Palos Verdes Real Estate Blog

In addition to being a fabulous resort that you can visit for a walk on the ocean’s edge, enjoy a meal or have an extended stay in one of their beautiful rooms — you can also purchase one of Terrenea Resort’s exclusive villas or casitas.

There are currently 9 properties for sale at Terrenea. The Casitas are 3 bedrooms, 3 baths, 2,040 square feet and range in price from $1,995,000 to $2,750,000. The 3 Villas are between 1,800 and 2800 square feet and range in price from $2,200,000 and $2,950,000. 49 Casitas/Villas have been sold to date.

The Los Angeles Times gave a nod to our new Terrenea Resort with a full page article in Sunday’s Travel section describing it as “the first waterfront resort in L.A. County, blends serenity, space and panache.” Serenity, space and panache – I couldn’t agree more.

“The typical monthly mortgage payment for Southern California buyers last month was $1,193, up from $1,052 in May. Adjusted for inflation, current payments are 46% below typical payments in the spring of 1989, the peak of the prior real estate cycle” states the Los Angeles Times on July 16th. I checked and in 1989, the average interest for a 30-year fixed mortgage was 10.32%. That is twice as much as today’s rates!

The current interest rate for a 30-year fixed conforming loan is 5.125% and 5.875% for a jumbo loan. A 5/1 Year ARM is 4% for conforming loans and 5.375% for jumbo loans. A 5/1 Interest Only conforming loan has a 4.125% interest rate and a jumbo loan has a 5.5% interest rate.

Federal Reserve Chairman, Ben Bernanke, commented yesterday that he thought rates were going to remain low. I hope he is correct as these low rates continue to stimulate our real estate market.

I have just earned the prestigious Certified Distressed Property Expert designation having completed extensive training in foreclosure avoidance and short sales. Although we have not experienced many of these sales in Palos Verdes real estate, more are expected in the future. In a nutshell, I learned how to assist homeowners who are either behind in their mortgage payments or are having trouble making those payments identify their options.

I have worked with both buyers and sellers of short sales in the South Bay. A short sale allows a cash-strapped seller to repay the mortgage at the price that the home sells for, even though it is lower than what is owed on the property. More and more lenders are willing to consider short sales because they are much less costly to the bank than foreclosures.

A homeowner cannot just be upside down on his mortgage (owes more than current value of property). A homeowner must show a valid hardship answering the question, “What material change has taken place in my life since I took out this mortgage that precludes me from paying it back?” The single largest reason in today’s market is a payment increase due to a mortgage reset/adjustment. But it might also be a loss of job, death of a spouse, relocation, reduced income or a number of other reasons.

Short sales can be a complicated process as the lender requires specific documentation and an entire package (typically more than 55 pages) must be submitted in its entirety before the lender will even consider the short sale request. The buyer must be very patient as the lender sometimes takes months to respond. Even though short sales are more time consuming, it is rewarding to be able to help sellers save their home from foreclosure.

There were 25 homes on the July 21, 2009, Palos Verdes real estate Broker’s Tour. We currently have 295 active single family homes for sale in Palos Verdes ranging in price from $836,000 in Rancho Palos Verdes to $18,900,000 in Rolling Hills (the low in Eastview is $475,000). There are 50 townhomes/condos for sale priced between $250,000 and $1,500,000. My favorites were:

Chris Adlam’s 2775 Via Oleadas, Palos Verdes Estates, (above left) is a 4 bedroom 4 bath, 3,568 square foot home for $4,999,000. This Lunada Bay ocean front estate has breathtaking ocean/bay views from nearly every room (see photo above left), tennis court and pool. Jo Ann Van Leuven’s 3805 North Palos Verdes Drive, Rolling Hills Estates, (above right) is a 5 bedroom 5 bath, 4,737 square foot home for $2,890,000. This Palos Verdes Drive North estate has been exquisitely remodeled and has a huge outside entertaining area with a cook center, flagstone fire pits, spa and fountain.

Jack McSweeney’s 1484 Via Coronel, Palos Verdes Estates, (above left) is a 5 bedroom, 5 bath, 4,883 square foot home for $3,100,000. This stunning upper Lunada Bay home has a fabulous gourmet kitchen, 2 family rooms, ocean views and heated stone floors. Pamela Lieb’s 27038 Diamondhead Lane, Rancho Palos Verdes, (above right) is a 3 bedroom, 2 bath, 1,899 square foot home for $900,000. This mid-century Blackhorse home is well priced with a pool, and panoramic city light views.

Photos courtesy of MRMLS

I have written several articles in the last couple of weeks about the current status of Palos Verdes real estate. We have had better sales numbers in June compared to May. Now Peter Hong of the Los Angeles Times, who is usually ultra conservative, has written an article entitled, “Southern California median home prices surges in June”.

Could it be that we are finally turning the corner? Hong writes, “Southern California home prices may have finally hit bottom, with median values rising last month for the first significant increase in two years…” “I think we can now say with fair degree of confidence the pace of real home price declines has slowed dramatically,” said Los Angeles economist Christopher Thornberg, who was an early predictor of the housing bubble.”

The number of June sales in Southern California are up by 12% compared to May and up 29% from a year earlier. “But Thornberg and other analysts cautioned that the housing market remained wobbly and prices wouldn’t rise substantially in many neighborhoods for months or even years.” I think we would all be happy if they just stabilized.

