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LA Digs - Northeast LA Real Estate Blog

Welcome to LA Digs, the real estate and Northeast Los Angeles community blog written by Realtors Tracy King and Keely Myres.

Here, we share tips, market updates, and local news bits to keep you informed on what's happening in Northeast Los Angeles and the surrounding neighborhoods. Read on to learn about the latest in your neighborhood!

Why Should I Buy Now?

The real estate market has hit the Pause button in the last few days. Why? Who knows? Waiting for another shoe to drop (such as even worse economic news?) It doesn’t make a lot of sense, really. Mortgage interest rates have dropped to the lowest in over 50 years. Lots of people have rushed to refinance their homes, but many have discovered that the rules are too tough for them to qualify now. Appraisals are extremely conservative, which means that if you refinanced back in the boom times a few years ago, you might owe too much to qualify for the required 20 to 30% equity that lenders want you to have now.

People who ask me about the real estate market assume that no one is buying because no one can qualify for a loan these days. Surprisingly, this is not true. Lots of people can qualify and are walking around today with pre-approval letters hanging out of their pockets. They even have 20% down payments sitting in their bank accounts ready to go to purchase that new home. Why don’t they make a move?

We’ve talked before about fear and how that has been holding the market back for quite awhile now. Fears such as: what if the prices drop more? What if I lose my job? What if a better buy pops up next week? What if my friends/relatives think I’m stupid for buying now?

Another obstacle is information overload. Every day we hear more economic news about things we really don’t understand, like, say, the Case-Shiller index or Standard and Poor’s credit rating of companies or countries. We hear about Europe’s economic woes, we see the stock market rocket up and down. What does it all really mean? How can we make a good decision in the face of all this information (so much of it bad news)?

How about trying this: turn off your radio, throw the newspaper in the recycling bin, and think about what you really want. Do you want a home to live in for several years? One that you can make your own with your unique designer touches? One that your kids can grow up in with a sense that they are loved and provided for? Want to try your hand at urban gardening? Raising a litter of puppies? What does any of that have to do with the Euro?

For most of us, not much.

The percentage of people in the United States who own their homes has varied between 65% and 70% over the last several years. “Experts” are saying that we probably won’t see 70% home ownership again. So what? So what if it is 65% forever more? Isn’t that still a large majority of the people in this country? Can we agree on this: most of the people in this country live in homes that they own?

Let’s go back to the basics for ourselves. A home is a big investment and the decision to purchase should be taken seriously, but life goes on day by day by day. Things do change, such as interest rates and loan guidelines. If you qualify for a good mortgage today, do you want to risk that you don’t qualify under some new guideline tomorrow? Do you want to wake up one day and see that your opportunity has passed you by?

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New listing! 4920 Floristan Avenue, Eagle Rock

Tracy King | Teles Properties | (626) 827-9795
4920 Floristan Ave, Eagle Rock, CA
New listing! Open Tuesday 10/11, 10-2pm; Thursday 10/13, 10-2pm; and Sunday 10/16, 2-5pm.
2BR/1BA Single Family House
offered at $479,000
Year Built 1950
Sq Footage 1,102
Bedrooms 2
Bathrooms 1 full, 0 partial
Floors 1
Parking 2 Car garage
Lot Size 11,300 sqft
HOA/Maint $0 per month
DESCRIPTION

Nestled on an 11,000 square foot lot in the heart of Eagle Rock, this midcentury traditional offers views, trees, patios and decks that expand this two bedroom one bath home into more. The kitchen has been updated with granite counters, a dishwasher, and a charming breakfast nook with built-in benches. Lined with windows on 2 sides with a door out to a patio with lots of space for dining and lounging, the outdoors come in with real California style. The sliding glass door off the master opens out to the front deck with spa, fenced for privacy. Freshly painted in and out, there is nothing you need to do but turn the key in the front door and move right in. The 2-car garage has been fitted out with all the ingredients of a workshop, an art studio, or even just a place to park the cars. The entire property is fenced and gated for complete privacy. Truly your own Shangri-La.
see additional photos below
PROPERTY FEATURES

- Fireplace - Hardwood floor - Balcony, Deck, or Patio
- Yard - Jacuzzi/Whirlpool
OTHER SPECIAL FEATURES

- Located in a quiet Eagle Rock neighborhood
- Large, private lot
- Move-in ready
- For open house information visit www.TracyKing.com
ADDITIONAL PHOTOS

Front
Living Room
Kitchen
Dining Room
Master
Bedroom
Bath
Spa
Patio
Yard
Garage
Contact info:
Tracy King
Teles Properties
DRE Lic#01048877
(626) 827-9795
For sale by agent/broker
Equal Opportunity Housing
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Posted: Oct 10, 2011, 11:40am PDT
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Sneak preview of my new listing

