Pasadena CA Real Estate

Ann Erdman, Public Information Officer for the city of Pasadena, wrote a great article titled Looking for Work? We’re Here to Help.

Ann’s post outlies various resources available to Pasadena residents including a Career Services Division where you will find computers connected to CALJOBS which matches applicants to available jobs, various free library activities and workshops focusing on essential skills and more.

Give it a read… it might help you or someone you know!

I’ve been talking for awhile now about banks holding on to their Real Estate Owned (REO) properties to help close out 2008 in a better financial position.

As the new year begins, Pasadena is seeing a lot more foreclosure listings hitting the real estate market as banks are trying to push out the backlog of repossessed homes up for sale. I expect the inventory of foreclosed homes in Pasadena to swell over the next few months.

Currently, we’re begining to see some Pasadena condos, some even next to South Lake Avenue district, in the $200,000 range. Pasadena single family homes are now more affordable and the interest rates are the lowest they’ve been in the last fifty years even with a bit of a climb over the last week into the 5% range.

According to a recent foreclosure prevention report by the Federal Housing Finance Agency (FHFA), repossessions by Fannie Mae and Freddie Mac grew by nearly 25 percent from the second quarter to the third quarter of 2008, hitting 15,196 homes nationwide.

Looking at Pasadena real estate foreclosure statistics, we’ve seen a tremendous jump in volume.

2nd quarter of 2008, there were only 7 foreclosed homes for sale and sold in Pasadena;

3rd quarter of 2008, there were 21 foreclosed homes for sale and sold in Pasadena;

4th quarter of 2008 saw the highest increase in Pasadena foreclosures for a total of 54.

The next few months will be telling.

In the meantime, keep track of available foreclosure homes in Pasadena, by clicking on this foreclosure link.

If you would like more information about any of these Pasadena homes, please call me at 626-629-8439.

WHAT DOES THE FEDERAL RESERVE DO ANYWAY?

With the economy in the news every day, more attention is being focused on the Federal Reserve than ever before. Let’s look at some of the facts, and understand exactly what they do and how they do it.

The Federal Reserve System was created on December 23, 1913 by President Woodrow Wilson to act as the central bank of the United States. It was created to provide the nation with a safer, more flexible, and more stable monetary, banking and financial system.

The Federal Reserve System is made up of twelve Federal Reserve Banks, overseen by the Board of Governors. The Board of Governors is located in Washington DC and is comprised of just seven members, who are appointed by the President and confirmed by the Senate. The full term of each member of the Board of Governors is 14 years, and the appointments are staggered such that one term expires on each even-numbered year. This system ensures that “fresh blood” will be brought to the Board every two years. When your term is up as a Board Governor, you are done, and cannot be reappointed. But if a member leaves the Board before his or her term expires, the person appointed to fill the remainder of the term can be reappointed for another full term. The terms for the Chairman and Vice Chairman are four years, but may be reappointed for additional four-year terms. The current Chairman, Ben Bernanke, and Vice Chairman Donald Kohn lead the Board of Governors.

So What Does the Fed Do on a Daily Basis?

The main responsibilities of the Fed include:

1. Researching US national and regional economies
2. Providing financial services to depository institutions, the US government, and foreign official institutions
3. Supervising and regulating banking institutions to ensure the safety of the nation’s financial system and protect the credit rights of consumers
4. Conducting the nation’s monetary policy by influencing the monetary and credit conditions in the economy (i.e. hiking or cutting the Fed Funds Rate, as they did recently) in pursuit of maximum employment, stable prices, and moderate long-term interest rates
5. Communicating information about the economy via publications, speeches, seminars and websites

But the communication method that typically grabs the attention of most individuals is the statement given by Federal Chairman Ben Bernanke, following the eight formal meetings that take place about every six weeks throughout the year. At these meetings, the Fed has the opportunity to make changes to the Federal Funds Rate, and make their decision by reviewing economic and financial conditions. They can also make adjustments to the Fed Funds Rate outside of these meetings, but rarely do so because they don’t want to deliver a surprise that could rattle the financial markets.

Overall, the Fed’s main responsibility is to keep the economy growing at a steady pace by keeping inflation stable and rates moderate.

When inflation is low and stable, businesses and households can spend, knowing that their purchasing power can remain strong.

Teaching Moment for Children…

While you’re watching the news on television or listening to it on your car’s radio, your kids can probably hear–but not completely understand–the news too. That means now’s a perfect time to turn the current economic news into a lesson on money and finances. One terrific website can be found at www.federalreserve.gov/kids, which gives a very simple overview of the Fed and what they do, including a great definition of inflation that any small child can understand.

