Internet Bargain?

ONLINE

I found this, or rather, one of my clients found it, which brought it to my attention. I'm always amazed at what my clients find searching our ZIP Realty Website. The market is currently chock full of opportunity, and interest rates haven't been this low since post war America, and by that I mean post WW1!
So, back to this place: looks pretty neat, huh? The price is 50k under the market in that neighborhood. I get pretty excited. Then I visit there. Ho-ly shit. I'm not sure what kind of filter the guy that took these pictures used, but I want one. The place was a hodgepodge of poorly done and mismatched improvements, the floor reminiscent of the haunted miners shack in Knotts Berry Farm. There were roaches and spiders scurrying everywhere. That garage looking thing back there? Bootleg guesthouse. The bones of this house are 1941 vintage, but I suspect it was more of a bunkhouse back then; there were several large ranches it could have been a part of in that era. The exterior paint was amateur and the wood peeling everywhere. Major termite damage was visible just upon casual inspection. I told my client who was looking at it (her hands were drawn up tightly together at her chest, body language tells all!)that it would never do for her. There's another guest unit behind the bootleg one, which purports to be permitted. So there's kind of upside if you can save that roof, bring back the garage and get rid of all the termite infested siding. In the home, you'd better plan on jackhammering the slab, and repouring it. While you're at it, add on another bedroom/bath. The tab for all this would probably be about 50k. That makes it even with the neighborhood comps, and you could probably use it as income property.
But the condition in person vs the photo online was like night and day. I imagine internet dating is a lot like this.
The moral of this tale? BUYER BEWARE! ALWAYS SEE THINGS IN PERSON.
REALITY

Gallup: Time Is Right to Buy

By Steve Cook at RISMEDIA
RISMEDIA, May 5, 2011—Consumer attitudes towards the housing markets are echoing views in the years immediately preceding the peak of the housing boom, according to a new national survey by the Gallup poll. Americans continue to see a buyer’s market in housing, according to an April 2011 Gallup poll. Sixty-nine percent of respondents say now is a good time to buy a house.

Historic Gallup data shows that many Americans also thought it was a good time to buy between 2003 and 2005, when housing prices were increasing and getting financing was relatively easy. Those attitudes began to change in 2006 as some homebuyers began to realize a housing bubble was taking shape in local markets across the country.

Men (74 percent) are about 16 percent more likely to see now as a good time to buy a home than women (64 percent). Those living in the West are the most likely to hold this view (75 percent), 17 percent more than those living in the South (64 percent). Americans making $75,000 or more a year (86 percent) are 18 percent more likely to see 2011 as a good time to buy a home than those making $30,000 – $75,000 (73 percent), and 72 percent more likely than those making less than $30,000 (50 percent).

Americans’ expectations for home prices in their local markets are slightly better now than they were in January. Currently, 30 percent of Americans say home prices will increase and 28 percent say they will decrease in the next year.

Research Firm Says U.S. Housing Has Never Been This Undervalued

The continuing depreciation of residential property values at the end of last year has made housing look more undervalued relative to income than ever before, according to analysts at the research firm Capital Economics.

Based on the latest Case-Shiller home price index, Capital Economics’ study shows that in the fourth quarter of 2010, housing was 21 percent undervalued when compared with disposable income per capita.

Looking at data included in the index published by the Federal Housing Finance Agency (FHFA), the firm found that housing in Q4 was 15 percent undervalued as measured against individuals’ disposable income.

Capital Economics says its results illustrate “housing is exceptionally undervalued,” and the gap is getting bigger. In its third quarter 2010 report, the research firm pegged the Case-Shiller index readings as 19 percent undervalued and the FHFA index as 14 percent below what would constitute a balanced housing value in relation to income.

The recent fall back in house prices, coupled with low rates, explains why the initial monthly mortgage payment on a median priced house bought with a 20 percent down payment has fallen to a record low of 13 percent of the median income, Capital Economics pointed out in its report.

Home prices in 29 states hit a new cycle low in the fourth quarter of last year, and the research firm says on both
the FHFA and Case-Shiller house price indices, housing now appears close to fair value when set against rents.

Such favorable valuations mean there is plenty of scope for housing to perform well in the medium-term, according to Capital Economics, but over the next year, the firm says the combination of weak demand, high supply, and more forced sales of foreclosed properties will push prices lower.

As Capital Economics pointed out, the sharp fall in the mortgage delinquency rate at the end of last year means there are fewer homes in the foreclosure pipeline, but the elevated number of defaulted properties still in process means home values will continue to be negatively impacted by the presence of distress for some time.

