A Guide to 16 of the Most Classic Types of LA Houses

Image via Los Angeles magazine
Article via CURBED LOS ANGELES

In its February issue, Los Angeles magazine runs through 26 "classic" LA things (in alphabetical order), with entries for Cobb Salad, the Figueroa Street tunnels, the Rainbow bar, terrazzo sidewalks, Vin Scully, yoga, and more. "A," of course, is for all the awesome architecture, and the magazine put together this handy guide to 16 classic examples of LA houses. While, as the mag notes, "The city of Los Angeles is stiched into nearly 900,000 parcels of land with almost as many architectural styles built on them," these 16 are some of the most common and most identified with LA--you'll definitely spot several on any average drive to the grocery store or scroll through Curbed.

Full infographic this way>>

 

Image via Los Angeles magazine; click to enlarge
· Classic LA to Z [Los Angeles]

Hackles Up Over Potential Dismantling of UCLA's Japanese Garden

UCLA is planning on putting Bel Air's one and a half acre Hannah Carter Japanese Garden (and an adjacent house) on the market next month and has already started taking out some of the objects at the site. The garden was donated to the university in the sixties by a former chair of the UC Board of Regents and named after his wife, but has been troublesome due to "rising maintenance costs, deferred maintenance, and the lack of attendance due to limited parking," according to the LA Conservancy, which is starting an effort to save the site. A court ruling last year allowed UCLA to remove "in perpetuity" from the 1964 donation agreement--the school now hopes to make about $5.7 million from the sale and put the money toward academic programs. The land is zoned agricultural, but the Conservancy says it could be used for a single family house and that UCLA is "not planning to sell the garden with any protective covenants or requirements calling for it to be maintained or preserved." According to the LA Times, the school is planning to keep some of the garden's significant objects, including a pagoda and a Buddha statue, at the Folwer Museum or other campus spots. The garden, designed by Japanese landscape architect Nagao Sakurai, includes a main gate, shrine, bridges, and a garden house for tea ceremonies made in Kyoto. The Conservancy wants interested folks to contact UCLA's chancellor and urge that the school stop the sale and work on some sort of partnership to keep the garden intact. There's also a community meeting on the matter tomorrow at 5 pm at the Community Magnet School Auditorium. Image of garden house via openspacesfengshui.com
· Preservation Alerts and Issues [LA Conservancy]

9 real-estate deal breakers

VIA MSN REAL ESTATE

Whether you think you’ve found the perfect house, the classiest neighborhood or the friendliest neighbors, be sure to step back and look at the big picture when you’re shopping for a new home. Was there something you missed along the way because of your enthusiasm?

“A lot of first-time homebuyers fall in love way too fast, and then look for reasons to fall even more in love instead of the other way around,” says Kathryn Alesandrini, a real-estate agent based in Malibu, Calif., who works for Dilbeck Christie’s Great Estates.

Even experienced homebuyers aren’t immune from love at first sight, but they might be more aware of signs that could signal a deal breaker. Here are nine questions that will help you identify potential pitfalls.

• Video: Bogus real-estate deals

1. Do you qualify?
The first deal breaker for many homebuyers — especially with today’s tighter lending standards — is not qualifying for their desired price range. “You’d be surprised how many first-time homebuyers want to see the house, then get truly disappointed when they find out they’re not qualified to buy it,” says Sonya Ann Loose, an agent with Red Carpet Real Estate in Gladwin County, Mich.

What to do: It’s discouraging to start your search looking at homes you can’t afford. Talk with a loan officer or mortgage broker early in the process to help you set reasonable expectations. Here are other things to consider at the outset:

• Upfront costs: Every loan requires a certain percentage as a down payment, usually a minimum of 10%. Add to that the amount you’ll need for closing costs, and you could be in over your head before you’ve signed any paperwork. (Read “How to save on closing costs” to learn more.) “Sometimes initial application appointments are overwhelming,” Loose says. “(Homebuyers) should know clearly what percent they would be expected to bring as the down payment.”
  
• Types of homes: Some loans limit the types of homes that buyers can purchase. For instance, Loose warns that some lenders won’t allow loans for a manufactured home in some areas. “They need to understand what home they are qualified to buy under that loan,” Loose said.
  
• FHA — or nay: Although loans backed by the Federal Housing Administration are popular because they require a down payment of as little as 3.5%, there are limits to the perks. “Buildings aren’t necessarily all FHA approved,” says Best Chicago Properties real-estate agent Chuck Gullett. For instance, if you’re interested in a condo and still prefer to pay the lower down payment despite limited options, a search of FHA-approved condos on the Department of Housing and Urban Development’s Web site could save you letdowns down the road. (Read “Why ask for an FHA loan” from HUD if you’re contemplating an FHA loan.)

2. Is this the right neighborhood for you?
Maybe you’ve always dreamed of living in a certain city or even a specific neighborhood. But when it comes time to buy a home, you may find that your dream community isn’t all that you hoped it would be. (Read “Make a neighborhood love connection.”)

What to do: Before viewing any homes for sale, take advantage of online databases such as Move.com’s City Profile Report, which gives you a detailed look at specific neighborhoods using demographics, finances and economics to help determine quality of life. (Move and Realtor.com are MSN Real Estate partners.)