Graph courtesy of LA Times

Recently, a client asked me “Exactly when did we start viewing our homes as an investment rather than the place we live with our family?” I didn’t have an answer for her. I knew what she meant though. Originally, we purchased a home for shelter and then because we needed more space or wanted our children to go to a particular school or needed to be closer to our job. Now, we have those same needs but also ask ourselves the question, “How much will this house appreciate; how much money will I make?”

Do we ask ourselves that same question when we buy a car, furniture or clothes? Okay, you are correct if you said that a house is a much more expensive purchase but exactly when did we start expecting a large return on investment on our house? I took that question to a Certified Public Accountant who replied with a bit of history on when mortgage interest became deductible on our tax return and how initially the government wanted to encourage us to have our mortgage paid off in 30 years so that when we retired we would not have a mortgage payment thus assisting in our retirement planning. The CPA then explained how instead, many people began using their houses as piggy banks. No real answer on when we starting viewing our homes as investments.

Perhaps we would be better served to view our home as the place we live instead of a part of our financial portfolio.

Statistics for single family homes for the month of June for Palos Verdes real estate are now available and as I indicated in my post earlier this week, “Good News for Palos Verdes Real Estate,” the numbers are looking better. June 2009 had nearly twice as many closed sales (47) and one additional pending sale compared to May 2009. Months of inventory (months it would take to sell existing inventory at the current rate of sale) decreased to 6 months for June 2009 compared to almost 12 months in May 2009.

It is also interesting to note that in June of last year there were 38 closed sales; this June, the closed sales were 23% higher! Active single family homes for sale in Palos Verdes in June 2009 was exactly the same as May at 281. Average days on market in June 2009 decreased to 69 compared to 86 days on market in May. Average price per square foot for homes that closed escrow in June 2009 was $489 ($488 in May). The average price for homes that closed escrow in June 2009 was $1,316,000 compared to $1,356,000 in May. The average price for homes that closed escrow in the last 6 months is $1,273,333. Entire charts can be accesses by clicking here or on the “Statistics” tab above.

Currently, there are 291 single family homes for sale on the Palos Verdes Peninsula. Additionally, 45 homes have pending sales, 43 homes are in escrow accepting backup offers and 20homes have sold/closed escrow in the first 10 days of July. If we continue at the current rate of closed escrows, it would give July 2009 the highest numbers for the last 2 years!

There were 22 homes on the July 7, 2009, Palos Verdes real estate Broker’s Tour. We currently have 293 active single family homes for sale in Palos Verdes ranging in price from $799,000 in Rolling Hills Estates to $18,900,000 in Rolling Hills (the low in Eastview is $475,000). There are 51 townhomes/condos for sale priced between $250,000 and $950,000. My favorites were:

Jack Cummings’ 2501 Via Pacheco, Palos Verdes Estates (above left), is a 4 bedroom, 3 bath, 2,328 square foot home for $1,525,000. This lower Lunada Bay home is located within walking distance to shopping and the bluffs; it is an “empty canvass” waiting for a buyer to personalize the home to their liking. Megan Neel’s 1201 Granvia Altamira, Palos Verdes Estates (upper right), is a 3 bedroom, 3 bath, 2,591 square foot home for $1,495,000. This remodeled Monte Malaga home is situated on 2/3 of an acre with wide lawns, gardens and a peek of a city light view.

Michael and Nadia Foster’s 22 Covered Wagon Lane, Rolling Hills Estates (above left), is a 5 bedroom, 4 bath, 4,149 square foot home for $1,699,000. This gated Rolling Hills Park Estates home features soaring ceilings, 2 large family rooms and a saltwater pool and spa. Steve & Ceci Watts’ 5352 Ironwood Street, Rancho Palos Verdes (above right), is a 3 bedroom, 2 bath, 1,404 square foot home for $995,000. This extensively remodeled Silver Spur home features a fabulous outdoor entertaining area with built-in barbecue, gas fire pit, pool and spa.

Photos courtesy of MRMLS

Preliminary sales figures for Palos Verdes real estate for June 2009 show an upswing in single family homes sales compared to both May 2009 and June 2008 which is significant. That is good news for Palos Verdes real estate!

June 2009 has 48 closed sales compared to 24 in May – twice as many sales. And June of 2008 had only 38 closed sales compared to 48 this June. It looks like buyers have moved “off the fence”. Another interesting statistic is the “mix” for last month. As of May 31st, nearly 50% of the sales this year were under $1,000,000 and only about 8% were over $2,000,000. In June, 39% of the sales were under $1,000,000 and 8% were over $2,000,000 which means that our mid-price range of $1,000,000 – $2,000,000 made up 53% of the sales. Of the 90 single family homes in escrow, only 33% are under $1,000,000 and 13% are over $2,000,000. Again, this is good news for Palos Verdes real estate.

Final June statistics will be available at the end of the week.

Mortgage rates have been see-sawing up and down a bit for the Palos Verdes real estate market. A 30-year fixed conforming loan is 4.875% which is a quarter percent higher than 2 months ago and a quarter percent lower than last week. A 5/1 Year ARM is 3.875% and a 5/1 Interest Only loan is 4%.

30-year Fixed Jumbo rates are 6.125% for borrowers with FICO scores over 740 and 30% down. A jumbo 5/1 Year ARM is 5.125% and a 5/1 Interest Only loan is 5.25%.

A mortgage broker I spoke with expects interest rates to continue their up and down cycle through the end of the year as the loan market reacts to the ups and downs of the stock market and consumer confidence.