Whittier, CA

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FOUST Team Listing Will Be Featured in LA Times

Just a quick heads up that one of our listings in the city of Whittier, CA will soon be

featured in an upcoming article on real estate in the area. The listing is this 3 bedroom 2 bath 1800 square foot home in the popular Morningside community.


The author of the story should be Lauren Beale and we imagine the spotlight section should take place in the real estate section.


This is just another example of how a strong web presence pays big dividends in the current real estate market. We'd like to thank the LA Times for featuring us and invite all interested parties to check out our Whittier real estate and Whittier homes for sale pages.

Dear Friends,

While the whole world is engulfed in Swine Flu hysteria, we take a look at the facts and fiction surrounding the H1N1 Flu virus.

www.clientappreciationprogramweb.com/baccaro_flu.pdf

It Looks Like a Bottom. Home Prices Increase in February 2009

On April 22, 2009, the Federal Housing Finance Agency issued a Press Release showing that "U.S. home prices rose 0.7 percent on a seasonally-adjusted basis from January to February". In other words, home prices have gone up for the second month in a row. Do two months make a trend? Only time will tell, but there are other indications that the real estate market has made a drastic turn upwards.

The above graph starts at the peak of the housing boom in April 2007, and shows how prices continued downward until December 2008. The first significant rise in nationwide real estate prices was during the month of January. The trend continues with another consecutive month of price increases from January to February 2009.

The Low Inventory of Quality Homes for Sale

At the low end of the market, consisting of mostly bank owned properties, there are several obstacles for first time home buyers:

• Condition of most bank repos is only fair to very poor.
• Bank repos in fairly decent condition are getting multiple offers.
• Some bank repos in Whittier have received over 40 offers because they were priced low and in decent shape.
• Most first time home buyers are planning to use an FHA loan to buy their home. Unfortunately, when competing against a dozen other offers on the same house, there will usually be a few buyers using a conventional loan, with 20% or more down payment, or all cash. A bank will take conventional financing or cash over an FHA offer any day.
• If a property requires repairs, don't expect the bank to pay for them. Usually, they won't, which is another reason why they don't want to deal with FHA and its requirements that the home be in livable condition.

The Looming Prospect of Shadow Inventory, Increasing Unemployment and a Continuing Bad Economy

Although the trend shows home prices continuing upward, the overall economy could throw them into a downturn at any time.

Shadow Inventory: Banks have had a moratorium on foreclosures for the past few months, resulting in a huge inventory of homes that have not yet started the foreclosure process. Banks have also put a throttle on releasing their existing inventory of foreclosed properties onto the market to sell. They have held back because they do not want to flood the market with properties, and thus cause prices to go down. It appears as if they have gone too far in holding back because it is getting harder to find good properties for sale, especially where there are not multiple offers, and prices are rising. Some experts have estimated this shadow inventory to be so huge that it could have devastating effects on home prices.

Increasing Unemployment: If more and more people continue to lose their jobs, there will be more foreclosures. If, on the other hand, job losses decrease, people will start feeling more confident in the economy, and more people will want to snatch up today's low priced homes before prices go up.

The Overall Economy: If the economy gets worse, real estate prices will follow. If any of the Big Three auto makers go bankrupt, look for the rest of the economy to tank. On the other hand, if the auto makers survive, the economy will improve, consumers will have more confidence, and sales will increase.

Real Estate May Lead the Way Out of the Recession

It may be happening already. Home buyers are smart people, and many of them, who have been waiting for the bottom, have jumped into the market now, all at the same time. Competition for homes is fierce in Whittier. Don't let anyone tell you it is a Buyers' Market anymore. A Buyers' Market means that there is at least 6 months of inventory and buyers can make offers that are lower than the asking price. Buyers in this market have no leverage if the house they are buying is under $400,000. That price range is a Sellers' Market. Is now still a great time to buy? Absolutely. But be prepared to make an offer at market price. Forget about low ball offers; but with prices as low as they are, you can still get a great deal.

Real Data Strategies reports that Whittier had 9.2 months of housing inventory available on May 8, 2008. Their latest report, dated March 3, 2009, shows only 4.4 months of inventory.

The Fed Sees Recession Easing

According to the Federal Reserve, the recession is easing its downward slope. An Associated Press article dated April 29, 2009 reports that stock prices rose for the day due to the Fed statements on the economy. Consumer confidence is also high, and the economy is improving.

The BOTTOM?

The bottom line is, if you find a home that you want to live in for at least five years, then buy it now. Don't wait for prices and interest rates to go back up!

-Blog End-

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About the author: The above Report about the Whittier Real Estate Market and National Real Estate Trends was provided by Bob Willis, a locally recognized Realtor®. Bob can be reached via email at bob@willisrealtor.com or by phone at (562) 639-9400.