• Price range: Narrow your search by limiting yourself to neighborhoods with a large number of homes in your price range. It’s not a hard and fast rule, but it can prevent the potential heartache of looking at disappointing houses in otherwise perfect neighborhoods. Search for home values in different regions at Realtor.com.
• Cost of living: Prospective homeowners should factor in expenses such as groceries, gas, child care and even property taxes, which can vary widely across the country. (Compare property taxes at Property Shark.) If a high cost of living isn’t enough to sway you from a certain neighborhood, lower your target price range to offset the difference. (Read “Is your suburb overpriced?” to see how high costs have affected some U.S. communities.)
• Commute: You may love a neighborhood’s bohemian vibe, but what if living there drastically increases your commute to work or for errands? Even if the new commute doesn’t look far on a map, give it a try during rush hour to see if it’s bearable. The eco-friendly commuter can look up public transportation systems nationwide on the American Public Transportation Association’s Web site, or check a neighborhood for walkability with the help of Walk Score. (Read “America’s most walkable big cities.”)
• Culture: If you’re hoping to get involved in your new community, Move.com’s City Profile Report can help you find a neighborhood where you’ll fit in based on demographics such as median age, family size and education level. Community festivals and other gatherings can also be a draw – or a deterrent – for some residents. (Read “Taking it to the streets” to learn more about neighborhood festivals around the nation.)

3. What’s that smell?
You’re already in love with a neighborhood, and now you’re also sure you’ve found the home of your dreams. But that perfect neighborhood could have a few imperfect blocks, and one of them could be where your new home sits.

What to do: Spend a couple of afternoons walking through the neighborhood. Do you notice anything that could end up putting a damper on your quality of life? Maybe you’ll discover a noxious odor that permeates the block once a week, or you learn from a neighbor that teens use your street as a racetrack in the wee morning hours. Perhaps you’re seeing more foreclosure signs than you were hoping for, which could be cause for concern about home values, as well as crime in the area. (Read “How to find a safe neighborhood.”)

4. Is it really a good deal?
Once you’ve narrowed your search to a few neighborhoods, don’t fall for the first bargain that sweeps you off your feet. “Some people are blinded by just the value and are not stopping to consider: ‘Do we have the money to fix this up? Do we have the ability?’” Loose says. Just because the price is right doesn’t mean the home is.

What to do: Even if you’re a do-it-yourselfer, remodeling costs add up quickly. If the home you’ve fallen for has flaws that you can fix down the road, you can hope you’ll have enough equity in the home within a few years to take out a home-equity line of credit. But will it be worth the cost? And will you actually do the project? “If you don’t have the money to put into it, then you really shouldn’t be just looking at the value,” Loose said.

5. I owe more than just the mortgage?
After you’ve chosen a home, it really starts to get down to the nitty-gritty. “First-time buyers think the majority of the work is finding the place,” said Gullet, who writes a Chicago real-estate blog. “All the work really starts with paperwork and negotiations.”

What to do:“It’s important for first-time buyers to understand that there are other costs in there,” says Alesandrini, whose blog includes tips for first-time homebuyers. “It’s not just what the loan’s going to cost you.” Expenses such as property taxes and utilities need close scrutiny, as they potentially change from one owner to the next. Then there are other expenses that might break your bank if you don’t plan for them.

• Taxes: Although you’ll learn early on what you’ll be expected to pay in property taxes, those prices can increase dramatically because of new levies or even reappraisals of your property, such as what’s happening in parts of northwestern Montana. Keeping track of local issues and price fluctuations in your neighborhood can help you prepare for any added costs. (Read: “Win a property tax reduction.”)
• Utilities: After years of living in rentals, where basic utilities such as garbage, heating, water and sewer often are included in the rent, monthly utility bills can come as a shock to first-time homebuyers. Your real-estate agent should be able to get an estimate of the monthly costs from the current owners, but even that price is subject to change. “You really can’t rely on what the current owner pays,” Loose said. “It all depends what you’re doing with the property.”
• Condo dues: Although your monthly costs are disclosed with the sale price, keep in mind that they often go up 3% to 5% a year, Gullett says. He added that it’s crucial to request and review the condo rules and regulations, declarations and bylaws, meeting minutes and operating budget. “After inspecting these documents and speaking with the management company, the buyer can make a better informed decision on the purchase,” he says. (Read: “Condo buyers: How to protect yourself” for more savvy skills.)
• Homeowners association dues: Similarly, if you move into a development with an HOA, you’ll want to know upfront what your monthly bill will be. But your homework doesn’t stop there. Fees can sometimes increase up to 20% a year, and fines for not following regulations can easily sneak up on homeowners who don’t read the fine print. (Read “The runaway power of homeowners associations.”)
• Homeowners insurance: Rates can vary by neighborhood and provider, but the average premium paid in 2007 was $822, according to the Insurance Information Institute. If you’re concerned, most insurance companies provide estimates.

Read: There's more to a home's cost than just the mortgage

6. My sofa doesn’t fit?
It’s easy to fall in love with a place that’s staged to perfection, but most people have more than just a coffee table and sofa in their living rooms. If that’s you, a tape measure could keep you from spending money on new furniture and other belongings that weren’t in your budget.

