by Eve Bachrach
It looks like the under-construction Triangle building is getting a buddy in the neglected southern corner of Glendale: meet The Link, which will be built on a one-acre site at the corner of San Fernando Road and Central Avenue. According to the Glendale News-Press, it’s a five-story 142-unit building with commercial space on the ground floor. The project, which was just approved by the Glendale City Council, will replace the Solar Studios building, but the company–which provides studio space for commercials and music videos–will move back in when work is complete. The owner of Solar Studios says that the new building “will help his business by providing more parking, higher ceilings and better acoustics,” although its general manager is wary.
“I think a little more study on what the impact might be might benefit us. I’m not opposed, I’m just very skeptical. It seems like there’s a lot of greed going on.” Kareco Inc. is developing the project (the owner called the neighborhood “the orphan child” of Glendale), and the city council approved it unanimously, though some council members were more enthusiastic than others. “I hope there is enough demand to fill all those units, there is an awful lot of units coming into Glendale,” said Councilmember Ara Najarian. He’s very right about that.
Check out new home communities by Meritage Homes
via Curbed LA.
by Alex Bevk
A 52-story 700′ foot tall building is proposed for Fremont Street between Mission and Howard. The Heller Manus-designed tower (of 555 Washington fame) is another in the Transit Center District Plan area, and will have 404,000 sq.ft. of office space, 74 dwelling units, 2,000 sq.ft. of retail space, and below ground parking. There’ll also a bridge connecting it to the City Park on top of the Transbay Transit Center. The EIR was certified back in July, and now the Planning Commission will vote on all its compliance applications. A bunch of organizations and business owners in the area are into the transit-oriented, mixed-use parts of the project, and Planning staff is recommending approval.
Visit new homes at Bridgeton by McMillin Homes
via Curbed SF.
By John Gittelsohn
William Lyon Homes rose 2 percent in New York after selling shares to the public at $25 apiece, exceeding its price target as the homebuilder raised $217.5 million.
The stock, which had traded over the counter, closed at $25.50 on the New York Stock Exchange, a day after the Newport Beach, California-based company and an existing investor sold 8.7 million shares. The price topped the $22 to $24 a share the builder initially expected to receive.
“They’re trading up on a day the rest of homebuilders are down,” Megan McGrath, an analyst with MKM Partners LLC in Stamford, Connecticut, said in a telephone interview. “Their story hits on data points investors have liked,” she said, citing its focus in areas where there’s a boom, including California, Arizona and Nevada, and its land holdings.
Visit new homes at Classics at Avellino by Van Daele Homes
An estimated 39,051 new and resale houses and condos sold statewide in California in April. That was up 3.4 percent from 37,764 in March, and up 2.1 percent from 38,241 sales in April 2012, according to San Diego-based DataQuick. Last month’s sales count was the strongest for an April since 48,894 homes were sold in April 2006. California April sales have varied from a low of 27,625 in 1995 to a high of 71,638 in 2004. Last month’s sales were 11.1 percent below the average of 43,920 sales for all the months of April since 1988, when DataQuick’s statistics begin.
The median price paid for a home in California last month was $324,000, which is the highest for any month since the median was $328,000 in June 2008. Last month’s median was up 3.5 percent from $313,000 in March and up 22.7 percent from $264,000 in April 2012. April was the 14th consecutive month in which the state’s median sale price rose year-over-year. In March/April/May 2007 the median peaked at $484,000. The post-peak trough was $221,000 in April 2009.
Of the existing homes sold last month, 13.5 percent were properties that had been foreclosed on during the past year–the lowest level since foreclosure resales were 12.6 percent of the resale market in September 2007. Last month’s figure was down from a revised 15.0 percent in March and 30.3 percent a year earlier. Foreclosure resales peaked at 58.8 percent in February 2009.
See elegant new homes in Roseville, CA
The housing market is heating up, yet many house hunters are not prepared to take on the biggest purchases of their lives.
When it comes to mortgages, homebuyers answered basic questions about terms, how to choose a lender and financing wrong nearly one-third of the time, according to an April survey of more than 1,000 current and prospective homeowners by real estate website Zillow.
Among the survey’s findings, 31% of buyers don’t think it’s possible to get a mortgage for less than 5% down; 34% don’t know what the term “annual percentage rate” (APR) means and one in four believe you must close with the lender that pre-approves your mortgage.
Check out new home communities by Tim Lewis Companies
The entire Bay Area and Silicon Valley is a major hotbed of extraordinarily fierce competition among buyers. The best properties are seeing as many as 40-50 offers with asking prices often being bid up 20 to 30 percent.
Harrington made two interesting observations about how buyers are responding to the current inventory crunch. Her first observation is that many buyers are experiencing “buyer fatigue.”
They have made numerous offers, none of which were accepted. They desperately want a house and finally decide they will do whatever is necessary to win on the next offer.