I am meeting with a Duarte home seller this morning.  In preparation for the meeting or as we in real estate call a listing presentation, I looked at statistical data for real estate market performance in Duarte from 2003 and 2005.

Honestly, there were no major surprises.  When comparing Duarte’s real estate performance to Pasadena, San Marino and South Pasadena, the trends are very similar:

The home sale volume dropped significantly over the last couple of years:

An almost 50% decline in the volume of Duarte home sales from 2006 to 2008.

The most significant Duarte home price increases took place between 2003 and 2005.

The MAJOR difference between Duarte and its neighboring cities to the West is that the down-trending in home sales prices is more significant and home prices are still on the decline.

Duarte home prices moved down 16% in 2008 from 2007 and almost 20% over the last two years.

READ MORE: Pasadena Real Estate Market Review 2003-2008
South Pasadena Real Estate Market Review 2003-2008
San Marino Real Estate Market Review 2003-2008

Here’s Duarte California real estate data of sold homes for 2003 to 2008 for your review:

Notice that the year ended with home sales closing at $305 per square foot.  The last month of December 2008 ended at $283 per square foot – 8% lower than the average home price sold of last year.  Not a good trend for Duarte home sellers, but a great opportunity for Duarte home buyers.

Duarte Real Estate Market statistics for December 2008:

Currently, there are 61 houses available for purchase in Duarte California.

SPosted by Irina Netchaev, Real Estate Agent.

An interesting question was just posed on Trulia. A home buyer was told by her real estate agent that the realtor representing the home seller was going to cancel escrow since loan and appraisal contingencies were not released. The question was – can the seller cancel the escrow?

Absolutely!

When you make an offer to buy a Pasadena home or any California property, your realtor will discuss with you the three main contingencies of the home purchase. These contingencies are:

1. Loan Approval Contingency:  A home buyer can back out of the escrow and NOT lose their earnest money deposit if that home buyer can not qualify for a home loan within the contingency time period.
2. Appraisal Contingency:  A home buyer can cancel the escrow if the home doesn’t appraise to the full purchase price offered. 
3. Home inspection:  A home buyer has an opportunity to hire a home inspector to check the property condition.  Don’t forget that sewer inspection!  If the inspector finds issues that the home buyer was not aware of before and the buyer is unable to negotiate repairs with the home seller or is unwilling to purchase the house after learning of these issues, the buyer can cancel the escrow.  This home inspection contigency would also include any reports that have been provided to the buyer by the home seller.  If it’s a condominium or a townhome, a review of the financial statements and other relevant information about the complex is done at the same time.

These contingencies are in place to protect the home buyer’s earnest money deposit.  In essence, it’s a free look at the property for the buyer without any penalties.

READ MORE:  The fastest way to lose your earnest money deposit

For a home seller, this contingency period or a “free look” is a period of uncertainty.  The deal is not sealed unless and until the home buyer signs off and releases all contingencies.

A good real estate agent representing the seller will ensure that all contingencies are released within the contractual time frames allowed and agreed to.  Usually, the buyer will have anywhere between 7 to 17 days to complete their inspections, get approved for the loan and get the appraisal completed. 

If home purchase contingencies are not released within the agreed upon time frames, a Notice to Perform is sent to the buyer by the seller and if the buyer still does not sign off and releases the contingencies than a home seller is totally in their right to cancel the escrow and move on with the marketing of their Pasadena home.

READ MORE:  Nine Stupid Things Buyers Do to Mess Up their Home Purchase

South Pasadena real estate has experienced an amazing five years of growth and 2008 has proven that values for South Pasadena homes are holding fairly steady while adjacent cities are seeing declines.

Single family homes in South Pasadena fared much better than condos and townhomes, but overall the real estate market held.

Read More:  South Pasadena Real Estate Market Report for December 2008

San Marino, adjacent to South Pasadena, another very affluent city has done extremely well in 2008 as well.  With San Marino property values declining just slightly from an already high numbers of previous years.