On top of low prices, mortgage rates have fallen back a bit in recent weeks, leaving them even further below the 20-year average of 7 percent, the firm’s analysts wrote. Last week marked the third consecutive week that rates have continued to decline. A national survey conducted by Freddie Mac shows that the average 30-year fixed-rate has dropped to 4.87 percent, while the 15-year fixed-rate has slipped to 4.15 percent.

When you wrap declining home prices and historically low mortgage rates together, Capital Economics says, “The incredibly favorable affordability and valuation environment is the housing market’s one big positive.”

But despite this fact, mortgage applications have remained subdued. While buyer demand is notably weak by conventional standards, Capital Economics says the decrease in mortgage apps of late reflects, at least in part, the prevalence of cash buyers.

The company says the recent “de-valuing” of housing stock appears to be attracting cash buyers and investors back into the market.

They have driven 70 percent of the increase in existing home sales seen since last July, particularly among heavily discounted foreclosed homes, Capital Economics pointed out. Over that same period, first-time buyers have been responsible for just 6 percent of the increase in sales of previously owned homes.

New Home Development in Western Malibu

IF you're driving up around Leo Carrillo and venture a little North on PCH to County Line Beach, there's a little Beach Shack style dive called Neptune's Net. They used to feature seafood so fresh it was still alive in tanks out back. Many's the time I made a special drive just to get a plate of their steamed clams and sit on the patio at sunset. I don't know if the place is as good any more as my memories from then. There's a road that winds up the bluffs above Neptune's, and you may have noticed the fervent activity of earth movers and graders there. This is part of the western outpost of Malibu,the Gated community of Marisol. Honestly, this really IS an outpost; I think Malibu officially ends about six hundred yards north of here. While many question the wisdom of building on these oft-shifting bluffs, the technology to stabilize these hillsides known for their kinetic activity has developed to such a point that multi-million dollar homes are being built there.

This from the Los Angeles Times :

A luxury planned community has opened at the western end of Malibu and listed its beachfront showcase home at $17 million.

Called MariSol Malibu, the gated community will contain 17 properties on 80 acres. The 13 oceanfront estate sites have beach frontage ranging from 130 to 210 feet.

The showcase estate, sited on an acre, has 6,800 square feet of living space containing a 60-foot-wide great room with 14-foot ceilings, two bars, a refrigerated wine cellar, a gym, two master bedroom suites, two additional bedrooms and six bathrooms. Outdoors is an additional 3,000 square feet of sheltered courtyard space. There is parking for 10 cars.

Luxist, a blog whose name says it all together with top rate writing and style points, has this to say about Marisol:

Malibu hasn't seen this level of pristine land since May Rindge locked up her gates and tried to block the railroad and county road from coming through her home. The Rindges bought the 13,300 acres of Rancho Malibu for $10 an acre in 1892 and while developer Richard Morris is certainly looking to fetch a little more, you can totally see what the Rindges saw way back when. It's just a breath-taking location, and as they say, nobody is manufacturing any more oceanfront land, are they?

Marisol Malibu features a 10,000-square-foot single-story main home. It has a 60-foot-wide great room with 14-foot tall ceilings, a fully equipped wet bar and two master bedroom suites both with oak ceilings and views of the surfers below. There are two other bedrooms with mountain views. The home has a state-of-the-art home theater, an open chef's kitchen, refrigerated wine cellar, gym and landscaped grounds with an infinity-edge lap pool and three patios. There is an outdoor dining pavilion and an ironwood deck on the 4,000 square foot bluff "beach." The home has a water wall of rock quarried from the site and set in a a fern and oak garden. The driveway is made of hand-hewn cobblestones of native rocks. There is parking for 10 cars. All the electronics are centrally controlled b a Creston smart system and 10 security cameras patrol the property.

Including the showcase property, Marisol has 13 oceanfront one-acre estate sites and three two-acre flat sites for estates to be built elevated above the oceanfront sites. There is also a 57-acre hillside retreat that overlooks the whole project and 10 miles of rugged coastline. The lots range from $4 million to $9 million.

Jack Pritchett of Pritchett-Rapf & Associates of Malibu, and Chris Cortazzo of Coldwell Banker Malibu, share the listing.

