Prices are actually up even though sales are down!

The numbers are out from the California Association of Realtors, and even though sales are down due to a high number of houses on the market, the prices of closed sales are up overall in Southern California. So while talk of a buyer's market is on everyone's lips, I wouldn't expect to find many bargains. I'm seeing a few sellers dropping prices, but only if they're in a real hurry.

You can look at the numbers at the following site:


http://www.car.org/index.php?id=MzY0MzY=

Softening Market Hits Riverside

In the two months since my last report, there's been a rise in inventory and a general flattening of prices. Buyers have become rather ambivalent now that there are more homes to choose from. Many are hoping that sellers will drop their prices, but how much they can depends on their level of debt and whether or not they can get a lower price on their next home. In addition, the recent rise in interest rates has also had an effect on buying ability, so that motivated buyers simply can't go as high as in the past.

Back in May, there was a noticeable difference between the average value of available properties and the average of closed sales. That difference is still there, especially in the larger houses, thus revealing a top-heavy inventory. In other words, it's a buyer's market primarily in the upper ranges where there are fewer qualified buyers. Among the smaller houses, the average price of available houses has dropped a bit, but the average of pending houses is only slightly less than before, and that of closed sales is actually up. This is because there's a real lack of houses in good condition in the bottom range of the market. Interestingly, the trend among 3-bedroom houses has been very similar.

2 and less bedrooms
Active: 155 Avg. Price: 385,269 Avg. Days on Market: 54
Pending: 51 Avg. Price: 351,995 Avg. DOM: 49
Back-up: 6 Avg. Price: 342,150 Avg. DOM: 51
Sold: Avg. Price: 353589 Avg. DOM: 41
Expired: 24 Avg. Val: 363112 Avg. DOM: Unavailable


3 bedrooms
Active : 941 Avg. Price: 448,905 Avg. DOM: 56
Pending: 224 Avg. Price: 408,203 Avg. DOM: 57
Backup: 51 Avg. Price: 432,240 Avg. DOM: 79
Sold: 243 Avg. Price: 412,975 Avg. DOM: 49
Expired: 262 Avg. Val: 444,649 Avg. DOM: Unavailable

4 or more bedrooms
Active: 1187 Avg. Price: 640,865 Avg. DOM: 60
Pending: 200 Avg. Price: 532,059 Avg. DOM: 51
Back-up: 55 Avg. Price: 546,378 Avg. DOM: 80
Sold: 275 Avg. Price: 564,320 Avg. DOM: 47
Expired: 318 Avg. Val: 645,014 Avg. DOM: Unavailable

As there are fewer condos, the data becomes rather more anecdotal, but there has been a drop-off in the average price of those actually sold. The prices of 2-bedroom condos are up, but it remains to be seen if they will remain thus and if buyers are forced up to be able to get anything at all. Definitely, it's been the lowest priced 2-bedrooms selling most recently, so that the average of the pendings is a little over 30k below that of closed sales.

Condos:
2 and less bedrooms:
Available: 62 Avg. Price: 279,931 Avg. DOM: 46
Pending: 9 Avg. Price: 239,866 Avg. DOM: 31
Back-Up: 1 Avg. Price: 279,900 Avg. DOM: 81
Sold: 15 Avg. Price: 270,120 Avg. DOM: 29
Expired: 5 Avg. Val: 250,580 Avg. DOM: Unavailable

3 bedrooms
Available: 26 Avg. Price: 347,023 Avg. DOM: 47
Pending: 12 Avg. Price: 357,690 Avg. DOM: 46
Back-Up: 1 Avg. Price: 297,000 Avg. DOM: 73
Sold: 10 Avg. Price: 339,940 Avg. DOM: 35
Expired: 3 Avg. Val: 319,266 Avg. DOM: Unavailable

4 or more bedrooms
Available: 8 Avg. Price: 428,325 Avg. DOM: 43
Pending: 0
Back-Up: 0
Sold: 0
Expired: 4 Avg. Val: 439,650 Avg. DOM: Unavailable

As always, these numbers are from the IMRMLS and only include properties listed there. Sold and expired info is as of 5/26/06. Errors by listing agents may skew the numbers.

Do I expect prices to come down? People keep asking me this. I ask them if they expect gas prices to go down. Home prices will drop if interest rates go up significantly. Motivated sellers who have enough equity will sell for less. However, those who can't get enough on their homes to cover their debts and/or get into another home are likely to stay put until prices rise again. We are beginning to see some foreclosures and short sales, but very few are admitting it yet on the MLS, and their lenders will have the final ok on a non-contingent buyer for a short sale.

