Despite many promising factors leading in to 2015, the market got off to a relatively slow start to begin the year. Though the winter months are typically considered an “off season” for brokers and agents around the nation, there were still many who had hoped that the record low interest rates and slowing home appreciation would be enough to drive sales forward – I was one of them. This clearly wasn’t the case in January, when sales throughout California and most of the nation dropped from the month before, but not all hope should be lost. New research from the California Association of Realtors has found that existing home sales increased across California in February – likely a result of slowing home appreciation and increasing inventory, and the latest indicator of a stronger market ahead.

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 368,160 units in February, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide.  Sales in February were up 4.7 percent from a revised 351,480 in January and up 2.4 percent from a revised 359,600 in February 2014.  The year-over-year increase was the largest observed since December 2012. The statewide sales figure represents what would be the total number of homes sold during 2015 if sales maintained the February pace throughout the year.  It is adjusted to account for seasonal factors that typically influence home sales.

“While February’s statewide improvement in the housing market was moderate, it’s an encouraging sign, nevertheless, as we head into the spring home-buying season,” said C.A.R. President Chris Kutzkey.  “On the supply side, housing inventory improved overall with active listings growing at a faster pace of 5.3 percent when compared to last February.  Regionally, both active listings in Southern California and Central Valley increased moderately from last year, while housing supply declined 10 percent in the Bay Area.”

The median price of an existing, single-family detached California home was essentially flat from January’s median price, inching up from $426,660 in January to $428,970 in February. February’s median price was 5.5 percent higher than the revised $406,460 recorded in February 2014.  While the statewide median home price is higher than a year ago, the rate of increase has narrowed significantly since early 2014. The median sales price is the point at which half of homes sold for more and half sold for less; it is influenced by the types of homes selling as well as a general change in values.

“The California housing market regained some traction in February as sales activity improved on a year-over-year basis for the second time in three months,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young.  “At the state level, the market is moving in the right direction as the growth of sales continues its upward trend and home prices start stabilizing.  At the regional level, however, the San Francisco Bay Area continued to be hampered by constrained inventory and low housing affordability.”

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Veteran agents know that buyers can make a “no” decision on a house before they even step in the door. It has nothing to do with the numbers. It’s the curb appeal that sets the tone, before they even see the inside of the listing.

That’s not just speculation. Studies confirm: Big, extensive renovations that functionally improve a home are net money losers, on average. They may enhance enjoyment of the home significantly – but they generally do not add as much in value as they cost to execute. Meanwhile, the projects and improvements that add the most value, according to the annual Cost vs. Value Study put out byRemodeling Magazine, are almost invariably cosmetic.

Looks count. You don’t want to be selling the neighborhood’s “ugly duckling.” If your listing is so ugly that it scares the crows away, here are some things you can do to boost its curb appeal – and get it sold for a good price – without busting the bank.

Provide Some Seasonal Decorations

Seasonal decorations are a great way to dress up a drab property or make a vacant house look “lived in.” Fall decorations are my favorite. Not everyone decorates their home and yard for autumn like they do for Christmas, so your efforts will be noted.

Try buying fall decorations cheap on clearance sales at craft and home goods stores. Late November is a good time, as managers will discount their fall stuff to make room for Christmas decorations. Keep them in your closet to help dress up fall listings.

Add an American Flag

Two quick screws and a flag holder, and you’re in business. But don’t settle for an old flag – faded flags won’t do the trick. It has got to be new and bright. Make sure the white stars and stripes are sparkling and the red stripes pop.

Apply Fresh Coats of Paint

A coat of paint and some nice trim is usually the number one value-enhancing, curb appeal-boosting modification that property owners can make immediately prior to listing.

Don’t just paint the house, though. Take the same care with mailboxes and numbers, if any. Make the colors pop, while still fitting in with the overall aesthetic of the neighborhood.

Invest in Landscaping

According to the 2012 HomeGain Home Improvement Survey, investing in landscaping generates an average return on investment of 215 percent. The same study found that over 90 percent of real estate agents recommend that clients invest in some professional landscaping prior to selling.

