By Alejandro Lazo, The Los Angeles Times

In a typically sluggish month, the median sale price rises 4% over the same period a year earlier, and sales jump 12.1%. The pace of sales is the best since 2006, aided by tax credits that end soon.

Rock-bottom interest rates and stronger sales in higher-priced neighborhoods helped Southern California's housing market post robust gains in the typically sleepy month of December, new data show, and experts say the momentum is continuing -- ushering in an early start to the spring home-buying season.

The median price paid for a Southland home rose 4% to $289,000 last month from December 2008, the first time the closely watched figure has posted a year-over-year gain since the region's real estate market took a nose dive 2 1/2 years ago, according to data released Tuesday by MDA DataQuick, a San Diego real estate research firm.

Rebounding home prices could help the Southern California economy recover from its slump, as a stronger housing market could lead to hiring on construction sites and in real estate sales, title and escrow offices, said Esmael Adibi, director of Chapman University's A. Gary Anderson Center for Economic Research.

"The worst is behind us for sure," he said. "For the economy, the implication is, at least on the residential side, we don't expect more layoffs, and you might actually see some pickup in employment."

But Adibi noted that those gains could be tempered by continued weakness in the commercial real estate market, which includes office buildings, retail centers and hotels.

The increase in December home prices follows a dismal 2008. Even with the rise, the median price was still 42.8% lower than its $505,000 peak during several months in 2007, underscoring the steep decline in the latter part of the last decade. The median is the point at which half the homes sold for more and half for less.

Still, December's sales pace was the best since 2006, capping a year in which strong government support of the housing market helped stabilize prices for most of the last year and brought more buyers back into the market.

"It's time for me to move," said Soosan Saedi, 43, who is looking to sell her three-bedroom, 1,300-square-foot Woodland Hills house and trade up to something bigger. "I need the space, the mortgage rates are low, and fortunately I am not having trouble with loans, so it is time for me to buy."

The housing market's recovery began last year as first-time buyers and investors competed for steeply discounted foreclosed homes. Now foreclosure properties are making up a smaller part of the mix. The gains in December also reflect a more diverse market, experts said, as prices were bolstered by increased sales in many mid- to high-priced communities.

Part of that trend shows the increased affordability of high-end properties as more are taken back by banks or are sold "short," for less than what is owed on their mortgages, real estate professionals said.

"They have come down a lot," said Syd Leibovitch, president of Rodeo Realty in Bel-Air. "I think the sellers dug in for a while, and now they are accepting the reality that prices have dropped, and they are being a lot more flexible."

Beverly Hills, Santa Monica and Newport Beach were among the affluent areas notching healthy sales gains, according to DataQuick. Conversely, areas hard hit by foreclosures -- including Moreno Valley, Lake Elsinore and Palmdale -- saw a drop-off.

Christopher Cortazzo, a Coldwell Banker agent in Malibu, said he sold a home for $12 million in December, roughly $3 million below its listing price, and closed out the month with $26.5 million in sales, one of his best months of the year. Cash-rich buyers looking to capitalize on lower prices have rushed into the market in recent weeks, he said, and the sales pace has continued through January.

"Spring season is going to start early," Cortazzo said. "We are having a lot of cash deals, so there is a lot of money out there, and there is amazing opportunity and great deals to be had."

One thing driving sales is the April 30 expiration of tax credits for home buyers. First-time home buyers can get up to $8,000 in credit on their federal income taxes, and current homeowners can qualify for up to $6,500.

Low mortgage rates are also a factor. Thirty-year fixed-rate loans were below 5% through most of December and haven't risen much.

The role of the federal government in the housing market remains key. Some experts worry that once certain policies and programs wind down -- among them low interest rates, tax incentives for buyers and an increased accessibility of mortgages backed by the Federal Housing Administration -- the housing market could falter.

Christopher Thornberg, principal of Beacon Economics, predicts home prices will drop once those policies and programs expire.

"The bounce in the housing market is due to government policy, not due to fundamentals," he said. "None of these programs fix the underlying problem. They only delay the solution -- they only delay the healing process."

The percentage of Southern California homes that sold for more than $500,000 rose to 20.2% of all sales in December from 16.5% a year earlier, DataQuick said. That is well off the 52% level reached before the credit crunch hit in 2007, which made large mortgages difficult to obtain.

