Westside Market Slowing Again?: In a complete contrast to 2009, the market has been very busy for most successful realtors this year. As expected with the expiration of the tax credits, the market under $1,000,000 has begun to slow down. However, what has been unexpected was the recent slow-down in the mid high-end (1.5M-3.5M) which was picking up pace throughout the spring. Most conversations I have had this week with other top realtors have revolved around this recent slowdown.
Inventory has been creeping up (still low compared to historical norms) and with interest rates at all-time lows we are a little concerned. It could be a brief summer time lull but the lowest interest rates on record could spur buyer interest once again. It will be very interesting to monitor the next two months in all price ranges to see where the market is headed.
It’s about time: Fannie Mae is threatening deficiency judgments and will not allow those who walk away from homes to secure a mortgage through them for seven years…they currently back 95% of the mortgages in the U.S. Article: Fannie Mae Gets Tough on Homeowners Who Walk Away.
I have no pity for people who walk away from a financial commitment they made and think it is okay. I wish I wouldn’t have to be liable for some of the stocks I invested in at the top of tech boom. Unfortunately, it doesn’t work that way and nor should it. You have risk and reward in every investment. You should never buy something you truly can’t afford and if it sounds too good to be true it usually is. You buy a home to live in and enjoy and usually in the long run it turns out to be a solid investment…as long as you buy with the proper fundamentals in mind.
$68.5 Million Listing in Beverly Hills: After spending four years and supposedly $65 million building a mega mansion on Sunset in Beverly Hills, Businessman C. Frederick Wehba Sr. has put his house on the market for $68.5 million without living in the home for one day. The businessman said he and his wife, Suzi, have decided to sell the 36,000-square-foot home because such a prominent display of wealth no longer made sense during the protracted economic slump. Check out a great article about it by Daniel Miller in the Los Angeles Business Journal: One Palace, Never Used
Thoughts On The Macro Market: Nationally, the 8.3 month inventory level is significantly above normal and with tax credit expiring and banks beginning to start unloading REO’s at a little quicker pace (just quicker than a snail’s pace), rationally speaking you would have to think prices will be on a downtrend toward the end of the year despite the record low interest rates. This past week it was announced that sales of newly built homes in the U.S. plunged 32.7% in May.
Celebrating America in Santa Monica Saturday: Santa Monica College’s annual fireworks show is Saturday June 26th at Corsair Field. It is a very good 20 minute show that begins around 9:00 pm. Gates open around 5:00 pm but now that they have a synthetic field turf drinks and food will not be allowed on the field area where many people used to picnic.
I will be back after the 4th of July holiday weekend with more key insights and a close look at Mar Vista and Venice. Have an awesome 4th of July!
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