Lakewood Real Estate News

(Saturday afternoon, 11/15/08) Being a second-generation native Californian, I tend to take our local disasters in stride. Local’s joke that we really do have seasons out here in So Cal, they’re just not the traditional winter, spring, summer, & fall outsiders are used to. Our seasons are more like flood & mudslide season, riot season, fire season, and earthquake season. (I left off “drought,” but that’s more like a year-round thing every few years).

Trouble is, in the last few years fire season keeps getting longer.

I just flew back from a wet, chilly, but fall-foliage beautiful two days in Nashville on Thursday night. During the last half of my non-stop Southwest flight home the “Tea Fire” in Montecito ignited, spread, and burned several dorms and other buildings in my wife’s Alma Mater, Westmont College. I teased my son-in-law that he needed to keep I couldn’t leave the state for two days without Barb’s college burning down. Fortunately, injuries and loss of life was minimal, but hundreds of gorgeous acres and scores of expensive mansions were lost, along with the Tea Garden well known among Westmont students.

Fortunately, the winds died down on Friday, but when I got up this morning and saw the Santa Ana winds gusting through our neighborhood, I knew the fires would be back today. Before we even turned the TV on for the non-stop coverage I told Barb to expect at least 4 new fires and 500 homes destroyed. Sadly, it appears that I may have underestimated.

Most of our natural disasters aren’t really that widespread in their devastation. This week’s fires, for example, will probably devastate less than a hundredth of 1% the homes in Southern California. That’s still hundreds of homes and millions of dollars, but most of us aren’t severely impacted.  Lakewood homes are at virtually no risk from these wild fires, nor from flooding or mudslides.

The smoke and pollution will be felt by millions, lots of patios and cars will need to be washed off sometime early next week, but life essentially goes on.

Fire season is brought on by the infamous “Santana” winds, often mistakenly called “Santa Anas.” The word is probably a contraction of vientos de Satan, Spanish for “winds of Satan.” These are hot, dry offshore winds that descend from the Great Basin through the Mojave desert down into Southern California, primarily in spring and summer. While the threat of fire is generally greater in the fall, with recent dry winters fire season has extended to include spring and, now, late fall as well.

Los Angeles weather is the weather of catastrophe, of apocalypse, and, just as the reliably long and bitter winters of New England determine the way life is lived there, so the violence and the unpredictability of the Santa Ana affect the entire quality of life in Los Angeles, accentuate its impermanence, its unreliability. The wind shows us how close to the edge we are.

—Joan Didion, “Los Angeles Notebook”

Ultimately, additional restrictions will be imposed on construction and additional clearance and greenbelt requirements imposed in fire prone areas. Our wildfire challenges are actually easier to manage and less widespread than California’s earthquake risks.

To most Californians, our natural disasters are less ominous than those in so many other regions of the nation or the world. Most of us regard them as one trade off for 360 days of temperate sunshine a year and the many other benefits of living in a dynamic, diverse land of opportunity.

While our thoughts and prayers and help will be going out to our neighbors in these days of loss, while it’s annoying to curtain outdoor activity and deal with the smoke and ash, most Californians still consider this our Golden land of opportunity, and really wouldn’t want to live anywhere else.

(photos from L.A. Times’ Gallery

(10/8/08) We ‘ve been teaching brief buyers’ and sellers’ classes for the city of Lakewood for about 20 years now. I like to do a buyers’ class early in the fall each year in anticipation of the market bottom that usually occurs during the winter months (see “Real Estate 101: Our 2 market cycles.”)

Several months ago we scheduled this year’s class with Lakewood’s Community Services Department for this Saturday, October 11, from 9 - 11 a.m. at Lakewood’s Mayfair Park (details & registration link here). At the time, we were anticipating at least the annual market bottom and possibly a cyclical bottom as well, but we weren’t exactly anticipating the events of the last few weeks!

The current market presents that rare combination of low prices and low interest rates that usually mark a bottom. That bottom could be occurring right now, or it could still be years away. Regardless, smart buyers should prepare now for the bottom that eventually will come.

Our little class includes basics of buying, an overview of foreclosures, break-out sessions for first time buyers, move-up buyers, and investors, an overview of current lending options, and an up to the minute discussion of the current market and what may be anticipated. It’s open to all, whether Lakewood residents or not.

Blair and I were both teachers when we first went into real estate, and we enjoy getting back into a classroom setting from time to time. My decision to buy my first home way back in 1976 was largely based on information I received in a similar, but longer, Saturday class taught by Los Angeles realtor Scotty Herd for UCLA’s extension program. It gave Barb and I the information, tools, and confidence we needed to make that first purchase. The buyer and seller classes we do give us an opportunity to discuss real estate in a classroom, rather than selling, setting.

If you know of someone who may be thinking about buying in the next year or two, this course would be an excellent opportunity to get some useful information.

