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Monday, November 22, 2010
Thursday, November 18, 2010
Phil Missig has a new foreclosure REO listing in the prestigious neighborhood of Los Feliz - The Oaks!
Located in the Hollywood Hills near the Griffith Observatory and Hollywood sign!
Former celebrity home appointed high on a knoll, in the prestigious Los Feliz neighborhood “The Oaks”. Gated & completely walled, private & secluded with hardwood floors, rich wood paneled walls, beamed ceilings, spectacular views, huge living room w/ fireplace, formal dining room, circular library, wine room, and much more.
The breathtaking views of the Griffith Observatory, downtown, and all the way to the ocean are an extraordinary experience and a must have.
4 Bedrooms
5.5 bathrooms
5367 sqft
12530 sqft lot
Call Phil Missig at 310-844-6434 for a showing!
Wednesday, November 17, 2010
California Real Estate’s Inherent and Long Term Value
by
Understanding the concept of value is central to the Buy and Hold real estate strategy. Value is both created and destroyed by the actions and attitudes of people. Because value is affected by how people view the overall real estate market, as well as individual properties, a thorough estimate of potential growth takes the likely attitudes of people into account, whether they are buyers, sellers, real estate professionals, city officials, or economic policy makers.
Despite fluctuations in short-term appreciation, the market value of desirable real estate will invariably rise over time. It might not be evident over a specific period due to recessionary trends or inadequate activity in a given community, but because each piece of property is heterogeneous and unique, real estate is the type of asset that is advantageously affected by inflation, even when inflation is low. Real estate, because of its use value as residential, rental income or storage, etc. is probably a better investment than the stock market.
Six salient factors will prove real estate to be a superior investment far into the 21st century:
- Inflation- Rents go up, building materials cost more and the price of gas makes commuting to far away areas more expensive.
- Economic exuberance- more jobs being created push up demand for California housing.
- Geographical limitations- oceans, mountains, rivers, lakes, etc constrain limitations on local growth which puts pressure on existing housing.
Southern California’s coastal strip of land bordered by the Pacific Ocean and the Santa Monica Mountains is a prime example. Another one is the peninsula of San Francisco. That land abutment has made that city’s real estate some of the most expensive in the country. Everybody wants to be there.
4. Political limitations on growth. As soon as an area gets to be more crowded, streets become congested and local services become overburdened. Area governments start passing ordinances to making it harder to build new housing or add square footage to existing structures.
5. America’s population will double. Another 300 million new residents are expected to exist by 2060. Areas that exhibit economic dynamism will do particularly well.
6. 72 million more Echo Boomers. This generation, born between 1976 and 1994, are just now starting to come online, buying cars, renting apartments and houses then purchasing their first house.
This is the time to make hay and buy property in California. I predict we have two years before the REOs dry up. Well located property in areas of high demand will always do well. I buy my properties at wholesale prices but you do not have to. Even if you pay straight retail prices for houses, you will do well in the long term. No other place has the mix of industry, the ocean and the weather; California is still the land of promise!
Monday, November 15, 2010
Sunday, November 7, 2010
What a split Congress means for investors
Gridlock likely, but it's not what the market and economy needs
Now that the political pundits have had their say on the impact of the election, it's time to consider what it means for investors and pocketbooks.
The midterm election results and Republican takeover of the U.S. House improve the chances that the wealthy will be included in any extension of the Bush-era tax cuts expiring at year's end. Banks, big oil and high-end retailers likely will benefit, although green technology not so much. And we can say goodbye to stimulus spending to boost the economy and possibly to emergency jobless benefits for the long-term unemployed.
Gridlock is widely expected in Congress, where Democrats still control the Senate. But economists say the country can't afford a stalemate when legislators should be solving the big financial problems — the deficit, economy, Social Security and Medicare.
"We don't have the luxury of waiting another election cycle to see if we can get a unified government," says David Resler, chief economist at Nomura Securities International. "We keep trying to find the right mix [of politicians] to get things done that need to be done. We are running out of time on some of them."
