Pasadena Real Estate

Over the last couple of days, I've been taking long walks around Pasadena and San Marino and looking at all the amazing decorations that are gracing our beautiful homes.  It's no small feat to put some of these up.  I, for one, am not much for decorating - maybe it's the lack of time or just not enough creativity - I don't know.  My decoration was three huge pumpkins (2 of which unfortunately walked away off of my porch a few days ago) and a door hanger.

This morning, as I'm watching my kids put together their costumes, get the cookies and cups ready for school parties and talk about this evening's activities, I'm reflecting on how commercialized Halloween is getting.  This is not going to be a rant, but out of curiousity, I wanted to look at some Halloween facts as presented by National Retail Federation.

• "This year, the average person plans to spend $66.54 on the holiday, up from $64.82 one year ago. Total Halloween spending for 2008 is estimated to reach $5.77 billion."
•  "This year, consumers will spend an average of $24.17 on Halloween costumes (including costumes for adults, children, and pets). People will also be buying candy ($20.39 on average), decorations ($18.25) and greeting cards ($3.73)."
• National Retail Federation estimates that total Halloween spending is expected to reach $5.77 billion
• Halloween remains most popular with young adults, as 18-24 year-olds plan to spend $86.59 on the holiday, the most of any group.

Are folks trying to get away from the economical roller coaster by focusing on Halloween?  Is it because, Halloween falls on a Friday this year, that adults are taking more of an effort in decorating and getting ready to celebrate?

As my social media buddy, Dave Taylor asks - What will Halloween look like 20 years from now?

What are you doing around Pasadena to celebrate Halloween this year?

Whatever you do STAY SAFE and HAVE FUN!!!

• By: Brian Brady
• America's #1 Mortgage Broker

We analyze Pasadena mortgage rates by examining the mortgage-backed securities market and its reaction to economic data and events.  Today, the Federal Reserve cut the Fed Funds rate to an historical low of 1%:

The Fed funds rate target is now 1%, the lowest level in more than four years. In announcing its decision, the Federal Open Market Committee cited a drop in spending by consumers and businesses, and predicted that consumption may slow further due to tighter lending standards.

"The pace of economic activity appears to have slowed markedly," the FOMC said in a statement, "owing importantly to a decline in consumer expenditures."

Why's the economy in the tank?  You just aren't spending enough money, Joe the Plumber.  Of course, you can't borrow any either so you're hesitant about spending.   Hence, the Fed cut in rate.  Normally, a Fed cut should be followed by a RISE in mortgage rates but it looks like the mortgage-backed securities market anticipated the cut a week ago. 

Let's take a look the crystal ball (market chart):

See what's happening here?  Two weeks ago, we had a six day BIG drop, which caused rates to rise from 5.875% to 6.5%.  That drop was followed by a 5 day rally, which brought rates back down to 5.875%.  Then, we had a six day BIG drop, driving Pasadena mortgage rates back up to 6.5% (today)...

...and I think the market overreacted which means I think we'll see lower mortgage rates into the beginning of November.

This is the kind of volatility we've come to expect.  Pasadena mortgage rates should drop to 6.25%, pause, then drop again to the 6% level or below.  No guarantees but November closings should get a peek at 6% or better rates soon.

I've been posting monthly real estate market report updates on this site for cities around Pasadena. One of the key real estate indicators that I refer to is the Market Action Index or MAI.

What is the Market Action Index ? And, why does the Market Action Indicator matter?

Residential house prices are a function of supply and demand, and market MARKET ACTION INDEX conditions can be characterized by analyzing those factors.

My research company, Altos Research uses an algorithm to divide a Buyer's Market from a Seller's Market. The red line at 30 is that line.

For example in the graph below for Pasadena's real estate market, it has been a COLD, BUYER'S MARKET since end of 2007 with the MAI hovering quite a bit under the balanced market of 30, closer to 15. Now, this graph is for the entire Pasadena real estate market. Each zip code within the city has a different MAI.

Come back to this site to watch this index for sustained changes: if the index falls into the Buyer's Market zone for a long period, prices are likely in for a downward correction.

The Market Action Index (MAI) illustrates the balance between supply and demand using a statistical function of the current rate of sale versus current inventory.

An MAI value greater than 30 typically indicates a "Seller's Market" (a.k.a. "Hot Market") because demand is high enough to quickly gobble up available supply. A hot market will typically cause prices to rise. MAI values below 30 indicate a "Buyer's Market" (a.k.a. "Cold Market") where the inventory of already-listed homes is sufficient to last several months at the current rate of sales. A cold market will typically cause prices to fall.

