Anytime your work is recognized is recognized by your peers is an affirmation of a job well done, Anytime your experience is cited with a reference in a National news organization is confirmation that your knowledge and experience provides you with a level of authority, indicating that you have a special status in your area of expertise.
Deena Willis is a contributing editor of a Pasadena Real Estate Blog, and has also recently just obtained her Eco Broker certification. She was recently interviewed about her knowledge of Energy Ratings and Green Homes, by a reporter for MSN and an article which featured "5 Tip-Offs That Your Home is an Energy Hog"
Contributing to her understanding of home energy audits was the fact that she had a home energy rating completed on her own house. With the focus now on energy conservation and "green advantages", home energy audits are expected to become much more important to the home buying process. "A home energy rating is an excellent inspection to have. The report will make recommendations and provide approximate costs as to the recommended repairs and the resulting savings", said Deena.
We may soon see the day when the energy audit becomes as ubiquitous as the professional home inspection. People need to understand the efficiency of their heating and cooling systems and how much energy may be saved by completing some maintenance items and a few inexpensive repairs.
The month of August has typically began the end of the summer selling season. However this August has been anything but typical. As a matter of fact, the real estate market for the last couple of years has been anything but typical. As we report the Pasadena home sales for the month of August we begin to see a couple of developments taking shape, one positive and one negative.
On the positive side, unit sales for the July-August period are the highest they have been all year. Could the fact that median home prices continue to fall have something to do with that? Median prices took one of the biggest monthly declines that we have seen in the last several months. As banks continue to deal with repossessed inventory, the market for homes in the high $300's and low $400's has reestablished, something we have not seen in quite some time. Median home prices for Pasadena real estate are levitating between 2004 and 2005 levels.
The specifics of the Pasadena real estate market has been recapped and offered in a new format this month. I think you will find the data easier to understand. Sometimes numerical data has a tendency to run together and can be hard to comprehend. This new slide format makes it much more understandable and I believe much more visually appealing.
The Pasadena housing market continues to hobble on one leg. While this strategy seems to work well for Tiger Woods, and the manner in which he won the US Open It does not bode well if you are a property owner attempting to sell a house. June home sales continue to confirm what we have seen year to date with (1) fewer home's being sold (2) a continuing decline in the median sales price.
June's median price was $700,000, compared to $790,000 last year, a decline of 11.3%. Compared to Pasadena's median home price last month of $760,000, prices declined 7.9%. June is normally a strong month for housing as evidenced by last years median price of $790,000 for May and June. The fact that we experienced further declines this past month is a good indicator the housiing market continues to soften.
Also, the mix of units sold is changing. In June ‘07, there were 4 homes that sold below $500,000 ranging in price from $449.0 to $495. This year 10 homes sold below $500,000 with prices from $339.9 to $469.9. The low end of the market has re-emerged with sales of homes in the range of $500.0 to $999.0 slowing. Currently 504 units/properties are either active, pending or in back-up position resulting in approximately a 10 month inventory supply.
Pasadena Condo's & Townhomes
Condo's and Townhomes continue to lag and drag. They lag the units sold in comparison to the single family market and they continue to drag down the overall performance of the housing market with their larger declines in value. June salaes results indicate a median price of $477,500 which was down almost 17% from last years median price of $575,000, plus we sold almost 50% fewer units. Compared to last month's median price of $488,000, the median price declined 2.1%. We also have approximately a 10 month supply here as well with 319 units on the market today.
Median Price vs Average Price
I am often asked why we do not include an "average" price on our market updates. To me, an average price is not a good indicator of what is happening in the market. Here is an example. Currently the most expensive listing in Pasadena is a house for $52 million. If this house were to sell, can you imagine how the numbers would be inflated and thrown all out of proportion due to this one sale based upon an average? Median prices direct us towards the middle. Average prices tend to sku the results, either positively or negatively and can be based upon one individual unit.
The data used for this report was compiled from the i-Tech MLS on 7/10. The data will only include properties listed in the i-Tech MLS.
