Prognosticators were quick to point out the decline was due to the federal tax credit expiring. If this is the case then I guess the opponents of the tax credit were correct several months ago when they proclaimed the tax credit would only serve to move up purchases, not increase them. It appears the tax credit was a complete disaster, at least from a macro economic point of view.

All Real Estate is Local

What most of us here are concerned with is how are things here in Pasadena? The National Housing Report uses single family, condos and townhomes. I analyzed the sales of Pasadena Condos and Townhomes last week, so this analysis only looks at Pasadena single family homes. While it is true fluctuations do occur on a local level, these exceptions are very often mitigated by influences outside of current environments. It reminds me of an analogy used in boxing “beat the body and the head will fall”. The economic news delivered a gut punch to the housing market in July and even smelling salts in the form of lower interest rates couldn’t help the market regain its footing.

Housing Indicators

There were 49 more units for sale in July than there were in June resulting in a 16% increase. Compared to last July, inventory increased by 78 units or 28%. Unsold inventory of single family homes in Pasadena also reached a 4.7 months supply. Growing inventory is a strong indication of a slowing market

Again looking at month to month, July home sales were 6 fewer units than June, but 20 fewer units than last July which was about a 21 % decrease. A slight offset to the lower monthly sales numbers were “pending” units. They increased by 8 units or approximately 11% from June to July.

Most articles I have read blame the nations housing woes on unemployment indicating housing strength will not return until we see the unemployment numbers decline. So much for the hypothetical correlation which thought the strength of the housing market was dependent upon low interest rates. Could interest rates be any lower? So much for the correlation which linked housing and affordability. Housing prices have come down probably 20% to 30% from their highs 4 years ago. Strike Two. The new correlation for the housing market coincides with the employment picture. If people are working and feel secure about their prospects for continued employment, housing will prosper.

Pasadena Single Family Home Sales Dip in July is a post from: Up2Date

Search all Homes for Sale in Pasadena, South Pasadena, Altadena and all surrounding areas

Looking for a single family home with 3 beds and 2 baths with 1600 square feet in the Pasadena zip code of 91104?

Want to keep it between $600,000 and $700,000 square feet? Very easy to set up.
How about a condo in South Pasadena between $450,000 and $500,000? Want to try and buy below market and think you may be interested in a bank owned home in Altadena? Its all here for you.

The search results below are from a search I created for pre-foreclosures and bank owned homes in the Pasadena zip codes of 91104 and 91107. Here is how you can customize and create your very own search:

1. In the upper left hand corner of www.up2daterealestate.com you see a map of Pasadena, click it. It is just below the logo on this page.
2. The search screen pops up with menu options on the left.
3. Enter a city or zip code.
4. Click in the box below and enter a price or move the sliders.
5. The next options will limit the properties you will see. Unless you are very specific, don’t be too precise with your parameters.
6. Property Types – enter single family, condo, etc.
7. Foreclosures – tab will show you bank owned or pre-foreclosures and short sale properties.
8. Click “SEARCH”
9. Properties that meet the guidelines and criteria you have selected will now populate on the screen with an easy to read map interface.
10. To see complete listing information and more pictures, click the picture of each listing.

Set up your account and elect either email or RSS updates and have your home search come to you. When you find something you like, give us a call. We would appreciate the opportunity to help you find your next home.

You can also bookmark this page. This search will remain intact.

Search Bank Owned, Pre-Foreclosures and all Homes for Sale is a post from: Up2Date

The timing of the award wasn’t exactly working in my favor. We have been busy searching for a new office location and attempting to sign a lease as we prepare to open our new RE/MAX office in South Pasadena. I am glad to report that we are now in the final stages and will soon be announcing the Grand Opening.

Fortunately or unfortunately, a blog is like a house plant. You have to constantly feed it so it will grow and improve your search rankings or it will slowly wither as it becomes forgotten. Not posting any recent articles for several weeks tends to diminish what you work so hard to obtain, which is a loyal following.