Here's a link to yesterday's NAR article on the softening market.
Existing Homes Sales Flattening

I'm not supposed to tell, but you can ask...

As a realtor, I'm not supposed to show or not show property on the basis of the ethnic make-up of the neighborhood. It follows that I shouldn't volunteer information about race, marital status, and sexual orientation either. I can and do talk about the economic conditions of a neighborhood and will tell buyers how to find public schools rankings. People generally understand that this is how it works, but every now and then, I get a surprise.

Some months back, a woman called and asked me if she could talk to my seller directly as she had some questions about the neighborhood. I asked my seller if he minded, and he said he just didn't feel comfortable dealing with potential buyers. So I asked the woman if she wanted to ask me the questions. Finally, she said that what she wanted to know was if any Black or Mexican people lived nearby. She added hastily that she wasn't racist. I paused, and it occurred to me to suggest that she park on the street and watch for a few hours on a weekend. But then I thought better of it as the elderly Black couple next door might call the cops on her. So I told her that the neighborhood was "fully integrated," and that I knew of African American, Spanish-speaking, Asian, and Caucasian families who lived on the street. I said that there might be other groups, but that I didn't know for a fact. This was enough information, and the woman assured me that she would call back if she had any more questions. She never did call again.

The funny thing is, I'm Filipina (several Philippine ethnicities), Chinese (probably Fukien), Anglo, and who knows what else. My extended family has members who are part Hawaiian, Native American, Jewish, Scottish, French, African American, and Japanese among other backgrounds. If this woman had seen my photo, she probably would have been scared off and never called in the first place!

absolute best vacuum cleaner for realtors and anybody

A seller called my Dyson Animal the "uber vacuum." It's the one I use before holding open house when my sellers have more pet hair than they can handle. As we have four long-haired dogs, a short-haired one that sheds profusely (at least it means she doesn't need bathing as the dirt comes off with the hair), my own long hair, and my husband's receding hair line, we have to vacuum a lot. And not just the floors because the fans kick the hair up the walls and all the way to the ceiling where it clings. I seem to vacuum up enough to make 10 more little dogs each week. I wouldn't be surprised to hear barking from inside the garbage bag as I haul it out to the curb.

James Dyson isn't exactly an inventor--I'd call him a re-inventor. He takes appliances that already exist and makes them work very well. (His vacuum cleaner was designed in response to his wife's complaints about the shortcomings of the one they had.) His story is also the rare one of the underdog who wins out over the famous company (Hoover) that tried to steal his ideas.

My only complaint about my Dyson when I got it was that it didn't have a good attachment for hooking over to vacuum high shelves, the tops of ceiling fan blades, and semi flushmount light fixtures. They seem to have some new attachments out, however, that I'm going to order and try out.

To read up on James Dyson and his inventions, you can go to his company's main website:

http://www.dyson.co.uk/

She wants a house, but he doesn't want to work

I read an article recently about how divorce forces a lot of people into poverty as it's a lot harder for one person to live on half the couple's assets. In terms of real estate, a couple has better chances of getting a home by pooling their resources to qualify for a loan. However, I've known some women who've been forced to rent for a long time precisely because they ended up being the sole breadwinner, and I've seen one made into a slave of her mortgage. Each one got married with a lot of hope, only to discover that the man she married didn't want to grow up and get a job.

Now, these women and their husbands have nothing in common with each other geographically, ethinically, financially, or education-wise. They were all in their early 20's when they got married, and they and all but one of the husbands were very religious (hence, the reluctance to divorce). One of the husbands had a law degree from a top school, one attended college, another had been in the military and done some community college, and another had gotten his GED. One never worked at all while two quit work within months of marrying. The fourth quit his job while his wife was pregnant with their 2nd child, leading to their eviction from their apartment. They ended up in a government subsidized apartment.

The men refused to get individual therapy, and several couples only got limited marriage counseling after much begging on the part of the wives. One man told their counselor that if his mother could stay home, he could, too, and any money from part-time work was his alone.

Several of the women wanted a house, and 2 actively searched for a while when prices were low, but they couldn't qualify for a loan. One couple was able to buy a condo when the husband's mother gave them the down payment. The fourth lived with his parents the whole time.

Of the three couples without children, two divorced after several years and no assets. After some years, one of these women did finally marry a man she met at work who already owns his own house. The couple with the condo divorced after some 20 years, but she was forced to buy him out for half even though he had never helped with the mortgage payments. As the property has quadrupled in value, she's facing big payments for the next 30 years.