The content of this article holds the key to what so many have searched before. The text is not based upon speculation, not based on here-say, but rather predicated on market fact. Everyone has an opinion on the housing market. But when does fact supersede opinion/ And although the secret is a widely know belief, has it been proved beyond a reasonable doubt? . The key to selling your house in this current market will soon be revealed.
The basis for a successful property transfer was discovered in less than an hour. Not merely by accident like rubber and the telephone, but by proving a theory. There must be a correlation somewhere between why some experience success while others repeat failure.
Selling houses is not rocket science. There is no magic bullet, no formula that has been passed down through time. No one person or company has "the power", for if they did it would have been published long ago, allowing the keeper of the cup to cash out and make thousands of dollars on speaking and book publishing. Any experienced salesperson knows this to be true, although it is often a euphemism with talk of "an aggressive marketing program".
It Should Have Been Obvious
Sometimes we attempt to make things more complex. The secret to a property transaction being completed in a timely manner is simple. It should have been announced a long ago. In fact, we confuse the real issue with terms such as "staging", "curb appeal" and rosy laced language we forget we are selling real property, instead of trench coats for J. Peterman.
The Secret Announced
Your success or failure will be determined from the first day. When your house hits the market and has been announced "For Sale", your philosophy has been played and your motive announced.
For the key to maximizing your value, the difference between winning and losing all comes down to one thing........the listing price
Price your house correctly from the beginning and two things are likely to happen:
It will sell for more money
It will sell in less time
When properties are listed too high, they tend to chase the market taking price reductions, ultimately selling for less and less of their asking price. The result is longer selling times, therefore reducing your value.
When the market is declining, time is money. The longer your home sits unsold, well I think you get the idea.
If you are buying Pasadena real estate, there is a good chance the property will be inspected by a city employee. A 6 page form will be completetd entitled “Housing Inspection Report”. Responsibility of the report and its findings can be negotiated through the purchase agreement. In other words who assumes the responsibility, the buyer or seller? The report includes the following:
Building & Structural
Weather Protection
Fire Detection/Protection, Exits & Safety
Natural Light & Ventilation
Heating and Mechanical
Plumbing
Pool Safety, Environmental Health & Sanitation
Use & Parking
The back page of the report speaks to Landmark and Historic Districts and also the City’s Tree Protection Ordinance.
The Intent of the Report
Most of the issues identified as “minor” violation can be easily addressed and corrected. These items require correction but not a reinspection. Other issues which are marked “major” require a reinspection. If you have completetd some remodeling such as converting a garage into an additional living space you will probably be ask to convert it back to its original intent. This would qualify as a “major” violation.
But what is the real purpose of this inspection? Many of my colleagues in the industry see it as a tax, a revenue enhancer for the city. The reasons cited are our neighboring cities such a Monrovia, Arcadia, San Gabriel, and South Pasadena do not require an inspection of this kind. The City of Los Angeles has an inspection but they have taken a different perspective and it is one I think the City of Pasadena should consider.
Pasadena’s Green Initiative, Lets Make it Work
Pasadena’s goal is to become a green and sustainable city. A goal we have written about at up2daterealestate. However, this has been adopted for commercial buildings and residential single family structures continue to fly under the radar. I have never been a proponent of introducing increased government intervention into the real property transaction. But water is a finite resource and it’s time we began taking measures to conserve it. Just last year the City of Pasadena called for strict conservation as a means to deal with our ongoing drought. We need to put some teeth into this report and include low flow toilets and shower heads in the inspection report, mandating that they be upgraded prior to closing escrow. The change in water usage is justification enough for the new provision:
low flow toilets - 1.6 gallons per flush compared to 3.5 gallons for standard
low flow shower heads - 2.5 gallons/minute compared to 4-5 gallons/minute for standard
As you can imagine, the water savings would be tremendous and I believe the adoption of the new requirements would be accepted throughout the community. Much more so than the proposed energy audit that was just passed by the California State Assembly.
