As a special to the Palisadian-Post, Teles’ agent Michelle Bolotin shares her expertise and insight about the real estate market. Read the full article below or click here to download a PDF version.

Home Mortgages Rival Leases Here

Home prices and mortgage rates have fallen so far that the monthly cost of owning a home is more affordable today than at any point in the past 15 years and is less expensive than renting in a growing
number of cities.

Can this be possible even in Pacific Palisades? Many of my clients who are currently renting are pleasantly surprised when they discover that a mortgage on a house here will be very close to what they are paying in rent. Mortgage rates, hovering around 4 percent, are the lowest in six decades.

It’s true! In Pacific Palisades, from September 1- November 30, the median price of a 3-bedroom,2-bathroom home with up to 2,000 sq. ft. sold for $1,275,000. With 20-percent down and the right credit score, the same house can be financed with a jumbo 4.5-percent loan for about $5,168 a month.

The median price of a rental for the same type of house in Pacific Palisades averages $5,700 a month. After factoring in monthly carrying costs like property taxes and insurance and leveraging in a tax write-off, leasing a house is approximately the same cost as buying a house.

According to the Multiple Listing Service, leases in Pacific Palisades for 3-bedroom, 2-bathroom homes from September 1 to November 30 increased $500 a month from the same period in 2010. The demand for leases is greater than the supply.

Lease prices are increasing because many would-be buyers can’t qualify for mortgages because lending conditions are tight or because they don’t have enough liquidity to use as a down payment. Other current tenants may have purchased their home at the height of the market and due to hard economic times lost their property in a short sale or foreclosure. Additionally, there are individuals going through divorce or separation. These people want to keep their children in the same schools and stay in the neighborhood while they get back on their feet.

Many investors, skittish about keeping their funds in the stock market, are trending towards buying investment properties. I have many clients interested in buying properties who understand a tenant can more than cover their mortgage payment. These new landlords feel their money is safe if they buy in Pacific Palisades. In a few years, they can keep the property as an investment or realize a profit by selling when the real estate market rebounds.

Another interesting phenomenon is the new desire by tenants to find furnished short-term leases. Many takers are people who may have just started a new job who will pay extra just to avoid committing to a full-year lease until their firms commit to them permanently. Others expect to buy but want to take their time and find the right house.

The option-to-lease agreement works out well for sellers who have had their house on the market for many months and it hasn’t sold. If principals can afford to wait to sell their house and are open to leasing while waiting for the market to rebound, they can get 30-40 percent more for a lease if they offer it for a minimum of three months and provide furniture. If sellers also provide Wi-Fi and cable, tenants will be glad to pay far more for the convenience.

Overall, studies show that homeowners, on average, accumulate more wealth than renters. Home ownership is a self-imposed savings plan. If people are planning on staying in a property for awhile and don’t abuse taking cash out of their house as their equity increases, owning a home is still a strong investment.

The economy is in flux but Pacific Palisades is a beautiful and desirable area to live and because of its proximity to Santa Monica, Century City and downtown will ALWAYS be a safe place to invest in real estate.

Michelle Bolotin is a longtime Pacific Palisades resident and a Realtor with Teles Properties. Please call her with any questions at (310) 463-7278 or visit her Website: www.michellebolotin.com

As a special to the Palisadian-Post, Teles’ agent Michelle Bolotin shares her expertise and insight about the real estate market and Shadow Inventory. Read the full article below or click here to download a PDF version.

How ‘Shadow Inventory’ Threatens Housing Market

How is the market doing? This is a question I hear several times a day from my clients. While many homeowners faithfully follow the latest statistics trying to get information regarding their home’s value, what they might be missing is the creeping reality of Shadow Inventory. Shadow inventory can be broken into three categories:

• Properties that lenders have repossessed but haven’t put up for sale. These homes are referred to
as real estate owned, or REOs.

• Properties that are caught in the clogged foreclosure process.

• Properties that are severely delinquent in loan payments and almost certainly headed for foreclosure, but haven’t yet entered the process.

