Opportunity with Boni and Joe

September 5, 2007

Boni and Joe remain on the cutting edge of service, garnering ground-breaking prices for our listings and finding opportunities for our buyers. How? First, by the two of us combining the power of west-side connections with an intimate knowledge of east-side neighborhoods. Next, the power of Sotheby’s guarantees that you get respect from other agents and their clients, allowing for greater opportunity.

How are we leveraging opportunity for our clients?

Have you heard the news regarding increases in foreclosures? The housing industry in LA is faced with unstable news as some highly-leveraged (mostly) first-time buyers have defaulted on their loans.

Please remember, however, that real estate is a very LOCAL industry and that by a WIDE margin foreclosures are occurring on the outskirts of LA in places like Lancaster, Palmdale, Moreno Valley, Temecula and to a lesser extent Riverside and San Bernardino. (Call us and we will send you the local foreclosure map)

Why are foreclosures up? Several homeowners’ have gotten used to using their houses like a piggybank, thereby living over their means. When appreciation slowed down, they were unable to extend their equity lines or refinance. In addition, rates are up so many short-term “teaser rates” are re-setting at much higher payments, and some are finding themselves short.

So why does that effect us here in “the city”? Well, money is more expensive as the “Fed” has steadily raised interest rates. Banks have knee-jerked back to old (more sane) qualifying standards, requiring borrowers to have a job (gasp!) and good credit (huh?). This has definitely resulted in fewer buyers in the starter home category and has made buyer’s who previously could afford $1.5M now have to settle for a house at $1.2M-$1.3M. In addition, there are media reports creating doubt.

What’s real? Locally, we are seeing correctly priced homes selling quickly (and surprisingly often) with multiple offers. We are also seeing a lot of unrealistic seller’s who are leaving their houses on the market at too high a price. This is compounded by a psychological shift in buyers, reacting to national news stories and to a lesser extent the increase in rates.

Here in “the city”, many buyer’s are pulling the trigger, and in many cases getting really good deals. In addition, many sellers are having success and while they may not be getting prices from 2005-2006, they are none-the-less making quite a profit as long as they have owned the property for a while.