Thursday, May 28, 2009

Graph outlines sales activity on high end since 1988

This graph was compiled by the Manhattan Beach Confidential blog and plots high-end home sales in six affluent markets (Beverly Hills, Rancho Palos Verdes, Manhattan Beach, pacific Palisades and the 90402 Zip code in Santa Monica) dating back to 1988.

The sales activity in these wealthy areas has been on a strong decline since 2004 despite prices continuing to rise into 2007.
I expect activity in these areas to continue to slow through 2009 and then begin to pick up in 2010/2011 after further price declines motivate those that are on the sidelines.
The last major real estate downturn occurred in the early 1990's and didn't start to appreciate again until that late 1990's. . .How will this downturn be any different?

Manhattan Beach school district cuts athletic funding

Because of cost cutting in the Manhattan Beach Unified School District, Athletic Director Bob Fish has been reassigned to teach full time, leaving Paula Spence, Vice Principal to coordinate Mira Costa High School's 64 teams and 1,200 athletes.

The reassignment of athletic director duties is only one of sweeping changes approved by the district's board of trustees, who voted to eliminate all of the school's coaching stipends and its athletic trainer beginning next school year.

To pay for the $180,000 in coaching stipends and more than $60,000 for a trainer, plus other costs, the school's booster clubs have joined forces with the Manhattan Beach Athletic Foundation to ask parents for a donation of $325 per athlete for the first sport he or she participates in and $200 for each additional sport.

*Source: LA Times: For the full article plus more information on budget cuts regarding athletic programs across the region, please read: Budget cuts affecting athletic department funding

Beverly Hills and Santa Monica Schools look to Alumni

If you grew up in Santa Monica or Beverly Hills and attended publich schools for at least four years, your child could attend schools in these high acheiving districts even if you live outside the boundaries.

The Beverly Hills Unified School District and the Santa Monica-Malibu Unified School District have adopted legacy admissions policies for children of former students who live outside their enrollment boundaries. The policies appear to be the first in the nation at public schools.

The programs vary slightly, but leaders of both districts say they hope to raise money by forging closer ties with alumni who may be priced out of their hometowns as well as with grandparents who still live there. In each district, nonresident legacy students will make up a tiny percentage of the student population, officials said.

Beverly Hills adopted its legacy policy on a 3-2 vote last spring, allowing the children of anyone who attended city schools at least four years and whose grandparents have lived in the city for at least a decade to apply for permits. Eleven students, among 5,100 enrolled in district schools, attend school under the program.

Fenton said he proposed the idea to reconnect the district with grandparents who live within its borders and no longer have a direct stake in the city's schools yet are asked to vote on school measures, such as a $334-million facilities bond passed in November. Fenton also said the district needed to forge closer ties with its alumni.

To round out classes and maximize state funding, the 12,000-student Santa Monica-Malibu district has long offered permits to the children of district, city and community college employees, siblings of current students and others who moved away. After those, it also has given permits to some nonresident students without connections to the district.But the board voted unanimously in April to give alumni children priority over this last category of students, starting next school year.

"If we're going to be giving out additional permits to students who live outside the community, the board felt we wanted to give them to people who had a tangible connection to our community," said board member Ben Allen.

He also said the policy was a response to soaring housing prices that have hurt diversity in the district and priced out younger families. Bill Koski, a Stanford University law professor who specializes in education policy, said the preferences could widen the gap between affluent and poor districts. "The adequacy of education funding in California is problematic when even our wealthiest school districts feel they must resort to this type of thing," Koski said.

Source: LA Times; Full Article:,0,474770.story

Plan to widen Sunset Boulevard in Brentwood is halted

Los Angeles city traffic officials have abruptly dropped a plan to widen congested Sunset Boulevard in Brentwood after the proposal generated widespread community outcry.

The controversy underscores the challenges traffic planners face in attempting to improve traffic flow -- even in notoriously clogged areas such as the Westside. City officials say this stretch of Sunset is one of the most congested in the region.

The Los Angeles Department of Transportation last month proposed adding one eastbound lane on Sunset, from Barrington Avenue to Gunston Drive, about a 0.4-mile stretch. Officials had asked the Los Angeles County Metropolitan Transportation Authority to fund about $4 million of the project's estimated $6.1-million price tag. Hundreds of residents questioned whether adding a lane would effectively ease traffic congestion. They also said the proposal was not properly vetted, and that widening Sunset violated existing community plans to preserve the scenic highway.

This is at least the second time in recent years that L.A. has tried to widen this stretch of Sunset.