Not sure how they can refer to up on the bluffs as "beach frontage" But the way the acoustics work up there, you can hear the waves, which is worth a lot. But 17 Million? Not sure about that.
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If you've got 17 million to spend chances are you've got another 17 to match the first, in which case you might be in the ballpark for this landmark Malibu Estate on the pinnacle peaks off Kanan Road:

Yes, Rocky Oaks reduced the price back in December from 65 million to 49 million. Located in the new "wine corridor" of the Malibu hills The estate has its own award-winning vineyard, a large Tuscan home, plus additional pads for a potential helicopter landing site, guest house, and guard gate. The acreage includes terraced vineyards and orchards of approximately 75 citrus trees and 50 fruit and nut trees. The hillside location also offers panoramic views of the ocean and distant vistas of city lights in all directions. This area is home to at least ten active producing wineries by my count, and this estate ranks among the most baronial in feel and presence. If they turn you down for 34 million, that's just crazy, in my opinion. But call me and I'll provide you with several logical alternatives if you want a similar property in this price range.

Architect's Masterpiece in Pacific Palisades

This home isn't for sale, but it's so gorgeous I had to share. Besides, it will be someday, and when it does, you'll already be familiar with it. From this article in today's Los Angeles Times by Sean Mitchell, which is a wonderful tribute to the man Ray Kappe. This home was built on a Palisades lot that was considered unbuildable because of the high water table; a small stream actually runs through it. So, much like Frank Lloyd Wright's Fallingwater architect Ray Kappe chose to incorporate the streams and hillside into the home rather than create a grade pad. The effect is stunning and transcendent.


Front entry-note the stream bed.


Master Bedroom. Note the use of built ins.
Lack of stair rails enhances the view, but increases the vertigo. The vista produced here is magnificent . The thing about an architectural piece is every way you look in the home there is interest for the eye.

Great kitchen with all the bells and whistles, and a great informal dining place.

What a wonderful fireplace and conversation area. The green carpet is intended to bring the outside in. The wall/window ratio is 50%, which is not permissible today.
I know most of the players in the architectural specialty market. I prefer to deal with everyone as it's a more democratic approach to the market. If you have a specific interest in architecture, give me a call and let me know your needs.

8 Tips for Adding Curb Appeal and Value to Your Home

By: Pat Curry

Appraisers and real estate agents offer advice for adding curb appeal that both preserves value and attracts potential buyers.
Effort: Med Up to 1 wk Investment: Med Up to $5,000

Curb appeal has always been important for home sellers. With the vast majority of today’s home buyers starting their search on the Internet, the appearance of your property is more critical than ever. You only have a few seconds to catch their attention as they scroll through listings online to get them to stop and take a closer look.

But the role of curb appeal goes beyond just making a good first impression. The way your house looks from the street can impact its value. It can also shorten the time it takes to sell your house.

We asked real estate agents, appraisers, home stagers, landscape designers, and home inspectors which curb appeal projects offer the most value when your house is on the market, both in terms of its marketability and dollars. Here is what they told us:

1. Paint the house.Hands down, the most commonly offered curb appeal advice from our real estate pros and appraisers is to give the exterior of your home a good paint job. Buyers will instantly notice it and appraisers will note it on the valuation.

“Paint is probably the number one thing inside and out,” says Frank Lucco, managing partner of Houston-based IRR-Residential Appraisers and Consultants. “I’d give additional value for that. If you’re under two years remaining life (on the paint job), paint the exterior because it tends to show wear badly.”

Just make sure you stay within the range of accepted colors for your market. A house that’s painted a wildly different color from its competition will be marked down in value by appraisers.

2. Have the house washed.Before you make the investment in a paint job, though, take a good look at the house. If it’s got mildew or general grunge, just washing the house could make a world of difference, says Valerie Torelli, a California real estate agent with a background in accounting.

Before she puts a house on the market, Torelli often does exterior makeovers on her clients’ homes, a service she pays for herself to get higher selling prices. Overall, she says her goal is to spend less than $5,000, with a goal of generating an extra $10,000 to $15,000 on the sale price.

Torelli specifies pressure-washing—a job that should be left to professionals. Pressure washing makes the house look “bright and clean in addition to getting rid of unsightly things like cobwebs, which may not be seen from the yard but will detract from the home’s cleanliness when seen up close,” she says.

The cost to have a professional cleaning should be a few hundred dollars—a fraction of the cost of having the house painted.

3. Trim the shrubs and green up the yard.California real estate agent Valerie Torelli says she puts a lot of emphasis on landscaping, such as cutting down overgrown bushes and replacing them with leafy plants and annuals mulched with beautiful reddish-brown bark. “It runs me $30 to $50,” says Torelli. “Do you get a return on your money? Absolutely. It sucks people in.”

You also don’t want bare spots. Take the time to fertilize the yard, throw out some grass seed, and if need be, add some sod.