Read More:  San Marino Real Estate Analsyis – Five Years in Review

Here are the statistics for your review (analysis is below this chart):

Data gathered from ITEC (Pasadena Foothill Association Multiple Listing Service)
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Here’re my thoughts and observations on the data for South Pasadena’s last 5 years in real estate:

• The volume of units for both Single Family Residences (SFR) and Condos and Townhomes was drastically lower in 2008 compared to previous years.  South Pasadena volume of sold homes dropped almost 50% from 2007.
• Price per square foot of sold homes remained pretty much stable and ended the year at $510 per sq. ft. That is only 1.4% lower than the selling price per square foot in 2007.
• Condo and townhomes didn’t do as well as single family homes and the price per square foot dropped 9.1%, but has been dropping each month in the 4th quarter of 2008.  December closed at $346 per sq. ft.
• Last quarter of 2008 has been tough for both South Pasadena homes, condos and townhomes, with prices moving below the average sold prices for 2008.  Take a look at December 2008 South Pasadena Statistics.
• It is taking longer to market and sell South Pasadena real estate.

How will South Pasadena real estate market do in 2009?

• South Pasadena home prices will move down a bit more in 2009 especially for condos and townhomes.
• Inventory of homes for sale will increase due to additional short sales and foreclosures on the market.
• Homes will stay on the market longer due to lenders tightening of funds.
• South Pasadena home buyers will need to come up with more cash: conforming rate limit dropped to $625,000 and 2nd Trust Deeds will be more difficult to get and will be a lot more expensive.
• South Pasadena schools will continue to be the #1 driving force for home sales in South Pasadena.

Read more: South Pasadena City Guide

If you have questions about any of the data listed above or would like a private consultation to sell or purchase your South Pasadena home, please call Irina Netchaev at 626-627-7107.

Pasadena real estate housing market has been on a bumpy ride in 2008, as we enter 2009, it’s always interesting to look at historical trends.

Every month, Pasadena real estate blog brings you a statistical report highlighting Pasadena housing trends.  For December’s 2008 Pasadena real estate statistics, visit Pasadena housing trends and real estate market report for December 2008.

Looking at historical data and trends is critical in understanding what the Pasadena future real estate market can bring.

So, without further ado, here’s the analysis of where Pasadena real estate has taken us:

First of all, the most significant change each year has been the volume of Pasadena homes and condos sold:

• 2003 has seen the highest number of Pasadena homes sold – 1,402 units.  Compare that to 657 Pasadena homes sold last year in 2008.  That’s a drop of over 50%.
• Pasadena condo and townhome sales have peaked in 2004 at 744 units sold.  Again, the volume of condo and townhome sales in 2008 has dropped by more than 50% from 2004.
• Each year, it’s taking longer and longer to market Pasadena homes.  Still, the average days on the market was a bit over 3 months for both Pasadena homes and condos/townhomes.  We are still very much in the seller’s market even though it doesn’t feel like it to those of us that has experienced the real estate market over the last several years.  The official definition of a buyer’s market is when properties stay on the market for six months or more.

Pasadena real estate is still selling close to asking price:

• 2008 closed at 96.7% of asking prices for homes sold and 95.2% of list to sold price of condos and tonwhomes sold in Pasadena California.

Price per square foot for Pasadena Real Estate:

• Pasadena real estate started seeing price per square foot decreases in 2007 where it dropped slightly to $489 per square foot for homes sold and then a more significant drop in 2008 of 12.5% to $428.
• Pasadena condos and townhomes sold price per square foot was pretty flat from 2004 through 2008 and dropped by 11% this year.

Average Pasadena home sale prices:

• Pasadena home sale prices are back to 2005 levels, ending 2008 at $851,702.
• Pasadena condos and townhomes are paralelling, Pasadena single family homes and are also back to 2005 levels at $504,093.

So what can we anticipate in 2009:

• More foreclosures and short sales – no surprise there.
• Great interest rates for Pasadena home buyers and refinancing.
• Banks tightening up lending requirements and making financing dollars more difficult to get.
• Buyers needing to come up with more down payment funds.
• Home sellers providing more incentives to buyers.
• A much longer marketing period to sell Pasadena homes.
• Internet marketing and social media playing a significant role in selling homes.

Read More:  Pasadena Real Estate Outlook for 2009
South Pasadena Real Estate Review – 2003 – 2008
San Marino Real Estate Review – 2003 -2008
Duarte Real Estate Review – 2003 – 2008

Posted by Irina Netchaev, your Pasadena Realtor.

The average Pasadena mortgage rate on a 30-year, fixed-rate mortgage dropped to 5.14 percent last week to a new record low, according to Freddie Mac.

A year ago, the rate was 6.17 percent for a comparable loan.

As a result, mortgage applications last week jumped to the highest level in five years, with more than 80 percent of the applications for refinancings.

There also was an 11 percent increase in applications for home purchase loans.

If you have questions about any of these Pasadena homes for sale, call Irina, Pasadena Real Estate Agent at 626-629-8439.