Ever since I started appraising real estate in Los Angeles, twenty eight years ago, it became apparent to me very quickly that L.A. would be as dense as New York or Chicago, one day. Over the past fifteen years many sections of Los Angeles neighborhoods such as Highland Park, Mar Vista, Echo Park, Silver Lake, Faircrest Heights, Hollywood and others have been re-zoned from single family to multiple family use. And slowly but surely multiple family dwellings have begun to emerge. Some with a little sympathy on the surrounding neighborhood, some, not so much. Last night I attended my neighborhood homeowners meeting and the hot item was a proposal of a new development of sixteen semi-detached, three story homes being built on two standard size residential lots. The neighborhood was furious. Even I was a little upset knowing that this area of the neighborhood had been re-zoned for higher density over ten years ago and when a hot area gets re-zoned for higher density in L.A., the multiple family monstrosities are soon to follow. If you want to start a fight against this type of development, keep in mind you’re up against deep pockets, the “wheels of progress” the banking industry, worldwide demand and city hall politics!
What I can offer are some suggestions to ease the pain and help avoid experiencing this type of problem again. First you can go to the city website www.zimas.lacity.org, type in an address and it will give you the zoning of all the properties in the area. If your property is near anything other than an R1, there “may” be cause for concern. At this website you will see several other buttons you can click that will give you all kinds of information from economic development, planning and zoning, tax assessor information and permit information. Most cities have ten and twenty year plans for how they’re planning to develop the area, this is also helpful. In the future when you purchase property, this research should always be done, in addition to seeing how close public amenities are, what traffic patterns are like at rush hour, types and proximity of public transportation, proximity to parks and the like. A worthy Realtor should offer these services!
Most of us live in Los Angeles because of its great weather, open space and many other great amenities. The world is aware of this and they want a piece of the action!
Long ago, I learned to cope with such development when the miniature golf/trampoline park on La Cienega was razed for a new commercial strip center.
Chief Appraiser / Realtor / Analyst / Investor
At the WalshStreet Group, we specialize in handling affordable real estate that has the potential to give you the strongest appreciation rate. Whether you’re a fist time home buyer, or just looking to upgrade to your dream home in a short period of time, we can provide you the kind of property that can make this happen. Some of the strongest areas of appreciation in Los Angeles are right here in metropolitan Los Angeles (Los Angeles Median Home Prices) allowing us to bring you the highest possible price for your home.
We accomplish this by concentrating in neighborhoods that have functional location with great curb appeal. With the ever increasing traffic and population of Los Angeles, commute times and proximity to public amenities, can be a big “deal”. Our experience and in house data as Certified Appraisers allows us to pinpoint which neighborhoods have a history of accelerated appreciation, and which neighborhoods are up and coming.
So if you’re looking to sell, let us list your home and get you a higher offer by not just marketing your home, but marketing its exceptional location. If you’re looking to buy, let us show you where you can pay an affordable price in metropolitan Los Angeles, and receive accelerated appreciation, in an appealing neighborhood, in a short period of time.
Lawrence A. Walsh
Realtor / Certified Appraiser / Investor
Why so bubbly? I have decided to list the top five reasons of why California real estate has been and continues to be inflated.
1. No Check and Balance. No longer is there a true advocate for a buyer in real estate. When was the last time you heard a buyers real estate agent say” this property is overpriced, make your offer accordingly, or not”!
2. Distortion and Spin. Agents attempting to discredit or ridicule an appraiser if the appraised value does not support the “market” price. Banks choosing appraisers based on the cheapest price, shortest turnaround times, pocketing half the appraisal fee, creating their own appraisal guidelines irrelevant to the efficiency of the valuation process. In reality appraisers are an unbiased, third party, creating complete transparency with documented reports potentially saving a buyer thousands in financial loss or a refinancing home owner from going upside down!
3. Lack of Knowledge. A lack of understanding between market price vs. market value. The onslaught of real estate flipping T.V. shows that are edited down to a simple and easy process with a happy ending creating an unprecedented number of inexperienced real estate investors that are trying to make an ongoing business out of flipping properties. Along with this is a growing oversupply of investors and declining number of deals. This is keeping real estate prices artificially inflated!
4. New Purchasing Power. The first time participation of hedge funds also looking at residential real estate as an investment tool, making above list price offers, because of their buy and hold strategy.
