Los Angeles Times - the muted market

This week I was quoted in The Los Angeles Times. I was interviewed by Dianne Wedner for a feature about the state of the real estate market today, as compared to a year ago. The article made the front page of this Sundays real estate section. Here is a snippet straight from the article: "It's pretty ugly out there," said longtime Coldwell Banker broker David Toyama, who specializes in Eagle Rock, Glassell Park, Highland Park and Azusa. His business is down 50% from a year ago, he said, "and that wasn't our best year either." Hope springs eternal, however, and spring typically is the season of highest hopes for buyers and sellers. Despite slumping consumer confidence and ever-worsening economic news, some hardy souls are venturing into the housing market, and not all of them are just looking.

As part of the story, one of our current listings on Townsend Avenue in Eagle Rock is also featured. Ben Manibog the listing agent was gracious enough to arrange for the reporter and photographer to sit thorough an open house of ours. The open house was well attended by 23 prospective buyers. The reporter was able to interview many of them first hand. The host for the open house, Denise Barnes was also interviewed. One of Denises recent buyers is also featured on the cover photo in front of their new home. The photo is captioned, "The usually bustling spring home sales season is quite restrained this year, but some hardy souls are buying."

Here are some interesting facts pulled from the article:

Deal sweeteners

Many buyers are on hold while awaiting that outcome. But with new and resale home and condo closings in Southern California down 41.4% in March from a year ago and the median price off 23.8%, at $385,000, some sellers and builders are luring buyers into the market with discounted prices and concessions, such as paying loan points, helping with closing costs and upgrading kitchen amenities or carpeting.In Los Angeles County, the March median home price fell 18.5%, to $440,000, from a year ago; in Orange County, 19.6%, to $506,000. The hard-hit Inland Empire saw values tank 27.1% and 28.2% in Riverside and San Bernardino counties, respectively. Meanwhile, sales in Los Angeles County plummeted 49%; in Orange County, 46.9%; and in Riverside and San Bernardino counties, 26.9% and 38.0%, respectively. Nearly 38% of existing Southland homes that sold in March were foreclosure resales -- houses sold after they were foreclosed on last year.By a widely used measure of inventory, there has been an average 8.3-month supply of homes on the market in Los Angeles County during most of the last two decades, according to the California Assn. of Realtors. That's how long it would take for the supply of homes to be sold at the prevailing pace. In February, that supply was 21.2 months, compared with 10.6 a year ago. It went as low as 1.1 months in December 2003.The market slide means bargains galore in areas hard hit by foreclosures, such as Hemet 92543 in Riverside County, where median prices plummeted 48%, to $130,000, during the first quarter this year, compared with the same period a year ago, according to DataQuick.

Agent Toyama recently brokered a sale in Baldwin Park in which the first-time buyers, stretching to afford the $325,000 home they wanted, were told by their lenders that they had to pay off some debt to get the green light for the loan.The sellers, eager to clinch the deal, paid a portion of the closing costs, freeing up money for the buyers to settle some of their debts. The sale went through. "When sellers tune out reality," said agent Adriana Toyama, David Toyama's wife, "I refuse their listing."

The article is a fresh current look into the real estate market on a typical Sunday in Los Angeles. I think you will find the information interesting and relevant. It is written from the most important perspective we can have right now, the home buying public. Here is the address to the article, or just click on the title above for the full article. I will try to post the article her at a later time.

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So the market is in the dumps, now what?

In times like today's, I am reminded so much of the market in the early 90's. I never, ever in my wildest dreams imagined the real estate market in Los Angeles could deteriorate so quickly. So here we are again. Now what? To sellers, I say if you do not have to sell, absolutely sell, then ride it out until the market recovers, which it will eventually. This market for sellers, is like selling a commodity at it's low point. If you do not sell then you do not experience a loss. For those that must sell because of relocation's, job loss, spike in mortgage payments etc.. then I say be prepared to make hard fast decisions. Be prepared to list at or below current comparable sales, and be prepared to pay buyer concessions as well as a full commission of 6% or more. This is the reality of the market. Expect to compete against banks and short sale properties, as the increase in these types of sales will start to become more of the norm than the exception.