Richard Green, director of the USC Lusk Center for Real Estate, said buyers have sensed more security in Southern California's real estate market in recent months and have begun to get off the fence.

"We are getting a little bit of what we had six or seven years ago, where people are worried if they don't get in now they are going to miss out on an opportunity," Green said. "In a decent neighborhood, in the half-a-million-dollar range, we are back to lots of offers."

A total of 22,328 new and resale homes sold last month in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties, up 16.4% from November and 12.1% from December 2008, DataQuick said.

Still, uncertainty lingers. Unemployment and a potential wave of homes headed for sale because of foreclosure or delinquency loom over the U.S. housing market. Both could slow Southern California's progress toward recovery should the Obama administration fail in its efforts to aid struggling borrowers. California's budget woes could also bode poorly for the state.

"The fiscal picture is still really bleak, and that makes me worry," Green said.

The home-buyer tax credit motivated Jennifer Scholte, 31, to close on a Lakewood home in December. The teacher said she and husband Eric, 34, saved up for a 20% deposit on the $361,000 property.

"We are first-time home buyers, and with that credit, that was a big push," she said.

To take advantage of similarly minded buyers, Leibovitch of Rodeo Realty said he has hired 40 to 50 people in the last three months, including secretarial, marketing and administrative staff, to prepare for what he predicts will be one of the strongest sales years on record. Escrow of the West, a Beverly Hills company, said it would open a Sherman Oaks branch Thursday, creating 25 jobs.

Mortgage rates began moving further and further downward, culminating in an announcement from Freddie Mac on December 3rd that, according to its Primary Mortgage Market Survey, both 30-year and 15-year fixed-rate mortgages had fallen to new record lows.  Economic data had been pointing to a tepid recovery at best, with some analysts concerned that we might dip further down than expected.  GDP had been revised down to 2.8%.  Manufacturing activity appeared to be slowing.  While most had expected some slowing in growth, fears of a painfully slow recovery helped drive rates to the new lows.

Then, two days later, we got what was the first surprising piece of economic news in quite some time.  According to the Labor Department, only 11,000 jobs were lost in November, and the numbers for October and September were revised lower.  Additionally, the unemployment rate shrank to 10.0%.  Mortgage rates immediately began climbing on this good economic news.  Of the two data points, the jobs lost number is the more important.  One of the critical factors to reach true economic recovery will be to stem the job losses the economy is suffering and to begin creating new jobs to get people back to work.  There is an expectation that the unemployment rate may go back upward as people, who had not been job hunting and therefore no longer calculated into the unemployment rate, begin looking for work again.

While it is refreshing to see that market forces are beginning to influence mortgage rates, we are still seeing a heavily subsidized secondary mortgage market.  With the Fed and various Fed governors reaffirming their support for continuing to support the mortgage markets, rates are likely to be held from climbing too much even if more signs appear of a quicker-than-expected recovery.  The employment picture may influence rates a bit more than usual over the next month or so.  If the tide has been stemmed, and jobs are created during December, we’ll start the new year with rates on a decidedly upward trend.

In February, Congress passed the American Recovery and Reinvestment Bill of 2009, otherwise known as this year’s stimulus bill. One small part of this bill allows first time home buyers (anyone who hasn’t owned a home in the past three years) to qualify for an $8,000 tax credit.
 
For individuals or families hoping for some help to move into a house within their reach of affordability, this is an amazing offer. Not only does it help home buyers, it will in theory help stimulate the real estate industry by keeping housing prices from falling further and allowing more people to afford to buy homes.
 
Even better, this year’s credit does not need to be paid back to the government unlike last year’s $7,500 credit for first time homebuyers. The rules for claiming the home buyer credit are not as helpful as they could be, however. If you qualify for the credit, you need to buy the house firs, using funds you have or a loan, and then later apply for the credit either in an amended 2008 tax return or your 2009 tax return.
 
The U.S. Department of Housing and Urban Development wants this benefit to assist home buyers differently. HUD is pushing for the rules to be changed to allow lenders to borrow against the tax credit. If the buyer qualifies, he or she can receive their tax credit up front to be used for completing the down payment or paying closing costs.
 
If HUD models the first time home buyer’s loan after similar programs offered by a select number of states, the loan would be interest-free as long as it is paid back within a reasonable amount of time. The grace period would be determined when the rules are set if HUD is successful in getting the rules changed.
 