What to do: Compare the total square footage of a potential home to your current digs, but be sure to also get the dimensions for each individual room. Just because the home is 1,500 square feet doesn’t mean it has a room that’s the right size for your 52-inch flat-screen TV.

7. Legal issues
The preliminary title report you receive before you sign a contract to buy a home should tell you everything you need to know about easements, liens or pending litigation on the property, but that doesn’t mean those problems can be easily remedied.

What to do: Many of these issues are beyond a buyer’s ability to fix, which can lead to mounting frustration and a desire to walk away if your closing date keeps getting pushed back.

• Easements: Easements such as shared driveways are often obvious to buyers, but other easements such as a water main that requires access from utility companies or plans for a major road through your property could become problematic. Alesandrini says you have the option to have an attorney help you try to reach a compromise on the easement, but that process could be time-intensive and expensive.
• Liens: If anybody has placed a lien on a home you’re hoping to buy, the most that a buyer usually can do is sit back and wait: The deal won’t close until the seller pays off the lien. Although that’s not a deal breaker for most people, those who have to move out of their current home or who are on an otherwise tight schedule may choose to abandon the deal.
• Pending litigation: This is especially important to be aware of when buying a condo, because if the building you want to buy into is in the middle of a lawsuit, many lenders won’t finance your loan.

8. Is the infrastructure sound?
You may not see major flaws in a home’s infrastructure, but a home inspector or other professional can find costly problems that could break the deal.

What to do: Most states require home inspections before a sale can close, but they’re recommended even in states that don’t require them. Alesandrini says she occasionally refers buyers to specialists such as structural engineers or geologists if she believes a home may need a closer look. “We cover everything,” she says of real-estate agents, “but when they really need in-depth help, they need to go to specific professionals.” The seller may agree to fix major problems found at that point, but if not — or if the problems are beyond repair

-- it may be time to walk away from the deal.
Condo buyers also could benefit from a building-wide inspection since they’ll be expected to help pay for any structural damage down the road. “You’re not just buying into the unit, you’re buying into this huge complex along with all the problems,” Gullett says.

9. The appraised value is what?
So you’ve settled all of your differences with the seller and you’re ready to fall in even deeper love with your home. Then the appraiser comes, and the value she throws out there is way below what you agreed to pay. What now?

What to do: Loose said that this is especially common in areas with a strong buyer’s market, and that it can be detrimental to the sale. Somehow, the buyer and seller have to find a way to pay the bank the difference between the appraised value and the agreed-upon sale price. But if neither party is willing to budge, it’s bye-bye dream home. (Read “New appraisal rules cause chaos” to learn about changes in the system.)

Events in Beverly Hills: Beverly Hills Wine Festival

LINK: More Information
The Beverly Hills Wine Festival™ 2012 is the most prestigious wine festival in all of the United States. This is the only wine festival of its size that donates all of its proceeds to a great cause. The event benefits the LA Animal Alliance, Pets to Patriots and all the LA city and Los Angeles county animal Shelters.
Beverly Hilton Hotel, 9876 Wilshire Blvd Beverly Hills, Beverly Hills

Brokerage declares 2011 was the year of mobile

Via AG BEAT   

The year of mobile

Every technology goes through the process of being speculated about, with 2006 being the “year of MySpace,” 2008 being the “year of Twitter,” yet there is continued speculation as to when the “year of mobile” will hit, but Coldwell Banker has published a white paper claiming 2011 was the year of mobile. “Something has clicked. Something has happened.”

Mobile has changed the way businesses market, organize, and even practice, most notably companies like Coldwell Banker which has 87,000 agents and brokers frequently computing on their smartphones in the field and engaging consumers that are becoming accustomed to real estate search and communications through mobile devices.

Coldwell Banker’s white paper, “The State of Mobile” outlines the past, present and future of the mobile space as it relates to their industry and asserts that mobile hit a critical mass in 2011. The report also outlines the differences between Android and iPhone platforms and offers six steps brokerages can take to be mobile ready for their consumers.

See Full White Paper from Coldwell Banker :

http://agbeat.com/real-estate-sales-marketing/brokerage-declares-2011-was-the-year-of-mobile/

U.S. housing more affordable than other English countries

(Reuters) - Would-be American home-buyers can take heart: U.S. housing is more affordable than in other English-speaking countries, according to a study of metropolitan areas around the world.

The median home price in the United States as a whole was three times pre-tax household income in the third quarter of 2011, on the cusp of what Demographia, a public policy firm which conducted the survey, deems "affordable."

In major U.S. metropolitan areas, the ratio was 3.1, down from 4.6 in 2007, before the worst of the U.S. housing market slump that dragged the economy into recession, and 3.3 in 2010.

Detroit, at 1.4 times, was the most affordable big city in any of the 325 areas surveyed in six countries and in the Chinese territory of Hong Kong.

In contrast, the index was 12.6 in Hong Kong, by far the priciest market. And Canada, despite being larger in size than the United States with just one ninth of the population, continues to grow less affordable.

A ratio of 3 or less is considered "affordable," according to Demographia which surveyed 325 metropolitan areas in Australia, New Zealand, Ireland, the U.K., the United States, Canada and Hong Kong.