With the new makeup of Congress in mind, here are three things to watch for in the next year or so:
Taxes
One of the most pressing issues is what to do with the expiring Bush tax cuts. That affects almost all of us. President Barack Obama plans to meet with congressional leaders about taxes next week.
There is widespread agreement that the tax cuts should be made permanent for individuals earning up to $200,000 a year and joint filers with income of up to $250,000. But Republicans want tax breaks for higher earners, too.
Democrats might be willing to go along with continuing the tax cuts for the wealthy for a year or two, says Clint Stretch, managing principal of tax policy at Deloitte. They might, for example, offer to extend the cuts temporarily for affluent taxpayers with income of up to $1 million, leaving Republicans to argue for tax relief for millionaires, Stretch says.
Republicans, though, could let the tax cuts expire and try to negotiate a better deal next year when they take control of the House, he says. If that happens, your paycheck will shrink next year because of higher tax withholdings — at least until the tax debate is resolved.
Stock market
If history is any guide, stocks should perform well next year.
Obama will be in the third year of his term, a year that's traditionally strong for stocks. Not since 1939 has the Dow Jones industrial average given up ground the year before a presidential election, and even then it fell only 2.9 percent, according to the Stock Trader's Almanac.
Another positive sign from the almanac (if you're superstitious or a numerologist) — Years ending in "1" are usually positive unless there's a crisis, such as the Depression in 1931, World War II in 1941 and Sept. 11 terrorist attacks in 2001.
But even without a crisis, it might be a rocky ride up.
Stocks will rally at least into the spring in celebration of Republicans capturing the House, but volatility will replace that once gridlock sets in and there's uncertainty about what Congress will do to improve the economy, predicts Laura Gonzalez, an assistant professor of finance and business economics at Fordham University.
The conventional wisdom is that gridlock is good for stocks because no major legislation can get passed to muck things up — playing "squarely into people's cynical view of government," says Robert Johnson, senior managing director of the CFA Institute.
But in reality, stocks — particularly shares of small companies — do better under political harmony where the president and both chambers of Congress belong to the same party, Johnson says.
That would suggest that next year could be poor for small stocks, Johnson says, though Federal Reserve policies could overcome any negatives from political gridlock.
The greater Republican influence could improve the outlook for certain industries.
Traditional energy companies, especially offshore drillers, should see a boost, says Bob Doll, chief equity strategist with BlackRock, an investment firm. Meanwhile, less attention will be paid to climate change, dampening prospects for alternative-energy companies.
Banks and for-profit schools will benefit, too, because Democrats would have pushed harder to regulate them, Doll says. And the forecast for high-end retailers will be brighter if Republicans succeed in extending tax cuts to affluent households.
Republicans won't be able to appeal the health care law, but they could stymie or amend it, experts say.
That could be good or bad for health care companies, says David Straus, senior portfolio manager with Washington-based Johnston Lemon Asset Management Inc. For example, drug companies might not see their profit margins squeezed as much, he says, while hospitals could be hurt if fewer people have to buy insurance.
The outlook for stocks is better than for bonds, which will take a hit if interest rates rise in the next year or so, as expected. Those seeking income should invest in dividend-paying stocks, experts say. If tax cuts are extended, then dividend income will remain taxed at a favorable rate.
Economy
While it may feel like we're still in a recession, the economy is slowly growing at a 2 percent annual rate. Corporate profits are strong, and some employers are hiring.
Greg Ip, author of "The Little Book of Economics," predicts that the economy will pick up next year and grow at least 3 percent, which is more optimistic than other forecasts. Banks are beginning to ease their lending standards, he explains, and consumers are saddled with less debt. Still, growth will be nowhere near the 6 percent to 8 percent immediately following steep recessions in the 1970s and 1980s.
Chances are the economy will have to grow without another government spending package. Republicans criticized the last one and ran on a promise to cut spending.
This also casts doubt that Congress will extend emergency jobless benefits set to expire at the end of the month. Jobless workers can receive up to 99 weeks in state and federal benefits. If another extension isn't granted, about 2 million Americans will lose assistance in December, according to the National Employment Law Project.