4920 Floristan, 90041. $479,000. Isn't it lovely?

 

Photo

 

Tracy King
Teles Properties
DRE #01048877
Interesting homes for Interesting people
This email address is being protected from spambots. You need JavaScript enabled to view it.
Sent from my iPhone

Posted via email from Tracy's LA Real Estate

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In a Foreclosure Agent's Shoes

Now I understand why some foreclosure agents (who typically deal with a lot of offers) are so difficult to get a response from when I submit an offer to them. I have a listing that we “event priced,” that is, we listed it at such a good deal for the neighborhood it’s in that lots of people made offers. We had initial offers that went 25% over asking, so we countered everyone back at that. A number of people dropped out with the attitude of “Was that a typo?” “How do you think you are going to get that?” and the like.  But we did get a few that were up at that price, and the highest one was quite a bit over.

So why did it take us almost a month to get this home in escrow?

The highest offer was VA financing, which means no down payment, seller to pay 3% of the buyer’s closing costs. The real issue is that, because the house needs work, a VA appraiser could require a lot of repairs and the seller would have to fix them before the loan could be finally approved. The seller isn’t in a position to do repairs (a major reason why we priced it the way we did.) So this is kind of a “teaser” offer. When I asked the lender what could happen with the appraisal, he said it was 50/50 that they would require a lot of repairs.  How much of a gambler is the seller?

The next highest offer was for cash. They accepted our terms, but didn’t read the offer well enough to see that they were supposed to counter us back with their best and final offer. We couldn’t reach them for several days and when we did, we were told that we should have emailed them. So why give us phone numbers? Why didn’t they tell us that? Then they said yes to our “best offer over” price verbally, but then they countered in writing at $15,000 less.

The next offer was the most reliable deal: cash, a good agent, a savvy buyer. But at this point it’s the third highest.

Which one would you take? Or would you keep waiting?

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New Listing! 5220 Hartwick Street, Eagle Rock

Tracy King | Teles Properties | (626) 827-9795
5220 Hartwick St, Eagle Rock, CA
New listing! Open Sunday 9/11 2-5pm; Tuesday 9/13 10-2pm; and Thursday 9/15 10-2pm.
3BR/1BA Single Family House
offered at $299,000
Year Built 1923
Sq Footage 1,200
Bedrooms 3
Bathrooms 1 full, 0 partial
Floors 1
Parking 1 Car garage
Lot Size 7,450 sqft
HOA/Maint $0 per month
DESCRIPTION

Perched above the street to take advantage of sunset views, this 1923 Craftsman cottage offers so much to love--the well-above-Colorado Blvd location, the spacious living/dining room that stretches across the width of the house, the large back yard, the Dahlia Heights Elementary school down the street, the list goes on. Priced to help you see the opportunity behind the original solid wood door--at last, a house to make your own home!
see additional photos below
PROPERTY FEATURES

- Fireplace - Hardwood floor - Living room
- Dining room - Stove/Oven - Laundry area - inside
- Yard
OTHER SPECIAL FEATURES

- Built in 1923
- Located north of Colorado Blvd. in Eagle Rock
- Large lot with lots of potential!
- For more photos and open house times visit www.TracyKing.com
ADDITIONAL PHOTOS

Front
Porch
Porch View
Dining and Living
Living Room
Dining Area
Kitchen
Kitchen
Bedroom 1
Bedroom 2
Bedroom 3
Bath
Laundry Room
Hallway
Patio
Back Yard
Back Yard
Contact info:
Tracy King
Teles Properties
DRE Lic#01048877
(626) 827-9795
For sale by agent/broker
Equal Opportunity Housing
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Posted: Sep 8, 2011, 2:16pm PDT
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New listing! 5350 Waldo Place, Eagle Rock

Tracy King | Teles Properties | (626) 827-9795
5350 Waldo Place, Eagle Rock, CA
NEW LISTING! First open house, Thursday, July 21, 10-2pm! Visit www.tracyking.com for more open house dates.
3BR/3+1BA Single Family House
offered at $599,000
Year Built 1962
Sq Footage 1,748
Bedrooms 3
Bathrooms 3 full, 1 partial
Floors 2
Parking 2 Car garage
Lot Size 6,490 sqft
HOA/Maint $0 per month
DESCRIPTION