Officially, there are 3.5 million homes for sale nationwide. But there are millions more lurking in the shadows—hidden away on banks’ balance sheets, stalled in foreclosure court proceedings or simply occupied by nonpaying owners as lenders wait months or years before taking action. Wary of seeing such large losses appear in earnest on their books, lenders have been reluctant to deal with bad loans head-on. They don’t want to take paper losses. Their books show that they have these assets that are worth ‘X’ amount of money. But those values are not real.

Nationwide, there are 2.2 million homes stuck somewhere in the foreclosure process and many of those cases have completely stalled. Lenders are waiting longer before taking action against millions of homeowners who have stopped paying their mortgages. Nearly 2 million homeowners who haven’t paid their mortgages in three months or more haven’t received foreclosure filings. About 800,000 of those haven’t made payments in more than a year, according to Lender Processing Services.

According to Foreclosure Radar, as of March 16th, there were 88 active properties for sale in Pacific Palisades and 28 shadow-inventory properties*. If financial institutions decide to start releasing shadow inventory, adding to the amount of the regular inventory, prices in the Palisades may be adversely affected. Low interest rates and lower home prices for buyers also come into play which helps stimulate the market. But, homeowners considering waiting for the market to rebound before they put their home on the market for sale may want to consider the effect of how the release of shadow inventory will affect their property’s value.

Michelle Bolotin is a Realtor with Teles Properties and a longtime Pacific Palisades resident. Please feel free to contact Michelle with any real estate questions at (310) 573-1039 or michelle.bolotin@telesproperties.com.

*Updated statistics for TelesTalk release on 3/16/2012

As a special to the Palisadian-Post, Teles’ agent Michelle Bolotin shares her expertise and insight in “Going Green”. Read the full article below or click here to download a PDF version.

A Realtor’s Guide to ‘Going Green’ Throughout Your Home

When I am listing a home, sellers many times ask me what features buyers in the Pacific Palisades real estate market look for. Energy-efficient “green” homes are now at the top of the list of features buyers most desire.  There’s no selling point quite like a home that helps save money while helping to save the planet.  In this tight economy, savvy buyers have learned to keep an eye on the future and want to save on operating costs after they buy their new home.

One in four (25 percent) of all single-family homes built in 2010 earned EPA’s Energy Star rating, up from 21 percent in 2009, according to the U.S Environmental Protection Agency.

The Yahoo! Home Horizon study of 1,545 homeowners, buyers, sellers and renters found:

• More than four out of five (81 percent) say owning a home is still part of the American Dream.

• Fifty percent said energy-efficient appliances and ‘green’ building materials is a requirement for their dream home, followed by water views and building a custom home (both 38 percent), suburban location (31 percent) and beach location
(27 percent).

• Sixty percent of those in the market say that green/energy-efficient appliances are amenities they want in their next home.

• Twenty-seven percent of those in the market say that finding a more energy-efficient home is a key reason for seeking a new home.

In the past, resistance to “green” homes has been tied to the greater cost to build green than to build the old-fashioned way — without considering the planet.

However, that’s been offset, not just by the energy savings over time, but the premium price green homes reap when resold. They sell for as much as $20,000 to $50,000 more than a comparable home without major energy-efficient construction. To offset worries about your house not appraising for the higher value, the Appraisal Institute has introduced a “Residential Green and Energy Efficient Addendum” (Form A1- 820.03) to better analyze the value of energy-efficient home features, along with additional resources to aid in the valuation of green properties.

So you want to add value to your home and help save the planet and are wondering how to get started? Don’t be daunted by discussions touting super “spinach-green” homes, hyper-efficient properties that consume zero or near-zero energy and are off the grid and out of your price range.

Here are some first steps to get you on your way:

• Under-sink water filters can eliminate bad tastes, odors, even lead and chloroform while cutting out the use and expense of bottled water. Many bottled-water purveyors sell filtered tap water as bottled water.

• Low VOC paint. Volatile organic compounds (VOCs) are the noxious chemicals that create a paint smell, can cause headaches and dizziness and are linked to pollution, smog and respiratory problems. Find the VOC level listed on the paint can.