The City of Pasadena California is attempting to promote itself as a green and sustainable community. This is a very desirable program to promote due to our declining natural resources and increasing demands for power and electricity.
In a fitting tribute to the City of Pasadena and its green initiative, we will soon begin to witness the construction of the Pasadena Eco House. This environmentally friendly structure is designed by architect Robert Mechielsen, and his company Studio RMA. Mr Mechielsen's goal when constructing a house is to design "Carbon Neutral Living Architecture". His designs are built to LEED design standards and incorporate building materials that use recycled and sustainable materials, are more energy efficient, offer greater fire resistance and can withstand hurricane force winds. In addition, they provide better sound insulation and can even eliminate termite and vermin problems. Now who wouldn't be interested in something like this? The other major factor and advantage is that an Eco House is very competitive with the price of new construction.
Most people's ideas of going green include changing a few light bulbs, placing your newspaper and plastic bottles in the recycle bin or turning your thermostat up or down depending on the season. There are so many wonderful new products and technologies in the market today that will be utilized in the construction of this house that can improve our standard of living.
Follow the ground breaking to completion as we bring you the construction details for the next few months. Get in depth reports form the prefabricated panels to the recycled glass counter tops and see how these products will produce a synergy not found in conventional housing. Hear the comments from the general contractor and architect as we follow the development of this pioneering project and see what impact it has on the future of housing. And finally, hear directly from the owner's themselves and why they chose to go green and what factor's lead to this decision. We feel very fortunate to be included in this project as we report on the Pasadena Real Estate market..
Properties of this size and character are very unique and rarely become available. First time on the market in 40 years this property offers 3 beds and 1.25 baths with approximately 1700 square feet on one side and two master suites adjacent on the other side in approximately 1600 square feet.
The owners side has been updated with central air and heat. The property offers updated plumbing, a newer roof, and tremendous charm and character. The other unit is occupied by tenants on a month to month lease. Thee is a detached two car garage and beautiful landscaped grounds.
Offered at $1,375,000 and Open Sunday, January 13, from 1-4pm
In the current Pasadena housing market the only segment that is showing any growth has to do with the foreclosure market. Looking as far back as 1990 in Los Angeles County, foreclosure activity peaked in the third quarter of 1996 and did not begin to level off until approximately one year later. The foreclosure market hit bottom in the third quarter of 2005, but since then has been steadily increasing. When home prices are rising at 15 - 20% per year the amount of foreclosure activity is almost nonexistent as increasing equity can offset rising debt.
What is Happening in Pasadena?
The chart below indicates the amount of monthly foreclosure activity. For the most part, the foreclosure filings have steadily been increasing for about a year now. The activity appears to have peaked in August, however the data could be about to change. The largest number of adjustable rate mortgages are set to reset in late 2007 to early 2008 with many of those being subprime.
Foreclosure Activity by Zip Code
Analyzing the activity in Pasadena, the greatest numbers are found in zip codes 91103 and 91104. Overall there are 259 properties that are in some stage of the foreclosure process. These consist of single family, condo/townhome, multi-family or commercial. The majority are single family homes followed by townhomes or condominiums. This represents approximately 95% of the foreclosure market.
The zip codes of 91103, 91104, 91106 and 91107 represent 90% of the current activity and you can see how the numbers are growing month by month. Also many homes are in the initial "preforeclosure" stage. This means that the homeowner has missed one to several payments and a notice of default has been filed. This period will allow a property owner an opportunity to correct the situation. Sometimes a home is sold or refinanced while it is in the default process. The important thing for someone to understand is that there are options available. Most lenders do not want to foreclose and take the property back. The worst thing someone can do is to ignore a dire situation and hope it goes away.
The real estate news for October just seems to get worse. Not that it wasn't unexpected, considering the current market conditions and the time of year. People just are not buying houses.