(Maryland provides up to 26 weeks of benefits and the federal government pays for another 47 weeks. Marylanders in September received almost $56 million in federal benefits, according to the latest figures.)
Many Republicans claim that the election gave them a mandate, but economists say voters just want Washington to fix the ailing economy.
And if two years from now little has changed because of gridlock, we could end up with another incumbent-clearing election.
Wednesday, November 3, 2010
Target store to open in downtown L.A.
Retail giant Target Corp. is heading to downtown Los Angeles, part of a growing trend of big-box retailers taking advantage of a beaten-down urban real estate market.
The 7+Fig mall downtown — which has been without an anchor tenant since Macy's left early last year — will get the new Target, which will be smaller than most. It will also have a different merchandise mix, with a heavy emphasis on food and household basics and a reduced assortment of furniture and outdoor items.
The store is expected to open in 2012, Target executives said, and will reside in a combined space on one floor formerly occupied by Macy's and Bullock's department stores.
"It's really trying to magnify the relationship that we have had with those urban central core guests," said John Griffith, executive vice president of property development at Target. "We believe that as we offer them an alternative that is immediately adjacent to where they work, where they live, that we can increase the depth of that relationship."
It'll also give downtown denizens the big-box retailer they've long been waiting for, and retail analysts say Target — which is perceived as a cool place to shop by consumers despite its discount label — is the right fit.
The news was welcomed by downtown residents. Christine Baisez, 41, moved to downtown seven years ago because she liked the big-city feel, the growing art scene and the easily walkable neighborhood. But she grew frustrated at having to leave downtown to go grocery shopping and buy household staples for her loft.
"We don't have anything. It's terrible — I have to drive to Silver Lake or South Pasadena," she said. Target "is a must."
Target's agreement to rent more than 100,000-square-feet is one of the largest retail leases in decades downtown, easily surpassing the block of 54,000 square feet taken by a Ralphs supermarket in 2007.
The deal with Target is also the first step in a large-scale makeover of the 7+Fig mall, said Bert Dezzutti, senior vice president of landlord Brookfield Office Properties.
The 330,000-square-foot mall — about the size of a small regional shopping center — opened in 1986 and was intended to cater primarily to downtown office workers. Since then, thousands of residents have moved to the neighborhood and the multibillion-dollar Staples Center and LA Live developments have opened a few blocks away.
"LA Live has food, but no place to shop," Dezzutti said. Brookfield plans to turn 7+Fig into a more sophisticated center to complement the improvements on nearby streets. "There will be a lot of exciting apparel and consumer retailers as well as iconic brands and signature eateries."
He declined to identify potential tenants but said other retailers are in discussions to lease space. The leases of some existing tenants expire at the end of the year and will not be renewed.
Executives at Target and Brookfield, declined to discuss financial details of the lease, which was signed earlier this week.
Downtown's retail landscape is showing signs of improvement after hitting bottom in 2008, said real estate broker Derrick Moore of CB Richard Ellis.
Seventh Street has emerged as a restaurant row and more upscale eateries are coming, along with other retailers, he said.
"Restaurants and bars still lead the way," he said. "Now we have more supermarkets looking for sites and soft goods retailers including fashion are testing the market."
Target's downtown move signals a new direction for the Minneapolis-based discounter that will bring smaller stores to more dense metropolitan markets. The big-box retailer, which currently has 1,752 stores, is predominantly based in suburban areas.
The downtown Target, at the corner of 7th and Figueroa streets, will be less than 104,000-square-feet; in comparison, the average Target store is 130,000 square feet and the average Super Target is 175,000 square feet.
Griffith said that, in addition to the downtown L.A. location and a smaller store planned for Seattle, the discount chain is also looking at opportunities in San Francisco, Chicago, New York, Boston, Philadelphia, Miami, Minneapolis and the Washington-Baltimore area.
The announcement echoed similar plans recently announced by rival Wal-Mart Stores Inc. to open smaller stores that will focus on groceries in urban and small-town markets.
Bill Simon, chief executive of Wal-Mart U.S., said at the company's annual meeting last month that there were "hundreds, if not thousands, of opportunities in the U.S. for small formats."