We’ll also be doing a similar class for sellers on January 24, same place, time & price (info & reg link here). You can also call us directly at 562.822-SOLD if you have questions or want additional information.

Special Note: “How, What, When, & Where to Buy,” our special 2 hour Lakewood buyers’ seminar is coming to Lakewood’s Mayfair Park the second Saturday of October, 10/11, from 9 - 11 a.m.–to get you ready to take advantage of this cycle’s bottom!

We actually scheduled this class Lakewood’s Community Services Department several months ago. It’s open to everyone, not just Lakewood residents. It’s from 9 - 11 a.m. on Saturday, October11 at Lakewood’s Mayfair Park (Clark and South St.). We designed this to help buyers make the most of this fall and winter’s unusual buying opportunities. Class size is limited to allow interaction.

Special break-out sessions for first time buyers, investors, and move-up or move-down buyers.  Register  online or get details here. Only $5 per person, and we’re not selling cds or books! Blair and I are both former teachers, & we enjoy a chance to discuss real estate in a classroom setting.

Now back to our regularly scheduled market update post. . .

“ECONOMY HAS HEADS SPINNING” the newspaper screamed at me a few days back before I’d even picked it up off the driveway. Stocks tanking, huge firms failing or being bailed out, DataQuick medians show yet another home price drop, and now the “$700 trillion dollar Federal Bailout.”

And we decide now’s the time to tell you it’s a sellers’ market in Lakewood?

Sort of.

What’s going on now:

Actually I decided last night it was time to write a post that it’s become a sellers’ market at the low ends for detached single family homes in most neighborhoods in the Coastal Plane of Los Angeles and Orange Counties, and that includes most Lakewood homes, especially the lower priced, smaller fixers & bank repos.

What’s going on now:

You see, what we try to do here, as our masthead says, is give you “Lakewood real estate news and perspectives from the front lines.” What we and our colleagues see going on right now at open houses and with buyers and sellers in Lakewood.

So we’re 3 months ahead of DataQuick, whose monthly median closing price stats last reported August closings on sales that were negotiated mostly in June. We’re 5 - 6 months ahead of the Case-Schiller index, which averages 3 months of closings using their unique “matched pairs” approach and then delays a month to release.

So let me tell you what’s actually happening right now:

• Showings are up significantly at all of our listings priced below $500,000, and up modestly on our “move-up” inventory.
• That offer I made a few weeks ago on a Lakewood repo?   (See “Who should buy between now and Christmas?“): Outbid. Swamped with competing offers. My “all cash, close in 10 days, as is” offer didn’t even get a phone call back!
• Last week I surveyed several other agents I’ve known for years. Every one of them said buyer activity was up dramatically over the last few weeks.
• Even my partner, Blair, & his wife just made an offer.
• In Lakewood, all the lowest priced “bargain” homes are either sold or attracting multiple offers.
• Last weekend Blair had several local homes to show some buyers.  At every home there were other buyers looking at it while he was there with his clients.  That’s something we haven’t seen in over a year!

Why?

Pretty simple, actually. Summer just ended, prices have been coming down, and–oh, yeah–mortgage rates just plummeted:

• August is almost always one of the slowest months of the year, but things generally pick up in September and October before slowing again as the holidays approach.
• Foreclosures and pre-foreclosure “short sales” have been forcing prices down all year. Data Quick’s August median for OC was back to the level of November 2003! Vacation over, kids back in school, & buyers are noticing that neighborhood they couldn’t afford last year is now within their reach.
• When the U.S. Government (that’s you & me, in case you didn’t notice) basically took over Fannie Mae and Freddie Mac, confidence returned to the mortgage markets and rates dropped around a full point, with 30 year fixed loans at 5.5%! Rates have gone up since then, but once Congress passes the pending bail-out, hopefully this weekend, they should drop some.  In any case, they are still near record lows.
• The Federal mortgage bailout that’s been in the news so much this week is designed to attack what’s been housing’s biggest problem all year:  Home loans have gone from way too easy to get to way too hard.  Typically, the lending market overreacted, going from one extreme to the other.  Simply put, over the next month more and more buyers will be able to qualify.

What’s it mean?

Good question. Is it a seasonal blip or did we just pass the bottom, at least for starter homes in built-out areas? Well, part of it is seasonal, but that’s not the whole story. What happens next will largely be determined by the answer to five key questions:

1. What will the economy do?
2. What will interest rates do?
3. What will mortgage rates do?
4. Are foreclosures peaking?
5. Have prices corrected enough?

The first two will tend to counter-balance each other. If the economy continues it’s sharp declines, both the fed and investors will combine to drop interest rates, both short and long term.