One of the benefits of writing about our Pasadena Real Estate Market is that it does require preparation which includes analyzing, charts, sales history and trends. It allows you the opportunity to make better, more informed decisions because it does require some time and studying what is actually taking place as opposed to formulating an opinion based upon the latest rumor or economic news. Facts are indisputable, but the interpretation of what those facts will mean in the future is debatable.

If you have enjoyed what you have read here over the last three years we would appreciate your vote. Just click the logo and it will redirect you to Zillow. Give the page a couple of seconds and the poll will pop up. Vote for up2daterealestate. We would really appreciate it.

I remember it was my freshman year in college when we were introduced to Rene Descartes, who proclaimed ‘I think, therefore I am”. However in my situation, “I think, therefore I blog.”

The Best Real Estate Blog in Pasadena is a post from: Up2Date

Market Snapshot – Left graph

Two closely watched indicators declined from June, the number of sales and the number of units that entered “pending” status. There were about the same number of new listings for the month, but since there were fewer sales, actual inventory rose due to less units being absorbed.

Sold and Percent – Middle Graph

The critical component in this exhibit is the price sellers are receiving for their property. This shows the actual selling price compared to the listing price expressed as a percentage. In July, we see the value dropped to 94%, its lowest level since January which is typically the slowest month of the year. If a product was listed for a dollar, it sold for .94 cents. This indicates sellers must be willing to be more aggressive with their pricing and realize they will be selling for less money. Another sign of a slowing market.

Inventory Levels – Right Graph

Inventory jumped to over a 6 month supply which was a result of the poor sales in July. Inventory had been steadily declining as sales had been increasing, but when sales begin to slow during what is usually a high volume month, inventory consequently rises.

How long is the wait?

The other factor that has to be considered is the unusually low cost of money. With interest rates around 4.5%, one would normally assume a higher level of activity in the housing market. As I have always stated, one month does not a year make, so we will continue to see if the market does begin to slow down or is just catching its breath.

One last thought, I think if you see a slowdown in the housing market, you will begin to see it affect other areas. It would not be limited to just housing. Take notice the next few times you go to Starbucks or Costco and how long you stand in line. Store traffic is a great indicator of the strength or weakness in the overall economy.

Charts and Analysis, But How Long Is The Line? is a post from: Up2Date

Your home may reveal more about you than you know

The Housing Progression

As we move through the stages of our lives, our home is an integral part of the responsibilities we’ve obtained. In the college years our lives are marked by only a few commitments as we have a last chance to enjoy our youth. Our financial undertakings can be as simple as our housing needs. A 6 to 12 month pledge and you’re free to go.

Life begins to take a major turn once the kids start arriving. One day you wake up with the realization that your needs aren’t just about you anymore and that two bedroom condo now seems very inadequate. Its time to think about school and a yard, a place to play. This is the point where you begin to remember the conversations your parents had with their friends and now the realization begins to set in……you’re there. A milestone you thought would never be reached is here, front and center.

Our homes are our sanctuaries. They reveal so much about us whether it be expressed or implied. Be it ever so humble, there’s no place like home.

The Life Changing Event We Call Home is a post from: Up2Date

The Nuclear Option - Sell Quick and For More Money

For this example we will use a house with a market value of $500,000. Traditional theorists believe the more the house is listed for, the more it sells for. So seller “A” decides to sell his house for $550,000 and adopts the philosophy that he can always come down, but once we do we can’t go back up. Two streets over seller “B” decides to pursue the less conventional approach and elects to establish $450,000 as the price she will choose.

So the $64,000 question becomes, or in this case the $50,000 question is, which homeowner will sell their home the quickest and for the most money?

Getting a home seller to push the red button (sign the listing agreement) usually includes a summary of the benefits it will produce:

1. Awareness – a home priced below market value is going to create a lot of visibility
2. Traffic – increased visibility leads to more traffic. The more people that look at your home, the more likely a buyer will emerge. Real estate is a numbers game. It helps when the odds are in your favor.
3. Market Pricing – the first 30 days are critical when selling your home. Think of the grocery produce section, with a longer shelf life. It’s fresh, it’s new and will never look better than it does for the first few weeks. After that people will disregard it and wonder why it did not sell.
4. More than One Offer – making a multiple counter offer to more than one buyer changes the whole dynamic of the transaction and puts you in control. You want to sell from a position of strength, not of weakness.
5. Select Your Buyer -the laws of nature state the strong survive. It’s no different here. The elimination of some buyer contingencies, more deposit, better credit. All characteristics of a buyer you want to do business with.