Not ready to invest 10 percent of the value of the home in landscaping, as the American Society of Landscaping Architects (www.asla.org) recommends? Then at least make sure the lawn is green, mowed and raked at all times.

A New Front Door

The aforementioned annual Cost vs. Value Report put out by Remodeling magazine identified a new steel front door as one of the top value-enhancing improvements sellers can make to a house thatactually adds value, above and beyond the cost of the repair, on average.

In fact, a new entry or door was the only renovation or improvement studied that did, in fact, earn its keep by generating about 101 percent of its cost in resale value. If the front door is old or unsightly, this is a no-brainer for boosting a home’s curb appeal.

Paint the Rocks

Military veterans may get a chuckle out of the old joke about “painting the rocks white and the grass green” immediately prior to a VIP visit or inspection. Maybe you won’t paint the grass green, but in the right spot, bright white rocks marking out the edge of a lawn, or lining a walkway, can look sharp. Plus, it’s easy to do and doesn’t cost much.

Spruce Up the Mailbox

Many people forget about the mailbox, even though it’s one of the first things your buyers will see up close when they arrive to look at the property!

Pressure Wash or Bleach the Driveway

Get rid of those oil stains on the concrete! For that matter, once you have the pressure washer out there, perhaps pressure wash the exterior of the house – especially anything visible from the curb.

Replace the Garage Door

Again, according to Remodeling magazine’s most recent Cost vs. Value report, many markets reported that swapping out an old, decrepit garage door for a new one was a property-value enhancer, net of costs. This wasn’t the case on average nationwide, but it’s certainly true of certain areas.

If the garage door is so old or unsightly that it depresses the value of the property all by itself, you may do well to replace it in any market. Other frequently-cited examples of curb-appeal-boosting improvements or repairs that pay for themselves in some markets include window replacement, vinyl siding replacement, and the addition of a deck.

Note that none of these are super costly repairs or renovations. The available data seem to show that smaller projects actually pay off. Larger projects won’t always pay for themselves – at least in the short run. So keep things simple and straightforward, and take your curb appeal to the next level without breaking the bank.

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Despite many promising factors leading into 2015, home sales in January fell sharply from December, a modest dip from a year earlier and the 14th month in the last 16 to post year-over-year declines. While a decline in sales is typical during the winter months, many experts were hopefully that the abnormally low mortgage rates would be enough to drive the market forward. Now many agents and brokers are left asking the question: If low mortgage rates aren’t enough to sell homes, what is?

A total of 13,560 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in January 2015. That was down month over month 29.4 percent from 19,205 sold in December 2014, and down year over year 6.3 percent from 14,471 sold in January 2014, according to CoreLogic DataQuick data.

On average, Southern California sales have fallen 27.6 percent between December and January since 1988, when CoreLogic DataQuick data began.

January home sales have ranged from a low of 9,983 in 2008 to a high of 26,083 in 2004. January 2015 sales were 21.7 percent below the January average of 17,322 sales since 1988.

“The January and February statistics are always interesting, and sometimes a bit strange, but they’re not necessarily a good indication of what’s to come,” said Andrew LePage, data analyst for CoreLogic DataQuick. “That’s largely because many traditional buyers and sellers drop out of the housing market during the holidays and mid-winter, and therefore don’t close deals during those months. In recent years that’s led to somewhat higher concentrations of investor activity for January and February, and we saw that again last month. Heading into spring it will be interesting to see whether price appreciation and other factors will finally release a lot of the pent-up supply of homes out there. More owners have gained enough equity to sell and buy another home and more will be satisfied with how much their homes can fetch. At the same time, recent gains in job and income growth, coupled with low mortgage rates, could stoke demand and put significant pressure on prices unless we see a meaningful jump in inventory.”

The median price paid for all new and resale houses and condos sold in the six-county region in January 2015 was $409,000, down 1.4 percent month over month from $415,000 in December 2014 and up 7.6 percent year over year from $380,000 in January 2014. The median hasn’t changed significantly since September 2014, when it was $413,000. The median’s peak for 2014 was $420,000 in August.