As for mortgage rates, with the feds supporting the market, we know the margin, or mark-up, for mortgages will stay at the more normal levels we’ve seen over the past few weeks. One of the biggest challenges for housing has just been met. Federal intervention is having some positive results for home sellers and buyers, as we’ve been predicting all year.

Foreclosures may be the key here. In California it takes about 4 months to foreclose on a home from filing the initial Notice of Default through the Trustee’s Sale. Longer if the owner files bankruptcy. It takes another 1 -3 months to get the occupant out and the home on the market. We know that the banks have been taking back record numbers of homes, assuring a continued influx of foreclosed homes hitting the market through year’s end.

We can also check on homes entering the foreclosure process (click on the “Lakewood preforeclosures link under “Useful Links” in the column to the right).  A month ago, it looked like homes entering foreclosure were peaking, but recently released August stats are up a bit for Lakewood.  Government relief for foreclosures is about to kick in next month, and the shakiest borrowers have already lost their homes. On the other hand, a sinking economy combined with coming payment “resets” (increases) on many adjustables may put more homeowners in jeopardy. This one may be “too close to call,” but I think by mid spring of 2008 the worst of the foreclosure market will be behind us.

Which brings us to question # 5. You’ll get plenty of debate on this, but the multiple bids on properly priced REOs make it pretty obvious to me that some prices have, indeed corrected enough, provided interest rates don’t rise dramatically & the economy doesn’t tank.

What prices have corrected enough? The prices that bring competitive bids: The fire-sale prices the lenders are now offering on starter single family homes in built-out markets, like Lakewood. Pretty much what we said three weeks ago, except it’s happening now, not early next year.

Is this the bottom?

For starter SFRs in the coastal plane of OC & L.A. Counties, quite possibly.  If not now, probably sometime over the next several months.   It largely depends on the economy, interest rates, and when foreclosures peak.

Note: You don’t know it’s a bottom until it’s passed; DataQuick medians won’t show it until 4 months after it’s passed! We’re defining the bottom based on prices of homes going into escrow–what we’re seeing in the Lakewood market.  The media only gets the data after a home closes escrow 30 - 60 days later, and it takes another month and a half to compile the data.   So a December bottom in the market itself won’t show up in DataQuick monthly medians until February.  But you don’t know it was a bottom or a blip until you’ve had at least two up months after it.  So DQ stats won’t show it’s a bottom until several months later, when the prices are up for at least two months in a row.  And even then there will be some debate as to if it’s a real bottom or just a spring surge.

Bottom line: If you’re not going to be moving any time soon and you can find and negotiate your dream home at a price you can afford with a 30 year fixed loan, go for it.  That’s what Blair and Beth just did, so we’re putting our money where our mouth is on this one.  Stay tuned, & we’ll keep you posted on what we’re seeing here on the front lines of Lakewood Real Estate.

We’ll be going into detail on all aspects of home buying for two hours on Saturday morning, October 11th, at our city-sponsored buyers’ seminar at Lakewood’s Mayfair Park.  Blair and I just planned the schedule yesterday, and we’re hitting all the key high points, including REOs, short sale, lending, moving up, moving down, investment property and the foreclosure process.  We’ve also got a lender who’ll bring you up to the minute on the new lending standards.  It’s all only $5, due to the city sponsorship!  If you know someone who should be thinking about buying, you’ll do them a favor by encouraging them to attend.  More details and a link to register are below.

Our 2-hour, $5 October Buyer Seminar:

We actually scheduled a two hour buyers seminar with the city of Lakewood’s Community Services Department several months ago. It’s open to everyone, not just Lakewood residents. It’s from 9 - 11 a.m. on Saturday, October11 at Lakewood’s Mayfair Park (Clark and South St.). We designed this to help buyers make the most of this fall and winter’s unusual buying opportunites. Class size is limited to allow interaction. Sponsored by Lakewood’s Community Services Department. Details here. No, we’re not selling tapes, cds, books, or DVDs! We’re both former teachers, & we enjoy a chance to discuss real estate in a “classroom” setting.

Selecting the right Lakewood real estate agent may be the most important single step to a successful home sale or purchase.

Of course choosing a competent, honest, experienced and diligent agent is always important for such a major financial transaction, but there are some unique things about Lakewood that make picking the right agent especially important.

To illustrate, let me go back to when Barb and I bought our very first home, in Lakewood, back in 1976 (I believe we were about 7 years old at the time. . . .)

A Child of Lakewood Moves Away. . . .

Actually, I’d grown up in Lakewood, so I thought I knew the city pretty well.  In fact my parents were original owners in Lakewood Park, the biggest new tract ever built at the time.  I went to school in Lakewood from Samuel Gompers Elementary through Lakewood High.   But after graduating from UCLA in 1972 I remained in Westwood. By 1976 Barb and I were ready to buy our first home.

. . . and Finds Out There’s No Place Like Home!