Compare this to the consequences of listing too high and chasing the market. I don’t think most people would disagree with the stigma of an overpriced listing and the liabilities associated with it such as:

1. Buyer motives – are they serious about closing escrow or are they in escrow with you because nobody else would accept their offer?
2. Desperate seller – if the property has been on the market for an extended period, the thought is the sellers will accept anything just to get it under contract
3. Property issues – what is wrong with the property? Structural, plumbing, foundation. These questions circulate among potential buyers when the property sits unsold.
4. Seller concessions – be prepared for an aggressive list of demands from a buyer once you are on the hook, because you cannot afford to lose this contract and put the house back on the market.

Strength or weakness, chose or be chosen, move on or stay. It’s great to have choices!

The Nuclear Option, Quick, Painless and Profitable is a post from: Up2Date

Pasadena Housing Inventory March '09 thru May'10

The number of Pasadena homes in foreclosure has been staying constant at close to 650 units for the last several months. So, what does this really mean? Are homeowners more likely to make their mortgage payments now than they were this time last year? Are modification efforts taking place which are keeping homeowners in their homes ultimately delaying the inevitable? Is there now so much government intervention in a process that used to take close to 4 months, now taking up to 2 years? This reminds me of some of my college friends who managed to squeeze 4 years into 6.

I can give you my opinion based solely upon my experience and empirical data I have collected. I have actually had the opportunity to meet with some people in the foreclosure process in an attempt to consult with them about their options. For the most part there doesn’t seem to be a real concern the bank will kick them out and foreclosure on their home. If here is, its not visible to me. The wave of short sales that have been predicted hasn’t seem to materialize yet, at least here in Pasadena. To add a little proof to what I just said, in the week of June 7th, there were 29 homes scheduled for auction. There was 1 recorded foreclosure. From what I have observed is that many of these homes are just postponed until next month. How high is the water mama, two feet high and rising.

Pasadena’s Homes For Sale, Now and Then

I read an article he other day where someone cited the rising number of homes for sale along with the high amount of shadow inventory as evidence the housing market was slowing. Since i have already addressed the number of homes with Notices of Default in Pasadena has been fairly constant, I decided to look at the current number of homes for sale. Included in this number were single family, condos and townhomes. I looked at the boom years through the end of the cycle which occurred in mid 2006.

Pasadena Housing Inventory March '05 thru May '06

This is a very impressive statistic considering the availability of mortgage money has been severely curtailed compared to the free and easy policy of years past when all that was required was to turn your head and cough.

The other similarity worth noting is inventory begins to build in January and February as these months can typically be the slowest months for home sales. It happened in 2006 and again in 2010. My bet is that it will repeat once more in 2011. Oh yea, as far as the free beer tomorrow goes, that was a sign in a roadside hamburger stand in Houston Texas back in the mid 80’s. Remember Houston? They had their own issues with the oil patch and a crashing real estate market.

Shadow Inventory, Actual Inventory and Free Beer Tomorrow is a post from: Up2Date

Market Variations

The unique thing to point out when attempting to explain market activity with condo’s and townhomes is the analysis includes new construction. Therefore the information is a little less predictable. Analyzing single family home prices in Pasadena produces data that is more uniform since we do not have new construction here to speak of. In 2009, according to the graphs there were 814 single family homes sold in Pasadena and 486 townhomes and condo’s, making the condo market about 60% of the single family market. This year through April there have been 220 recorded home sales and 160 sales of towns and condos. This year condos are about 73% of the market YTD.

