Studio City CA Real Estate & Homes

Is it just me or are newspapers in large part responsible for the current state of affairs in real estate?  On a daily basis, we are bombarded by article after article bemoaning the demise and unravelling of the American Dream. Home ownership, the lofty goal of every American, is being threatened not by foreign powers who wish us harm but by a malicious press whose sole objective is to terrify and instill fear in the hearts and mind of real estate buyers and sellers. They obviously took a page out of Dubya’s playbook. It worked for him, it’ll work for us.  Over the last 5 years, these doom and gloom writers extolled the “bubble”; and for 5 years they were dead wrong. Prices rose and the market continued to boom.  It’s like flipping a coin; at some point, your going to flip “heads” and voila!, the bubble has finally burst.

For those of us who have lived longer than 20 years, we can remember 15% and higher interest rates, high foreclosures and stagnant markets. These are natural cycles and are to be expected from time to time. I would like to go on record and predict that the Real Estate market will recover it’s former glory and then some in the next 2 years.

It should also be noted that this market downturn is regional and spotted. Many markets have seen slight price increases although the sales volume may be a bit lower.

Don’t believe everything you read, especially in the newspapers. I for one believe that the histrionics and ranting is nothing other than the death rattle of a dying empire being beaten to a pulp.

In the immortal words of the Governor of the great State of California, “I’ll be back”. You can bet the farm it will be a resurgence in Real Estate long before we see an increase in newspaper sales.

 ”All the fear the news can print”.

When it comes to selling your home, nothing says “buy me” like a vacant home. Not!!

When the furnishings and draperies are gone, even large, expensive homes can look like empty generic boxes. A vacant home often sells more slowly and for 5 to 10 percent less than a similar property that is well furnished. That’s because most people buy on emotion and have a hard time warming up to a stark, empty place. A lived in home has greater emotional appeal than a vacant house. When you see someone else’s sofa, chairs and coffee table in the living room, it’s easier to picture your own furniture there.

 Vacant homes have a distinctive echo and sometimes odor because doors and windows are not opened.  A vacant house can suggest a highly motivated – maybe even desperate – seller. It suggests to the buyer that the seller is carrying two house payments and that stealing the property is possible and encourages low ball offers. When houses are vacated, every nick and scratch shows up. That means that you should definitely go in to clean and repaint. You can get as much as a tenfold payback on the cost of a can of paint when you sell. That has more value than nearly any other improvement you could do.

Leave the draperies on the windows when you move. Keep the light fixtures throughout the property. Leave good quality furniture in the house if you can. It helps give the buyer a sense of value and a better perspective on where to place their furniture and if it will fit. If not, I recommend using a professional staging company in order to show the home in its best light. I would be happy to refer you to several excellent companies for ideas and pricing. Feel free to contact me for more ideas on preparing your home for sale.

ian@runningrealty.com

Word on the investment street where you live says that we can expect to see a substantial  increase to the conforming loan limit. Currently the magic number is $417,000. In California terms, this limit is laughable. Every loan above $417,000 is a Jumbo loan and that rate has recently jumped from a 1/4 point (per cent)  to a full point or higher differential. This  has been one of the big stumbling blocks to continued Real Estate growth as cautious lenders shy away from riskier (jumbo) loans. Fed Chairman Ben Bernanke has asked that this increase should be significantly higher at least in the near term and he would like to see this happen sooner rather than later. I agree with Mr. Bernanke in that a loan limit as possibly high as $700,000 would ease credit restrictions. This limit level would allow numerous borrowers to qualify for Freddie and Fannie loans that at least have the backing of the U. S. Government. This support translates to lower rates and thus will allow the backlog of buyers to once again get into the market. Generally this limit adjustment takes place in November, but, given the current situation, perhaps we may see this implemented this month.  

With all the doom and gloom being plastered across every major newspaper and financial website, it’s a wonder that the sky hasn’t fallen. It took about 5 years of constant badgering in the press about the “bubble” before all these geniuses finally saw a weakening in the real estate markets. We now know that it was the freewheeling (read greedy) lenders, banks, brokers etc. that caused this market downturn. Trusted ratings companies sold their AAA ratings to the highest bidder; and brother it wasn’t you.