction of bacteria in linen â which can be important in settings such as hospitals and restaurants.
Food waste is a huge environmental problem. The amount of resources that go into getting food products from field to fork is staggering;Â in the UK, nearly a third of bread purchased is thrown away. Australians are now dumping around 4 million tons of food a year and in the US, around 40% of all food produced is discarded. The environmental damage caused by our wastefulness isnât confined to production and transport â after food is thrown out, and if it goes into a landfill, it can then create greenhouse gases as it decomposes.
Even without the whiz-bang technology such as Micro Zap offers, reducing food wastage is something most of us are quite capable of doing to some degree. Perhaps itâs a nice, achievable goal to add to your 2013 New Yearâs Resolution list. Aside from humanitarian and environmental issues; less food waste means more bucks in your pocket
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After taking a little time off for the holidays and selling all of my listings, I have started gearing up for the new year. I have a few new listings coming on line in the next few weeks (sales and leases primarily in Bel Air Crest, Mountaingate and Bel Air), and am working with a number of buyers looking for condos in Santa Monica, investment properties, and homes for their families.. Please let me know how I might assist you or someone you know with their real estate needs.
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