Sales Summary

In April, 12 units sold above $500,000 compared to April ‘09 when there were only 6. Also emerging on the condo / townhome market this month was a recorded sale over $2,000,000 at an astounding $764/sq ft. That is expensive airspace. To get an idea of upcoming activity, inventory in the condo / townhome market has been holding steady, while it has also been gradually rising in the single family home arena. However this may be somewhat misleading as it appears much of the new construction is being held at the sales office level and not hitting the MLS. The median price of all of the properties for sale currently stands at $515,000.

There is still some price negotiation going on as Sellers received about 98.3% of their current asking price, however this was after an initial price reduction of approximately 3%.

Click the image to view

Searching for a Pasadena Condo or Townhome? Market Activity Update is a post from: Up2Date

If you have been reading this blog or other real estate publications or just the newspaper (does anyone read the newspaper anymore?) you probably are aware that short sales are being marketed as a viable alternative to a foreclosure.

If a short sale is truly a panacea for homeowners in distress (think of a woodpile) then as with most woodpiles, things may not be as cut and dried as they seem. For instance, there may be snakes in the woodpile. Some homeowners are finding out there may be a lot of snakes in the woodpile which are taking shape in the form of taxes. Like most people, you are probably afraid of snakes.

In California when you purchase your home, you have what is known as a purchase money mortgage. Sounds simple; its the original loan you receive to obtain your residence and it affords you a protection known as an anti-deficiency, meaning the homeowners liability on the mortgage is limited to the property itself. As the video explains, once you refinance your property you may lose the protections you are entitled to under a purchase money mortgage. The California Association of Realtors is calling for passage of Senate Bill 1178. If passed this bill would afford additional protections to homeowners who have refinanced. Rather than summarize the proposed legislation, watch this short video. It provides a great explanation.

Full Disclosure?

When most people used a Home Equity loan, my guess is they understood the home became the collateral. Don’t pay and you can lose your house. You were provided with a 3 day right of rescission to think about it. My question is how many people understood the foreclosure ramifications when they chose to refinance their home? Was this a conversation you had with your lender?

The issue here is how to avoid your exposure to the snakes. The answer is to seek the guidance of the appropriate professional be it legal or tax.

For more information refer to the Mortgage Forgiveness and Debt Relief Act.

Proposed Bill Could Ease the Burden of California Short Sellers is a post from: Up2Date

Pasadena Home Prices Are Trending Higher

What to Buy

As a potential homebuyer you have many options to consider including your budget, upkeep and maintenance, the lifestyle and amenities you desire. After this, then decide what meets your needs, either a single family home or a condominium / townhome.

Some buyers also attempt to look into their crystal ball and attempt to make home buying a science. Whereas home buying is usually a very emotional process, some folks attempt to study and rationalize every possible situation including other factors than just the comparable sales in the area. Whatever your approach, the more focused and less general information which you can draw from, the more likely you can make a better decision.

Median Price and Price per Square Foot

In a city as large and diverse as Pasadena median home prices can be very volatile. Although it is typically the main measure used in the media to report monthly home sales too much relevance is given to this measurement. However the price per square foot viewed over time can be a much better indicator as evidenced by both of the charts. Take a look at the graph for the Single Family. Since February ‘09 the price per square foot has been fairly consistent, while the median prices have had larger swings and been less predictable. (note: in the graphs, the months run along the bottom of the chart, while price per sq ft is indicated on the right and the median price $000’s is indicated on the left.)

The Condo and Townhome Market

Defining the condo and townhome market in Pasadena has almost taken on a “V” shape with a sharper decline and a more pronounced ascent. However there has been less consistency due to the market experiencing a pause in November of last year. The other factor that has defined this market has been the greater number of new construction units that have been for sale over the last 18 months. Most of which have been designed to appeal to a higher end consumer than the $500,000 price point not seen in the last two years.

The Condo and Townhome market has taken longer to improve

Whatever your preference it’s always a good idea if you can see how your prospective purchase has performed in a down market. That’s something we have all become familiar with over the last few years. Whether you view a home purchase as an investment or a place to live, you can table the emotional appeal of your real estate purchase with a look back into what has transpired over the last few years.

Why the Word Home is in Homework is a post from: Up2Date