"The bubble is over - prices have continued to decline. We have housing prices back to where they're supposed to be," said Wendell Cox, principal of Demographia which is based in Belleville, Illinois.

Not everywhere in the United States is housing looking like a good deal: the most unaffordable U.S. markets were San Jose (6.9), San Francisco (6.7), San Diego (6.1), New York (6.1), Los Angeles (5.7) and Boston (5.3), according to the survey.

Cox blamed stringent land use regulations for choking supply in many of the "unaffordable" U.S. markets, driving up prices.

Signs have appeared in recent months that the U.S. housing slump may have touched bottom and economists mostly expect prices to remain flat in 2012 before small gains next year.

After Hong Kong, Autralia's major cities were the most expensive at 6.7 times pretax median household income, followed by New Zealand at 6.4 and Britain at 5.0.

(Reporting By Phil Wahba; Editing by Kim Coghill)

First-Time Buyers More Willing to Compromise

 

Via Daily Real Estate News |      National Association of Realtors

When it comes to space and upgrades, first-time home buyers are more willing to compromise than repeat buyers, according to the National Association of REALTORS®’ 2011 “Profile of Home Buyers and Sellers.”

While they have big wish lists too, first-time buyers seem to be most driven by finding a home that offers a reasonable monthly mortgage payment.

"Single home buyers tend to value affordability above all when they are choosing a home and a neighborhood," says Jessica Lautz, NAR’s manager of member and consumer survey research. "They also focus more on living some place convenient to friends and family, as well as entertainment and leisure activities."

The median age of first-time home buyers is 31, and about 26 percent are married with children.
First-time home buyers tend to rate energy efficiency high on their wish list, as well as simple, no-hassle technology use in their house, the study finds.

But "even if they like the idea of solar panels, first-time buyers are not likely to spend an extra $20,000 to have them," says Stephen Melman, director of economic services for economics and housing policy for the National Association of Home Builders.

First-time buyers also are willing to compromise on space: The median-size of a home purchased by a first-time buyer is 1,570 square feet.

Overall, "the top three things that buyers want are a great room instead of a formal living room, a walk-in closet in the master bedroom, and a laundry room," says Melman. "First-time buyers want the same thing, but they are more likely to be satisfied with a small laundry room without an attached mudroom and with a smaller master bedroom and a smaller walk-in closet."

But one thing first-time buyers aren’t as willing to compromise on: Buying a home that needs a lot of repairs.

"Buyers that don't have any experience with home maintenance tend to be afraid of renovations, so home sellers should be sure to fix everything they can and make minor home improvements in order to appeal to first-time buyers," Melman says.

Source: “Size Matters Most to First-time Buyers,” HSH.com and Fox Business News (Jan. 26, 2012)

What the Fed's Low Interest Rates Mean for Homebuyers

Via AOL Real Estate

The Federal Reserve announced today that they will keep interest rates low until at least late 2014 in an effort to help jump-start the sluggish economy by making it less expensive to borrow money across all segments of the economy.

What this means for homebuyers and current homeowners is that mortgage rates for a purchase loan or to refinance will remain remarkably low in the near-term, keeping affordability high. The 30-year fixed mortgage rate fell below 4 percent on Zillow Mortgage Marketplace in mid-October 2011 and has dropped as low as 3.67 percent in recent weeks.

Here's a quick comparison of mortgage rates and affordability using today's rates compared to 2008:

Today's rates: For a homebuyer shopping for a home today assuming 20 percent down and today's interest rate of 3.7 percent, they would be able to afford a $215,000 home with a monthly mortgage payment of about $1,000 per month (including principal and interest).

2008 rates: If a homebuyer shopped for a home in 2008 when mortgage rates averaged roughly 6 percent, the same homebuyer would only be able to afford a $165,000 home for $1,000 per month (including principal and interest)

Difference: $50,000

Rent or Own a Home

Should you buy versus rent a home in today's real estate market?

Via Homes Go Strong

In last night's State of the Union address, President Obama addressed our country's current real estate situation, including the fact that many American homeowners currently have underwater mortgages. While there has been some improvements to help those underwater homeowners in the form of changes to the Home Affordable Refinance Program (HARP), in today's real estate market it's not surprising if people are a bit gun shy about buying or owning a home.

• What if I can't afford my mortgage in the future?
• What if my home loses so much value that I eventually owe more than it's worth?
• What if I have to move in a few years and can't sell my home?
• If you've ever asked yourself these questions about home ownership, it could be time for you to look into renting versus buying a home.

1. Evaluate whether you have a steady income to support paying a mortgage. At or near the top of every potential homebuyer's mind is whether or not they can afford to buy a home right now. Buying a home remains a sound financial decision for those with documented income and a good credit history, and a steady income can provide a strong backbone for the initial down payment and future mortgage payments. However, if your income is unreliable, getting tied down to a mortgage may not make the most sense financially.
2. Make a timeline of how long you plan to stay put. Buying a home is a lifestyle decision, and can be a very smart move if you're planning on staying in your home for a while—think five years or more. With proper planning a home purchase has historically proven to be one of the safest investments one can make. If you anticipate staying in a home for only one or two years, you are less likely to see a significant financial return on your investment. In addition, if you buy a home and live in it for fewer than two years, you may find yourself having to pay capital gains taxes.
3. Crunch the numbers before making your decision. You can start by using this "buy versus rent" calculator on the Coldwell Banker website. It will help you see the costs of home ownership versus the costs of renting a home. For example, with buying a home, you have to take into consideration your mortgage payments as well as real estate taxes, insurance payments, and the maintenance costs that come with owning a home. With renting a home, calculating month-to-month housing expenses is as easy as inquiring about the monthly rent and average utilities.

