Coaching Businesses and Life, a view from Long Beach

Real Estate Market in Lakewood and Long Beach

As I said yesterday, I wanted to see what the market was doing in our city. So I used a few numbers. Please bare in mind this is an informal MLS research.

Out of 2682 total homes on the market, only 120 have closed. That's 1.8% of homes are selling in this market.

Of homes above $300,000, 2348 are listed, 104 sold
Of homes above $400,000, 1893 are listed, 67 sold
Of homes above $500,000, 1264 are listed, 35 sold
Of homes above $600,000, 678 are listed, 20 sold
Of homes above $700,000, 418 are listed, 12 sold

As you can see, a very small amount of homes are selling. There are obviously many factors here, loans falling through escrow at the last hour, unrealistic asking prices, agents picking up any listings for a chance to have their signs on your property.

I still believe as I have seen in our office, homes priced well, qualified buyers and outstanding professional service does not come at a premium. Chose well, chose wisely. Chose the best for this market. And of course, if you have any questions, send your comment right blow here.

The Difficult Balancing Act The Fed Reserve Have, Long Beach

It's nothing short of difficult to be aware of the true nature of things and have the obligation of explaining the reality of it without sending an entire nation into a panic. Well, that's how I see the Federal Reserve, balancing a tricky act of informing without spreading panic.

The Feds probably understand the market, at least how volatile it can get. That's why, plenty of times, people either brush them off as not saying like it is or go and try to read in between the lines. If they say it like it is, plenty of folks will panic and send the market tumbling. If they don't, no one will trust them. So they are caught in a balancing act, spoon feeding us until they admit, slowly, the nature of the economy. If you've watched them this past twelve months, they went from denial to being realistic. They are finally admitting that things are not as rosy and the the real estate market is somewhat of a drag on the economy.

Seeking Alpha (yes, again) had a great article submitted by Tate Dwinnell where he recaps how we are now being told the ways things are and even worse, fears of things to come.

If you have been reading my blog, you will remember how I said the first four to five months would have been great months in real estate had the news headlines been not so dramatic. Sending buyers into a wait and see attitude and sellers into a let's-get-yesterday's-prices, it was a stalemate. I think the door of opportunity is closing. Boy, how is that for pessimistic on my part. But it is based on my personal observation in the field as well as the specialized news.

Definitetely a good time to be a Realtor for those who do it out of passion. Tough times for those in it for the money.

Know What You Want Before You Invest, Long Beach

It always brings a smile to my face when people ask me what I think about the real estate or the collector car market. Frankly said, more than once I feel like asking the true question: "What are you looking for, investments or pleasing yourself?"

Know yourself. Understand what you are looking for and be honest about it. If you want to invest in real estate, fine. Do you just want to have a Spanish Revival because you love the style? Great. Once you are fully aware of your hidden motivation, you can start to look in the right direction and be better prepared. You would like an old collectible car? Great. Why? Is it for investment, for pleasure, emotional value? You have to answer these questions before you make the leap.

It is not a bad thing to want to invest and make money. It is a normal. Are you a gatherer or a hunter? Do you like to own or look for things more than own them? The costly mistakes happen when people get blinded by not fully recognizing their motivations.

If you want to invest, study the market. Ask professionals, look online for trends. Don't just study what happened the last three months or a year, go back as far back as you can. In this market, whether you are talking about real estate or cars, it is hard to define the value of anything. Value is emotional, it's also how much the same property or automobile sold for in a somewhat same condition. But remember, conditions are never the same. No home is ever the same. No two old car (not mass manufactured) was ever built the same.

Go back a few months, then a few years. See the spikes and lows. Recognize the trends. Go to the last bubble and burst. There are tell-tale signs. Life is cyclical but you can learn to recognize the trends. To have a more or less accurate idea of a market, take the last three months and see what is on the market currently, what is in escrow and what has closed. These three things will help you get the gist of it. What has closed is the actual price buyers were willing to part with in order to gain something. What is escrow is the very latest prices but beware, many things can fall out of escrow. What is on the market gives you an idea as to what to expect when dealing with sellers. Make your own statistics and ask a few Realtor. Don't get blinded by dazzling numbers people throw at you.