By Flexo in Real Estate and Home May 2009

After an August filled with mostly encouraging economic news, many leading economic forecasters are now predicting that the US gross domestic product (GDP) will turn positive in the third quarter of 2009.  It now appears that US manufacturing may lead the charge out of this economic hole.  Last month, the respected ISM Manufacturing Index climbed to 52.9 from 48.9.  Any reading above 50 indicates that the manufacturing is expanding in the US.  Analysts had expected the reading to only exceed the 50 mark slightly in August.  Many other indicators of factory and industrial health are also finally appearing to show some signs of growth. 

While we breathe a collective sigh of relief that we may have avoided an even greater economic catastrophe, there are still some significant risks on the path to economic recovery.  Like the last two recessions, we are likely looking at a “jobless recovery.”  As long as unemployment remains high, consumers will be unlikely to increase spending, which would help drive the economy out of recession quicker.  Some pundits fear that one of the dramatic effects of this recession is that we may have fundamentally shifted consumer purchasing behaviors.  While saving money and not running up debt is a great personal financial discipline, the same does not necessary hold true for the nation.  Right now, many analysts are cautioning that the current increase in factory activity may be directly tied to replenishing inventories that have been drained over the course of this recession.  If consumer spending does not pick up over the next few quarters, then manufacturing may again slow down with a risk of drawing us back toward recession.

Mortgage rates have faired very well during the last month will little upward movement despite the positive economic news.  It is quite likely that mortgage rates will continue to stay at a fairly low level even as the economy begins to recover, especially if inflationary pressures continue to behave.  Eventually rates will begin to rise again, but probably not until the government begins to slow its purchases of mortgage backed securities.

The deteriorating economic situationin our country has caused millions of homeowners to get behind on their mortgage payments. Households are being squeezed from all directions as the job market contracts while costs for healthcare, food, and gasoline continue toclimb in chorus. Americans wonder how times could ever get so bad.

With access to cheap credit, Americans pumped the bubble by securing financing without even undergoing simple background checks. Questionable lending practices allowed for home prices to become inflated as more and more people jumped into the property market. The law of gravity states that what goes up must come down. Everyone can agree that this crisis has been more like an airplane crash than the soft landing predicted by our government officials.

 
The house of cards has collapsed and our nation is now left with a myriad of borrowers burdened by the inability to cover their monthly mortgage bills. Millions of homeowners now owe money on a mortgage that exceeds the value of their home. Realtors have coined this term as an upside-down mortgage. Unfortunately not many homeowners know their rights and alternatives to relieve themselves from this burden.
 
Short sales and foreclosures are the two most common ways to close a delinquent loan. In a short sale, the lender agrees to accept less than what is owed in exchange for avoiding the expensive and lengthy foreclosure process. In a foreclosure, the lender will repossess the property from a borrower and then try to sell it on the open market in order to recover a portion of their money.
 
Over the past year millions of borrowers have decided to simply stop paying their mortgage and from their homes, handing ownership over to the banks. Individuals who default on their mortgage and go through foreclosure have their credit ratings ruined for 7 years further complicating their lives. They will find it virtually impossible to secure a future mortgage or financing for any other purpose. Homeowners should weigh the benefits of a short sale (better credit ratings, and elimination of debt) versus ruined credit and the embarrassment of being evicted from their own home during a foreclosure. The Federal government has recognized that short sales are a favorable option to bring the current housing meltdown to an end.
 
Industry experts agree that it is in both the homeowners and lenders best interest to perform a short sale. Congress recently passed legislation that ceases taxation obligations on short sales and encourages lenders to negotiate solutions with distressed homeowners.
 
Raffi Tal, COO of I Short Sale, Inc. (ishortsale.com) explains, "The passage of the Mortgage Forgiveness Tax Relief Act in 2007 eliminated the tax obligation for homeowners who have their mortgage debt released through a short sale and foreclosure (up to $1 million per individual or $2 million per couple)."
 

Tal, makes clear that with taxes no longer an issue, short sales are clearly the best option for homeowners in distress as well as for lenders. This legislation helped create a surge in demand for short sale services. Banks recognize that foreclosures hurt the homeowner, scar neighborhoods, and most of all are expensive. Beyond the financial implications, a short sale upholds the homeowners dignity and helps avoid the unpleasant process of eviction.
 