Bottom line: buying doesn't always make sense and neither does renting. So be sure to speak with a real estate expert, your tax person, and a financial professional before deciding to rent versus buy a home.

LAPD cracks down on drone aircraft use by real estate agents

The Los Angeles Police Department is warning real estate agents not to use images of properties taken from unmanned aircraft, saying the flying drones pose a potential safety hazard and could violate federal aviation policy.

The warning was issued this week after officers saw a television news report showing a basketball-sized object with multiple rotors hovering over an expansive Westside residence.

"We are just trying to inform the public to ensure that before hiring these companies to operate these aircraft in federal airspace, that they are abiding by the federal regulations to ensure safety," said police Sgt. George Gonzalez.

Drones can range from as small as model airplanes built by hobbyists to as large as a commercial jet. Nationally, there has been an intense and growing debate about the safety of allowing drones to operate in airspace used by passenger aircraft.

Federal regulations prohibit the operation of unmanned aircraft in U.S airspace without specific permission, though the rules do allow hobbyists to fly model planes in designated areas.

Real estate agents have been posting aerial photos and video of homes for sale in the Los Angeles area, according to the LAPD. The pictures have been taken from several hundred feet off the ground in the city's crowded airspace -- an altitude at which police helicopters often fly.

Seeking to maintain the safety of their pilots as well as people on the ground, LAPD officials are first notifying those who are in the market for photos taken by drones "so they make informed decisions and don’t hurt anybody," Gonzalez said.

The LAPD knows who was operating the "spider-like" drone shown on TV, but hasn't yet contacted the operator, Gonzalez said.

All-cash sales driving down prices

VIA MSN REAL ESTATE

Nearly one-third of home sales are to cash buyers, who often command a significant discount off list price. In turn, the seller gets a quicker closing.

As home sales increase and inventory shrinks, we're continuing to experience a decline in median home prices in many cities.

One reason for that, according to the new Campbell/Inside Mortgage Finance HousingPulse Tracking Survey, is the influence of investors who are paying cash for homes. Those cash sales are driving down prices.

 "Investors are very aggressive and expect to see 15% to 20% off list. They will close in 30 days or less and most are cash buyers," one California real-estate agent said to the surveyers.

All-cash sales accounted for 33.2% of sales in December, up from 29.5% a year earlier, according to the Campbell/Inside Mortgage Finance statistics. Among investors, 74% paid all cash.

• First-time buyers competing with investors for homes

Although sales to investors made up only 22.8% of the market in December, they have a greater effect on prices because those lower prices drive down appraisals — a significant issue for buyers seeking mortgages — and thereby, all prices.

As inventory declines, and competition arises for the best properties, investors have even greater leverage.

 If sellers have a choice between selling to an investor for cash or to a buyer who plans to seek a mortgage, the investor is a safer choice, even if that means a lower sale price.

• Would turning foreclosures into rentals help?

Cash buyers can close more quickly, usually in less than 30 days, which is attractive to lenders selling off real-estate-owned properties. Buyers seeking a mortgage usually need 45 to 60 days to close, even when everything goes well.

• Prediction: 3 times more investors than owner-occupants

Cash buyers don't have to deal withbank-ordered appraisals that come in lower than asking price. In a cash deal, the price is what the buyer and seller agree upon, regardless of appraisal.

The report noted:

While investor bids may not be the first offers accepted, they often end up winning properties after other homebuyers are eliminated because of mortgage approval or timeline problems. Appraisals below the contracted price are a common reason for mortgage denials. Most mortgage financing timelines are now in excess of 30 days.

The percentage of all-cash deals is higher than 33% in many areas. In Miami-Dade County, for example, cash sales accounted for 63% of closings in December.

Fannie and Freddie don’t deserve blame for bubble

Courtesy of The Washington Post

By Mark Zandi,

There is plenty of blame to go around for the U.S. housing bubble, but not much of it belongs to Fannie Mae and Freddie Mac. The two giant housing-finance institutions made many mistakes over the decades, some of them real whoppers, but causing house prices to soar and then crater during the past decade weren’t among them.

The biggest culprits in the housing fiasco came from the private sector, and more specifically from a mortgage industry that was out of control. These included lenders who originated home loans, investment bankers who packaged them into securities, rating agencies that misjudged these securities, and global investors who bought them without much, if any, study.

In other words, America’s mortgage securitization machine was fundamentally broken. It created millions of mortgage loans that, even under reasonable economic assumptions, stood little chance of being repaid — and were not. As a result, hundreds of billions of dollars were lost as defaults and write-downs brought the financial system, and the wider economy, to the brink, requiring a massive government bailout.