We started researching communities from Thousand Oaks to Garden Grove.  The San Fernando and San Gabriel Valleys were just too hot and smoggy, so we focused on the coastal plain.

The “West Side,” from Redondo Beach up to Santa Monica, was just too expensive for us, even back then.  We wanted to avoid the high crime areas, and decided against the warmer inland locations like La Mirada.  Eventually we ended up back where I’d started, in Lakewood.

My parents still lived in Lakewood, and as relative newlyweds I thought it might be a good idea to buy someplace else.  (Turns out I was wrong:  After we had kids, we were thrilled to have their grandparents nearby.)   But Lakewood was simply the best value for our money.  Turns out Lakewood’s still a great value 30+ years later:  Great location,  great climate, good parks, mostly decent schools all at reasonable prices.

Affordability Then and Now

Back then I was a school teacher, not a Realtor, so I asked my parents for a Realtor they’d recommend.  They referred us to Bob, a friend from their church.  He was an experienced agent, honest, nice guy, and spent a lot of time working with us.  There was one problem, however.

We wanted a three bedroom, two bath Lakewood home with a family room and a fireplace under $50,000.  To get a little perspective on that price, gas was about 40 cents a gallon back then, today it’s about $4.40–up eleven times.  Multiply $50,000 by eleven & you’ve got $550,000.  I just found out about a three bedroom, two bath, family room REO in an excellent Lakewood area neighborhood in outstanding condition. It even has a nice pool, and it’s hitting the market next week for $499,000.

So, with the dramatic declines in value of the past two years, Lakewood home prices actually have not gone up as much since 1976 as have gas prices.

“But wait, there’s more!”  Did I mention interest rates?  When we bought, rates were 9.25% for a 30 year fixed loan with 20% down.   Today they’re about 6.25%!  So interest rates have actually gone down about 33% since 1976! Maybe “happy days are here again for buyers!

About “Lakewood Schools”

On about our third househunting trip with Bob, we fell in love with one home.  There were only a few things we needed to clear up before making an offer.

Having grown up in Lakewood, I knew there was no such thing as “Lakewood schools.”  Lakewood was incorporated as the nation’s first “contract city,” to avoid being annexed piece by piece by Long Beach.  Contracting with the County for police and fire services made incorporation affordable for a “bedroom community” like Lakewood.   The area had already been divided up between four surrounding school districts.

Most people think there is a wide variance in quality between the four districts that serve Lakewood.  So, even though we didn’t have kids yet, I wanted to check to make sure we were in a good district.  Having gone to Long Beach schools myself, and knowing this home was close to the Long Beach border with Lakewood, I asked Bob, “This neighborhood belongs to the Long Beach School District, right?”

“Uh. . . I think so,” came Bob’s answer.

So we wrote the offer, negotiated the price, bought the home and moved in.  Only then did we discover that  the neighborhood actually didn’t go to Long Beach schools, but instead went to a district I felt was less desirable.

Our Mistake. . .

Bob was honest, caring, experienced, diligent, friendly, and a member of the local Board of Realtors, but he did more business in Long Beach and West Orange County than in Lakewood.   He actually was pretty  knowledgeable about Lakewood, but lacked awareness of some important details, like exactly where the school district lines were.

Knowing school district lines in Lakewood is trickier than it seems.  In our case, if the home was just three tenths of a mile to the south or to the east, it would have been in the Long Beach school district.  200 yards to the east, & we’d have been in a third district.  The lines were drawn sixty years ago, and are a little tricky.

In Lakewood, as in Cypress or La Palma, the school district can make a significant difference in a home’s value.  In addition, that difference can be greater for certain types of homes.  Often there’s almost no price variation for condos or two bedroom SFRs, but a huge variance for larger, multiple bath homes.  Whether you’re buying or selling, whether or not you have school aged kids, you need that information to make intelligent pricing decisions.  Unfortunately, I’ve met scores of Lakewood homeowners who were told by their Realtor that their home went to “Lakewood Schools” or “The Lakewood School District.”  Unfortunately, there is no such thing!

Those aren’t the only Lakewood nuances that many agents know little if anything about.   Some neighborhoods are downwind from polluting refineries.  One tract has an optional homeowner’s association  with a neighborhood pool and clubhouse available for just $15 per month association dues.   Some residential streets that you wouldn’t expect are parked up when school is in session.  Or AYSO.  Or Lakewood’s annual Pan American Festival.  There are blocks where you can plan on staying up late six Fridays every fall during football season.

Then there’s my pet peeve–the areas the So Cal Multiple Listing Service divides Lakewood into.  They are more complex than almost any other city I’m aware of, and lots of agents just can’t seem to be bothered to spend $5 for the MLS map to learn them.  The areas are actually based on the original tracts, back when Lakewood was developed from 1940 to 1962, with names like “Lakewood Park,” “The Mutuals,” “Mayfair,” or “Lakewood Gardens.”