One of the primary decisions in the purchase of a home is how much the payment will be and the factor that determines that is the interest rate. Interest rates are very favorable these days. Lender's have been offering 6 - 6.25% with no points for the past couple of weeks on a 30 year fixed rate conforming loan. Despite the fact that interest rates are historically low, most would be home buyer's seem content to sit on the sidelines and see if home prices will fall as the result of the ever increasing list of foreclosures continues to grow.
Single Family Homes
Unit sales for the month of October were off 55% from last year. That is the biggest drop we have seen to date. Although the median price does show an increase over last year, it was down from $815,000 or close to 13% from last month. Median price swings are not that uncommon from month to month, but a 55% decrease in sales volume is dramatic.
Townhomes & Condominiums
Townhomes & condominiums were also affected by the October slowdown. This particular housing segment had faired well due to some of the new construction in town with the median price running around $550,000 for the past few months, but dropping considerably to $450,000 in October. Sales of townhomes and condominiums mirrored single family with sales declines in excess of 50%
What Effect is Real Estate having on the State & Local Economy?
You may have seen the article about upcoming budget cuts. You may not realize it, but when a property is sold, there is a documentary transfer tax applied. Here is Pasadena, it is usually paid for by the seller. It amounts to $1.10 per $1000 of valuation. An $800,000 sale price would generate a tax of $880. Now if every city in California is selling 50% fewer homes, you can begin to see the shortfall created on the local and state tax rolls.
The housing market has a tremendous amount of momentum, albeit negative momentum right now. And you have to hit bottom before you can begin to the climb back up. The question on everyone's mind right now is "When will we hit bottom?"
Visit up2date for the latest information on the Pasadena housing market.
Every month we recap the housing statistics in the Pasadena area and provide an analysis of what is happening with respect to home values and how they correspond with the overall real estate market. On a macro level, the Pasadena Housing Market appears to be holding up pretty well compared to other parts of California. Each month the median price of a Single Family Residence continues to increase and the number of units that are sold continue to decrease.
Sales for the third quarter continue to support this rationale:
However, if we begin to break it down by sales price and by geographical area, things aren't quite as rosy as they appear. Since Pasadena covers such a wide socio economic area and offers many different types of housing, can house prices still be increasing when there are fewer of them being sold?
Of the four area's of the City, home prices south of the 210 frwy seem to be holding up better than the ones to the north. The graph below shows that the Northwest and Northeast regions have declined considerably over the same period last year.
Northwest
There still seems to be a market for million dollar homes in this area, however there were only 6 recorded sales of homes under $699,000 this year compared to 29 last year. That has summed up the housing market in 2007. Homes less than $650,000 continue to sit unsold. There just doesn't seem to be any buyers in this market. Homes in this area are staying on the market well over 100 days. The median price in this area last year was $610,000, and since the market in has shifted to primarily million dollar homes, the median price has become an insignificant measurement.
An article recently appeared at the L.A. Land Blog in which Peter Viles ask his readers if they thought Los Angeles would be immune to a rise in foreclosure activity? In zip code 91103, there were eleven Notice's of Default filed in the month of September. The highest level of any Pasadena zip code.
Northeast
Currently indicating about a 1% decrease as the median price has gone from $725,000 last year to $717,500 this year. The decrease is attributable to homes from the $500.0 to $800.0 price range. 70 units were sold last year compared to 46 this year.
Southwest
Showing a healthy increase from $882,500 last year to $977,000 this year, home sellers in this quadrant have still been blessed with rising values. The important thing to note about the Southwest area is that there is also more of a homogeneity of home values in this area, where as the other three areas have a broader value range.
Southeast
Only region to show an increase in the number of homes sold. Also the median price increased from $835,000 to $897,500, about 7.5%.
Projections
As of today 385 Single Family Homes are for sale and 67 in escrow totaling 452 units. With only 42 homes sold in September, there is almost an 11 month supply. As we approach the end of the year it is hard to imagine things getting better anytime soon. There is no urgency in the market. Home buyers are very content to wait.
So, back to the question, "Are home values going up in Pasadena?" The unequivocal answer is "it depends". For the latest information on the Pasadena Housing Market visit up2date
Doug Willis
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