Also to blame, of course, were regulators, who gave the private mortgage market little, if any, oversight. The market’s watchdogs were lulled to sleep by a misplaced view that self-interested private financial institutions would regulate themselves. This flawed thinking was most pervasive at the nation’s most important financial regulatory agency, the Federal Reserve.

Getting history right for this dark economic period is critical if we are to design a better mortgage finance system for the future. If Fannie Mae and Freddie Mac are responsible for the debacle, then perhaps government’s role in a future mortgage finance system should be minimal. But if private lenders deserve most of the blame, the case grows for giving government an important role in backstopping and overseeing the system.

“If it grows like a weed, it probably is a weed.” This age-old banking adage aptly applies to the private mortgage lending business during the housing bubble. Between 2004 and 2007, private lenders originated three quarters of all subprime and alt-A mortgage loans. These were loans to financially fragile homeowners with credit scores under 660, well below the U.S. average, which is closer to 700. But only a fourth of such loans were originated by government agencies, including Fannie, Freddie and the Federal Housing Administration.

The dollar amount of subprime and alt-A loans made during this period by the private sector was jaw-dropping, reaching nearly $600 billion at the height of the lending frenzy in 2006. For context, this is about equal to the total amount Americans currently owe on bank credit cards. By contrast, government lenders made just over $100 billion in subprime and alt-A loans in 2006. Even in 2007, when the housing market was beginning its free fall, private lenders still handed out more than $300 billion via these very shaky mortgage loans.

All this can be seen in the share of total residential mortgage debt insured or owned by Fannie Mae and Freddie Mac. At the start of 2002, before the housing boom got going, the two agencies’ market share accounted for almost 54 percent of all mortgage debt. By summer 2006, the bubble’s apex, their share had fallen to only 40 percent. It is difficult to see how the agencies could have been responsible for inflating the housing bubble at a time when they were losing a full 14 percentage points of market share. Indeed, the opposite was true, as their position in the housing market rapidly diminished.

It wasn’t that Fannie and Freddie made a prescient strategic decision to stay clear of the housing frenzy. They couldn’t have participated even if they had wanted to. The two agencies had committed various accounting irregularities earlier in the decade, and their regulator forced them to rein in their growth.

Moreover, Fannie and Freddie couldn’t compete with rapaciously expanding private lenders. Securitization was in full swing, enabling private lenders to offer low rates and increasingly aggressive terms to borrowers. In 2006, almost half the loans made by private lenders required no down payment and no documentation. Fannie and Freddie simply couldn’t play in that league, even though Congress had given them aggressive lending targets to help boost homeownership among lower-income and minority households.

Fannie and Freddie did play a significant part in the financial panic. As financial conditions began to weaken in 2007 and the private mortgage industry pulled back, the agencies partially filled the void. This was their chance to get back in the game. The memory of their accounting scandals had faded, and policymakers hoped the agencies could keep the housing market from unraveling. Fannie’s and Freddie’s originations of sketchy loans actually peaked near $160 billion in 2008, the year regulators placed them into conservatorship. The two agencies had jumped back into the housing market at precisely the wrong time.

The government’s takeover of Fannie and Freddie arguably ignited the global financial panic. The Treasury Department’s decision to wipe out shareholders of Lehman Brothers and Bear Stearns, two of the largest financial institutions on the planet, sent a shock wave through markets as it became apparent that no institution was safe any longer. Investors ran for the door, sending Lehman Brothers into bankruptcy one week later; a string of failures at other venerable institutions followed.

Despite Fannie and Freddie’s role in the panic, it is wrong to blame them for creating it; that distinction belongs rightly to the private mortgage market. Understanding this is critical to creating a stable, efficient mortgage finance system for the future. While Fannie and Freddie themselves deserve to pass from the scene, given their numerous past missteps, it is equally clear that the government needs to remain an important player in housing finance, providing consistent regulatory oversight and a backstop in case the private market collapses again.

Mark Zandi is chief economist at Moody’s Analytics, a subsidiary of Moody’s Corp. He is the author of “Financial Shock,” an book about the financial crisis. His column will appear regularly.

 

More analysts say housing market has hit bottom

Add another voice to those saying the housing market will really, truly, finally hit bottom in 2012.

"We have seen the worst. We are at the bottom. We may hug along the bottom for a while, but we are at the bottom," Jamie Dimon, CEO of JPMorgan Chase, told Maria Bartiromo in a Q&A published in USA Today.

That doesn't mean that happy days are here again, he cautions, but there is light at the end of the tunnel.

"Supply and demand are rapidly coming in balance," he said. "Renting is now more expensive than buying in half of America. We're adding 3 million Americans a year … 2 million jobs, and all this shadow-inventory stuff will be getting better, not worse. And it's the rate of change which is important, not the absolute level."

He added: "It's still terrible, by the way. But we think it's going to get better over time."

Make-believe and the real world meet in Beverly Hills

Try to look like you belong and enjoy the eye candy

Via Michael McCarthy, Postmedia News

 

 

 

On the southern edge of Los Angeles, Disneyland presents a world of pure make-believe for children and families. At the other end of town, discerning travellers with more adult tastes might find the fantasy world of Beverly Hills more to their liking. The major difference is that one fantasy is real and the other isn't. A visit to Beverly Hills is like stepping into a dream.