“Lakewood City” was the name of a tract on both sides of Carson west of Bellflower Blvd.  Two thirds of the “Lakewood City” tract and MLS area are actually in the city of Long Beach.  Yet dozens of listing agents list dozens of Lakewood homes as being in “Lakewood City” when they’re actually miles away from there.  That’s only one of the most common mistakes.

When a home’s listed in the wrong area, it’s invisible to any agent who’s searching for it under the area it’s actually in.  Yet I routinely find that about 35% of Lakewood homes are listed in the wrong MLS area of Lakewood.  You’d think an agent who was going to make thousands of dollars if his listing sold would spend $5 for a MLS map to be sure it was listed in the right area. . . but you’d be wrong!  That $5 mistake could cost his seller thousands of dollars, or even a sale.

. . . and How You Can Avoid It:

Perhaps now you can see why, whether you’re buying or selling in Lakewood, it’s critical to have an agent who’s not only honest, experienced, and diligent, but who also knows Lakewood inside and out.

So how do you know how well your agent knows Lakewood.  There are some clues:

• The agent’s office address.
• Where the agent lives.
• How long the agent’s been licensed.
• Ask the agent to tell you about the “Lakewood School District.”
• Ask, “By the way, what schools did your kids go to?”
• Ask “How many Lakewood homes have you sold in your career?”  (Under 30, keep looking.)
• Ask the agent for an MLS print-out of all his Lakewood listings for the past 6 years.  (Not his office’s, but his.)  All of them–sold, expired, cancelled.  (Then ask another agent for the same thing for both his listings and that first agent’s.)
• My favorite:  Ask the agent where 4820 Briercrest is and see if she can tell you off the top of her head or needs to look it up.

Some Inside Info on Lakewood’s Addresses:

(West of the San Gabriel River, Lakewood addresses are fairly easy, and most experienced agents should have a fairly good idea of them.  Address numbers there are a continuation of Long Beach’s street numbers.  The north/south numbers start from Ocean Blvd., so they’re all north.  East/west street addresses are numbered from Long Beach Blvd. and are all east. I think of Carson as Blvd as 41st Street and Del Amo as 49th St., although there are some variations.  South St. is 58th St. west of Bellflower Blvd. and 56th east of Woodruff to the San Gabriel River.

East of the river, the numbers run from downtown Los Angeles, as in the city of Cerritos, so Del Amo would be 203rd St.  The homes are generally newer, but some of the neighborhoods are rougher.  (I told you Lakewood was nuanced.)

In part of central Lakewood (zip 90713)  the north/south streets are in alphabetical order moving east from Bellflower Blvd.  (Adenmoor through Eastbrook), then skipping past Palo Verde Ave., where the alphabet resumes with Josie through Quigley.)

Briercrest not only is the “B” street that’s the second street east of Bellflower Blvd., but it’s also the street Lakewood’s largest high school sits on.  (Yup, that would be Lakewood High.  In the Long Beach Unified School District.  Give me a call (562-822-SOLD) & I’ll sing you the alma mater.  Class of ‘68, along with 1,400 of my closest friends.)  So 4820 Briercrest is on the second street east of Bellflower Blvd. in the first block south of Del Amo (which I think of as 49th St.)

If you now know more about Lakewood Streets than your Realtor, you probably need another Realtor!

Selecting a Lakewood Real Estate Agent

The above questions should at least get you an agent with some knowledge of Lakewood’s nuances.  To avoid other mistakes in picking an agent, regardless of area, you might want to check out ”Top 5 ways NOT to pick an agent“  in our regional blog, SoCalRealEstateNews.com.

We think it might be a good idea to give us a call so you’ll at least have a standard to compare other agents against.   After almost 30 years of working in the Lakewood area, I pretty much know every experienced, active agent.  Blair and I aren’t the only honest and competent agents with a close knowledge of Lakewood, but there are probably 10 - 20 inexperienced or dishonest agents for every one that I’d recommend.  They may be counterfeits, but many of them are very good counterfeits that are very difficult to identify.  If you don’t do your homework, the odds are definitely against you.

As always, we appreciate your questions and comments and will try to respond.  If you want us to contact you by e-mail, just ask in the comment, otherwise we won’t bother you.

If you’re interested in Lakewood real estate, we’d also encourage you to click on the RSS logo on the right just below our masthead and above the wide photo.  We intend to put up informative posts about Lakewood, its real estate market, and market trends regularly.

And best wishes on your Lakewood real estate endeavors!

If you got to this link from a link on a comment on Matt Padilla’s Mortgage Insider blog looking for “How we got into this mortgage mess,” oops!  The problem wasn’t caused by free concerts, but by a lot of stupidity, greed, and dishonesty by a lot of people. Sorry–I pasted in the wrong link!