For Whittier real estate, see Whittier Welcomes You. Want to have MLS access to beat other buyers to your dream home? Sign up with no obligation at my ListingBook website.

I service the following towns in the greater Whittier area: La Habra, La Habra Heights, La Mirada, Norwalk and Santa Fe Springs.

I specialize in helping first time buyers get into their first home. Whether you want to buy now, in six months or in a year, a Buyer Consultation with a professional Realtor® should be the first priority of your home search. It's custom designed for you and your needs! Please call me for a FREE Buyer Consultation! (562) 639-9400.

From time to time, we all have to ask ourselves what advantages there are to buying over renting. With home prices continuing to go down and rents rivaling those of mortgage payments (including taxes and insurance) its time to visit some of the concerns a first time home buyer would have when buying their first home.

Concern #1 - What if the price of the home goes down?

This concern is probably on the top of most people's list. Everyone wants to be an expert on everything and you'll hear it from friends, family members and random people like my CPA the other day. The truth is, even the most seasoned Real Estate Professionals cannot predict what will happen in these uneasy economic times. However, one Real Estate agent put it best the other day when she said it doesn't matter what happens in the next couple of years with home prices. Fact remains, you keep renting you'll keep throwing that money away anyway. Throw $1000 away on rent for two years and that's $24000 you'll never see again. Isn't that the same as losing that kind of equity on a house? This money also goes with no tax benefits.

Concern #2 - I can't pay for a down payment or for closing costs.

This one is more gray than black and white. Last year, the Nehemiah program which allowed the seller to fund your down payment was taken away and Real Estate Professionals were left scrambling for a way to get 100% financing. Today, the government gives an $8000 credit to first time home buyers that they DO NOT have to pay back. But that doesn't really put money in our pockets today does it? There are several ways to get a down payment. FHA loans only require 3.5% and the money can be a gift from a relative. Down payment assistance is also slowly making a comeback and most cities even offer the Neighborhood Stabilization Program now which allows money for down payment and for repairs in homes that need it. Here in Los Angeles, it's only for certain pockets and doesn't cover most of of the territories. The area is gray because while its not as bad as it seems (i.e. tax credit will refund your down payment if you already have the money) there isn't really a great solution for the down payment. Its likely you'll need to bring in something even if just upfront. Closing costs, on the other hand, are being paid by sellers on most transactions now days. At least, that's how it is here in the Los Angeles area. FHA loans allow sellers to contribute up to 6% of the sales price towards the closing costs.

Concern #3 What if I lose my job?

This economy has hit many people hard. If you've lost your job, my heart goes out to you and I wish you a speedy recovery. Those of us still getting paid need to ignore the fear and keep the economy moving. Yes its different. Today we have to live within our means and avoid big credit debt or buying over our heads. That doesn't mean you don't buy anything at all. You can't control what happens in the future but if today you can make your dream of home ownership come true, then what are you waiting for? Food for thought - if you rent and you lose your job then you're out of luck because your landlord will have you out FAST. Your mortgage lender, on the other hand, has a process before they foreclose that lasts many months.

Concern #4 The media says banks aren't lending money. They won't approve me with my fico scores in the 600s.

The myth here, that I hear over and over again, is that you need a fico score in the high 700s to buy a house and that you need at least 10% down payment. What irks me about the media is that they report for entertainment purposes rather than to inform us. Are they wrong? Not exactly. The old way of lending meant conventional loans which now days do have those requirements. However, the whole story should read that FHA loans are different and more affordable. They only require 3.5% down payment, sellers can contribute up to 6% of the sales price for closing costs and the minimum fico requirement for most banks is just 620.

Concern #5 - The homes I can afford are not even in living condition and I don't have the extra money to fix it up.

This one is my favorite because I have a solid solution for it. 203K loans! These loans allow the buyer to finance to costs to fix up the home providing the end result (appraised value after improvements) increases enough to cover our higher loan amount. You have to involve a contractor unless your line of work is in construction. I've had a few Realtors say the only reason they took our offer was because it was a 203K loan for an otherwise substandard property we wouldn't be able to finance. The loan is still 3.5% down payment except its not 3.5% of the sales price, but rather 3.5% of the sales price plus the costs of improvements. So if the house costs $90,000 and you finance $10,000 for upgrades then you add those up ($100,000) and use 3.5% of that or $3,500.

This post is not meant to trivialize your concerns on buying your first home. These and any other concerns are as legit as you believe them to be. My intentions are to keep the concerns in perspective and hopefully provide some useful information that'll assist you in achieving the dream of home ownership.