5. No Transparency. Market value is based on “market trend”, not on a handful of people who have been informed by agents that stand to make a commission based on what they’ve decided the sales price should be. An unbiased third party, the Appraiser, should do the appraisal first, fully informing all parties and making the transaction transparent. The current system is backwards because of the strong lobbying power and endless money that real estate sales agent organizations have.
In the past ten years, what determines value and who is most qualified and experienced to fully inform the homeowner of market trends, has been distorted exponentially because of money and politics. Improper sources are leading to fake real estate prices!
Los Angeles home values are rising and that’s great news, but let us not forget our lessons from the bubble! The bubble showed us that atypical circumstances that occur in the real estate marketplace, can lead to fake value! Current atypical conditions include the fact than the economy has only grown by less than one percent in the past year but real estate prices have gotten back to pre recession prices, a 26% - 29% price increase – and the music continues to play! Now as we head into the spring/summer (high) season, demand will go up and I suspect so will prices, as long as interest rates remain low. After seeing a spike in sales prices this time last year, in August, a month that traditionally has the strongest real estate activity and appreciation, rates inched up slightly and the music stopped. The bubble didn’t burst, it got soft! The music has started again and the rotation around the empty chairs will continue until the music stops – rates go up noticeably! Those left sitting in a chair (home) will have bubble face!
Yes, California home prices are rising, the question is, “have you learned your lesson”?
Fool me once, shame on you; fool me twice, shame on me!
O:323-936-9970 ; C:310-283-2730
Help, Don’t Hinder Your Home Value
Simple, easy steps to prepare your home for an appraisal and what you can do to help the appraiser see your homes total worth;
· Clean your house. Pick-up all objects that are blocking doorways, hallways or in the middle of a room. Don’t water your grass/plants right before the appraiser comes.
· Let the appraiser do his job, don’t try and control what the appraiser does or dictate what he sees first.
· An experienced appraiser has walked thru hundreds or thousands of homes. If you must follow him around, stay at a professional distance. Rushing to catch up to the appraiser once he turns a corner implies that you don’t trust him. This can be very offensive since most people let the appraisers have free run of the house. Don’t try and engage him in unnecessary conversation, this can cause him to miss something important.
· If you have been talking to a realtor and have a value in mind, make that realtor produce sales that are similar to your house so you may give these comparables to the appraiser for documentation. If the sales are compatible and recent, there will be no surprises in the end. One of the most difficult parts of the appraisal is finding recent, compatible, consistent data that supports a final value. If you can provide “pertinent” data that helps the appraiser, you’re being a big help.
· When the appraiser calls to make an appointment, be informative. Let him know about recent remodeling, upgrades, additions, additional amenities. The more he knows about your house while he’s doing research, the faster he can get the appraisal back to the lender, the faster you get your loan.
· Wait until the appraiser is finished with the inspection to mention anything else that you think will help contribute to your home value. An itemized list is helpful. If the list and costs are extensive, be prepared to provide copies of receipts to the lending institution.
Keep in mind that appraisers have to DOCUMENT everything they report. In valuation, “talk is not cheap, it has no value”!
Solar Growth In The U.S.
Many are still unclear about Solar Energy and weather its benefits and costs out weight that of traditional utility companies. Well the verdict has been out for some time now (http://www.businessweek.com/articles/2012-10-25/solar-energy-is-ready-dot-the-u-dot-s-dot-isnt) and that verdict is, solar energy is more cost efficient, cleaner and will add value to your property. A win, win, win return for the property owner! Additionally, the installation of solar systems is accelerating job growth and making the country more energy efficient.
The largest hindrance to this growth has been misinformation distributed to the general public. After all, we are talking about transferring a large amount of wealth and revenue from large utility companies to the property owner.
The overall value increase of a property equipped with a solar panel (photovoltaic) system has also not recognized its full potential. There are still those who argue that there is not enough data of homes with solar systems to support a premium price, but there are plenty of studies with supportive data that contradict this argument. One such study was conducted by the Berkeley National Laboratory (http://emp.lbl.gov/sites/all/files/lbnl-4476e.pdf). Another deterrent for this value adding feature are the banking institutions efforts to increase profit by selecting an appraiser who offers the cheapest price and shortest turnaround time. This usually denotes an appraiser who does not have the experience/knowledge to adequately justify the additional value or doesn't’t have the time to properly address the issue and therefore ignores the contributing value factor all together! (http://eetd.lbl.gov/news/article/57302/exploring-california-pv-home-pr)
For more “real deal” information about solar panel systems give us get in touch with us
at your leisure.