And if you just want to drive north from the OC for some free concerts every Thursday in July, read on.

Free family entertainment so close to your Lakewood home that you can even afford the gas!

Lakewood’s popular free outdoor summer concert series continues through the end of July.

Thursday this month, Del Valle Park will rock and roll with great music, vocals and entertainment from 6:30 to 8:00. (That’s the park we referred to as “the airplane park” when I was a kid. The actual military jet is up on a pillar now, but when I was a kid it was at ground level & we could actually climb around on and even in it!) Off Woodruff between Del Amo and Carson.

The weekly concerts feature a changing variety of music including classic rock, country western and pop music.

Dinner and refreshments will be sold at each concert, or attendees may bring their own picnic basket. We strongly recommend you bring lawn chairs or blankets and arrive early. Pets, barbeques and alcoholic beverages aren’t allowed.

These Summer Concerts in the Park are doubly free–no charge to you to come, and no charge to you as a taxpayer either. The concerts are solely supported by area businesses and concert patrons.
So mark your calendar & plan to spend your Thursday evenings this month at Del Valle Park.

Schedule:

Thursday, July 10 Ronny & the Classics (50’s/60’s)

Thursday, July 17 The Sean Wiggins Band (Country Rock)

Thursday, July 24 Rock Inc. (Classic Rock)

Thursday, July 31 Mother Jones (Variety Rock)

I know, this is a Lakewood real estate blog, but we like to point out some of the things that make Lakewood such a great place to live. In fact, if you’ve been considering buying here in Lakewood, this might be a great way to get to meet some people and see what they like about this great little town!

Today’s home selling market here in Lakewood is challenging, but it’s not impossible. We’ve seen worse–much worse. Like back in the late 1980s, in the months leading up to the first Gulf War.

Back then, buyers were virtually non existent in Lakewood. Today, the buyers are out there, but they have plenty of homes to choose from, and they’re not in any hurry. With the correct approach, Lakewood properties can be sold quickly without “giving them away.” A good illustration is provided by the southern half of one 50-home block in Lakewood’s 90712 zip code.

This past February year, six homes were on the market there. By the start of July, three of them had sold and closed escrow, one had been taken off the market and rented out, and two remained on the market unsold, even as their lender was in the process of foreclosing.

Of the three that sold, one was a “flip” on which the owner lost money and one was a probate sale that the seller refused to fix up but was able to sell after dramatically reducing the price. Two sellers taking significant losses, one because they fixed it too much, the other because they fixed it too little. In the days ahead we’ll take a closer look at those two homes, but today we’ll focus on the third seller, who did most things right and was able to sell and close escrow within a few months close to their original asking price.

Meet the Smith Family:

This Lakewood seller called us early this year. We’ll call them Mr. and Mrs. Smith. They had purchased their 1600 square foot Lakewood Gardens home in June of 2002 for $275,000 with 20% down. They refinanced two years later for $325,000 and again in 2006 for $338,000.

Refinancing every two years is generally better for the mortgage broker than the homeowner, but the Smiths were fairly conservative. Not only did they avoid negative amortization loans, they also resisted the temptation to pull out the bulk of their equity. Otherwise, they could easily have owed over twice as much as they did.

Like most Lakewood sellers, the Smiths knew values were down, but still had unrealistic expectations for their home. (Even in normal markets, most sellers tend to overprice their home, giving value to personalized “improvements” that actually are negatives to most buyers, and overlooking negatives they’ve grown accustomed to.)

When we prepared for our appointment, we were pleased to see that they still had equity in their home, but it was far less equity than the Smiths expected. However, their personal situation made this year a good time to move. They wisely chose to let their personal situation guide them in an uncertain market, rather than speculate on when the bottom might come (see “What to do when nobody knows what’s next” in our regional blog, http://SoCalRealEstateNews.com).

Getting Ready

Unlike many sellers, they were willing to listen to our recommendation, not just on pricing but also on timing, preparation, and staging (see “How to sell your So Cal home for top dollar in 30 days,” also on our regional blog):

• Preparation: We suggested adding some flowers in the front, fertilizing the lawn, and repainting the chipped & peeling front porch, and removing posters and repainting the teens’ bedrooms.
• Staging: This home was larger than your typical, 900 to 1200 square foot Lakewood home , but it had an unusual floor plan, including a huge master bedroom with some unused space and a small utility room with a half bath.

Partly because the average Lakewood seller is about 20 - 40 years older than their most likely buyer, most of our sellers aren’t aware of how visually dependent their buyers are. We’ve learned that words, even posted custom signs, aren’t nearly as effective as properly staging a home.

In this case, we suggested using a bookcase to separate part of the master as a semi-private office or retreat. We knew that the utility room with a private half bath should be staged as a bedroom, and offered the use of one of our inflatable twin “instant” beds. This would also enable us to list the home as a four bedroom, two bath rather than a three bedroom with utility room, without potential buyers asking “Where’s the bedroom?”

