Best Buys

I figured it would be nice to identify some of the best buys in the South Bay. Since I'm still not that comfortable on the stability of the market well outside of agency conforming loans, although I'm hopeful this will change soon, I'm choosing to focus on the best buys under $1.2m and under $600k. This will greatly limit the neighborhoods accordingly, but my hope is that this will help readers weed through the new listings that we'll see through the year. Since the South Bay is a vague term, I'm going to keep the search between PVE (Valmonte and Malaga Cove) to El Segundo and as far inland as Anza Blvd. in Torrance. Here are this week's nominees:
$1.2m and under:
555 S Helberta AV , Redondo Beach 90277, listed by Rae Lord of Coldwell Banker has a nice 1400 3 bed/1 bath ocean view listing in a nice neighborhood of South Redondo on a 6600' lot. There are many $1mil houses in the neighborhood and an ocean view with a walk to the beach is hard to find for $889k. The one that got away is 220 Ave A listed at $859k. This is one of the coolest little craftsman homes in the avenues.

Under $660k:
2401 Marshallfield LN , Redondo Beach 90278 listed by Hady Chahine of Shorewood Realtors has a nice 3/1 on a 5000' lot listed at $569k. Not bad for a short drive to the beach and close to the main arteries for a freeway commute.

That's it for this week. Keep a smile on your face and your rain coat nearby just in case.

Lessons from a surfer

The surf has been pretty big here in the South Bay the last couple of weeks. If you're a surfer here, you've learned to be prepared for those special days when the waves are really good - boards are waxed and ready, schedules cleared, and your wetsuits are dry and ready to go. It's not much different for the real estate market in the South Bay - you need to be ready for that diamond in the rough. Sure, there are currently many houses that have been on the market for months; in that case, time is on your side. However, most of the best deals in any neighborhood require you to be ready to take immediate action. If you're thinking of buying a home in 2010, or any time for that matter, here are some steps to get yourself prepared to score a deal in today's market.

1. Get prequalified for a loan. Meet with a mortgage banker or broker and find the type of loan and amount of loan that's best for you. Be prepared with recent tax returns, pay stubs, and bank statement.

2. Identify your needs. Do you need to upgrade or downsize? Are you a first time home buyer or are you looking for an investment property? A real estate professional can help you identify the type of property you are looking for.

3. Match your needs with your price range and find a target neighborhood.

4. Know the market. Have your Realtor update you on new listings and visit open houses in your target neighborhood.

5. Write an offer. Once you've found a house that meets your needs and affordability, it's time to identify your price and write an offer.

The bottom line is you need to establish some goals for finding a home and take action once you find that house. Don't be like the surfer who spends all morning checking out the surf on the webcams. In order to catch a wave, you need to paddle out to the surf.

Why we live here.

As I check the weather around the country, it is clear to me why so many people call Southern California home. From Atlanta to Boston, Dallas to Detroit, below freezing temperatures are what most of the country woke up to this fine Saturday morning. As I was wondering where I'd go surfing this morning, most Americans weren't even thinking of leaving the house. No wonder people visit and vow to return - with a moving van. In fact, my own father left Michigan in the 60's and has never gone back. Sure, with news of unemployment, foreclosures, and the ever present traffic, it's sometimes easy to forget the weather and beautiful beaches. However, as many of you already know, in the long run, the beach remains a very attractive place to buy a home. So as many football fans from Oregon, Ohio, Alabama, and Texas return home from the Rose Bowl after a week of perfect weather, I’m sure many are planning their moves back to Southern California. Sure, I could go into detailed statistics of why to buy a house here, but let's look at some of the basic and simple facts.

• Interest rates are still historically low. Assuming you buy a house worth $800k, with 20% down, a 30 year loan on $640k at 5.25% will cost you $3,534/month. If rates were to increase to 6.25%, merely 1 point, that same loan will cost $3,941/month, or roughly $70k in loan value. One thing is certain, I don't think interest rates can remain this low for much longer.
• Tax incentives - the US government will actually give you money to buy a home. Now there are restrictions on who qualifies, but first time home buyers and those that have lived in their previous home 5 of the last 8 years can receive $8k or $6.5k, respectively, if you buy a home by April 30th.
• Home prices are discounted. With prices in many areas of Southern California peaking in 2006 (median price was $585k in 2006 and was $340k in 2008), current price levels represent a significant discount. The South Bay has remained somewhat insulated from huge price drops, but it still remains a buyers market.
• Finally, look around. The lowest priced homes have seen bidding wars - yes, bidding wars. I had clients submit offers on two homes in Manhattan Beach last year that both had over 20 offers - in less than one week! What does this mean? People simply want to live near the beach. Low priced homes in the South Bay are in high demand, and will continue to as long as people want to live near the beach.

So what does this mean for the next year? I stand by this logic - if you like the house, want to live in it for the next 5 years or more, and can afford the payments, you can't go wrong buying a house in the South Bay.

New Year, New Opportunities

It's hard not to be optimistic about 2010 after surviving 2009. The South Bay Real Estate market certainly had it's ups and downs, but even in a tough year there were opportunities for savvy buyers. The border cities continue to offer great opportunities to live in the ocean breeze. I expect these opportunities to continue in 2010.