29. September 2007 by Burbank Real Estate.

Last week was quite eventful.  We saw Existing Home Sales in August come slightly lower than expected, they came in at an annualized pace of 5.50M.  The big story, however, was the Home Inventory numbers at an all time high!  New Home Sales were down 8.3% to an annualized level of 795,000, lowest level in 7 years.

The Case-Shiller home price index fell by 3.9%, and the 10-city metro index fell 4.5% on a year-over-year basis.  This was the steepest drop in sixteen years according to this index.

Other items of note:

Rumors that Warren Buffet and a few Chinese banks were considering an “investment” in Bear Stearns……ummm, seems like a bail out to me.

GM and UAW strike came to an end.  UAW will now be managing the trust fund that is supposed to take care of the 275,000 retired GM workers.  Hopefully UAW will do a good enough job managing it so they don’t come asking for a bailout down the road!

Consumer Confidence fell to 99.8, much lower than expected, the number was supposed to come in at 104.3.

Personal Spending was up .6%.

Earnings warnings from Target and Lowes.

Both Goldman Sachs and Alan Greenspan made comments to the effect that they are concerned about a looming recession, so needless to say that was a damper on market activity.

As we close out the third quarter, it is interesting to note how eventful it was as we saw the subprime mess implode and take Bear Stearns, Countrywide, hedge funds with it as well as wreaking general havoc abroad.

More to come on Sunday when I put out the Week Ahead post!!!

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25. September 2007 by Burbank Real Estate.

City of Burbank has a General Plan that sets out goals and is essentially a policy guide for growth and development.  Whatever is in this plan will serve as a blueprint for all future development.

The Planning and Transportation Devision is in the process of updating this plan and will hold a special City Council and Planning Board joint study session to discuss the housing element update.

According to state law this element has to be updated and what’s interesting is that Burbank has to show that it can plan for “it’s fair share” of housing based on regional needs.  One of the proposals is to increase residential densities, another is to allow residential in commercial areas and/or a blend of these two alternatives.

Either way, it’s an issue that directly affects our quality of life.

I do think that any proposals to increase housing densities needs to have an adequate transportation plan to go with it.  The inability to create a viable and executable transportation plan along with a housing density increase will negatively impact Burbank residents.

If you are interested in attending, here are the details:

Date: Tuesday, October 2, 2007

Time: 6:00 p.m. (regular City Council meeting time)

Place: City Council Chamber, Burbank City Hall, 275 E. Olive Avenue, Burbank, California

If you are unable to attend the meeting, please tune into the local city channel (channel 6 on Charter Cable) for the live feed of the meeting.

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17. September 2007 by Burbank Real Estate.

I’m frequently asked if buying makes more sense than renting.  The answer is that there is no one answer as that decision depends on many factors, not the least of which involve your financial situation, job stability etc.

It warrants a good look and before I go any further, for the purposes of this discussion I’m going to assume that the person asking me this question meets the following parameters:

• solid job history

• no out of area relocation planned, at least for a few years

• good credit history and fico scores

• stable income

First things first, talk to a mortgage agent to see what amount you qualify for, if you don’t qualify for a loan the discussion ends here.If you look at rents in the Burbank area, here are the ranges:

• Studio apartments         $950-1175

• 1 Bedroom    ” “              $950-2475

• 2-3 Bedroom ” “             $1300-2815

Next item on my list is to ask what are you currently paying and are you interested in a condo or home?  Very important, as condos/townhomes bring association fees that can range from $180-400 or more per month.  This amount will cut into your monthly amount available for the mortgage.

Here’s what the available inventory looks like for homes and condos $300k-600k(nothing available below 300k):

• 62 homes available between the prices of $399k-600k

• 86 condos available between the prices of $298k-599k

Assuming a 6.31% average for a 30 year fixed(rate obtained from Ricardo Bueno’s excellent Industry Report) you will pay the following amounts per month(excluding taxes or PMI):

• $300k…………..$1858.87 

• $400k…………..$2478.5  

• $500k…………..$3098.12

• $600k…………..$3717.75

The discussion should then turn to a review of what you are paying and how that compares to the home inventory.  In addition, how comfortable are you with your current payment?