Once they win the bidding war, however, they begin to question whether this was the right choice. It probably comes as no surprise that the DFT (deal fell through) rate on typical offers hovers around 10 percent, whereas the DFT rate in multiple-offer situations can be as high as 50 percent.
Deal doctoring
Harrington also observed that rather than letting the transactions “DFT,” buyers are engaging in what she called “deal doctoring.”
Buyers are tying up one property, then continuing to make offers on other properties in the hopes of obtaining a better deal or a better property. If they find a deal that’s good enough, they will forfeit their deposit and walk away from other offers.
Playing a risky game
The overheated markets have forced both buyers and their agents to play risky games. In order to win the bidding war, they waive the physical and geological inspections as well as the loan contingencies.
In a less heated market, buyers could inspect the property before writing an offer. This is usually not an option, however, since many new listings are placed under contract within 24 to 48 hours from the time they are listed.
This type of desperation serves no one in the transaction well. In the case of the physical and geological inspections, what happens if there is a major issue? In California, earthquakes are a fact of life. Without the appropriate inspections, buyers could literally be putting their lives at risk.
Most California purchase contracts contain a liquidated damages provision that allows the buyer to walk away from the deal for 3 percent of the purchase price. On a $1,000,000 deal, $30,000 is a hefty price to pay for changing your mind. The buyer would have to weigh this loss against the cost of the repairs to the property as well as the potential risk.
There’s also another risk. Recently, a New York judge ruled that if a buyer walks away from a transaction and the seller sells the property for less money, the buyer is responsible for the additional costs of the cancellation, and the difference in the purchase price.
Although this decision only applies in New York, it is still a very disturbing development, especially if the market is flat or declining.
Buyers have some leverage
Even if buyers waive inspections and contingencies, they do have two additional leverage points. If the seller did not provide a disclosure statement during the offer process, the buyer can sometimes use a disclosure item to either be released from the deal, or to have the seller handle the issue.
The second point where the buyer has leverage is time. Let’s say a deal is seven to 10 days from closing. The sellers have purchased another house and are set to move. At this point, if the buyer threatens to walk out, the seller now has their own deposit on their next purchase at risk. Furthermore, they have also emotionally committed to the next property. Consequently, this may cause them to be more willing to negotiate, even though they are not obligated to do so.
The simplest way to resolve this problem is to have the listing agents insist that no matter who wins the bidding war, that the buyers show proof of funds for an all cash deal and that they conduct a complete physical inspection of the property.
For five years, many areas have struggled with the worst buyer’s market in our lifetimes. It looks as if the next seller’s market is going to be equally difficult in an entirely different way.
- See more at: http://www.inman.com/2013/05/09/overheated-markets-have-buyers-agents-playing-risky-games/#sthash.H2nbUekT.dpuf
The entire Bay Area and Silicon Valley is a major hotbed of extraordinarily fierce competition among buyers. The best properties are seeing as many as 40-50 offers with asking prices often being bid up 20 to 30 percent.
Harrington made two interesting observations about how buyers are responding to the current inventory crunch. Her first observation is that many buyers are experiencing “buyer fatigue.”
They have made numerous offers, none of which were accepted. They desperately want a house and finally decide they will do whatever is necessary to win on the next offer.
Once they win the bidding war, however, they begin to question whether this was the right choice. It probably comes as no surprise that the DFT (deal fell through) rate on typical offers hovers around 10 percent, whereas the DFT rate in multiple-offer situations can be as high as 50 percent.
Deal doctoring
Harrington also observed that rather than letting the transactions “DFT,” buyers are engaging in what she called “deal doctoring.”
Buyers are tying up one property, then continuing to make offers on other properties in the hopes of obtaining a better deal or a better property. If they find a deal that’s good enough, they will forfeit their deposit and walk away from other offers.
Playing a risky game
The overheated markets have forced both buyers and their agents to play risky games. In order to win the bidding war, they waive the physical and geological inspections as well as the loan contingencies.
In a less heated market, buyers could inspect the property before writing an offer. This is usually not an option, however, since many new listings are placed under contract within 24 to 48 hours from the time they are listed.
This type of desperation serves no one in the transaction well. In the case of the physical and geological inspections, what happens if there is a major issue? In California, earthquakes are a fact of life. Without the appropriate inspections, buyers could literally be putting their lives at risk.
Most California purchase contracts contain a liquidated damages provision that allows the buyer to walk away from the deal for 3 percent of the purchase price. On a $1,000,000 deal, $30,000 is a hefty price to pay for changing your mind. The buyer would have to weigh this loss against the cost of the repairs to the property as well as the potential risk.
There’s also another risk. Recently, a New York judge ruled that if a buyer walks away from a transaction and the seller sells the property for less money, the buyer is responsible for the additional costs of the cancellation, and the difference in the purchase price.
Although this decision only applies in New York, it is still a very disturbing development, especially if the market is flat or declining.
