The October Market Wrap Up

Let’s take at look at some October numbers for Los Angeles County and see how they compare to a year ago.

Single-Family Homes

• 5,258 houses sold in October
• The median sales price was $325,000, down 8.5% from October 2008

Condos

• 1,632 condos sold in October
• The median sales price was $315,000, down 5.9% from October 2008

We got these numbers from DQNews.

Dig Deeper Into the Trends

These numbers are for Los Angeles County. To see what’s happening in your neighborhood, check out our stats & trends pages.

The $8,000 Home-Buyer Tax Credit Has Been Extended & Expanded

Earlier today, President Obama signed new legislation extending the deadline for the home buyer tax credit into 2010 and expanding it to include current home owners who are looking to buy a primary residence.

The Basic Requirements

You qualify for the tax credit if the:

• Home you’re buying will be your primary residence
• Purchase price isn’t more than $800,000

This credit is not a loan; it’s yours, but keep in mind you have to live in your new home for three years. If you sell the home in less than three years, you’ll have to pay back the money.

What’s Changed?

With the new legislation, buyers have more time to find a home and more buyers are eligible for the tax credit:

• New deadline: To qualify, you need to be in contract with a seller by April 30th & close on the home by June 30th (The previous deadline was November 30, 2009).
• Not just for first-time buyers anymore: Home buyers who’ve owned and occupied a home for at least five consecutive years during the past eight years are eligible for a credit up to $6,500.
• Increased income limits: Individuals making less than $125,000 and couples making less than $225,000 are eligible (The limits used to be $75K & $150K).

First-time buyers are eligible for a credit up to $8,000 on homes purchased between January 1, 2009 and June 30, 2010. Qualified homeowners can a credit up to $6,500 on homes purchased between November 7, 2009 and June 30, 2010.

Bonus Link

You can check out the full text of the bill. Scroll about halfway down to sections 11 & 12:

• Sec. 11. Extension and Modification of First-Time Homebuyer Tax Credit.
• Sec. 12. Provisions to Enhance the Administration of the First-Time Homebuyer Tax Credit.

Market Wrap Up for September

Let’s take at look at some September numbers for Los Angeles County and see how they compare to a year ago.

Single-Family Homes

• 5,071 houses sold in September
• The median sales price was $329,000, down 9% from September 2008

Condos

• 1,522 condos sold in September
• The median sales price was $319,000, down 9% from September 2008

We got these numbers from DQNews.

Dig Deeper Into the Trends

These numbers are for Los Angeles County. To see what’s happening in your neighborhood, check out our stats & trends pages.

What trends did you see in September?

The Market Wrap-Up For August

Let’s take at look at some August numbers for Los Angeles County and see how they compare to a year ago.

Single-Family Homes

• 5,119 houses sold in August
• The median sales price was $325,000, down 16% from August 2008

Condos

• 1,551 condos sold in August
• The median sales price was $321,000, down 10% from August 2008

We got these numbers from DQNews.

Dig Deeper Into the Trends

These numbers are for Los Angeles County. To see what’s happening in your neighborhood, check out our stats & trends pages.

What trends did you see in August?

62% Of Offers Are On Homes With Multiple Offers

In August, our agents in Southern California presented 146 bids on homes for sales and 90 of them, or 62%, were on homes with at least one other offer, up from 52% in July.

According to Joyti Goundar, things are crazy on the West Side and in the San Gabriel Valley: there are so many multiple offer situations that sellers are able to dictate terms.

Joyti recently submitted an offer on a home near Marina Del Rey with three beds, two baths and 1,200 square feet that was listed for $675,000. Our client offered:

• Full price
• ~30% down
• 17-day appraisal contingency
• 12-day inspection contingency

The listing agent told Joyti there were 14 offers and countered with:

• $735,000
• No appraisal contingency and the buyer pays the difference if the appraisal comes in low
• 7-day inspection contingency and the home is sold as-is: the seller won’t make any repairs or give any credits

Joyti advised her client to walk away:

I would never advise someone to waive the appraisal contingency. Why put my client in a position to pay more than the home is worth? It’s not in their best interest and it’s just not a good idea.

Joyti’s client took her advice and walked away from the deal. The listing agent accepted a counter offer from one of the other buyers.

For more numbers, download the spreadsheet with the data on what happened in August.

Have you had any similar experiences with multiple offers?

First-Time Buyer Hoping To Get The $8,000 Tax Credit? You Have Less Than Four Weeks To Find A Home

The federal government is offering first-time home-buyers a tax credit of 10% of a home’s sales price up to $8,000. To qualify, you must close on a home by November 30th; if you close on December 1st, you’re out of luck.

If you’re a first-time buyer in Southern California, you have a little less than four weeks left to find a home, make an offer and negotiate terms if you hope to close in time to get the $8,000 tax credit.

Close By November 13th

In a normal month, about 20% of closings slip from the last week of a month to the next. This number will almost certainly be higher in November due to the expected rush of buyers trying to get the tax credit and because November 30th falls on the Monday after Thanksgiving.

If you’re hoping to get the tax credit, you want to make sure you’ve closed before the week of Thanksgiving because it’s not a full work week:

• Thursday, November 26th: Turkey day. A day to give thanks and watch the Detroit Lions go for six Thanksgiving Day losses in a row.
• Friday , November 27th: Los Angeles & Orange County offices are closed.
• Saturday & Sunday, November 28th & 29th: The banks aren’t open so you can’t close.
• Monday, November 30th: The last day to close and qualify for the first-time buyer tax credit. It’s going to be a goat rodeo.

