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  • Redondo Beach / Area 151: Home Sales August 2013

    Posted on September 19th, 2013 acimetta No comments

    North Redondo Homes Sales August 2013

    Seventeen homes sold in August 2013 in Area 151 in North Redondo. This is 2 less than the number of homes sold in July, and 4 homes less than sold one year ago in August 2012. In most cases, it has continued to be a sellers’ market although buyers still have the advantage of buying homes at prices below the peak of the bubble and at low interest rates.

    New construction is still a good buy considering you can spend the same (and even more money, in some cases) and get a town home that is up to 7 years old. Most homes are still selling quickly… many within the first week. And this translates into offers coming in immediately followed by a couple of days of negotiations before an offer is accepted.

    One of the sales that really surprised me is 2144 Perry Ave. It’s a single family that had an addition. It does have a lot of square footage, but there is only a one car garage and it’s lacking in the quality department. this one sold for $1,115,000. This surprised me and many of my colleagues, but it showed that buyers are still feeling that desperation to get in the market and ultimately willing to pay a premium.

    Address Sq Ft. Lot Year B/B DOM Sold Price Original List Diff
    2219 Curtis Ave, #C * 1,060 7,499 1975 2/2 7 $464,000 $499,000 -7%
    1900 Voorhees Ave, #B * 1,471 1987 2/3 6 $553,000 $495,000 +12%
    2512 Gates Ave, #B * 1,610 7,526 1999 4/3 48 $667,500 $663,999 +.5%
    2811 Barkley Lane 1,064 5,872 1947 3/1 21 $669,000 $669,000
    2225 Mathews Ave, #C * 1,718 14,687 2000 3/3 8 $700,000 $649,000 +8%
    2223 Voorhees Ave, #B * 1,955 7,504 1981 3/3 8 $708,000 $700,000 +1%
    2415 Thomas Ave 1,590 6,550 1945 4/2 49 $722,150 $724,900 -.4%
    1918 Ruhland Ave, #B * 2,477 7,513 1987 3/3 0 $725,000 $725,000
    1921 Nelson Ave, #A * 2,054 7,480 1990 4/3 56 $750,000 $775,000 -3%
    2116 Plant Ave, #A * 2,050 6,655 1989 3/3 5 $817,500 $799,000 +2%
    2205 Nelson Ave, #B * 2,387 7,495 1986 3/3 34 $820,000 $769,000 +6.5%
    1913 Nelson Ave 2,180 1959 4/3 49 $828,000 $859,000 -3.5%
    2003 Curtis Ave, #A * 2,085 7,501 1990 4/3 9 $830,000 $779,000 +6.5%
    1914 Ernest Ave, #A * 2,300 7,500 2004 4/3 1 $910,000 $910,000
    2109 Plant Ave, #B * 2,357 7,504 2006 4/3 11 $930,000 $929,000
    2021 Gates Ave, #B * 2,508 7,481 2013 4/4 1 $959,000 $959,000
    2204 Plant Ave, #A * 2,500 6,645 2007 4/3 6 $959,900 $959,900
    2144 Perry Ave 3,134 7,509 1947 5/4 14 $1,115,000 $1,150,000 -3%

  • Termite work and your lender

    Posted on August 21st, 2013 acimetta No comments

    When you buy a home, your lender requires a copy of the purchase contract. They want to make sure that all the terms are met and their investment is protected. One of the sticking points is often the termite work. Once you include the Wood Destroying Pest Addendum in your contract, the lender requires that the work is done prior to close, and in some cases, prior to funding the loan. Without the termite clearance – proof that the property is clean – the lender will not approve your loan.

    Typically, in southern California, the seller agrees to pay Section 1 items and the Buyer will be responsible for Section 2 items. Section 1 items are those that must be fixed, i.e., dry rot, termite infestation, etc. Section 2 items are things that are not a problem now, but may lead to a problem later. These are preventative measures. The lender normally is not concerned with Section 2 items, however I have heard of some lenders requiring Section 2 items to be repaired as well. Consequently, I advise my buyers not to agree to Section 2 items so that the lender doesn’t require they be completed. This is as simple as not checking the Section 2 box on the WPA form.

