Since April, there have been 64 sales of single family homes in the Beverly Center-Miracle Mile area, and 90 YTD. At $ 491/SF List/$ 463/SF Sold, down about 22% from the 2006 peak of $590/SF Sold.  Current SFR inventory is at 6.5 months using  data for the last 5 months, and 7.4 months YTD.

Condos: 20 sales since April, 36 YTD., $465/SF List/$433/SF Sold, down about 17% from the 2006 peak of $523/SF Sold.  Condo inventory is  at 12  months since April and 10.6 months YTD. While the SFR market has picked up, suggesting a “normal” market of about 6-7 months, condo inventory has increased in the same period. Please note these numbers do not include pocket listings, or bank owned property not actively listed.

As we all know, there is currently a 90 day moratorium on foreclosures here in California. Also worth noting, the Attorney General’s office has demanded all  foreclosure rescue and loan modification consultant firms register with the AG by July 1st and post a $100,000 bond. Keep in mind, attorneys are exempt from this action. So why is it that an attorney who did personal injury cases 3 months ago is suddenly more qualified for the task than a legitimate loss mitigation company? Is this the kind of person you want working on your file? What exactly does this measure accomplish? At this time, it is estimated that there will be roughly $500 Billion in mortgage resets in the Alt A, Prime and Option ARM arenas between the last quarter of 2009 through 2012. About 58% of those mortgages are here in California. You can read more about that here. There are a growing number of short sales, and yes, it is spreading to the Westside of Los Angeles. The question many people have is : can we qualify for a loan modification.? We have all heard the TV and radio spots for these companies- What most of these loan mod “consultants”, and even the attorneys will not tell you is that many people will not qualify. For instance, even if the lender is satisfied the homeowner has documented hardship and verified income, whomever is holding the note will ultimately take the action which is in their best interest, which in many cases is to let the property go into foreclosure. Furthermore, more than 50% of loan mods currently are re-defaulting, which just adds more to what is already a hot mess. The truth is, unless the homeowners qualify for a government backed loan mod program, in most cases the best case scenario is that the modification will be good for about 5 years. You can see for yourself who can qualify for Obama’s loan modification program here . Currently, most non-realtor opinions have home values on the westside declining for at least another year. This means even more homeowners will be eventually be underwater, along with more loan mod re-defaults, which inevitably increases housing inventory, which puts downward pressure on prices. In the present climate, with the aforementioned massive defaults looming, for a homeowner who owes more than what the property is worth, it makes more sense in this case to do a short sale and cut your losses. Why? because if you don’t you are potentially chasing bad money with more bad money, or in other words, investing in a non-performing asset, like buying stock in a declining market with no real basis for upside potential. I realize there are no easy solutions here to avoiding foreclosure, but for the homeowner who owes more than what the property is worth, a short sale is a much better alternative than waiting for a bailout, which in many cases is like Waiting For Godot.

This article  from  the Dr Housing Bubble Blog needs no expanation; I thought it to be quite appropriate reading on the eve of the  90 day California foreclosure moratorium that starts tomorrow. Great- while homeowners in California enjoy a temporary reprieve from losing their homes for the time being, what happens in September? Will this measure help stem the massive tide of foreclosures? or will it just make the coming wave of Alt A and Prime defaults that much stronger? It would be prudent to keep these facts in mind amidst all of the “happy talk” of a market bottom. While it may be true that  some of the less expensive areas of L.A. may offer some buying opportunities, it remains to be seen that the more expensive areas on the Westside are immune to “declining market” conditions seen just about everywhere else.

As if the last year was not tumultous enough. It’s Summer of 2009, with at least a few pundits who cover Wall Street  hinting that the worst of the recession is over, stocks are off recent lows, so we have reason for optimism, right? After all, we have weathered most of the subprime debacle, at least for the time being. But what about the prime mortgages that are currently defaulting  at a faster rate than the subprime loans did previously? Remember the 5-1 ARMs that were very popular  just a few years ago? well, there is going to be another wave of resets/recasts which could last until 2012. You can read more here 

Is this Option ARM-Ageddon?  more defaults, means more foreclosures, which increases an already bloated housing inventory we currently have on the Westside of Los Angeles. How much more can this market bear?