To give yourself the best chance of getting the tax credit, plan on closing by November 13th. If you run into any problems during closing, you’ll have more than a week to work things out and still qualify for the tax credit.

Get An Offer Accepted By October 4th

Right now, it’s taking our clients in Southern California an average of 40 days to close once they reach initial agreement on terms. This means if you want to close by November 13th, you need to get an offer accepted by October 4th. That’s 26 days away.

For more information, check out the Home Buyer Tax Credit FAQ from the IRS and get all the details about the tax credit from the agency giving the credit. Also, check out the report that this program may be extended.

Find A Home You Like

Don’t rush into a purchase. Make sure you’re buying because you’ve found a home you want to live in, not because you want the $8,000. You don’t want to end up in the wrong house in the wrong neighborhood with the wrong commute just for a few thousand dollars.

Signed, Sealed And Delivered in North Los Angeles

Listing agents in North Los Angeles are using a new tactic to sell homes. Joyti Goundar, our agent who covers North Los Angeles, has seen a lot of competitively priced homes come on the market with agent-only remarks saying they’ll review all offers on some day in future, usually 10-14 days after the listing date.
Here’s how things work according to Joyti:

Interested buyers have to deliver their offer in a sealed envelope to the listing agent. Buyers often have to include a pre-approval letter and their FICO score as well. On judgment day, the listing agent will open the offers; sometimes they counter the top few, but often they’ll counter all offers. In the counter offers, buyers are told to come back with their best and final offer. The listing agent will ask for no appraisal contingency, a shortened inspection period (7 – 10 days rather than the standard 17) and says the seller selects escrow.

Joyti’s Four Tips

If you’re buying in Pasadena, South Pasadena, La Cañada, San Marino or Arcadia you’re more than likely going to run into this kind of listing. If you do, take a look at Joyti’s four tips:

1. Have your agent check the agent only remarks. These deadlines are generally not made public, but your agent can look to see if the listing agent is doing this.
2. Know what are you comfortable paying. If you get beat out by $5K, would you be o.k. with that?
3. Submit offer at the last minute. Have you agent call to find out how many sealed envelopes are in so you have an idea of the competition.
4. Be patient. 2-3 day response time and it’s hard to predict what will happen, there’s no negotiation.

Have you dealt with any situations like this?

The Market Wrap-Up For July

Let’s take at look at some July numbers for Los Angeles County and see how they compare to a year ago.

Single-Family Homes

• 5,810 houses sold in July
• The median sales price was $319,000, down 22% from July 2008

Condos

• 1,670 condos sold in July
• The median sales price was $306,000, down 14% from July 2008

We got these numbers from DQNews.

Dig Deeper Into the Trends

These numbers are for Los Angeles County. To see what’s happening in your neighborhood, check out our stats & trends pages.

This is our first monthly report on the inventory trends in Los Angeles. What numbers would you like to see in our August wrap-up?

57% Of Offers Are On Homes With Multiple Bids

In June, our Southern California agents presented 140 offers to listing agents and 80 of those, or 57%, were on homes with at least one other offer, down from 65% in May.

Joyti Goundar, one of our all-star agents in Southern California worked on 39 offers in June and 30 of them were on listings with multiple offers. “Things are so competitive right now, many listings are getting 5 – 10 offers so you have to put your best foot forward and make a strong offer,” says Joyti.

One of Joyti’s clients recently bought a home in Pasadena that had 16 other offers. To show they were serious about buying the home, her clients’ offer included a 40% down payment, 3% earnest money, no appraisal contingency and an inspection contingency reduced from 17 to 10 days.

However, sometimes putting their best foot forward isn’t enough. Another one of Joyti’s clients made an offer over listing price, with a 25% down payment and an inspection contingency reduced from 17 to 10 days. The sellers rejected the offer. There were 18 offers and the sellers were countering with the top nine.

A lot of this competition is due to families with school-aged kids trying to buy in between school years. “The summer market is always busy because parents want to buy and get settled before the school year begins,” says Joyti.

Where are you seeing listings with multiple offers?

Appraisals Are Lengthening Closing Time To 40 Days

In June, it took our Southern California clients an average of 40 days to close on their homes, 5 days longer than it did in May. The good news for our clients is that even though it may take a while to close, only three of our Southern California clients’ deals failed to get financing since February.

The main reason closing is taking longer is because on May 1st, the Federal Housing Finance Agency’s Home Valuation Code of Conduct (HVCC) took effect. The HVCC is designed to make home appraisals more reliable by restricting the interaction between mortgage lenders appraisers. Since May 1st, lenders can’t deal directly with appraisers. Instead, lenders schedule appraisals through third-party management companies. This adds a buffer between the lender and appraiser, but it also adds time to the process. You can get all the details in the official statement from the Federal Housing Finance Agency (25K PDF).

“The HVCC is supposed to improve the accuracy of appraisals, but we’re seeing just the opposite,” says Anna Nevares, one of our agents in Southern California. “Many of the appraisers aren’t familiar with the local market and they often appraise home well-below market value. Right now, we’re spending a lot of time disputing appraisals based on bad comparable homes.”

For more numbers, download the spreadsheet with the data on what happened in June at Redfin.