If you want to acquire for emotional reasons, get to the core of it. What is motivating you to buy this home, this car? Is it the dream you had? The High School dream car you never had? Really dig down and be honest about it. Once you know, you will see that what you were originally willing to spend, you might go higher.

The bottom line is that a true investor doesn't rely on yesterday's prices and fluctuations. An investor doesn't think about potential money and use it as a guideline. An investor looks at the current state of the market and fixes a guideline as to gains and losses. Take stock investments. The investors who come out on top of any situations are the careful ones. The look at an average, set a buy and sell percentage and no matter what, stick to it.

You could do the same with homes and cars. Look at the cycles, monthly, and decades. Try to spot the trends. If you are disciplined, you can make a gain. But remember, you can also lose. Nothing is full proof. The one place to start is to figure out who you really are. Are you an investor or are attracted to the emotional appeal?

"How To Sell You Home"

Whenever I see a title like that, I read it. What tips could they have? Mostof the time however, it usually concludes with: "For further questions, go and see my site here or email me" blah blah blah.

What a careful balance we strive for giving away free advice and having people come to us for professional help.

In this crazy market, the one tip that really (emphasize REALLY) help sell your home is very simple. I am not pulling anything out of my hat but a simple observation on what homes sold quickly, attracted multiple offers and most of the time sold higher than comparables. Going into the market with a lower than average price is a great recipe for success if handled by good professionals.

I looked at the transaction we had in the office since the beginning of the year and focused on our multiple offers. Getting multiple offers in this market is extremely rare and we have had quite a few. The reason? Careful sellers and high grade professionals.

When sellers turn to us and ask what is the best way to sell their homes, we usually get the illusive multiple offers. What struck me as admirable with these sellers is they all had the same reasoning, you are the professional, you tell us. I would like to make so much, how can you help? Those homes were put on the market at a lower price than anything around and almost all got multiple offers. Most of them sold higher than comparables.

Why? Maybe the allure of a bargain, the frenzy of grabbing one. Kudos to you sellers who trust professionals.

More Newspaper Fearmongering Headlines

I finally got it! I think I have found the Holy Grail of tools for accurate predictions.

Yes, after all this time of digging through official numbers, Real Estate websites and local bloggers, talking to other fellow Realtors in town to find out what is really going on, I should just read the newspaper. The latest FUD (Fear Uncertainty and Doubt) headline this morning was brought to you from a better-late-than-never, star real estate reporter, Don Jergler with his latest "Housing Sales Slow Down In Long Beach".

I wanted to start on a positive note this Monday but after reading the real estate Business section, I felt I needed to done my white shining armor and mount my faithful horse (my Apple laptop) and go on my crusade against distorted truths.

The title in itself is not incorrect but it is a year and half too late. Sales have slowed down in Long Beach for well over a year. The article quotes one single Los Alamitos broker who's point of view is correct as far as slowing sales but it is very OLD, dated news. I won't vouch for prices coming down. Too many reporters and experts have been saying that for the past year without it happening.

So does an article written by a journalist quoting one broker from Los Alamitos describe an accurate picture of Long Beach? Obviously not but it sure grabs attention. It brings to mind the question about the ethical responsibility of a journalist to report the truth without embellishments as it is.

So my prediction is that a journalist will affect the market more so than professional who lives in it 24 hours a day. My other prediction, as dire as it may seem are that prices will come down if enough journalists write about it.

And we all thought buyers and sellers dictated the market...

p.s. I am sure Jergler is a good reporter but quoting one person with no numbers is a little skinny for my diet. Maybe I should read the Grunion instead.

Buyers Beware

Buyers have been mistreated the last 4 years or so, they are back with a vengeance. If it is a buyer's market currently, not all is rosy. Many sellers still try to push the prices up, which buyers cheerfully resist. Who is caught in the middle?

One thing I realized with my clients and prospective clients is that most buyers, and I suspect most sellers are clueless as to what real estate professionals do. Real estate agent are not on a salary, we pay for everything.

Case in point, the very typical scenario all of us experience one day of another, we do all the legwork for another agent who reaps the entire commission. It happened to me 9 months ago, when a lovely couple came in and wanted to buy a home someone listed in the office.