Historically, discount stores have had a difficult time penetrating urban markets, said Bill Dreher, a retail analyst at Deutsche Bank Securities. With the recession opening up a glut of large commercial real estate spaces around the country, retailers have begun to focus on untapped opportunities.
"Both the major discount stores have recognized that to finish storing up the United States they need to have a format which addresses the urban market," he said, adding that city dwellers "tend to have a higher disposable income and higher taste level."
Even warehouse behemoth Costco Wholesale Corp. has begun eyeing opportunities in more urban areas, announcing over the summer that it would open a handful of stores in mall locations, including one at the Village at Westfield Topanga in Canoga Park.
"The markets that are underserved or attractive these days are urban areas," said David Messner, vice president of real estate at Costco. "As we look at where our holes are, a lot of times it turns out to be those close-in, downtown areas that have high barriers to entry from a real estate perspective. With the market downturn, we're seeing more opportunities now than we have in the past. But things are still expensive — no easy deals out there."
Copyright © 2010, Los Angeles Times
Monday, November 1, 2010
Foreclosure Freeze Cuts Sales, Supply in Hardest-Hit States
U.S. home foreclosure sales are slowing in the states hardest-hit by the real estate crash as banks review their practices and delay seizures.
In Arizona, California and Nevada, foreclosure auctions on courthouse steps, known as trustee sales, are down 42 percent since Sept. 20, according to ForeclosureRadar, a real estate tracking service in Discovery Bay, California. In Florida’s Miami-Dade and Broward counties, fewer foreclosures have led to 18 percent declines this month in the number of repossessed homes listed for sale, said Ron Shuffield of Esslinger, Wooten, Maxwell Inc., a realty firm based in Coral Gables, Florida.
In a real estate market where as many as 7 million homes face foreclosure or have already been seized by lenders, according to Zillow Inc., a clog in the pipeline may delay a housing recovery, which won’t occur until home prices stop falling. That could in turn postpone a U.S. economic recovery. Distressed properties accounted for 31 percent of all U.S. home sales last month, RealtyTrac Inc. said Oct. 14.
“If what’s a hiatus turns into a moratorium, that’s quite problematic,” Stan Humphries, chief economist for Zillow, a Seattle-based real estate data provider, said in an interview. “It will delay the ultimate bottoming process in the market.”
Attorneys general in all 50 states started probes into foreclosure practices after court documents surfaced showing employees signed papers without ensuring their accuracy. Bank of America Corp., JPMorgan Chase & Co. and Ally Financial Inc. temporarily suspended some foreclosure sales or evictions, pending reviews of their procedures.
Record Seizures
Full national data reflecting the effect of the foreclosure freeze isn’t yet available. Lenders took over a record 102,134 properties last month, before most of the delays, RealtyTrac, an Irvine, California-based real estate data provider, reported.
Nevada, Arizona, Florida and California lead the nation in foreclosure rates, according to RealtyTrac. Florida is the only one of those states where courts supervise home seizures, the focus of most of the banks’ reviews.
Bank-owned properties have been pulled off the market in Florida and re-sales of foreclosed homes have stalled in the process of closing, according to Shuffield. One in 56 homes in the state received a foreclosure filing notice in the third quarter, RealtyTrac data show.
Living in Hotel
Four days before Ted Roberts, 35, was scheduled to close on his first house -- a $168,000, four-bedroom foreclosed home in Orlando, Florida -- Bank of America put the sale on hold. After his apartment lease ended Sept. 30, Roberts moved his family of four to one bedroom at the Homestead Studio Suites in Altamonte Springs, waiting for the sale to close.
Roberts, a federal employee union organizer, could have gotten his $2,000 in escrow refunded. Instead, he is counting on the sale closing to avoid losing $1,000 spent on appraisal and inspection fees. Meanwhile, he’s spent more than $1,000 for the hotel room, furniture storage and a post office box.
“We’re going to try to ride it out,” he said in a telephone interview as he drove his sons Kalen, 13, and Torian, 5, to school, another cost of the temporary relocation. “We’d still like to get a house and obviously a foreclosure is a better deal. But if we knew this was going to happen, we would have looked at a non-foreclosure.”
