MARKET WATCH

September 2013

from your neighborhood real estate experts

Location is Everything ... Even with Interest Rates
Because the Federal Reserve has an indirect impact on mortgage rates, a lot of real estate brokers and professionals tied to the industry are watching the Feds every move this year. As the central bank of the worlds largest economy, it has a huge responsibility to stabilize the economy and control inflation. Real estate is at the heart of all this, along with national employment, GDP, the stock market and other economic indicators. If unemployment falls enough perhaps another full percentage point down to the neighborhood of 6.5 percent - that could trigger an increase in interest rates, which will spill into the secondary mortgage markets and eventually to the homebuyers who need the loan. With that cheap credit no longer available, home values in some areas might drop again. Stephen Phillips, president of the new Berkshire Hathaway HomeServices brokerage network, says he doesnt anticipate the rates to go up any time soon, but when they do, he adds, it wont affect everyone - or everywhere - the same way. According to Phillips, many first-time homebuyers could feel the sting of a rising mortgage interest trend as they try to get their first loans. There are many programs to help such buyers with financing, but Phillips notes that some just wont have the flexibility within their budget and/or credit score to stretch for a mortgage requiring higher interest payments. However, Phillips notes that there has been a flood of buyers within this segment taking advantage of the low prices, which resulted from the Great Recession and subsequent Not-So-Great Recovery. These buyers, he says, arent typically lowerend buyers who are stretching themselves. Theyre middle- to upper-middle class investors who are snapping up homes to turn them into investment properties and take advantage of the red-hot rental markets. Even with higher interest rates, Phillips suspects this trend could continue and sustain struggling communities. Its almost what Id call a fragmented market. The areas that got hit worst by subprime (lending), theyve come roaring back at the lower end, he says, pointing to speculative markets in areas such as Florida and Southern California. On the other end of the spectrum, affluent buyers are usually completely different animals. The typical high-end buyer, brokers say, will likely do well in a high-rate environment because so many of them dont need mortgages to make a deal. They just need cash. I dont believe that rates are going to increase very much, and not for a long time, says Phillips. When you look at the Fed, they have a dual mandate employment and inflation. Inflation is persistently below the (dangerous) range and unemployment is still above the target. And GDP growth is still about half the longterm trend potential. Why would the Fed do anything that would significantly increase rates at the moment? Andrew King RIS Media Power Broker Report

Marco Pirozzolo
Estates Agent
CA DRE License #01918280 NYS DOS Brokers License 30PIO900998 Direct: 310.975.5765 mpirozzolo@coldwellbanker.com

Wondering How Much Your Home is Worth?

How has the price of your home changed in todays market? How much are other homes in your neighborhood selling for? If you're wondering what's happening to prices in your area, or you're thinking about selling your house, WE CAN HELP YOU! Just give my office a call for a nofuss, professional evaluation.

Trivia Question for South Bay & West L.A. Friends

This Popular 2011 Movie Was Directed by Woody Allen: a) The Girl with the Dragon Tattoo b) Midnight in Paris c) Hugo d) The Tree of Life First one to submit the correct answer to mpirozzolo@coldwellbanker.com receives a $30 Starbucks Gift Card

Woody Allen Quote of the Day:

You can live to be a hundred if you give up all the things that make

you want to live to be a hundred .

THIS NEWSLETTER IS NOT INTENDED TO SOLICIT PROPERTIES CURRENTLY FOR SALE .

This newsletter and any information contained herein are intended for general informational purposes only and should not be construed as legal, financial or medical advice. The publisher takes great efforts to ensure the accuracy of information contained in this newsletter. However, we will not be responsible at any time for any errors or omissions or any damages, howsoever caused, that result from its use. Seek competent professional advice and/or legal counsel with respect to any matter discussed in this newsletter.

(REVERSE SIDE : RECENTLY SOLD PROPERTIES IN YOUR AREA)

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September 2013

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California Million-dollar-or-more home sales statewide surged in the second quarter to the highest level since the third quarter of 2007 as the economy and mortgage availability improved. The year-over-year increase was nearly double the gain for the overall California housing market, according to San Diego-based DataQuick. The 7,763 homes sold at $1 million or more from April to June represented an 18.5% increase from the same period last year. It was the most sales in this price range for a quarter since 2007, when 10,946 closings were recorded. -- Million-Dollar-Plus Home Sales Surge in Second Quarter, by Lauren Beale, LA Times, Aug. 9, 2012.

Sharks Off Manhattan Beach Tagged and Released

Researchers from the Monterey Bay Aquarium were tagging sharks and releasing them off the coast of Manhattan Beach Tuesday, said Capt. Kyle Daniels of the Los Angeles County Lifeguards. A Manhattan Beach resident who spotted the scene said there were two sharks, a seven-footer and fourfooter, a boat with a purse sein, a helicopter overhead and a lifeguard on a jet ski from about 12 noon until 1:30 p.m. Daniels confirmed the account. Daniels said sharks have been seen "consistently enough" in the area's coastal waters "so they're checking them out." The researchers, believed to be marine biologists, have a permit to tag and release sharks, he said. Daniels said it was "speculation" that the sharks were great whites, however, Monterey Bay Aquarium's website details its conservation and research efforts on behalf of great whites. It also details juvenile white shark tagging. Eric Martin of The Roundhouse Aquarium on the Manhattan Beach Pier has previously spotted great whites in the ocean near the pier, cutting the protected species loose from fishermen's lines. Liz Spear/Manhattan Beach Patch

J Mitchell Design
Wine Cellars & Storage www.jmitchelldesign.net 310.850.2575

This newsletter and any information contained herein are intended for general informational purposes only and should not be construed as legal, financial or medical advice. The publisher takes great efforts to ensure the accuracy of information contained in this newsletter. However, we will not be responsible at any time for any errors or omissions or any damages, howsoever caused, that result from its use. Seek competent professional advice and/or legal counsel with respect to any matter discussed in this newsletter.

THIS NEWSLETTER IS NOT INTENDED TO SOLICIT PROPERTIES CURRENTLY FOR SALE