I took them to the home and they wanted to write an offer right then and there. I told them what we needed to do. They asked all the right questions, how much, how long, and the whys. I asked all the right questions, mainly: "Are you currently working with an agent?". The answer was no. In a different sentence, they mentioned knowing someone who worked in real estate. Right, one home out of five has someone involved in real estate in California.

Then, they asked questions that were clearly not in their vocabulary, such as technical terms Realtors use. And you guessed it. All the sudden they had an agent. All the sudden they mumbled over the phone, all the sudden I get a phone from the rudest agent, grilling me, trying to get more information as she told me how ethical she is.

I guess people don't understand what agents do and why we earn a commission. When you go and have an agent drive around to show you properties and get information only to give it to someone else, what happens? You get a lot of sour people.

As a buyer, I think it is important to realize agents are not on a salary. And there is nothing more frustrating than to have someone walk away with all of your hard work while thumbing their noses at you.

And tomorrow, the other side of the story... maybe.

March Southern California Home Resale Activity For Long Beach and Lakewood

Here is DQNews numbers on the March Southern California home resale activity that shows the percentage difference compared to the same month last year:

SFR SFR % Change Condos Price % Change Median Home $
Sales Price March 06 Sales Median March 06 per Sq/Ft
Median
Long Beach 90802 n/a n/a n/a 22 $335 -17.3% n/a
Long Beach 90803 21 $965 8.4% 10 $470 -6.0% $554
Long Beach 90804 10 $595 6.4% 8 $331 -11.7% $395
Long Beach 90805 35 $445 -1.5% 5 $240 -7.0% $456
Long Beach 90806 25 $472 -10.2% n/a n/a n/a $434
Long Beach 90807 37 $575 -5.0% 9 $357 19.0% $446
Long Beach 90808 49 $580 0.9% 1 $435 16.5% $418
Long Beach 90810 13 $451 1.8% 2 $197 -21.5% $378
Long Beach 90813 7 $450 14.6% 1 n/a n/a $439
Long Beach 90814 11 $700 -8.1% 10 $315 -28.4% $580
Long Beach 90815 41 $583 0.4% 4 $435 -0.9% $447

And Lakewood

SFR SFR % Change Condos Price % Change Median Home $
Sales Price March 06 Sales Median March 06 per Sq/Ft
Median
Lakewood 90712 33 $525 -5.1% n/a n/a n/a $443
Lakewood 90713 48 $520 -5.6% n/a n/a n/a $447
Lakewood 90715 13 $493 -9.3% 1 $367 -6.5% $353

As you can see, what a change a year makes.

Lakewood's SFR sales are down but for the most part Long Beach is doing well. Condos didn't fair as well in neither cities and shows a net decline in activity. The obvious prized areas faired better then others.

It still looks like a market trying to find its balance while ironically, there is a pretty good balance between sellers and buyers. I see more and more serious people. My open house in Crown Point was a success this weekend and confirms my feeling that this year will be crucial IF we do not fall prey to doomsday headlines.

p.s. and yes, still haven't found a way to get tables in Typepad. Go figure!

Quality Vs Quantity, Long Home Market

One thing that we all firmly believe in the office is that service will always be sought for especially in a market as now where you really need a professional to waddle through the pages and pages of contracts involved in selling or buying a home.

The same thing seems to be happening in the lending industry at last, PMI are back in vogue.

Private mortgage insurance was out of favor for adjustable-rate mortgages or "piggyback" loans or some other exotic form of financing. With this market and lenders tightened their standards, many people are choosing traditional fixed-rate mortgages backed by private mortgage insurance, or PMI.

The article is a refreshing good news in the midst of the avalanche of negative information we receive continuously.

State of the Real Estate Market in Lakewood, CA

Following our post on Long Beach median prices, I looked into Lakewood also. Even though Lakewood is surprising and offers a wide array of homes ranging from affordible to out right multi-million properties, the market in Lakewood reacts different than Long Beach.

Case in point, the mediam price is at around $565,000, compared to + $575,000 in Long Beach. However, the market transaction has been relatively flat for the past year, much like Long Beach.

Obvisouly, price per square foot and days on the market follow similar trends.

Altos Research.