Wish you could afford a well-built mid-century with western views and some soul? With commanding views and privacy in the midst of the city, this is the kind of home that makes you feel grateful to live here. Views call from almost every window in the house. The open floor plan flows from the entry with its original magnesite floor to the open kitchen/living/dining area, back to the family room and out to the private deck for your Za-Zen meditation and discreet dip in the spa. The magnesite stairs to the 2nd floor have been restored by the current owner. Originally build by Ed Sylvis Senior as his personal residence, this is one solidly built home. Lovingly maintained and updated, the baths have been done with travertine marble and quality fixtures, the office remodeled, hardwood floors installed in the living and family rooms, paint inside and out, and much more. This unique home is conveniently close to Old Town Pasadena as well as the hip eateries of Eagle Rock. This is a short sale and subject to lien holder approval.
see additional photos below
PROPERTY FEATURES

- Central A/C - Central heat - Fireplace
- Hardwood floor - Living room - Office/Den
- Balcony, Deck, or Patio - Yard
OTHER SPECIAL FEATURES

- Midcentury Modern north of Colorado Blvd in Eagle Rock
- Open floor plan with original details, plus updated floors and baths
- Western views from a private location
ADDITIONAL PHOTOS

Front
Open Floor Plan
Kitchen
Living Room
Master Bedroom
Deck
Contact info:
Tracy King
Teles Properties
DRE Lic#01048877
(626) 827-9795
For sale by agent/broker
Equal Opportunity Housing
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Posted: Jul 20, 2011, 4:29pm PDT
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First Half of 2011 Market Update for Eagle Rock, 90041

Here is a table that illustrates the number of sales and percentage of distress sales over the last 3 years in Eagle Rock 90041. The question is, what does it mean? There’s a flipflop from a greater number of foreclosures in 2009 to more shortsales in 2011. Distress sales as a whole dropped in 2010 and have increased again so far in 2011.

ergraph



My guess, and it’s educated but still a guess, is that the lenders were very resistant to doing shortsales early on and have finally bowed to the inevitable. As more distressed homeowners are able to sell short, there are fewer foreclosures. The more positive numbers in 2010 I attribute to the peak of the “double dip.” Or you might look at the whole thing as our thudding along the bottom.

There is a lot of talk about “Shadow Inventory,” which is distressed properties that might come on the market. This includes properties that have notices of default filed (the homeowner has stopped making mortgage payments), have notices of trustee sale filed (they haven’t brought the loan payments current and are scheduled to go to foreclosure sale), REO or bank-owned or 3rd party owned (sold at trustee sale). It also includes properties that are “upside-down” which means the property is worth less than what is owed. This can be a huge number and there is no way to track what it is. The fear of “Shadow Inventory” is what if a lot of these distress sales come on the market at once? What will that do to the rest of the market

Personally, I think that is a big “if.” If it hasn’t happened yet, why would it happen now? One reason could be if we had a major economic setback. But believe it or not, we have actually been out of the recession and experiencing a slow (excruciatingly slow) recovery for the last 2 years, according to the National Bureau of Economic Research. Another reason could be a drastic change in mortgage lending in terms of either interest rates or underwriting guidelines.
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Case-Shiller Index Officially Double-Dips--Big Deal!

Data released this morning by Standard & Poor’s show that the S&P/Case-Shiller national home price index declined by 4.2 percent in the first quarter of 2011, after having fallen 3.6 percent in the fourth quarter of 2010. The national reading hit a new recession low with the first quarter’s data and posted an annual decline of 5.1 percent versus the first quarter of 2010. Nationally, home prices are back to their mid-2002 levels.
...From DSNews.com, your Daily Dose of Default Servicing News, May 31, 2011.

My response is, so what? What does this have to do with your home? What does this have to do with, say, the sale at 2030 Estes Rd in Eagle Rock (closed April 21, the highest sale in Eagle Rock since September, 2009, for $176,000 over asking)? In the first place, this is first-quarter news and we have moved on (and up) from there. In the second place, once again, we have to note that national home prices have little to do with local home prices.

So why should we care at all about this depressing news?

Because the common, everyday, not-in-distress, regular, homeowner who wants to move is influenced to wait.

For what?

For prices to “get better.” For the market to “improve.”

I posit that by waiting, homeowners are creating the very problem they seek to avoid. The fewer “regular” sales there are, the more weight is given to “distress” sales, which often sell for a significant discount off market price, which lowers the average sales price, which lowers the comparables that appraisers use to value a home sale, and so on in a self-fulfilling prophesy downward spiral.