    South Bay – Redondo Beach, Manhattan Beach, Hermosa Beach
    In the South Bay, we do come across some challenges from time to time. Due to the fact that we have many properties that have 2 or 3 attached town homes, but no active HOA, a problem arises when the seller of one of the units has termites and needs to tent for fumigation. In order to tent, they have to tent the whole structure which includes his attached neighbor(s). But what if the neighbor doesn’t agree to tenting? You are forced to do secondary local treatment to eradicate the termites, but the lender might not accept this alternative treatment and the loan, and ultimately the deal, could be in jeopardy.

    This can also be the case with two detached units that share the same gas line. Because you have to shut off the gas during fumigation, the neighboring unit must agree to this. It can make for a very sticky situation.

    If there is no way to convince the neighbor to cooperate with the fumigation, the other option is to remove the WPA from the contract. Once the WPA is not part of the contract, the lender will not require the work. However, as a buyer, you must be comfortable with he fact that the termite work will not be completed and you may need to tent in the future if and when your neighbor is cooperative. You may want to negotiate a credit from the seller for the cost of the fumigation in exchange for removing it from the contract in order to close the deal.

     

     

     

     

  • Chasing the Real Estate Market

    Posted on July 24th, 2013 acimetta No comments

    Typically when Realtors talk about “chasing the market”, we are referring to a seller who has priced his home to high. The property sits on the market for some time without offers, and then the seller decides to reduce the price. This new price may have been attractive when the house was first listed, but now the market has changed – prices have dropped further, and even though the property is sporting a new, lower price, it’s ultimately still overpriced. This can happen again and again… price reduction, wait, price reduction, wait… but with each price reduction the seller never seems to catch up with the changing market, and he ultimately chases the market down hill. This trend is what drives Realtors to recommend to their sellers to price the home right at the beginning. They may be asking for less than what they would like to get for their home, but it will be more money than what they will ultimately make if they start too high.

    But these days “chasing the market” can also be applied to buyers. There has been such high demand in so many markets with extremely low inventory that competition has spiraled out of control. Buyers lament that they went $20, 30, 40 thousand over the asking price and they still didn’t get the house. And after missing out on property after property, they learn their lesson. On the next listing, they come in like gangbusters, make the offer of the century, and blow everyone else out of the water. Ultimately, each home that is sold sets a new benchmark. And the next listing can start at the new level and go up from there. The sooner a buyer gets super aggressive the better, because she will secure her home and get out of the race while prices continue to go up. The buyers that continue to hem and haw and make conservative offers will chase the market up and possibly price themselves out of the market or pay a great deal more money than they would have had to pay just a few months prior.

    As a Realtor, I don’t enjoy having the conversation with my buyer clients that they need to make an offer over the asking price. I’m much happier when my clients feel like we did a good job negotiating and they got a good deal. But not all markets work that way. And when you find yourself in a market that has rising prices, the sooner you are aggressive, the better.

     

    Redondo Beach, CA 90278

    For instance in North Redondo, the price of a 4 bedroom, upgraded town home was selling in the mid to high $800,000s at the end of 2012 and into early 2013. They are currently selling for low to mid $900,000s, and in a couple of cases close to $1,000,000. It’s a big price swing in a short amount of time. If a buyer was aggressive back in January, he could have purchased 2109 Huntington Lane, #B for $829,000 or new construction at 1905 Plant Ave, # B for $859,000. (These are sold prices.) In the past 6 weeks, buyers have paid $998,000 for 1906 Morgan Lane, #B, $960,000 for 2208 Warfield Ave, #B, and $950,000 for 2118 Pullman Lane, #B.

    The key to buyers “chasing the market” is that at any time it can stop. Once buyers decide enough is enough and they feel prices are too high,  they will pull back and prices will come back down again. But until then, the competition is stiff and sellers are in the driver’s seat. And for once they are not the ones chasing the market.

     

     

     

  • Listing of the Day – Redondo Beach

    Posted on June 27th, 2013 acimetta No comments

    204 N Lucia Ave, #B in South Redondo just came on the market. I previewed it today during Brokers’ Open. This Cape Cod style rear unit townhome has a cheerful, lovely ambiance from top to bottom. Dark wood floors and white walls give it a crisp, clean look. You just want to make yourself at home!