We also recommended removing or relocating some furniture to make the home look larger, as well as eliminating knick-knacks and clutter. (Most Lakewood buyers live in apartments with bigger bedrooms and closets than the typical Lakewood home, so you want to minimize the feeling that the bedroom is too small any way you can.)

• Timing: Aware of the coming onslaught of foreclosure listings in Lakewood, we strongly recommended the Smiths waste no time getting their home on the market.
• Pricing: Correct staging and preparation would significantly improve the sellers’ bottom line, but locating and closing a qualified buyer using today’s tighter lending standards is often a major challenge.

The first week a home is on the market is the best opportunity to get competing offers. So it was critical to hit the market with all staging and preparation done, and to hit it at an aggressive price. Our hope was to obtain competing offers within the first two weekends, not only so we would be in a stronger negotiating position, but also so we could focus on the buyer most apt to close the escrow.

• What not to do: Fortunately, the Smiths called us early in the process of deciding what to do. Not only did that allow us to encourage them to speed up the process to take advantage of early spring activity in a falling market, but it also allowed us to help them focus their preparation efforts on the most productive items.

As is commonly the case, there were several repair items they wanted to fix that we felt would be better left for the physical inspection once we had a buyer. That not only saved time and effort, it also allowed the buyers to pick the repair items that were most important to them.

The Team Effort:

In order to get things moving quickly, we completed the listing paperwork that night, with a target of getting the home on the market in a few weeks, once the work was done. We agreed on a tentative list price, which would be adjusted as needed just prior to putting the home on the market.

We were amazed at how efficiently the Smiths went to work. The bedrooms were painted and lawn fertilized within a few days. Furniture was moved out, and our “instant bed” was moved in.

There were, however, a few areas where disagreements arose. The master retreat was set up with a desk from the former utility room, but the bookcase screen never made it.

We never fully agreed on pricing, although we were only off by a few thousand dollars. In a challenging market like today’s, accurate pricing from the start is quite important. As with proper staging and preparation before hitting the market, “you never get a second chance at a good first impression.” That’s especially true now that listing information travels at the speed of light over the internet.

Still, it’s the seller’s house, and all we can do is explain our recommendations. We were very fortunate the Johnsons worked so well on preparation, staging, and timing. And we weren’t that far off on pricing, but things might have gone smoother were the initial price just 1% lower.

Our Part:

It’s not just the seller who has to work hard in this market, however. As the Johnsons were preparing the home we began working on our marketing plan into play. We’re constantly looking for and trying out new ideas, and over the last three decades we’ve incorporated quite a few that have proven effective. Selling a home for top dollar fast isn’t rocket science, but it does involve doing lots of little things right. In the Johnson’s case, this included:

• buying the home’s address for the domain for the home’s website & getting a sign printed with the domain. (1234Main.com, for example–much easier to remember than “12J75jKR Wxyz@prudential.yahoo.homes.com or whatever)
• videoing the virtual tour
• photographing, writing & printing the color flyers for inside the house & for the brochure box
• preparing 19 photos for the MLS & adding captions
• recording an audio tour & put up our call-capture “audio tour” sign so we could follow-up with buyers while they were still in front of the house.
• putting up our personalized “for sale” sign with only our cell number on it, so all calls would go to one of us, not some 18-year-old receptionist who’d never seen the house (or an agent taking “floor time” who’d rather sell the buyer his own listing).
• holding open houses with about two dozen strategically placed signs.
• over 400 flyers delivered throughout the tract to neighbors who might have friends or family looking to buy in the neighborhood.
• Bringing our local office through on tour.
• Precisely timing the inputting of the listing into the M.L.S. and onto the internet to maximize the possibility of multiple offers (we’ve actually go this down to not just which day of the week but also what time on that day.) (Sorry–that’s our secret, but we know what works. It changes based on the market anyway.)

The Results:

The good news was, we had an offer within the first two weeks, and were able to negotiate a mutually acceptable price and terms. The “challenge” (we try to avoid words like “bad news” or “problem”) was, the buyer wasn’t as strong as we would like, in terms of qualifying for the loan. They weren’t terrible, probably a little stronger than average. They were even “pre-qualified,” but that really doesn’t mean much if you check out the fine print. They were still weaker than we’d prefer.

So we dragged out the negotiating process a bit, checked with other potential buyers, but nobody else appeared, and that initial burst of activity when a new listing hits was dying down. The home was fairly unique, which also limited our pool of buyers. The seller was firm on their price, so we went with the only buyer we had. In this market, you can be too choosy.

Unfortunately, in these days of ever changing lender requirements, the lender modified the loan requirements during the escrow, if the buyers’ agent is to be believed. (BTW, the buyers’ agent is never to be believed, but there’s only so much a third party can verify. Shoot, even Presidents have been known to lie under oath!)