It should be noted that just about all information that conveys how you can make your home more energy efficient, is referring to newer homes built on a slab foundation. A homeowner should be aware that there are additional issues that need to be addressed, if your house is on a raised foundation; has a "crawl space". A basic building block in creating energy efficiency, is to start with balanced air flow within the house. Leaks allowing the elements to come in or controlled air out, can greatly reduce the efficiency. One should consider how much efficiency loss they may have, if they don't properly seal off a crawl space. "Like trying to carry water in a paper bag".
Additionally, if the property in question is in California, foundation settlement can be frequent as a result of earthquakes. This can cause doors and windows to become unaligned and create a leaky home. Bolting the foundation before trying to correct a leaky house is a good idea.
Certified Green Real Estate Professional
With all of the investor competition and high volume of homeowners making improvements to their homes because it wasn’t feasible to sell; if you’re going to place your home on the market anytime soon, make sure it’s in “good” condition.
The majority of real estate transfers that have occurred over the past few years have involved investors looking to add value to the properties they purchased, by renovating and remodeling them. This has resulted in many neighborhoods throughout Los Angeles County having a high percentage of properties that are in good or superior condition. As someone who is looking to put their home on the market for sale, it is imperative that your house be in good shape. Otherwise you’ll be dealing with nothing but bottom feeders and get nothing but unsupported “low ball” offers.
As always, some of the most effective things you can due to increase the appeal of your home is a, kitchen/bath remodel, painting, cleaning and have appealing landscape.
The Appraisals we’ve recently conducted for sales transactions at WalshStreet Appraisals (www.WalshStreetAppraisals.net) has uncovered some misleading practices going on with list prices of single family homes in Los Angeles.
List prices are as high as 35% above actual sales prices in some areas. Normally, we see list prices at 15% or less, above sale price. This can be attributable to a lot of things, agents wanting to stay competitive with every other inflated list price, agents not sure what to list the property for and influenced by low market inventory and high demand or agents looking for higher commissions. Whatever the case, buyers (www.WalshStreet.net/buyers) need to be aware of this. This misleading practice was just in the news the other day concerning retail stores. Present the property as being way beyond what it’s worth, then substantially reduce the price and make it appear that the buyer is not only getting a great deal, but he’s buying at a discount. This coupled with the fact that interest rates are beginning to rise and the summer high cycle of real estate will soon be over, a buyer could easily wind up fifty feet underwater!
At “The WalshStreet Group” we have always recognized the greatest overlooked problem that occurs for people when trying to buy or sell a house. That problem is thetimeframe in which you or the traditional real estate system gives you to complete a real estate purchase or sale. All too frequently we see a seller who has put their property on the market without beginning to look for another property. Or a buyer who puts an offer in on a property, before listing their current home or taking the necessary time to analyze the market or better options. Typically, a person contacts a real estate agent shortly after making the decision that they are ready, not prepared to move. From that moment on, the traditional timeframe of the real estate process is less than six months, including the escrow period. In today’s Los Angeles market that means that possibly no more than ten properties total may be available for sale in your target area. Anxious real estate agents ready to close a deal, doesn’t help matters. (www.WalshStreet.net/sales) The odds of you finding your dream home under these conditions are remote. In the current Los Angeles home buying market, a buyer or seller should look at a minimum of sixteen months as a window of time (excluding escrow) it will take to properly explore all options before making a decision about buying or selling a home. The chances of your exact dream home being available are very slim, but something close to it could be available. When you reduce the window of time you give yourself to look, your chances are less likely to get something remotely close to what you’re looking for. The additional thousands of dollars you may have to spend in making alterations or remodeling can be saved or greatly reduced with a little real estate transaction management.
At the WalshStreet Group, (www.WalshStreet.net/sales) we have always provided assistance to clients on how to strategically handle their move and keep their window of time open, to their advantage. Our most popular program is “Home Buyer/Seller Time Management”. In this program sixteen months before you’re ready to move, we help you find potential neighborhoods and homes that meet all or most of your wants. We then contact the homeowners of those homes whether their home is listed for sale or not. In today’s Los Angeles market, this strategy is more beneficial than ever.
We may not close a deal on the specific house we were targeting, but this opens up a word of mouth amongst the homeowners in that neighborhood who are familiar with those that own similar types of properties that may want to sell. Using this method, time works for you, not against you.