The silver lining in all this is especially for first time buyers. What an excellent opportunity to find a good home at a great price, and at a decent rate. On top of all this it is now commonplace for a motivated seller to pay for buyers closing costs and other concessions. There are a myriad of new home buyer programs out there right now, from government sponsored silent second programs to down payment and closing cost assistance. In the private sector, home builders are offering below market interest rates, price discounts and upgrades. This cloud in the real estate could be a golden opportunity for astute home buyers in Los Angeles.

affordable housing and loan programs for Los Angeles area home buyers

As a real estate Broker we are pioneering the way for people to afford to own a home, and keep it. Our efforts these past several months have been focused on creating opportunities for homebuyers by assembling the many resources into simple to use systems and resources. You will notice our newest links on this blog, everything from affordable housing and loan programs for Los Angeles area home buyers. To programs for Pillars of the community, like Teachers, Firefighters, Police and Law Enforcement officers, Nurses, Military Personel, and Veterans. We have cutting edge loan programs from CALHFA (Califronia Housing Finance Agency), VA (Veterans Administration), CALVET (California Veterans Association). We also have Affordable Housing programs like silent seconds, closing cost assistance programs, City State and Federal programs.

Los Angeles REO's and forclosures

Find out about foreclosed homes, townhomes and condominiums in the greater Los Angeles area. We will show you how to find, buy or sell REO properties, or show you how to negotiate find or sell a short sale home. Find reo's in the cities of Alhambra, Altadena, Arcadia, Atwater, Azusa, Baldwin Park, Burbank, Bradbury, Covina, Duarte, Eagle Rock, East Los Angeles, Flintridge, Los Angeles, Echo Park, El Sereno, El Monte, Glassel Park, Glendale, Glendora, Highland Park, Irwindale, La Puente, La Canada, La Crescenta, La Verne, Lincoln Heights, Monrovia, Pasadena, San Dimas, San Gabriel, Shadow Hills, Sierra Madre, South El Monte, South Pasadena, Temple City, West Covina.

What it is like to be an Agent in this market

It is now the end of May, and the market has progressed in a pretty healthy manner lately. Healthy to me means that consumers are still buying, however their buying patterns continue to change. Agents have started to shed their seller market skins (finally), and are catering to the needs of this new "normal market". I wanted to give a little insight into what real estate agents have experienced and how they are working now to try to adjust to today’s new "normal market". I keep saying "normal market" because that is what it is, if you look at real estate over the long term, the last 5 years of a steady boom in the market has been the exception, not the rule. From 1990-around 2000, for example, there were 10 years of a normal market in Los Angeles. Prices were declining, then stabilizing, and then slowly starting to increase. You will see that pattern or cycle throughout our real estate past. Now that the dust has settled I think Realtors have made the adjustments to deal with the market or have left the market entirely.
Real estate agents today have learned that they have to be more active with their customers. Where an agent was used to the phone ringing all the time, they now have to make the calls themselves, so to speak. They have to go out and find the buyer for their listings. The good agents are not taking their leads (buyers especially) for granted anymore. They are too few to do that. For example, agents are working longer hours prospecting than ever before; open houses, public events, walking in their farm areas, contacting their former customers and social sphere for business, and conducting homebuyer educational events. I think this change in the market is great for consumers. They are getting more attention, and the level of customer service is increasing. I see this in our agents all the time.
Some agents have not been able to make adjustments and have left the business or taken part time jobs. I think the trend of agents leaving the industry will continue, and applicants for new licensing will drop. This is a shame, because the best time to learn this business is in a normal market. An agent that can learn strong fundamentals in this market will only excel in the next real estate boom.
The customer has also changed the way they want information delivered to them, and how they want to interact with agents. For better or worse, the information age has caught up with this industry too. Consumers want to be in control of the search. They want information readily available, easy to find, and at their convenience. Agents are now delivering this in exactly that manner. Agents are becoming web experts. I see my agents putting their listings on Craigslist.com, trulia, openhouse.com, coldwellbanker.com and our local company websites. They are also developing blogs of their own so they can further interact with the customer online. They know that when the consumer is ready and serious, they want to make the first move. Some interesting blogs from our agents are: http://www.realestatenaturelover.blogspot.com/ , http://www.eaglerockrealestate.blogspot.com/ , http://realestateguide101.blogspot.com/ , http://realbydenise.blogspot.com , http://www.baldwinparkrealestate.blogspot.com/ and http://www.realestate4petlovers.blogspot.com/

In a nutshell, agents that are staying in the business have to learn new technologies, work harder, and be better consumer advocates than ever before. I ask you, is this bad for the market??