Home prices in Southern California have been rising at different rates depending on price segment. In January 2015, the lowest-cost third of the region’s housing stock experienced a 9.0 percent year-over-year increase in the median price paid per square foot for resale single-family detached houses. The annual gain was 5.7 percent for the middle third of the market and 3.2 percent for the top, most-expensive third.

The number of homes that sold for $500,000 or more in January 2015 rose 2.0 percent compared with January 2014. Sales below $500,000 fell 13.8 percent year over year, and sales below $200,000 dropped 30.3 percent.

Do you think this lull was fully due to the winter “drop out” LePage was referring to? What will it take to get year-over-year gains?

View OC Home Sale Activity by City Here

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Understanding the current market.

Much like the beginning of 2014, this year has started with a lot of uncertainty in the housing market. January sales dropped to the lowest annualized level since the housing collapse despite positive housing fundamentals and bustling economy. Disappointing January sales largely reflect noteworthy slowdown in sales in the Bay area, which despite having one of the best job markets in the country continues to struggle with very limited supply of inventory of homes for sale. Low supply has constrained sales for several years now and has certainly contributed to low activity in 2014 in general.

January sales in the Bay Area dropped almost 15 percent from the year before, which is double the drop seen in the Los Angeles metro area where sales decreased 7 percent. Inland Empire performed relatively better with only a 4 percent decrease in sales and also the strongest increase in pending activity in January over the year before, 11 percent. Based on the pending numbers, the Bay Area sales will remain soft in February while Southern California will improve slightly.

At the state level, median home prices appear to have decreased as well. Again, however, median home prices at the state level are affected by the sales mix. Since fewer homes were sold in the Bay Area, the most expensive market in the state, the sales mix was largely repressed by homes at lower price levels. Consequently, median prices were pulled down. But are home prices coming down? No. Home prices are still rising throughout the state though the increase has slowed down on an annual basis. While home prices were increasing rapidly in 2012 and 2013, often at double digit year-over-year rates, the increase in prices has slowed down in 2014.

California Association of Realtors show median prices have slowed to 3.4 percent annual increase in January. While again, median prices are affected by mix of sales, other price indices which measure price changes on a same home show prices growth at about 5-9 percent. Highest price growth does remain in the Bay area, while somewhat slower growth is reflected in the Southern California.

What can we expect going forward?

Well, most recent pending sales along with Market Pulse survey of Realtor members suggest that there are some positives on the horizon. Pending sales index for January showed a monthly increase of almost 27 percent from January, which is much larger than monthly increase of 16 percent between the two months observed in the last six years. National pending sales index showed similar numbers. Also, there has been a pickup in open house traffic when compared to last year. As for housing prices, the appreciation rates will stabilize. Existing listings have already had to adjust to slower price growth and now over 50 percent of transactions are closing below the asking price. The discount on asking prices varies but it has averaged about 11 percent. Taken all together, we are seeing a market that is more buyer-friendly and should lend itself to more market activity over next year.

 

 

If you really want to make your home attention-grabbing, it’s time to up your game…..

You may think you know the basics when it comes to getting your home ready to sell: remove any clutter or personal effects, fix what’s broken, and stage your rooms. But buyers are a fickle lot, and they can fall in — or out — of love with a home for any number of reasons, some so subtle that the buyers themselves aren’t fully aware of their logic.

If you really want to make your home attention-grabbing for all the right reasons, it’s time to up your game with these outside-the-box tricks:

1. Set the mood (lighting)

Swap out your bright white light bulbs for a soft and flattering wattage that invokes a cozy, yet welcoming feel and hides any tiny imperfections. Opt for bulbs that emit yellow-toned and red-toned hues.

2. Wash your windows

Have your windows professionally washed, or devote an afternoon to washing them yourself from both inside and out. Even on gray days, clean windows will let in more light and make your rooms sparkle — and buyers will definitely notice if it isn’t done.