4. Add a splash of color.It could be a flower bed of annuals by the mailbox, a paint job for the front door, or a brightly colored bench or an Adirondack chair. “You can get a cute little bench at Home Depot for $99,“ Torelli notes. “Spray paint it bright red or blue and set it in the yard or on the front porch.”

It’s not a bad idea, but don’t plan on getting extra points from an appraiser for a red bench, says John Bredemeyer, president of Realcorp in Omaha. “It’s difficult to quantify, but it does make a home sell more quickly,” Bredemeyer says. “Maybe yours sold a couple weeks faster than the house down the street. That’s the best way to look at these things.”

5. Add a fancy mailbox and house numbers.An upscale mail box and architectural house numbers or an address plaque can give your house a distinctive look that stands out from everyone else on the block. Torelli makes them a part of her exterior makeovers “I’ve gotten those hand-painted mailboxes,” she says. “A nice one runs you $40 to $50.” Architectural house numbers may run as high as a few hundred dollars.

6. Repair or clean the roof.
Springfield, Va.-based home inspector and former builder Reggie Marston says the roof is one of the first things he looks at in assessing the condition of a home. He’ll look at other houses in the neighborhood to see if there are a lot of replaced roofs and see if the subject house has one as well. If not, he’ll look for curls in the shingles or missing shingles. “I’m looking at the roof for end-of-life expectancy,” he says.

You can pay for roof repairs now, or pay for them later in a lower appraisal; appraisers will mark down the value by the cost of the repair. That could knock thousands of dollars off your appraisal. According to Remodeling Magazine’s 2010-2011 Cost vs. Value Report, the average cost of a new asphalt shingle roof is about $21,500.

“Roofs are issues,” Lucco says. “You won’t throw money away on that job. You gotta have a decent roof.”

Stains and plant matter, such as moss, can be handled with cleaning. It’s a job that can often be done in a day for a few hundred dollars, and makes the roof look like new. It’s not a DIY project; call a professional with the right tools to clean it without damaging it.

7. Put up a fence.A picket fence with a garden gate to frame the yard is an asset. A fence has more impact in a family-oriented neighborhood than an upscale retirement community, Bredemeyer says, but in most instances, appraisers will give extra value for one, as long as it’s in good condition. “Day in a day out, a fence is a plus,“ Bredemeyer says. Expect to pay $2,000 to $3,500 for a professionally installed gated picket fence 3 feet high and 100 feet long.

8. Perform routine maintenance and cleaning.Nothing sets off subconscious alarms like hanging gutters, missing bricks from the front steps, or lawn tools rusting in the bushes. It makes even the professionals question what else hasn’t been taken care of.

“A house is worth less if the maintenance isn’t done,” Lucco says. “Those little things can add up and be a very big detractor. When people say, ‘I’d buy it if it weren’t for all the deferred maintenance,’ what they’re really saying is, ‘I’d still buy it if you reduce the price.’”

Georgia-based freelance writer Pat Curry has covered housing and real estate for consumer and trade publications for more than a decade, including covering new home sales and marketing for BUILDER, the magazine of the National Association of Home Builders.

MARKET TURNAROUND UNDERWAY

Green shoots appearing in the Real Estate Market?


I'm seeing some interesting signs which in my experience and opinion point towards a turnaround in the local scene. IN the past downturns I noted things which later proved to be signals that things are turning around. My personal observation in past cycles has been that marginal properties , such as those on busy streets or with other incurable defects , begin to sell. THAT is happening all over the West Valley. Whether the home is on Victory Boulevard or has a backyard that is overlooked by a multi-story commercial building, these properties are starting exhibit "SOLD" signs. The next sign is a little more subtle and not apparent to the casual viewer. I'm seeing investment groups from the East Coast, Malaysia and China, put together by guys like Goldman Sachs, buying properties for ALL CASH at LIST PRICE or ABOVE LIST PRICE! What this indicates is that "hot money" sees value (and upside) in local properties and is buying with an eye towards future appreciation. NOT FLIPS. They plan to get cash flow as a rental and sell in a future appreciating market. These guys are not where they are today by being wrong. Bear that in mind before you tell me Dr. Housing Bubble or Nouriel Roubini says there's more downside to come. Finally, a sure sign that something is happening is that LOTS , dirt unimproved lots, are starting to sell. I'm working with a builder right now and we are on the front line with this. About 4 out of the 15 lots we were interested in since November have sold. People don't buy lots unless they are going to build for the most part, so this indicates there will be some action in the previously moribund construction trades. So, things are looking up!
If you'd like to speak with me regarding buying or selling into this newly dynamic market, I'm available @ (805) 907-5211.