• Dual flush toilets. Replace your old toilet with a dual-flusher for $300 to $400 and get a small flush for Number 1 visits and a larger flush for Number 2 visits. With technology in the toilet you’ll save on both flushes, compared to older toilets.

• Wood Floors. If you are installing wood floors, use wood from trees that grow quickly like bamboo. Reclaimed wood is also a great alternative as is cork.

• Water-saving shower heads. Likewise, you can save water with a low-flow model for $50. Shower heads with three settings allow you to get that near-massage feeling even while saving water.

• Energy Star appliances. Refrigerators run around the clock and washing machines and
dishwashers use both water and heat. Energy Star appliances are a no-brainer energy upgrade and a good selling point.

• Landscaping. Plant native trees that don’t require excessive watering. Additionally, don’t forget small things like replacing air filters, caulking doors and windows, using programmable thermostats and auto turn-off power strips and installing CFL or LED lights.

Now that you’re on your way, don’t forget to check the state and federal tax credits. In some cases, 30 percent of the cost with no upper limit can be written off.

Michelle Bolotin is a longtime Pacific Palisades resident and a realtor with Teles Properties. For questions regarding your property, please contact her at (310) 463-7278 or michelle.bolotin@telesproperties.com.

As a special to the Palisadian-Post, Teles’ agent Michelle Bolotin shares her expertise and insight in the home selling process. Read the full article below or click here to download a PDF version.

When Selling Your House, ‘De-Personalize’ Every Room

Clients always ask me, “Is it a seller’s market or a buyer’s market?” If you listen to the national news, you would think it was a buyer’s market. This may not be the case on the Westside and, more specifically, not in Pacific Palisades.

I firmly believe we are going to see the market heat up over the next few months. Inventory is getting tighter and tighter. At the end of January, the Months Supply of Inventory (MSI) number fell to 4.8 months for Westside single family residential. For the past two years the index has averaged eight months. Meanwhile, interest rates are at an all-time low, and buyer demand is increasing. I have personally been involved in several multiple-offer scenarios in all price ranges. The foreclosure world remains stalled. The chatter of prices going lower is getting fainter and fainter. Builders are out again looking for land and teardowns. The DJIA is up about 20 percent from last October. There are many indications that we are moving quickly from a buyer’s market to a seller’s market.

Please don’t get me wrong. I am not here to predict anything. However, everything is pointing towards the reality that there is going to be heavy competition for property this spring among the buyer population and a shortage of sellers to accommodate the demand for property.

Yes, it’s still difficult for many buyers to secure a loan, but a good percentage of people living on the Westside are prepared to put down a large down payment or come in with all-cash when presenting their offers.

If you are a potential seller and need help getting your house ready to sell, remember, to get the highest price with the shortest days on market, think of your house as a marketable commodity. Property. Real estate. Your goal is to get others to see it as their potential home, not yours. If you do not consciously make this decision, you can inadvertently create a situation where it takes longer to sell your property.

An important step in getting your home ready to sell is to “de-personalize” it. Make your home anonymous. If there is a property for sale near your home, go visit that open house. What you will find are some wonderfully (but sparsely) furnished homes that anyone could live in—with the emphasis on “anyone.” They are anonymous. There may be a baseball glove in the boy’s room, but no family photos on the walls. There may be “personality”—but no person.

The reason you want to make your home “anonymous” is because you want buyers to
view it as their potential home. When a potential buyer sees your family photos hanging
on the wall, it puts your own brand on the home and momentarily shatters their illusions
about living in the house themselves.

Also, don’t overlook or underestimate the condition of your garage. When choosing between two similar homes, a buyer will write an offer on a house with a relatively clean and tidy garage. If you are removing
clutter from your house, don’t simply pack boxes and furniture into your garage as a temporary storage area. Instead, rent a storage area for a few months. This is an “investment” that will pay off.

The only thing constant in life is change, so if you are thinking of selling your home, with inventory at such low levels, now may be an opportune time.

Michelle Bolotin is a longtime resident of Pacific Palisades and a Realtor with Teles properties. For questions regarding your property, please contact her at (310) 463-7278 or michelle.bolotin@telesproperties.com.