Movies aren't made on Hollywood movie lots anymore, but many Hollywood stars still live, shop, dine out and party in nearby Beverly Hills. They can be seen in high-end restaurants and boutiques around the "Golden Triangle" centred on Rodeo Drive. A stroll along the Drive will prove that the beautiful people of Beverly Hills (and not just the movie stars) are as gorgeous in real life as they appear to be on the screen.

Beverly Hills has been home to the stars and the ultrarich producers and promoters who can also afford to live there, since the original Beverly Hills Hotel was built in 1912 in the middle of an apple orchard. The hotel is still located on Sunset Strip, with its 204 rooms and suites and 21 unique bungalows. Now the sultan of Brunei owns the hotel, and stars still party at the famed Polo Lounge, but if it's fantasy you're after, then it's Rodeo Drive you need to explore.

Rodeo Drive has evolved into the premiere shopping district for the entire world, and every major brand, from Faberge to Versace, operates a swank signature store here. But don't expect to waltz into every boutique, unless you are properly attired or have made an appointment.

There are large, welldressed and handsome doormen standing in many doorways, and they decide whether you look like a shopper or a gawker. Leave the scruffy blue jeans at home.

In Beverly Hills, the experience of rubbing elbows with the gorgeous and fabulously wealthy is totally free, but it's best to be rather circumspect with your camera, if you want to enjoy yourself. Even waiters and clerks look like movie stars.

One of the hottest restaurants in Beverly Hills these days is Crustacean, a delicate fusion of French and colonial Vietnamese cuisine. When our party was escorted to a booth, we saw David Caruso from the TV series CSI sat down at the table next to us. Standing at the bar were several other familiar-looking faces from TV and movies. And, the lobster, king crab and prawns served with garlic noodles were delicious.

The dress code at Crustacean is "relaxed," which means you don't need an evening gown or suit.  Make a reservation well in advance. Just give them the phone number for the Hilton and you'll be fine.

Be sure to check out the Aquastar pool at the Beverly Hills Hilton (note: reasonable room rates, too) for hot young stars and starlets sunning themselves in deck chairs. The Hilton's spa treatments are also reputed to be the best in town, so make sure you misplace your chequebook before checking in.

Actors such as Jack Nicholson are reputed to enjoy the occasional beverage at the Hilton's Trader Vic's lounge.  The downside is that you will feel like a B-movie extra compared to the gorgeous creatures who live and work here, but you can cheer yourself up by saying to yourself, "It's not real." Only it is real, and that's what is truly amazing.



If You Go

Where to stay: Splurge, and stay at the Beverly Hills Hilton (www.beverlyhilton. com).

Where to eat: Dress well and make a reservation at Crustacean (www.houseofan.com).

What to do: Walk around Rodeo Drive and try to see how many shops will let you in. Ride the trolley tour, or check out other attractions on the city's website (www. beverlyhills.org).

Rising Rents Make Home Buying a Better Choice

Via Realtor Magazine

Fallen home prices and record-low mortgage rates have pushed housing affordability to a 40-year high. Meanwhile, rental prices are continuing to rise at a fast pace, according to a new report released by Hotpads.com, a rental listing service.

Rental prices in 20 of the largest metro areas increased 3.75 percent in 2011, and prices are expected to continue to rise in 2012. Meanwhile, home prices fell by 1.83 percent in 2011, according to the report.

"In a lot of cases it's getting to a point where it makes more sense for people to buy because rent has been going up significantly faster, while home prices have been falling," Paul Gleger, author of the report, told AOL Real Estate.

According to the report, New York has the highest rental prices, with a two-bedroom apartment’s median rent at $2,653. Other cities posting some of the highest median rents in the country: Boston ($1,929), Miami ($1,748), San Francisco ($1,607), Los Angeles ($1,717) and Chicago ($1,552).

Source: “U.S. Rental Market Stays Hot in 2011,” Hotpads.com (January 2012) and “Rental Prices Climb, Buying Remains More Affordable,” AOL Real Estate News (Jan. 18, 2012)

HOLMBY HILLS BEST REAL ESTATE OPPORTUNITY

LA VILLA CONSOLATA

Neighboring the beautiful Los Angeles Country Club and a few doors away from Candy Spelling's former sprawling mansion in Holmby Hills that just recently sold for $85 Million is one of the most elegant spectacular estates ever built in Los Angeles.

Over 27,800 square feet of the utmost quality and luxury on over an acre. Enormous impressive domed entry, several sitting rooms, formal dining room, one of a kind gourmet kitchen, breakfast room, many fireplaces, high ceilings throughout, patios overlooking gardens and views. Indoor and Outdoor pools, gym, massage room, game room, two level library. Underground disco and guard house.

Located in the Holmby Hills area which is a prime location, 5 minutes from Rodeo Drive in Beverly Hills.

Status: Active
Property Type: Residential
Year Built: 1993
Bedrooms: 6
Baths: 13.5
Living Area 27,816. Sq. ft.
Lot Size: 51,400. Acres

PHOTO/VIDEO TOUR

Spelling, widow of legendary TV producer Aaron Spelling, put the 4.7-acre Holmby Hills residence up for sale years ago at $150 million. The Manor sold in the Summer of 2011 for a reported $85 million.

