All about Life & Real Estate in Silicon Valley – Broker Michael Koo's Blog.

It will become more expensive to buy your little piece of heaven this year, as lower-than-ever inventory in the City of the Angels continues to be the big story at the beginning of 2016. And with the lack of inventory in Los Angeles comes the inevitable rise in prices. All-cash offers and bidding wars are still the rule in every sought-after neighborhood and price range, especially if properties are correctly priced.

“L.A.’s housing market, despite becoming more expensive and unaffordable, is not in a bubble,” UCLA economist William Yu wrote. “The current rise in home prices seems to be driven by rising effective demand and limited supply, not by speculation. Therefore, the housing bubble burst we experienced several years ago is unlikely to haunt us this year or next, and the smart money will continue to invest here.”

Check out more Location Scouts reports on housing-market conditions across the U.S.
Moreover, the forecast states that Los Angeles is in the middle of its rebound and can be expected to experience price increases for at least another four years, with values increasing 35%. Obviously the global economy and the current uncertainty about the U.S. elections could play havoc with the predictions, but on the whole, relative to other parts of the country and world, L.A. looks like a pretty darn good investment.

Ed Fitz Market Watch,com

A gauge of pending home sales rose 0.2% in October, following two months of declines. Buyers are struggling with lean inventory that’s driving prices higher, said the National Association of Realtors. Its index of contract signings edged up to 107.7 and stood 3.9% higher compared to a year ago. The index has notched yearly gains for 14 straight months. NAR’s chief economist, Lawrence Yun, said supply isn’t keeping up with strong demand. “Unless sizeable supply gains occur for new and existing homes, prices and rents will continue to exceed wages into next year and hamstring a large pool of potential buyers trying to buy a home,” he said. The pending home sales index tracks real estate transactions in which a contract has been signed but the transaction has not yet closed.

Most single people own assets in their names individually and may also own some assets as a joint tenant with right of survivorship. Other assets, such as life insurance or retirement assets, will be distributed at death according to the terms of their beneficiary designations.

How these varying assets are titled and how the beneficiary designations are prepared will directly impact who will get control of the assets and how they’ll be distributed at the individual’s death.

If an individual dies without a will (known as intestate), possessions are distributed according to the default laws of his or her state. Under these state laws, a married individual’s assets typically go to their spouse or children. For a single person, however, the default under state law usually provides that assets are passed on to their closest relatives (e.g. children, parents, siblings). If there are no relatives alive, assets may go to the state.

To avoid having the state decide the fate of your assets, it is imperative that you put an estate plan to ensure your wishes are carried out:

NextAvenue.org

WASHINGTON—A forward-looking gauge of U.S. home purchases rose for the third straight month in March, a sign of firming demand in the housing market.

The National Association of Realtors said Wednesday its pending home sales index, which is based on contract signings for purchases of previously owned homes, increased 1.1% to a seasonally adjusted level of 108.6 in March from an upwardly revised reading of 107.4 in February.

Economists surveyed by The Wall Street Journal had expected pending home sales would rise 1% in March. Home sales typically close within a couple months after signing.

The index rose 11.1% in March from a year earlier.

Lawrence Yun, NAR’s chief economist, said the jump in sales from a year earlier is good news, but “the increased number of traditional buyers who appear to be replacing investors paying in cash is even better news.”

By Kate Davidson at www.WSJ.com

SAN JOSE — The Silicon Valley economy may be booming, but its self-professed capital, the city of San Jose, is hardly paving the streets with gold. The home of eBay, Cisco and Adobe can’t keep libraries open full time, plug most potholes or staff a police force that can investigate many burglaries.

While much of the focus of San Jose’s dreary budget picture has centered on rising pension costs, a deeper problem remains: San Jose pulls in less money in taxes per resident than other big U.S. cities and even its suburban neighbors because it simply doesn’t have enough shops and businesses to support its sprawling population.

By Nike Rosenberg at Mercury News

WASHINGTON (MarketWatch) — Sales of new homes in September rose slightly and hit a six-year high even though purchases earlier in the summer were not nearly as strong as initially reported.

The pace of new home sales edged up 0.2% last month to an annual rate of 467,000, compared to a revised 466,000 in August, the government said Friday.

New-home purchases for August were revised down sharply from an initial estimate of 504,000 and the Commerce Department also trimmed the sales figures for July and June. The report is notoriously volatile and often subject to sharp monthly revisions.

Still, new home sales in September were the highest since July 2008. And sales of new homes are 17% higher now compared to the same month in 2013, a sign that the housing market continues to get healthier. Home prices are rising at a slower pace and 30-year mortgage rates have fallen back below 4%, making houses somewhat more affordable.

“Despite the negative revisions, the new data doesn’t change the overall picture of a gradually improving housing market,” said Andrew Grantham, senior economist at CIBC World Markets.

By Jeffry Bartash @ MarketWatch

The pent-up housing demand apparently saw its shadow and is still in hiding – existing home sales declined in March, the first real month of the spring buying season, even as prices continue to rise.