The buyer really wanted the home, and kept searching for a loan that would work, but after a few weeks we put the home back on the market to see if we could find a stronger buyer. Unfortunately, we were right about the declining market as well as the uniqueness of the home. We couldn’t find another buyer quite as willing to pay top dollar, but after about a month back on the market we did find a buyer who was able to successfully close the sale in less than a month within 2% of the original asking price.

The sellers are now happily moved into their new home and are getting on with their lives in the location that’s right for them. Meanwhile, four of the other six listings on their block have not yet sold, and the other two both eventually sold but for almost 20% below their original asking prices.

Bottom line:

• Sellers today need to be flexible and willing to expend some effort.
• Find an experienced, honest, diligent Realtor (or two) as early as possible.
• Take your agents’ advice very seriously.
• Beware of letting market timing or wishful thinking trump your personal needs.
• Get it right the first time–condition, pricing, staging, marketing & listing agent.

That’s what we think–we’d love to have you add your comments, thoughts, or questions below.

This is a blog written by two Lakewood Realtors with over 30 years combined experience working with Lakewood sellers and buyers.

Our goal is to give you a front-line perspective on what’s going on and what we expect to happen next in the real estate market in Lakewood, California.

We’ll also be putting up posts designed specifically to help Lakewood buyers, sellers, and homeowners, including a summary of some of the classes we’ve taught over the years for the city of Lakewood’s community service department. Such as our popular seller’s course, “How to Sell Your Lakewood Home for Top Dollar in 30 Days.” Or info from our buyer’s courses, including “How to Move Up to Your Dream Home,” “Fixers, Foreclosures, and Fantasies,” and “How to Buy Your First Home.”

We’ve been writing a similar blog for all of Southern California since last fall, but we’ve always wanted a blog that focuses on the community we’ve both lived and worked in for so long. For a look at some of our region-wide perspectives, you might want to visit SoCalRealEstateNews.com. There you’ll find over 50 posts, including our most recent projections post, “So Cal home price bottom near?” our post on “How we got into this mess,” and our thoughts on “Top 5 ways NOT to pick an agent.”

We’ve already got some stories about what’s going on in Lakewood right now, like “A Tale of Three Listings: The probate seller’s big mistake” and The “flipper” Realtor who didn’t think, both about recent activity on the same block in Lakewood, California 90712.

Now just a brief introduction.

Our lead writer, Dave Emerson, has lived in or near Lakewood since his parents moved in as original owners way back in 1951! Dave was only one year old at the time, so that “Lakewood Park” Model 19 was the only home he knew until he bought his own first home in Lakewood in 1976!

Dave grew up in Lakewood, attending Gompers Elementary, Bancroft Jr. High, and graduating from Lakewood High School in 1968 as class valedictorian. Fascinated by the process of buying his first home, in 1980 Dave began working part time as a Realtor for the same company and broker he has been with for the last 28 years. He obtained his broker’s license in 1982, about the same time he stopped teaching at Mayfair High to become a Realtor full time. Since that time Dave has been # 1 in sales out of over 500 agents in his firm seven years, and has been elected “Agent of the Year” by his peers four times.

Blair Newman was a winner of Prudential California’s Rising Star Award when our office’s mentor agent suggested Dave team up with him. Blair brings the perspective, energy, and technological savy of his generation to Dave’s many years of experience. Like Dave, Blair bought his first home in Lakewood, but that was just 3 years ago. Blair also was a teacher before becoming a Realtor full-time several years ago. Blair also happens to be married to Dave’s daughter, which makes this a genuine family business.

We intend to get new posts specifically dedicated to Lakewood real estate every few days, so you might want to click the RSS in the upper right corner to subscribe to the RSS feed for this site using live bookmarks. Your thoughts, comments, and questions are welcome, and we’ll do our best to answer or respond.

Thanks for visiting, and welcome to Lakewood Real Estate News, the real estate blog dedicated to the city of Lakewood, California.

How to contact us:

1. The “comments” section below is probably the easiest way to get in touch with us. It will automatically generate an e-mail, and we will respond either publicly or privately, which ever you prefer.

2. You can also call us directly at 822-SOLD. The area code is, of course, Lakewood’s–562.

3. You can e-mail us at RealtorDaveE at msn. (You know how to translate that to an e-mail address–”at” means @ and “msn” is followed by “dot com”–but those web crawling computers that love to harvest e-mails don’t.

4. You can write us at our office address, Blair Newman, Prudential California Realty, 11409 Carson St., Lakewood, CA 90715. It’s just west of the 605 freeway on Carson, across from the Long Beach Towne Center. But if you just drop in you probably won’t find us unless you call first–we spend most of our time in the field, and do most of our office work from our home offices.