3. Mind the details

Small details can make your home look dumpy without you even realizing it. Freshen up rooms with new switch plates and outlet covers if yours are grubby from fingerprints or yellowed from aging. Polish handles and hardware and use a Mr. Clean Magic Eraser to remove minor spots and scuffs on walls.

4. Make it welcoming

You’ve got the curb appeal, but what about “walking up to the door” appeal? Invest in a new doormat and take the time to scrub down your front door since it’s probably covered with dust, dirt, and oils. Better yet, repaint it and add some new house numbers and a new porch light.

5. Don’t forget your side yard

Turn that dead space into a selling point by creating a potting station or kitchen garden, or even set up breakfast nook with a café table and chairs.

6. Get creative with color

Paint two adjacent rooms the same color to give the appearance of an open floor plan. Paint your walls to match your drapery (or buy drapery to match the walls). Use the same colors and patterns in the master bedroom and bath to create an “ en suite” feel.

7. Update your own furniture

Empty rooms show poorly. “Stage” a spare bedroom with an air mattress and bed frame. Create a living room arrangement by throwing matching slipcovers over clashing chairs and sofas.

8. Brighten up trim

Walls aren’t the only things that need a fresh coat of paint. Dingy door and window frames will drag down the prettiest of rooms. Repainting wood-toned trim white will also make your space brighter.

9. Employ scents

The old tried and true: bake a fresh batch of cookies to create a homey feel (or fake it with a scented candle). Employ soothing, spa-like scents like vanilla and lavender in bathrooms and bedrooms.

10. Make your space look bigger

Hang floor-length curtains above your windows to give the illusion of higher ceilings. Lay down a striped rug to make your floor seem more expansive. Use a clear shower curtain to open up a small bathroom.

11. Fake a closet organization system

Make your storage look custom with DIY shelves, hangers, and bins. Organize clothes by type and color for added impact.

12. Dress up your laundry area

Whether it’s a separate room or a corner of your basement, make your laundry area look welcoming by adding a folding surface, bins, and baskets for storage, and a designer element like a fun rug or temporary wallpaper.

13. Tidy up the garage

Install overhead or wall shelves to store bikes and sporting equipment. Create a workshop area in one corner — show buyers it’s more than just a place to park cars.

14. Prepare for snoopers

Buyers will open your fridge, peek in your medicine cabinet, and check under your sinks. Make these areas so tidy Martha Stewart would be proud.

15. Don’t knock feng shui

Many of its teachings can help make your rooms more attractive: avoid having the backs of furniture facing entryways, close the toilet lid, and don’t place anchor pieces like beds or sofas against a window.

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In recent weeks, Fannie Mae and Freddie Mac agreed to return of mortgages with as little as a 3% down payment – but for those struggling with affordability, the good news doesn’t end here. Just recently, mortgage rates dropped to a new low for 2014 – giving agents, brokers and the clients they serve one more reason to celebrate this holiday season.

The average rate for a 30-year fixed-rate loan now stands at 3.8%, a rate not seen since May 2013, according to Freddie Mac.

The average 15-year fixed loan, which is popular among those looking to refinance, fell to 3.1%. That rate is about where the 15-year stood in October.

Rates have been falling in tandem with 10-year Treasury yields, which have also fallen to their lowest level since May 2013, noted Frank Nothaft the chief economist at Freddie Mac.

Plunging oil prices, due to a slowdown in Russia and other global economies, have been sending investors into safe havens like U.S. Treasuries, said Keith Gumbinger, vice president of mortgage information firm, HSH.com.

“This is again driving down yields and pulling mortgage rates right along with them,” he said.

Another factor weighing on rates: few people are seeking loans, said Gumbinger.

Despite the bargain rates, the Mortgage Bankers Association reported a 3.3% decline in the number of people applying for mortgages last week.

If buyers and existing homeowners seeking to refinance do strike while rates are this low, they can save a lot of money. This week’s 0.13 percentage point drop alone results in a $15 a month savings on a $200,000 mortgage balance, or $180 a year.

That’s not such a bad Christmas bonus.