    There are ocean views from the deck off the top floor family room. There is a cute, manicured backyard accessed off the main living level. It doesn’t feel like a typical townhome. It’s nicely upgraded and I’m sure this one won’t last long. It’s my favorite listing of the day!

  • Testing the Strength of the Redondo Beach Market Part 2

    Posted on June 6th, 2013 acimetta No comments

    Redondo Beach Home Sales

    To follow up on my blog post on May 16th, the market is continuing to go crazy. All the listings that I earmarked 2 weeks ago: 2500 Ruhland, 2204 Plant, #A and 1933 Gates Ave, #B have all gone into escrow. 2500 Ruhland was on the market for a total of 7 days before it went into escrow. High tension wires not a deterrent; this home will sell for full price or over asking. 2204 Plant Ave, #A is in escrow after 24 days and 1933 Gates Ave, #B sold for $968,000 ($19,000 over asking). More and more 4 bedroom town homes in North Redondo are hitting the $900,000 and higher mark. We’re experiencing a quick and steep increase in prices. Hopefully, it will encourage more people to put their homes on the market in order to meet this pent up demand.

     

    New Listing in Redondo Beach

    1909 Morgan Lane, #A is another test of the market. This is a 4 bedroom detached town home (front unit) that came on the market today. It’s a clean 1992 build with some updates. It doesn’t have the beautiful detailing that some of the newer town homes have. And the bathrooms are not redone; they have the original tile counters. The sellers are asking $811,000. Are buyers so desperate that this second tier (in quality) town home will be bumped into the $800s? Or is there a limit to their madness?! We shall see.

     

    Home Buyers’ Frustrations

    What I can tell you is that many buyers are frustrated because they feel themselves being priced out of the market. I tell my clients who have missed out on a number of properties (and they have been aggressive in their offers) that they just need to stick with it. Everyone is feeling the pain; it’s not just them. It just takes time. The good news is that even though prices are going up, interest rates are still extremely low. And increase in price has less impact on your monthly payment, then an increase in price does. There is also the option to look for properties that may need some more work. You can buy something less expensive and then remodel it to your tastes. And these properties may have fewer people bidding on them since they are not turnkey.

     

  • Real Estate Advice: How do we get our offer accepted with VA financing?

    Posted on May 22nd, 2013 acimetta No comments

    I’ll be honest, it’s challenging in this market to compete with other buyers when you have VA or FHA financing. The reason being is there are so many buyers making offers on properties that sellers naturally gravitate to offers that are all cash or have heavy down payments, and those offers that remove certain contingencies such as appraisal or loan up front. There are two major issues that you are up against with a VA loan.First, the appraisal process can be sticky. If there are issues with the property, the appraiser will red flag these items which will need to be addressed prior to the close of escrow. In most cases, the seller knows that this responsibility will fall on them because someone who isn’t making a down payment, won’t be able to afford the cost of repairs either. Second, sellers equate (whether accurate or not) the size of the down payment to the strength of the buyer.It’s going to be crucial for you to work with an agent who can effectively educate the listing agent to why your offer is a strong offer. And there are things you can consider to make your offer stronger. For instance, you might not be making a down payment, but you can pay your own closing costs. Or if there are problems with the property, you may want to put in the offer that you will take care of these costs for repairs. You also may want to refrain from asking for a home warranty paid for by the seller. Doing things like this will help you structure a stronger offer.You may also want to make sure that you pick a lender with the shortest turnaround times. The time it takes to process a VA loan can be longer than conventional financing which is definitely a down side. With my VA clients, I also like to emphasize the patriotic angle of a VA offer. Veterans are being rewarded for their dedication to this country. They shouldn’t be penalized for not making a down payment. As long as the lender is giving the preapproval, there is no reason why the loan should not come through. I always want to encourage positive feelings with the seller if they decide to accept a VA offer.. it’s like they’re saying thank you for your service.It’s going to be challenging, but it’ s not impossible. You just have to be patient and keep trying.

  • How Low Are Mortgage Interest Rates?