We had 15 offers on 2030 Estes. That means that 14 buyers did not buy a home and went looking for others. Other “regular” sellers missed a bet by not coming on the market right after that. But it’s not too late! Some of those buyers are still out there looking...I know, I’ve seen them at other open houses. Plus there are buyers looking in different price ranges for other kinds of homes. Many buyers know that this is an amazing time to buy. They will pay fair prices for good homes. If you own a home and want to sell it, consider doing it now. Make your own good news and thumb your nose at DSNews and Case-Shiller!
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Today’s version of Irrational Exuberance

Remember when Alan Greenspan, former chair of the Federal Reserve, talked about the irrational exuberance in the stock market? You might not, because the quote is from a speech he gave all the way back in 1996!
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Letters to Tracy

do I ever even stand a chance on your listings? Obviously, you have many of the best listings in the areas in which I'm looking, and I'd like to try to find a way to be more competitive.

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Today's Loan Jungle

Well, I now see that we should definitely undergo the loan process in some manner right now, because no matter how excruciating we find the process to be when we represent our clients, it is about 100 times more excruciating when we have to go through it ourselves.
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First Quarter Market Update for Eagle Rock, 90041

Our average prices went down about 30% in the last 3 years. That does not necessarily mean your property is worth 30% less today than it was worth in March, 2007, but we can safely say that you would have a serious challenge expecting to sell your house for the same amount you might have sold it for 3 years ago.

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BUYER/SELLER ALERT!

Californians have a brief window of opportunity to receive up to $18,000 in combined federal and state homebuyer tax credits. To take advantage of both tax credits, a first-time homebuyer must enter into a purchase contract for a principal residence before May 1, 2010, and close escrow between May 1, 2010 and June 30, 2010, inclusive.

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Why You Should Have An Ongoing Relationship with a Realtor

I was chatting with someone the other day who mentioned that she had sold a property in another state recently, but just found out that her income taxes are going to take about a third of her profit. Someone had told her she could transfer the gain into purchasing a different property and defer the tax. All true, but, unfortunately, the transfer of property has to be done in the right order to qualify for the tax deferral.

This maneuver is called a 1031 Tax-Deferred Exchange. There are many good sources for information on the details, including the Internal Revenue Service, which is where you should start: http://www.irs.gov/newsroom/article/0,,id=179801,00.html.

Here are some excerpts that show why you need to plan ahead to carry out one of these transactions:

"It is important to know that taking control of cash or other proceeds before the exchange is complete may disqualify the entire transaction from like-kind exchange treatment and make ALL gain immediately taxable.

"One way to avoid premature receipt of cash or other proceeds is to use a qualified intermediary or other exchange facilitator to hold those proceeds until the exchange is complete.

"You can not act as your own facilitator. In addition, your agent (including your real estate agent or broker, investment banker or broker, accountant, attorney, employee or anyone who has worked for you in those capacities within the previous two years) can not act as your facilitator."

For those of you who like question and answer formats, here is another good site: http://www.1031.org/about1031/faq.htm. And here is the answer from them concerning my friend's situation:

"Q - If the taxpayer has already signed a contract to sell the relinquished property, is it too late to start a tax-deferred exchange?
A - No, as long as the taxpayer has not transferred title, or the benefits and burdens of the relinquished property, she can still set up a tax-deferred Exchange. Once the closing occurs, it is too late to take advantage of a Section 1031 tax-deferred exchange (even if the taxpayer has not cashed the proceeds check)."

A good real estate professional is like a good doctor. If you have an ongoing relationship with a doctor, and you tell her you are thinking of climbing Mt. Everest, she can probably let you know if it's a good idea. If you suffer from emphysema or some other breathing problem, she could either tell you it's too dangerous for you, or that you can change your medication and make it possible. The caveat is, you have to consult with your professional before you do it, not after.

If you are contemplating a real estate transaction, you could talk to your tax professional, your real estate professional, or your legal professionalbut why not start with the one who won't charge you for the consultation? You might think that simply selling your property should be a simple decision, and maybe it is, but as in this example, it could turn out to be costly.

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Market Update for Monday, March 08, 2010

Let's look at some numbers on this beautiful almost Spring morning:

We have a very energetic market in Northeast Los Angeles. In Eagle Rock 90041 since the beginning of the year, almost as many properties have closed escrow as have been listed. When you add in pending sales, you can see that we are quickly selling off the inventory. The sales numbers are moving almost as strongly in the other two zip codes which include all of Highland Park, Glassell Park, Mount Washington and Sagamore Park. At this rate, low inventories could continue throughout this year. Since this is a supply and demand business, if the demand keeps up at this rate, we will continue to have multiple offers and some increase in prices.