Sales of existing homes declined 0.2% in March to a seasonally adjusted annual rate of 4.59 million, the slowest it’s been since July 2012, according to the National Association of Realtors.

Affordability challenges and a declining inventory hampered sales, NAR says.

The median sales price of used homes hit $198,500 in March, up 7.9% from the year-earlier period. March’s inventory was 1.99 million existing homes for sale, a 5.2-month supply at the current sales pace.

The Federal Housing Finance Administration separately reported that U.S. house prices rose in February, with an increase of 0.6% on a seasonally adjusted basis from the previous month.

The FHFA’s measure is for February and considers different metrics and data sets than the NAR’s, which is for March. The FHFA HPI is calculated using home sales price information from mortgages either sold to or guaranteed by Fannie Mae and Freddie Mac. From February 2013 to February 2014, house prices were up 6.9%.

The 0.1% decrease in November 2013 ended a 21-month trend of price increases that had begun in February 2012. The previously reported 0.5% increase in January was revised downward to 0.4%.

“From a regional standpoint, sales were weak in the South and West, down 3.0% and 3.7%, respectively. Sales in the Midwest and North, on the other hand, were up 4.7% and 9.1%, respectively,” noted Sterne Agee chief economist Lindsey Piegza. “Bottom line, demand for housing remains uneven after months of heightened sales activity earlier in 2013. Now against the backdrop of minimal income growth and a still-tepid labor market, demand continues to wane.

“For potential homebuyers, rising prices are eroding affordability, putting further downward pressure on consumer’s ability and willingness to finance a home purchase. From the owner’s perspective however, rising prices are helping to create and maintain a wealth effect, fueling (or at least helping to support) consumer spending,” she said.

NAR chief economist Lawrence Yun said that current sales activity is underperforming by historical standards.

“There really should be stronger levels of home sales given our population growth,” he said. “In contrast, price growth is rising faster than historical norms because of inventory shortages.”

Trey Garrison at Housing Wire. www.housingwire.com

In February, 5.9% of all U.S. property sales were purchased by institutional investors (defined as an individuals or groups that have purchased at least 10 properties in a calendar year) down from 7.2% of sales the year before, according to data from real-estate data firm RealtyTrac. February was the third consecutive month the share of institutional investor purchases declined, after 19 consecutive months of year-over-year increases. Investors are cooling on markets like San Jose and Sacramento, Calif., Las Vegas and Phoenix, where prices have accelerated. “Supply and demand have reached a bit of a standoff in this uneven real estate recovery,” says Daren Blomquist, vice president at RealtyTrac.

So if institutional investors are backing out, should individuals as well? “Regular homebuyers are not likely to step in,” says Susan M. Wachter, professor of real estate and finance at The Wharton School at the University of Pennsylvania. The national median sales price of U.S. residential properties — including both distressed and non-distressed sales — was $164,667 in February, down 1% from the previous month, but still up 4% from February 2013.

By Q Fottrell at Marketwatch

The city of Gary, Ind., is selling a dozen homes for $1 each as part of a neighborhood stabilization effort. Potential homebuyers must have lived in Gary for at least six months; have $1,000 in savings; earn at least 80 percent of the median annual income of $35,250 in the area; and demonstrate that they have the financial ability to rehabilitate the home, CNN Money reported.

Only those who do not currently own a home are eligible, and they must live in the house for five years before they assume full ownership. If they leave before that time has elapsed, they forfeit everything, the news outlet said.

Source: CNN Money

How should investors and potential home buyers and sellers view the housing market when the news recently has been so mixed? The National Association of Realtors reported Monday that existing home sales for June fell 1.2% but were more than 15% higher than a year ago. And the national median home price was 13.5% above the level of last June, at $214,000.
Last week the organization for homebuilders reported growing confidence in the market while the government said housing starts fell.
David Rosenberg, chief economist and strategist at Gluskin Sheff & Associates, tells The Daily Ticker that the month-to-month decline in existing home sales is a “respite” from recent gains due to a “full percentage point jump in mortgage rates in June.”
Related: Home Flippers Come Roaring Back
“It’s a very rare event to have mortgage rates jump that far that fast” says Rosenberg, and he expects the jump will be temporary.
“The trend is still up but you can’t ignore the fact that mortgage rates shot up very quickly,” says Rosenberg who also writes a daily newsletter. “The good news is that rates have come back down about 40 basis points from a few weeks ago.”
(Click here to check mortgage rates in your area).
Job creation may be even more important for housing than interest rates, according to Rosenberg. He says, “An improving employment and income picture will act as a very strong antidote to any increase in interest rates.”
Related: Big Drop in Housing Starts Suggests a More Shaky Recovery: BNP Economist
Rosenberg expects the housing recovery will continue but at a slower pace so long as we “don’t see continuation of the rapid increase in interest rates as we’ve seen in the past 4-6 weeks.”
Whether you’re a potential buyer or seller in the housing market, watch the video above to see what this veteran economist and strategist has to say about the market.

Bernice Napach at Daily Ticker