The couple with kids now have 3, and the wife is working full-time and going to school. Her mother has moved in to help take care of the kids because the husband won't. When the wife began working full-time, her paychecks were garnished to pay off the former landlord. She was able to talk the judge into reducing the amount taken out monthly, but he openly recommended that she get a divorce. She's slowly repairing her credit, got a car of her own (her husband drives a stick-shift truck and never taught her), and has a secret checking account and a credit card. Her husband got excited when he saw the cable was finally paid off and wanted to get cable again, but she refused. She has gotten his name off the lease and the utilities (though the electricity was shut off while she was staying with relatives and recovering from surgery, and he chose to buy something else with the money she'd given him for the power bill. The sad thing is, the kids were sitting in the dark with him!).

I have been very frank with the last woman. If she ever wants to have her own property, she ought to divorce first because CA is a community property state. If she manages to finish school, get a decent-paying job, and get her own home before divorcing, she may find him getting half their property and demanding alimony. Yes, she could hold title as separate property, but she would have trouble getting a loan in the first place since she's responsible for his debts unless she can get control of his spending (highly doubtful). As an educated, working single mother, she's more likely to be able to tap into government aid than if she has a continuously unemployed husband.

So while it's more often true that divorce forces women and children into poverty, it isn't always the case. I just can't help but think that some women would really succeed financially on their own and be able to get their own home if they wouldn't hesitate to shrug off the dead weight of a man who won't even look for a job. In fact, 2 such women might be better off putting their salaries together to get a nicer house and helping each other with childcare. And since they wouldn't get married, they wouldn't be responsible for each other's future debts!

Electric bill too high? Plant trees!

I was talking to an acquaintance last year who wanted to buy an extra large lot. I asked him if he understood that he was going to have to landscape the half acre and that watering it wouldn't be cheap. So he said he'd just pour cement over it. I laughed and warned him that all that cement would really push up his air conditioning bills--not cheap considering that his 4000+-square-foot house was going to have at least 3 air conditioners. I told him that he should plant deciduous trees to shade his house in the summer. As they drop their leaves, the sun would be able to reach his house in the winter.

The City of Riverside has a great program that reimburses people for planting deciduous trees around their houses. We've taken advantage of this program plus put a pergola with wisteria over our patio. These plantings in combination with putting in 2 attic fans have reduced our kilowatt usage from 1850 to about 1350 during the summer months, which is quite remarkable considering that we have an all-electric house.

Our next goal, which we've been considering for the past decade, is to put solar panels up on our roof (the section that doesn't have trees over it). I've always liked the idea of using the sun to provide power that could ultimately cool our house.

Here's the Riverside Utilities site on the tree program:
http://www.riversideca.gov/utilities/resi-treepower.asp

A bathroom in the garage?

I had a listing that closed recently. It was a little house with only one bathroom. During the final walk-through, the buyer's agent noticed a sink in the garage and turned on the tap just as her companion and I screamed a warning. She jumped out of the way, and the water just missed her feet. You see, there was water coming in, but the drain to take it away was missing. I hadn't even bothered to mention the sink in the MLS as it wasn't a selling point.

She turned excitedly to her buyer and told him in Spanish that there was a bathroom in the garage. I was surprised but didn't say anything, not wanting to interfere. Technically, I suppose, the water was there to bathe with. And she had used the word "baño," which specifically pertains to bathing, and a toilet may not be present.

The home inspection might have cleared up the matter, but their home inspector hadn't gotten inside the garage. That was because she forgot to tell me that they were having the home inspection on the day they went. I was actually at another home inspection (I always go, whether I'm representing the buyer or the seller), and I only got her message later, asking about the keys. When I called her back to explain that I'd taken the keybox down because one of the keys had gone missing (never did find out where it went to as none of the agents who showed the house ever came clean), I offered to meet her at the house. Not to worry, she told me, she was a professional and knew what she was doing. They forced an unlocked window, climbed in, and did the inspection of the house. And she had locked the place up on their way out. They weren't able to get into the garage and so had left it out. I was so surprised, I didn't know what to say. I told my broker about it, and she was amazed, too.

When I went by the house later, I found the back window still wide open and the front door unlocked. Sigh. Nothing was missing, and no vagrants had moved in, which I reported to my out-of-area sellers.

When I told them several weeks later about the bathroom comment, they had to laugh. I guess a bathroom is in the eye of the beholder.