In a move designed to bring more first-time homebuyers into the housing market, President Barack Obama said Wednesday the Federal Housing Administration (FHA), the government insurer of home loans, will lower its annual insurance premiums from 1.35 percent to 0.85 percent.

In a statement, the White House said the move was part of the president’s efforts `”to expand responsible lending to creditworthy borrowers.” The president is scheduled to talk about improvements in the housing market at a speech on Thursday in Phoenix, one of the hardest-hit markets of the housing crash.

Stocks of the nation’s home builders rose on the news Wednesday, while those of mortgage insurers fell.

“This action will make home ownership more affordable for over two million Americans in the next three years,” said Julián Castro, U.S. Department of Housing and Urban Development Secretary. “Since 2009, the Obama administration has taken bold steps to reduce risks in the mortgage market and to protect consumers. These efforts have made it possible to take this prudent measure while also ensuring FHA remains on a positive financial trajectory. By bringing our premiums down, we’re helping folks lift themselves up so they can open new doors of opportunity and strengthen their financial futures.”

Mortgage bankers praised the decision. “It couldn’t come at a better time,” said David Stevens, CEO of the Mortgage Bankers Association. “February is the beginning of the spring market. I think it will have a definitive impact particularly in the first-time homebuyer market.”

For the typical FHA applicant, the reduction in premiums means a savings of about $80 on their monthly payment, according to CoreLogic’s chief economist, Sam Khater. “So it’s positive news from a consumer welfare perspective, especially for first-time homebuyers, which account for the majority of FHA’s business,” he said, adding, “However, I think the marginal impact on sales will be small because potential buyers make the decision to purchase based on trigger events, such as a new job, marriage, kids, etc. Changes in affordability only impact how much home they can buy.”

The FHA had been the only low down payment product available, with a minimum 3.5 percent down, but recently Fannie Mae and Freddie Mac announced a new 3 percent down payment product that would require private mortgage insurance. The product would compete directly with the FHA and could have offered some borrowers a cheaper option if they had a good credit score.

Read MoreWeekly mortgage applications fall sharply over holidays

“We believe the cut is strategic. Our view is that FHA was at risk of losing enough market share—especially of higher-quality borrowers—to the GSE 97 percent down mortgage that it could have put at risk the ability of the FHA fund to reach its 200 basis point reserve requirement this year as it had forecast. By cutting the premium, FHA would increase its share of the market and should be back on track to meeting the reserve requirement despite the cut in revenue,” wrote Jaret Seiberg, an analyst at Guggenheim Partners.

The reduction will likely come under scrutiny by some on Capitol Hill, as the FHA is still building its capital reserves and is not yet above the mandatory 2 percent minimum. It is back in the black, after having bled cash for two years.

The FHA’s volume had soared at the beginning of the housing crash, making up for the lack of credit in the private market, but that came at a price. In order to rebuild its fund, it more than doubled its annual insurance premium and raised average credit scores. That made it harder for borrowers today to afford an FHA loan.

Lowering the premium will bring volume back to the FHA, but it will also bring back risk.

“That is clearly the tension with any lending program that encourages low down payment,” said Stevens. “But we are in a different position. We are clearly in an environment where home prices are very stable with steady growth. You don’t have the dynamics to create any type of housing bubble.”

Mortgage volume has been lagging, even with interest rates falling to near record lows. The Obama administration is clearly looking for new ways to boost homeownership, as investor activity wanes and the market is left to mortgage-dependent buyers.

“Now that we’ve made it harder for reckless buyers to buy homes that they can’t afford, let’s make it a little bit easier for qualified buyers to buy the homes that they can afford,” said Obama in an August 2013 speech, also in Phoenix. At the time he did not make mention of the FHA, which was still in the red, but instead touted refinance programs and less red tape for lenders.Obama is also expected to address the issue of putbacks at the FHA, which is when lenders are forced to buy back bad loans. The regulator of Fannie Mae and Freddie Mac, the Federal Housing Finance Agency, has already sought to clarify these rules, which have created huge costs for lenders and consequently higher costs for borrowers.