Resubmitting Affidavits
Bank of America froze 102,000 foreclosures nationwide on Oct. 8 to review its procedures, and has now started the process of preparing affidavits for resubmission to courts. Affidavits will be resubmitted over several weeks, as they are completed through their internal process, according to Dan Frahm, a spokesman for the Charlotte, North Carolina-based bank. Those cases will proceed through the foreclosure process, including re-sales, he said.
“This review remains in effect and our review is ongoing,” Frahm said. “We are committed to giving our customers confidence they are being treated fairly.”
For the Florida foreclosure-judgment hearings that are canceled this week, banks are almost a month away from rescheduling them. That’s because a hearing can be scheduled no earlier than 25 days in advance under the state’s rules for legal proceedings, said Rick Melendi, a chief deputy court administrator for the 13th Judicial Circuit in Tampa.
Faulty documentation has scared buyers away from foreclosed properties because of concerns their titles may be in question, said Erika Phelan, Roberts’s real estate agent with Buyers Broker of Florida in Orlando.
‘No Foreclosures’
“I just took out a buyer who said ‘no foreclosures’ to avoid the problem,” she said.
Rick Sharga, RealtyTrac’s senior vice president for marketing, said his company hasn’t seen an “appreciable” dropoff in foreclosure activity so far this month.
“It could just be that these delays will be delayed a little bit before they hit the numbers,” Sharga said yesterday in an interview on Bloomberg Television. “Or it could be that the falloff isn’t going to be nearly as big as people have been predicting.”
Before the foreclosure freeze, lenders were taking an increasing amount of time to seize homes as they complied with requirements to offer loan modifications or sought to avoid the costs of repossession. Foreclosed borrowers were an average 484 days -- about 16 months -- delinquent on their mortgage payments in September, up from an average of about 11 months in January 2009, according to Lender Processing Services Inc. of Jacksonville, Florida.
Bank of America, the largest U.S. mortgage servicer, took an average 18 months to complete foreclosures during the third quarter, Frahm said.
Off the Market
Of 103 foreclosed homes listed for sale by Michael Saunders & Co., a broker based in Sarasota, Florida, 35 were pulled off the market since the foreclosure freeze began, said Tom Heatherman, communications director for the firm. Another 23 properties assigned to the firm for pre-listing by Freddie Mac, the mortgage guarantee company under federal conservatorship, were temporarily held off the market, Heatherman said.
Fannie Mae, another mortgage guarantor under U.S. conservatorship, has also frozen foreclosure sales in cases with questionable documents, said Janis Smith, a spokeswoman for the Washington-based company.
“Transactions on such properties are on hold until the servicer can verify that the problem has been rectified,” Smith said.
Inventory Drop
Foreclosures and short sales, in which lenders agree to sales at less than the mortgage balance, made up 66 percent of transactions in Miami-Dade and Broward counties in September, said Shuffield, the president of Esslinger, Wooten Maxwell.
“The closing pace hasn’t stopped yet,” Shuffield said. “But the inventory has definitely dropped.’ ”
Western states have had a steep drop in foreclosed homes headed for resale, said Sean O’Toole, chief executive of ForeclosureRadar.
The number of trustee sales in Arizona, California and Nevada fell to 4,151 the week ending Oct. 22 from 7,142 four weeks earlier, when the first freeze was announced, O’Toole’s data show. Bank of America, Ally, and PNC Financial Services Group Inc., which also suspended some sales, were the only companies that he found to account for the decline, he said.
In Georgia, which had the seventh-highest U.S. foreclosure rate according to RealtyTrac, the moratorium killed three pending sales this month for Becky Loar, president of the Becky Loar Group LLC, a real estate firm in Snellville, Georgia. One was a cash sale, which was halted two weeks before closing. The other two were in early stages of negotiations.
“It’s a nightmare for Realtors,” she said. “If you get a contract to closing before they back out, you have a miracle.”
To contact the reporter on this story: John Gittelsohn in New York at johngitt@bloomberg.net.
To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net.
By - Oct 28, 2010 9:01 PM PT
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