Theres no doubt that tough times are upon us, but homeowners can take comfort in the fact that there is a light at the end of the tunnel. The market will naturally adjust itself as savvy buyers purchase property at affordable prices alleviating the glut in housing supply. Most industry experts agree that the housing market will begin recovering towards mid to late 2009 (Wall Street Journal) and that the increase in short sale transactions may be speeding up the recovery process. Homeowners must avoid the foreclosure option completely and turn to other practical solutions. Companies like I Short Salenow provide free consultations to property owners by working on their behalf to alleviate the burden of debt and give them a fresh start.

Woodland Hills, CA (PRWEB) July 16, 2009 -- I Short Sale, Inc. issued consumer awareness guidelines about loan modifications. An increasing number of homeowners are currently seeking a loan modification but not everyone can get one. Many troubled homeowners are simply getting lost in the system and are dangerously close to falling victim to a preventable foreclosure. With assistance from a certified loan modification specialist, distressed homeowners can effectively adjust the terms of their mortgage and avoid foreclosure.

There are many types of loan modifications: lowering payments by lowering the interest rate and/or by stretching out the term of the loan, converting an adjustable interest rate to a fixed interest rate, taking past due payments and adding them on the back end of the loan balance, variable step payment plans, and, in rare cases, reducing the principal balance or any combination of the above. 
These 9 tips will help you navigate safely through the process of getting a bank approval for a loan modification.

1. Don't Wait. Act Now!

Falling into foreclosure is a time sensitive situation. If you wait, saving your home will become more difficult. It is imperative you take action right away.

2. Hire a Loan Modification Specialist.

Lenders are knowledgeable and experienced and they hold a significant advantage over the borrower. Their job is to represent THEIR interest. On the other hand, a loan modification specialist's job is to represent YOUR interest.

You wouldn't go to court without an experienced attorney. Why would you go to your lender without an experienced loan modification specialist? This is especially important because your mortgage is probably the biggest financial commitment you will ever carry.

3. Is Your Loan Modification Specialist Licensed by the DRE?

Don't let anyone take advantage of your sensitive financial situation. Make sure that your loan modification specialist is licensed by the Department of Real Estate. Only consider firms that comply with all necessary California Real Estate Laws and the California Foreclosure Consultant Act.

4. Get the Right Documents.

You and your loan specialist will need to decide on a strategy based on your hardship, your needs and your lender's requirements. You will need to provide current income and expense information to document your financial situation. 
5. Loan Modification Does Not Impact Your Credit.

One of the most common misconceptions is that executed loan modifications will negatively impact your credit. In fact, being behind on your mortgage payments is what affects your credit rating. Complying with the modified payments will probably be the fastest way to remedy your credit rating.

6. Know Your Loan.

Lenders may give modification priorities to certain types of loans that were previously allocated even if the borrower is current on payments. A seasoned loan modification specialist should be able to identify if you are in a category of preferred loan types.

7. Be Realistic.

Don't have unrealistic expectations. Remember that people tend to exaggerate. Each modification is unique from lender to lender and from investor to investor. Don't expect to pay next to nothing for your loan.

8. Be Thorough.

Based on your current and projected income, make sure that the new modification terms and conditions are something with which you can comply. Be certain to obtain a full financial review from your loan modification specialist that includes a budget for paying your home loan on time.

9. Never Give Up.

If for some reason your loan modification request is denied by the lender, resubmit it. Lenders often change their rules and programs and what might not work out today may work out tomorrow. In addition, consult with your loan modification specialist about alternative foreclosure prevention options. There are other effective ways to avoid falling into foreclosure. Never give up!

i Short Sale (http://ishortsale.com) is a leading nationwide loss mitigation advisory firm that has assisted thousands of property owners and lenders in the intricate business of short sales, loan modifications, forbearances, deeds in lieu and other loss mitigation solutions.

An estimated 39,051 new and resale houses and condos were sold statewide last month. That was up 2.9 percent from 37,967 in April and up 18.3 percent from 33,024 for May 2008. Sales have increased on a year-over-year basis the last eleven months. California sales for the month of May have varied from a low of 32,223 in 1995 to a peak of 67,958 in 2004, the average is 47,621. MDA DataQuick’s statistics go back to 1988.