The Brentwood homeowners association, along with the Bel-Air Assn., in 2004 commissioned traffic consulting firm Linscott Law and Greenspan to conduct a study of congestion on Sunset Boulevard.

One of the study's conclusions was that an additional eastbound lane on the road could ease gridlock. The proposed lane would decrease delay time by an estimated 39% in the morning and 50% in the evening in the 0.4-mile zone.

The time estimates were based on pending changes to the 405 Freeway, including a reconfigured Sunset Boulevard overpass and on and off ramps. Construction for the Sunset project would have begun after the 405 Freeway changes were complete.

*Source: LA Times: Full Article:,0,6939868.story

Are signs of a So Cal bottom misleading?

UBS Investment research recently met with Bruce Norris, founder of The Norris Group & an expert on So Cal housing.

On May 27th, they reported the key takeaways: 1) recent signs of stability in this market were likely premature; 2) driven by the expiration of the foreclosure moratorium in April ‘09, they expect foreclosures this year to exceed ‘08 levels; & 3) efforts taken by the Fed gov’t to encourage loan modifications aren’t working in CA, as homeowners are too far underwater to make this viable. Accordingly, they expect prices to decline further through the remainder of the year.

So Cal real estate notes to ponder

- The typical monthly mortgage payment that Southern California buyers committed themselves to paying was $1,030 last month, down from $1,074 the previous month, and down from $1,831 a year ago. Adjusted for inflation, current payments are 52.9% below typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 61.4% below the current cycle's peak in July 2007.

- Southern California's median home price in April was $247,000, down slightly from the previous month, a real estate research firm reported.The price drop -- a decline of 51% from the 2007 peak -- came after three months in which the median price had held steady at $250,000, according to the data from San Diego-based MDA DataQuick.

- First American CoreLogic, which has a vast store of data on actual mortgages, reports that Los Angeles County mortgages delinquent by 90 days or more in March were up to 8.9% of the total -- more than double the percentage of March last year.
Foreclosure filings, the next step in the foreclosure process, were issued on 2.3% of L.A. County mortgages in March, up from 1.9% in March 2008.
Repossessions, the final step in foreclosure, which results in a property being taken by the lender, were done on 1.6% of L.A. County mortgages in March, up from 1.2% in March 2008.

Wednesday, May 27, 2009

New rules are raising appraisal costs yet the quality gets worse

The rules, intended to improve the accuracy of home valuations, push most large lenders to use third-party appraisal management companies.

How about this scenario the next time you refinance or apply for a mortgage: The real estate appraisal that used to cost you $325 now costs $450, even though the appraiser doing the work is getting only $175 or $200.Plus, your appraisal-related charges may now be subject to add-on fees that you'd never heard of before -- $50 to $100 extra in "no show" penalties if you get stuck in traffic and miss your appointment with the appraiser. Or an extra $50 to $150 tacked on if the property is worth more than $500,000.

Worse yet, the person conducting your appraisal may be new to the field -- willing to work for a cut-rate fee -- and may not be as familiar with local value trends and pricing adjustments as an appraiser with more experience.

**I have received three calls from fellow real estate agents in the past month regarding recent sales I was involved in asking for additional info to provide the bank because the appraisal was botched by somebody who was not familiar with the area. This helps create multiple appraisals and broker-price opinions.

The rules, which go by the name Home Valuation Code of Conduct, are intended to improve the accuracy of appraisals by eliminating pressure on appraisers from loan officers. The code pushes most large lenders to use third-party "appraisal management companies" that contract with networks of independent appraisers around the country who have no direct contact with retail loan officers or mortgage brokers.

Mortgage brokers, who formerly chose appraisers and kept a competitive eye on appraisal fees, say Fannie's and Freddie's rules are adding 20% to 30% to consumers' appraisal costs.

Jeffrey T. Hawk, vice president of Maryland Mutual Mortgage in Forest Hill, Md., says a standard appraisal that previously went for $325 jumped to $400 or more May 1 when he was forced to use management company appraisers.

(Source LA Times: Full Article:,0,5903005.story

Regular Postings are back!

After making some administrative upgrades and getting some new systems in place to improve client satisfaction, the Skinny on Real Estate is back and will be consistently updated at least two times a week with pertinent news impacting the Westside/South Bay Southern California real estate market. The Skinny on Real Estate E-Newsletter will also go out every two to three weeks. We hope you find the information we provide to be very informative and that you will think of us whenever you require assistance with your real estate needs.

-Skinner Estates