Buyers have some leverage
Even if buyers waive inspections and contingencies, they do have two additional leverage points. If the seller did not provide a disclosure statement during the offer process, the buyer can sometimes use a disclosure item to either be released from the deal, or to have the seller handle the issue.
The second point where the buyer has leverage is time. Let’s say a deal is seven to 10 days from closing. The sellers have purchased another house and are set to move. At this point, if the buyer threatens to walk out, the seller now has their own deposit on their next purchase at risk. Furthermore, they have also emotionally committed to the next property. Consequently, this may cause them to be more willing to negotiate, even though they are not obligated to do so.
The simplest way to resolve this problem is to have the listing agents insist that no matter who wins the bidding war, that the buyers show proof of funds for an all cash deal and that they conduct a complete physical inspection of the property.
For five years, many areas have struggled with the worst buyer’s market in our lifetimes. It looks as if the next seller’s market is going to be equally difficult in an entirely different way.
- See more at: http://www.inman.com/2013/05/09/overheated-markets-have-buyers-agents-playing-risky-games/#sthash.H2nbUekT.dpuf
Buyers tying up one property, making offers on others in the hopes of obtaining a better deal.
By Bernice Ross
Your buyer has just won a bidding war where there were five other offers.
Although they didn’t intend to pay $30,000 over asking price, they are happy to finally have a house under contract after six other attempts to purchase.
That’s today — what about tomorrow?
There are a host of forces creating the current buying frenzy. The most recent high tech boom has created plenty of “Google millionaires” who can afford to pay $1 million or more — cash — for a property.
Multiply this by all the other successful brands in this area and it’s easy to understand what is driving the demand — plenty of money and minimal supply.
See elegant new homes in West Sacramento
By Rohit Chopra,
While a college degree can be a key to the American dream, for many Americans, unmanageable student debt has turned into a nightmare. There appears to be growing consensus that unmanageable debt burdens are not just a problem for individual borrowers but for all of us.
While many in Washington are focused on what loans look like for future borrowers, there may be a domino effect on the broader economy if we ignore borrowers currently stuck with high student loan payments.
Since the Consumer Financial Protection Bureau highlighted a year ago that student debt had surpassed the $1 trillion threshold, others have warned about the impact on the broader economy. Last year, the Treasury Department’s Office of Financial Research described how student debt might impact demand for mortgage credit. The Federal Reserve Board’s open market committee discussed whether student debt is impacting household spending. And just a few weeks ago, the Financial Stability Oversight Council discussion of student debt in its annual report added to the chorus.
Check out new home communities by Lennar Homes
by Eve Bachrach
Santa Monica will be getting another mixed-user with with 53 apartments if the city council signs off on a proposed development agreement next week. The project, on Second near Arizona, would include 19 one-bedrooms and six two-bedroom units, but more than half of the apartments (28) are studios, the smallest coming in at a rather tiny 424 square feet (they’ll average 478 square feet). The ground floor would have two commercial spaces and four studios at the rear of the building. Most units have balconies, and there’s also a little roof deck and interior courtyard planned. No parking is required, but the developer is planning to provide 66 subterranean spaces, in addition to secure bike lockers and racks, and short-term bike spaces out front. Because the four-story building would be 13 feet taller than the site is zoned for, the project needs a council-approved development agreement; in return, the developer would make a number of concessions to benefit the community.
Builder confidence rose in the 55+ housing market in the first-quarter of 2013, with the National Association of Home Builder’s 55+ single-family Housing Market Index jumping 19 points year-over-year to an index score of 46.
This is the highest first-quarter number recorded since the index began in 2008 and the sixth quarter in a row of year-over-year improvements.
“Builders and developers for the 55+ housing sector continue to report increased optimism in the market,” said Robert Karen, chairman of NAHB’s 50+ Housing Council.
He added, “We are seeing an increase in consumer demand for homes and communities that are designed to address the specific needs of the mature homebuyer.”
Visit new homes at Sierra Canyon by Del Webb
Over the last two years, home building has experienced significant growth, albeit off of low levels. And this expansion has added to overall growth of Gross Domestic Product (GDP). In fact, since the last quarter of 2011, advances in home building have been responsible for 20% of total economic expansion.
While the economy as a whole has slowed somewhat over the last year, the expansion of home building has picked up steam. The home building component of the GDP accounts, as measured by the Bureau of Economic Analysis, is Residential Fixed Investment (RFI). RFI includes spending on residential structures and some equipment. The category of residential structures includes new construction of single-family and multifamily housing units, improvements and remodeling that expand or extend the life of housing units, expenditures for manufactured homes, brokers’ commissions on the sales of residential property and net purchases from government agencies. The bulk of this spending is associated with construction of new single-family and multifamily units, plus improvement spending.
It is also worth noting that this measure of home building’s contribution to economic growth does not include other housing-related spending, such as the average $7,400 spent by buyers of newly built homes on furnishings, appliances and other items in the two-year period after the purchase.
Visit new homes at Bridgeton by McMillin Homes