The median price paid for a home last month was $230,000, up 4.1 percent from $221,000 in April, and down 32.2 percent from $339,000 for May a year ago. Last month’s slight uptick in median is the result of a relative increase in sales of more expensive homes.

Of the existing homes sold last month, 51.1 percent were properties that had been foreclosed on. A year ago it was 39.8 percent.

May began with mortgage rates hovering in record low territory.  Rates for conforming 30-year, fixed-rate mortgages appeared to be firmly entrenched below five percent.  With massive government intervention and a global recession, it appeared to many that rates would remain below 5% for at least a few months.  However, as talk of a potential depression waned, hints of economic reminded us that mortgage rates cannot stay low forever.  For many on-the-fence buyers and those waiting for rates to dip even lower to refinance their homes, there is a reasonable chance that they have missed the opportunity of a sub-5%, 30-year, fixed-rate mortgage.  Of course, compared to historical standards, rates are still amazing low and may be for some time.

There is certainly no question that we are in one of the longest and deepest recessions since WWII.  The economy continues to shrink, with all sectors of the economy struggling.  Many experts had assumed that the economy would continue to get worse for the remainder of this year.  However, economic news this month began to show signs that the rate of contraction may be slowing.  Many analysts and government officials began predicting that economic recovery might begin before the end of the year.  While it is certainly good news that we may be near the end of this economic tailspin, those historically low mortgage rates may be behind us now.  However, as the economy improves, there is significant potential for very positive news from the mortgage industry.  Assuming that the economy does turn around, we should see the rate of foreclosures also scaling back.  An improved economy and a reduced risk of foreclosure should begin to help the industry loosen underwriting standards that have become extremely restrictive for even high-quality mortgage shoppers.

So have we entered a period of ever climbing mortgage rates?  The answer is probably not.  The path to economic recover will have bumps along the way.  Signs that reveal continued economic weakness will help push mortgage rates down slightly, but it is unlikely that rates will return to historically low levels.  Please be advised that every data point that hints at economic recovery will provide significant upward pressure on rates.

Woodland Hills, CA (PRWEB) January 08, 2008: I Short Sale, Inc. is cautioning all consumers, contemplating a loan modification, to make sure and consider working with loan modification specialists that are authorized by the Dept. of Real Estate in the State of California (DRE) to perform loan modifications and other loss mitigation services. The DRE certification is a customer's insurance that companies like I Short Sale, Inc. meet the requirements stipulated by the Advance Fee Agreement.

Eli Tene, CEO of I Short Sale, with 19 years of extensive experience in the loss mitigation field, states that "most loan modification companies who provide borrowers with loan modification services in California are either not licensed by the DRE or licensed but do not have an approved Advance Fee Agreement. Complying with all necessary California Real Estate Laws and the California Foreclosure Consultant Act will allow I Short Sale to expand its services to our clients. There is no doubt that at these difficult times our help is needed the most."

I Short Sale, Inc. (www.ishortsale.com) is a leading nationwide short sale, Modification and loss mitigation advisory firm. Since 1991, it has assisted through its principals thousands of homeowners to avoid foreclosure. I Short Sale, Inc. has developed a far-reaching network of property owners, mortgage companies, banks and realtors.

The Standard & Poor's/Case Shiller composite index of 20 metropolitan areas released Tuesday shows prices of previously owned homes fell 2.2 percent in March. The 10-city and 20-city composites also set new records, with annual declines of -15.3% and -14.4%, respectively. Las Vegas is reporting an annual decline of -25.9%, followed by Miami and Phoenix at -24.6% and -23.0%, respectively.

Prices of single-family homes dropped a record 14.1 percent in the first-quarter in comparison to a year earlier, while U.S. consumer confidence is the lowest in 16 years as a result of escalating gasoline prices. 

As home prices continue to decline, the market sees a growing demand for short sales. A short sale is the sale of a house in which the equity falls short of what the owner still owes on the mortgage. “A combination of increasing financial hardship and declining equity rates put thousands of homeowners in an immediate risk of losing their property,” says Raffi Tal, COO of I Short Sale (http://ishortsale.com). The short sale advisory firm, a leader in its area nationwide, experienced a growth of more than 17% in requests for short sales during the first quarter. “Property owners and lenders look at the current situation and turn to the first and most effective solution currently available in the market.”