    Posted on April 22nd, 2013 acimetta No comments

    I sat down with Ray Kay of Searchlight Financial today. He reminded me of how low rates are… and I don’t mean the average 3.5% rates. I’m talking about rates even closer to zero. This is how it works. You get an interest rate of 3.5% but you’re in a 40% combined federal and state tax bracket so you get the 40% tax deduction. This calculates out to: 3.5% X .6 = 2.1% after your deduction.
    Essentially you are paying 2.1% on the money you have borrowed!

    Here’s another important perspective that Ray points out: You buy a home for $500,000 with 20% down and that home is worth $750,000 in 10 years. (I think you will agree that this is pretty conservative.) What is your profit? Most people would say 50% because $750,000 – $500,000 = $250,000 which is 50% of the original $500,000 sales price. But this is wrong. You only put 20% of the $500,000 down so let’s see:

    Initial Capitial Investment = $100,000 (20% of $500,000)
    Value of Home After 10 Years = $750,000
    Increase in Equity = $250,000 ($750,000 – $500,000)
    Profit on Your Original $100,000 is $250,000 or 250%
    That’s not a bad investment!

  • The Redondo Beach Market Continues to Rise

    Posted on March 5th, 2013 acimetta No comments

    Prices continue to go up in Redondo Beach. Case in point, 1625 Morgan Lane came on the market last week (brokered by KW). This is a 3 bedroom Tall & Skinny in the Golden Hills, close to Jefferson Elementary. It has been nicely remodeled. The kitchen has been redone, There are hardwood floors downstaris. And unlike most Tall & Skinnys, all the bedrooms are upstairs which is a huge selling point. The bathrooms were not remodeled, but are very clean. The biggest down side, in my opinion is that the living space (on the first floor) does not get much light. Anyway, it was priced at $759,000. In a few days, the seller had amassed 16 offers, going well over asking. I can reveal the final price once the property closes. This home is ultimately going to sell for more than it may even appraise at. However, the winning bidder may have removed the appraisal contingecny, eliminating this issue altogether.

    A few more examples are:

    1641 Ford Ave: Listed at $699,000. Sold at $720,000

    1517 Stanford Ave: Listed at $739,000. Sold at $769,000. This was my listing. I had 4 offers and the winning bidder was all cash, no appraisal contingency.

    1503 Stanford Ave: Listed at $759,000. Sold at $7990,000

    1610 Van Horne Lane: Listed at $825,000. Sold at $840,000.

    Buyers are being aggressive. If inventory continues to remain low, this marke could continue to rise. The question is are we creating another bubble?

  • Lease to Own in the South Bay

    Posted on February 27th, 2013 acimetta No comments

    It’s not that commom but there are sellers out there that will consider a “lease option”. In plain English, this is a property that you can rent with the option to buy. Now, you have to pay for the right to this option. Your offer should be structured in such a way that it dictates the rental fee, the sales price, and the cost and expiration of the option. If you decide to purchase the home, then the option normally gets applied to the sales price. If you decide not to purchase the home, then you forfeit the option money.

    Otherwise, if you’re renting a property, you can always ask the seller if they would be willing to sell it to you. Or just make sure that they know you are interested, if they decide to put it on the market.

  • Real Estate Advice: Am I Able to do an Inspection before I close?

    Posted on February 21st, 2013 acimetta No comments

    Yes, you should have the option to do inspections before you close. In California, buyers typically have 17 days from acceptance to do their inspections. If within those 17 days, the buyers decide that they don’t like what they find, then they can walk away. If the buyers do their inspections, then remove their contingencies, then they are committed to the property and the deposit becomes nonrefundable.

    It’s extremely important for you to get your inspections done as soon as possible especially if you want to do any further negotating with the seller on repairs, a credit or a price reduction. If your looking at a single family home, I would always recommend a home inspection and a mold inspection. The home inspection will give you a general understanding of the roof, foundation, plumbing, electrical, appliances, HVAC, fireplace, etc. The mold inspection focuses on water/mold issues. So many buyers don’t do a mold inspection, but it’s so important. Water is absolutely damaging to a home and so many times there can be leaks or mold problems that the homeowner is not even aware of. Needless to say, I have all my buyers do a mold inspection. And depending on the age of the home and the existence of large trees on the property, I also suggest a video sewer line inspection which will let you know if there are any obstructions (such as tree roots) or clogging issues. Replacing a sewer line can be expensive and it’s a good idea to know up front what you’re dealing with.