If you are interested in receiving a weekly real estate market reports with the Market Price Index, you can request Market Real Estate Report here and it will be emailed to you automatically each Monday. This is a report that I order specifically for the readers of my website from Altos Research who specializes specifically in real estate housing market activity throughout the country.

I currently offer real estate market reports for Pasadena, Alhambra, San Marino, South Pasadena, Monterey Hills (under Los Angeles 90042), Arcadia, Altadena, San Gabriel and more.

If you have additional questions about the state of the Pasadena housing market, please call me at 626-627-7107 .

Irina :-)

PR: wait... I: wait... L: wait... LD: wait... I: wait... wait... C: wait... SD: wait...

This Arcadia real estate market report is a few weeks overdue. My apologies for the delay, but I was struck down with the worst flu that I ever remember having. Oh well... it's over and done with. I hope at least. :-)

Single Family Home sales in Arcadia remained at 31 closed escrows just like in August, down from the high of 50 home sales in July. Inventory increased a bit to 129 listings, but essentially remained flat if you look at the last five months of data. Arcadia homes are selling at 96.33% of asking price in September, with 9 out of the 31 selling at or over asking.

Arcadia condos have seen an increase in sales in September, but the inventory remains pretty stable. If the rate of sales will hold and inventory remains the same, it'll take approximately 10 weeks to move the existing inventory. Arcadia home sellers are still overpricing their condos and are listing them on average at $317 per square foot. The sold price per square foot has fallen under $300.

Arcadia townhomes had an increase in inventory mainly due to a new complex that hit the market in early September at 1016 - 1020 West Huntington Drive. These townhomes were built in 2007 and are selling in the low $800,000 range. Again, listing price per square foot ($347) on most of the townhome listings is way higher than the actual sold price per square foot ($293) in September. Arcadia townhome sellers need to track the real estate trends a bit closer or they will end up sitting on these homes for a long time and then reducing home prices more significantly to bring in a buyer. The absorption rate increase speaks clearly to the overabundance of townhome listings vs. buyers.

Also Read: Arcadia Real Estate Market Trends for August 2008

Arcadia Real Estate Market Statistics for September 2008:

Data taken from ITEC (Pasadena Foothills Association MLS service)

SEARCH ARCADIA HOMES FOR SALE (Single Family Residence)

SEARCH ARCADIA CONDOS AND TOWNHOMES FOR SALE

For weekly updates on Arcadia real estate market activity, please feel free to request market analysis reports with detailed information by clicking here. These reports are gathered and updated by Altos Research and will be emailed to you with my compliments.

• By: Brian Brady
• America's #1 Mortgage Broker

Friday, Pasadena mortgage rates jumped from 5.875% to 6.25% as mortgage-backed securities traders joined the world wide sell-off.  Global stock markets plunged Friday and the Asian markets were weak for Monday.  Investors world wide don't want to be invested in ANYTHING.

When the world panics, we FLOAT mortgage rates.  So, roll the projectors!  The movie "Float Club" is playing all week.

Interestingly enough, gold isn't skyrocketing in price.  Long held as a "safe haven" during times of turmoil, investors are opting to hold their portfolios in cash instead:

Bullion is down 15 percent this month as the dollar climbed to a two-year high against the euro and the Standard & Poor's 500 Index headed for its steepest monthly loss since 1938.

`We're seeing some consolidation in the market today as investors pause for breath following the roller-coaster we had last week," Zhu Lv, research manager at Shanghai Tonglian Futures Co., said from Shanghai today.

Gold for immediate delivery gained as much as 1.7 percent to $746.91 an ounce, and traded at $735.33 at 10:29 a.m. in Singapore. The metal fell below $700 on Oct. 24. Silver for immediate delivery was up 1 percent at $9.4575 an ounce.

Gold still benefits from its safe haven properties, although these days, more and more are choosing to hold just cash instead, so it won't be surprising to see gold below $700 again," said Zhu.

What's that mean?  It means that while investors are cautious, they aren't completely terrified and that bodes well for mortgage-backed securities.  When investors buy mortgage-backed securities, mortgage rates drop; that's what we think will happen in the next 7-10 days.

I cautioned borrowers to lock in all October closings last week when Pasadena mortgage rates dipped below 6%.  That opportunity had a short-lived window.  Like all panics, reason eventually prevails.  Central banks world wide are slashing interest rates to avoid an economic recession.  This make US dollar denominated investments, especially mortgage-backed securities more attractive.

Hold out for a mortgage rate below 6% if you're closing in November.

Originally posted on Millionaire Real Estate Lender