From the Combined LA/Westside Multiple Listing ServiceMarket Update Northeast Los Angeles Mar 8 2010

The questions are:

  • Will the demand keep up?
  • Are first-time buyers driving the market?
  • Will they put on the brakes when the tax credit goes away on April 30?
  • What are your thoughts?
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All about California Propositions 60 and 90

If you are 55 or older, you can qualify for a once-in-a-lifetime chance to take your current property tax base and transfer it to your next home purchase.

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Foreclosure Update for January

remember that these are figures for the entire state, not your local market.

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Overview of 2009, First month of 2010 Market Update for Eagle Rock

It seems like I'm always saying that here at last is the straight story on the real estate market, but it's always true! Last year, 2009, there were 121 sales in Eagle Rock, zip code 90041. Here's the interesting part: 60% of the sales were distress sales, that is, either short sales or bank-owned properties. Now, in 2010, we had 9 sales in the first month and 55% of those were short sales or REOs (bank-owned). While the foreclosures were scattered out fairly evenly over the last year, I noticed that the short sales that actually closed escrow tended to happen later in the year, and in January, 5 of the 6 distress sales were short sales. This is in line with the government's efforts to help people avoid foreclosure, modify their loans and then approve a short sale if the loan modification didn't work out.

What you can't tell from the Multiple Listing Service is that a lot of the normal sales were under duress as well. I know personally of several divorce sales and a few properties that had to be sold quickly before the owners were unable to make any more payments due to job losses or failed businesses.Graph 90041 Feb 1 10

 

In other words, very few people who didn't have to sell did sell. But look at the graph and table for the year from 12/08 through 12/09: it's obvious that we did reach a bottom in the first quarter.I think the dip in November was not another bottom, just an example of my point about distress sales. Notice on the table how few properties were selling at the end of the year--because of holidays, because of perception of the market. If you take the dip in November out, the market was steadily higher than earlier in the year. And note that the year over year prices were up, which is much more meaningful than the dramatic 1-month changes around November.

Table 90041 Feb 1 10

What's going to happen this year? My crystal ball is still on backorder, but so far this year I have talked to a lot of people who want to sell and many who want to buy. From the energy I'm feeling, I'd say the first quarter of the year should be very active. In most years past, the first quarter is sluggish with sellers talking a lot about going on the market in the spring, but not getting around to going on the market until May or June. Buyers want to take advantage of the federal tax credit programs with their April 30 deadlines, and more and more sellers are saying they are ready to sell even if they can't make what they might have in 2007. This promises good things to come.

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Web Tools for Troubled Homeowners

It seems like every other person I meet is applying for a loan modification on their mortgage. The general feeling seems to be, "Why not? It might work."

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What's the market like now?

This is probably the most common question I am asked as we launch into an exciting new year in real estate. Everyone is happy to be done with 2009 and to look forward with hope to a much better year. The most common answer I hear from various experts is that, in general, don't expect much different from last year. I think it's better than that in our special corner of the LA area.

Here is my personal experience so far since the beginning of this year, a bit over 3 weeks.

I've taken two listings, one of which hasn't come on the market yet. Sellers are seeing that the prices aren't necessarily as dismal as this time last year, so it might be a good time to sell and figure out a good next step. I've been on about 9 listing appointments and several of them may decide to move forward in the next month or two. I also opened escrow with some people who have been looking hard for many months.

Of the two listings in Eagle Rock that I have on the market now, we are having a good turnout at our open houses. That means over 30-40 people at the $699,000 listing at 5320 Rock View Terrace at each the last 3 open houses. Yesterday was the first open house for 4902 Wiota, listed for $429,000, and we had over 60 people!

5320 Rock View Terrace, Eagle Rock

5320 Rock View Terrace, Eagle Rock

So the first-time buyer crowd is out in force for the under $500,000 price range, with good interest for higher price ranges as well. And we don't have just looky-loos walking through (though you are always welcome at my open houses), we have serious talk of offers at both properties.

The First-Time Buyer Tax Credit deadline of April 30, 2010, is having a positive effect both on buyers and on sellers. I think there is a real urgency to take advantage of that opportunity, so buyers are about to have a better choice of interesting properties to consider. The inventory is extremely low right now as properties are being snapped up.

4902 Wiota Street, Eagle Rock

4902 Wiota Street, Eagle Rock

For you homeowners who have been in your primary residence 5 of the last 8 years, you have a very brief opportunity for a tax credit as well.  Check out my previous blogpost at http://www.tracyslarealestate.com/federal-tax-credit-for-home-buyers-expanded-and-approved-for-eagle-rock-home-buyers. You can also go to www.federalhousingtaxcredit.com for the complete information.

But whether or not you qualify for tax credits, this year is starting off with an active real estate market fueled by relatively low interest rates and prices higher than last year, but lower than the peak. Opportunity is everywhere!

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