If you have left over monies each month and have been able to save up for a down payment of at least 5%, you are probably in a good position to own a home.  If you are struggling each month, be careful to jump into a home with the same payment as they can bring unexpected repairs with them.

You should talk to a CPA before you purchase a home to see what tax benefits you could derive from the purchase in terms of an annual tax deduction for the interest you pay out each year on your loan.  That extra incentive could make the difference if you are on the fence.

As you can see this is not a simple yes or no answer and much of the decision depends on your personal financial situation and goals.

Having said all that I think home ownership can be an extremely beneficial tool, not just for your enjoyment but from a financial planning standpoint.  Depending on where you purchase a home they can average decent returns.  It’s also a great way to build equity as opposed to doling it out each month to a landlord.

We need to appreciate the benefits of home ownership while respecting the fact that if you can’t afford a home you are better off waiting until your financial situation allows you to more comfortably purchase a home.

That’s my short answer!

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16. September 2007 by Burbank Real Estate.

There are items from last week and the upcoming week that I thought you might find of interest concerning the Burbank City Council.

Last week the Burbank City Council approved a “zone text amendment” for the Rancho area. As you may recall there was a heated discussion about this project last year. I wrote a post about some of the concerns in

Burbank City Council gets tough on Rancho Neighborhood Developments.

Bottom line is that by a 3-2 vote (Councilmembers Golonski and Bric dissented) the council voted to end grocery store development in the Rancho area. They also approved the zone text amendment stating that food stores on a smaller scale would be allowed.

My thoughts revolve around the logistics. Is it easier to police a larger entity like a Whole Foods or a mom and pop type store. Is it easier to gain day to day concessions from a national chain with lots to lose over bad PR or a local store that may not be as willing to appease the neighborhood?

I don’t have all the answers for this issue and certainly understand some of the concerns posed by residents. At the same time I think we have to be very careful in what we request.

Coming up this week:

Energy Programs

The council will hear presentations from Burbank Water and Power regarding installation of 20 Ice Bear thermal storage units, which would provide space for cooling and an air conditioning efficiency program.

Frederic Street Construction 1600 Block

The council will review a decision made by the Planning Board to reject a home expansion project on this block. The issue stems over the legality of the unit with respect to city zoning laws.

The Burbank City Council meets at City Council Chambers in City Hall, 275 E. Olive Ave. Tuesday at 6:30pm.

Posted in Government Issues!, City News, Blogroll | Print | 1 Comment »

5. September 2007 by Burbank Real Estate.

The Pending Home Sales number came out this morning at down 12.2% for July versus the 2% that was expected.  Realtors are reporting that sales are taking longer to close and many are failing to close.  Much of this, I’m sure, is tied to our current credit market situation and how much harder it is getting to qualify for a loan.

On a more important note is what  the Libor rate is doing.  Libor stands for the London Interbank Offered Rate.  This is a widely used benchmark that many mortagages are tied to.  The 3 month Libor rate is at 5.72% with the one month rate at 5.82%.

What this means is that the many homeowners whose adjustable rate mortgages are tied to Libor are going to be in for a surprise when their payments readjust. This also highlights the fact that current rumors of an interest rate cut by the Fed may be meaningless for the average consumer.

If the Libor continues on this path and you have an adjustable rate mortgage, start looking at your options now!  Review your mortgage terms and see what benchmark your new rate is tied to.  Don’t wait until you readjust and can’t afford the new payment.

Here in Burbank there are currently 365 properties, on the MLS, on the market, which has stayed steady over the last few weeks.  Days on market are 57 days, on average, although I see many properties that have been on the market upwards of 90 days.

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