Florence Mattar

Coldwell Banker Beverly Hills North

301 North Canon Drive, Suite E

Beverly Hills, California 90210

310.927.2777

Foreign Buyers See Big Bargains in U.S. Real Estate

Via Daily Real Estate News 

 

Foreign investors are finding plenty of deals in the U.S. when it comes to real estate, and, as such, more international investors are flocking to key states to buy their piece of the American Dream.

Mexico is the top country of origin for foreign buyers purchasing U.S. homes, according to a recent study by Credit Sesame, which used National Association of REALTORS® data for its findings.

“In this period of tremendous uncertainly globally, real estate here is a safe haven,” Susan Wachter, professor of real estate and finance at University of Pennsylvania, told MSNBC.com.

The top destinations of foreign investors for U.S. real estate purchases are:

1. Florida: Thirty-one percent of all home purchases in that state are made by foreign buyers, with most coming from Cuba, Haiti, and Colombia.

2. California: 12 percent of all home purchases (most coming from Mexico, the Philippines, China, India, and Vietnam)

3. Texas: 9 percent of all home purchases (most coming from Mexico, India, Vietnam, China, and the Philippines)
Source: “Housing More Affordable Than Ever ... for Foreign Investors,” MSNBC.com (Jan. 13, 2012)

Investors flood Southern California housing market in December

Home sales and prices slumped in December. (Genaro Molina / Los Angeles Times)

By Alejandro Lazo

January 17, 2012

A record number of investors and second-home buyers flooded the Southern California real estate market in December, though not enough to give sales in the region a bump over the same month a year earlier.


With the investor dominance, low-cost homes reigned. That helped push the region’s median home price back down to its lowest level in 12 months, according to San Diego real estate firm DataQuick.


Sales fell 1.4% from the same month a year earlier, with a total of 19,247 homes bought throughout the six-county region. Sales fell the most in San Bernardino, down 7.2% from the same month a year prior.


The region’s median home price -- the point at which half of the homes in the region sell for more and half for less -- fell 6.9% to $270,000.

Beverly Hills takes steps to preserve architectural treasures

Via The Los Angeles Times

In response to the demolition of several famous buildings, the City Council approves rules for tearing down or altering structures older than 45 years and designed by important architects. It also establishes a Cultural Heritage Commission.

By Martha Groves, Los Angeles Times

January 12, 2012

Responding to the demolition of such local icons as the Friars Club, Pickfair and John Lautner's Shusett House, the city of Beverly Hills has adopted a historic preservation ordinance that seeks to protect noteworthy structures.


Prompted in part by an aborted plan to raze Richard Neutra's Kronish House, the City Council voted unanimously Tuesday to approve new rules for demolishing or altering structures at least 45 years old and designed by a city-recognized architect. The council also approved the creation of a landmark designation process and a five-person Cultural Heritage Commission.


Beverly Hills Councilwoman Lili Bosse was among many who said the ordinance was long overdue. "For me, it was one of the most important nights in Beverly Hills history," she said in an e-mail.


PHOTOS: Beverly Hills preservation ordinance


Planning Commission members, who proposed the changes, said they and city staff worked hard to balance the rights of property owners with residents' desire to save architectural and cultural treasures. As in Los Angeles, landmark designation would not necessarily protect a building from demolition or drastic alteration, but it would trigger a longer permitting process.

"This is something the city has wanted for quite a while," said Brian Rosenstein, a planning commissioner who helped craft the ordinance with guidance from the Los Angeles Conservancy.


He mentioned houses by architects Wallace Neff, Paul Williams and Neutra, along with Greystone Mansion, the Beverly Hills Hotel, Robinson Gardens and the Beverly Wilshire Hotel. Some properties are already state or national landmarks, but the new Cultural Heritage Commission would probably designate them locally as well, so that owners could receive tax breaks under the state's Mills Act.


Photos: Ordinance seeks to protect noteworthy structures


The City Council would have the final authority to approve any designation. It named Noah Furie, a longtime planning commissioner who also helped write the ordinance, as the heritage panel's chairman.


The ordinance would expand the notice period for a demolition permit to 30 days from 10 days for any structure at least 45 years old that was designed by a locally important architect, designer or builder or a "master architect." The city will compose a list of architects of known fame and local architects who have designed buildings important to the city's history. In a bow to property-rights advocates, the ordinance prohibits designation based solely on who lived in a residence.


Under the ordinance, anyone who altered or demolished a historically significant building without permission would be subject to a five-year moratorium on developing the property.


Previous surveys have identified as many as 200 potentially significant properties. "Not all will be landmarked," Rosenstein said. "We really want to save the best of the best."


"The city has demonstrated a real commitment to the historic places that make Beverly Hills unique," said Linda Dishman, executive director of the L.A. Conservancy.


Hamid Gabbay, designer of many Beverly Hills residences, expressed concern that landmarking could dampen real estate values.


But Michael Libow, a real estate agent, disagreed. Libow spent years restoring the Witch's House, a 1921 storybook building created as a movie studio office.


"I've had calls from people who were shocked I was in favor," Libow said. "I actually feel there will be more value to be able to market a property as a landmark. There's a certain cachet to having a landmark status home."