Thank You, David

Southern California Real Rstate Update

Introduction:
I am David Toyama, Broker for Coldwell Banker David Steven Company, and this is my first blog entry ever! This blog is dedicated to bringing a clear perspective on the state of the real estate market in Southern California, with a particular emphasis in Los Angeles, and The San Gabriel Valley. The Goal of this blog is to be a resource forum for all readers, buyers, sellers and agents, so that they can make decisions based on relevant information that I receive in the field every day. I will be updating this site twice a week.

Qualifications:
I have been in the real estate business since 1984. I have seen cycles in this industry come and go and have a world of experience to share with those who will read my blog. Although I have many agents that work for me, I remain active to this day in the sale of homes, townhomes & condos, and commercial and investment properties. I am a licensed real estate broker/owner in The State of California. My 23 years in the business have been primarily in sales and managing sales agents. Currently my company has offices located in Los Angeles (Eagle Rock), Azusa and Baldwin Park. I and my agents will keep you well abreast of what is going on in real estate today. We work in the trenches each and every day. We know what is going on. Thank You for your readership. I look forward to your responses.

The State of The Market Today!
2007 has been a year of change in the market. Volume of property sales are down, however prices in Los Angeles County over the last three months have continued to climb as reported in The Los Angeles Times for the months of January through March 2007, as compared to the same periods last year. Very often buyers mistake a decrease in sales volume and equate it to a decrease in price. This has not happened. Sure there have been decreases in certain areas, or decreases in asking prices, but recorded sales statistics still show an overall increase in price. Prices are remaining relatively steady over all.
Loan products are starting to disappear, as loose lending practices, fueled by the previous booming market, and deregulation are now turning into foreclosures, particularly in the subprime lending market. This is having a ripple effect as we see many main stream lenders tightening their standards for the 100% loan programs. Some lenders are eliminating low or no down payment programs all together. I anticipate this trend to continue.
Real Estate Agents too have started to leave the market, as sales volume decrease and it gets harder to make a sale. The merger and closure of some real estate offices has begun, both independent and franchised companies have seen offices close. This fact has not been much publicized by the real estate industry.

Great News for Buyers!
It is a Buyer’s Market. That should not be news to anyone that has been in the market recently. Buyers are setting the tone for negotiations. Buyers are asking for and getting reductions from the asking prices. Sellers are paying for some or all of the buyers closing costs. Sellers are reaching out to proven sales agents as the market gets tougher. It is not uncommon for the seller to offer incentives to entice a homebuyer, or increased sales commissions to encourage agents to show their home.

The Silver Lining for Sellers.
If there is good news in the market for today’s seller , it is that prices are holding, especially in the entry level, and first move up housing markets. The demand for housing in these areas is still brisk. At a recent open house on April 1, 2007 in Azusa, Ca. Our agents had over 30 registered visitors. They have already received offers on this home priced for $495,000. In Los Angeles & San Gabriel Valley, entry level homes are the ones in the range of up to about $600,000, first time move ups that we see are from the $600,000's to just over a million, sometimes more. Of course the price ranges differ from community to community. This gives a general perspective in the areas we serve.

Other Trends in the Market.
There are two more trends that are occurring in the market that I think are of major significance. First the demand for housing has lead to an explosion in the development of urban living spaces. Downtowns in all sections of the southland, including downtown Los Angeles are experiencing a renaissance of the urban living experience. Thousand of higher density living spaces are being built in these urban areas. Townhomes, Condominiums, flats, live work spaces studios etc... And they are selling! That is the big news. The landscape of what is homeownership is changing dramatically, redefining where and how people want to live. I see this trend to continue to the point that it will be a commonality not a trend in the near future.
Secondly, buyers and sellers are redefining the real estate purchase and sales experience too. We find ourselves re-inventing as never before the way we are communicating to our consumers. In the case of buyers for example, we have found that over 80% of homebuyers are starting their search online. They want to remain in control and anonymous until they decide that they want to speak to a realtor or seller. Fortunately, we have found that once a decision has been made, homebuyers and sellers still prefer to have the services of a real estate professional to handle the details, and make sense of all of the information overload. That is what I am here for.