Love and Rain Are in the Air

February is the month of romance, and this year, lots of Los Angeles storms. Wet weather in Southern California definitely affects the market because buyers tend to stay indoors rather than shop for homes. With that said, it's been a better month overall compared to December and January.

So far this year, I've noticed that sellers are pricing their homes more realistically than in 2009, and buyers are realizing the risks of waiting any longer to find a good deal. I'm hearing more of, "I'm ready to buy now," rather than, "I'm waiting for the market to bottom out."

Overall, Nourmand & Associates's sales figures have risen in February as compared to months prior, and I anticipate that March will be a strong one. Why? Because the listing are hot, priced well, buyers are serious about making their purchases, and spring is always busier regardless of the market conditions.

I have a couple of trophy listings, Strada Corta, for $12.9 million and Sorbonne at $18.950 million in addition to high end leases including one at $49,790 a month.

I predict that March will be the month of real estate sizzle, even in a down market. The temperatures are rising and the outdoors are lush and inviting. These factors tug on buyer's emotions, which is always good for sales.

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Real Estate Market on the Rise

Here's your economic word of the day: Housing starts.

What is that? According to Investopedia it's beginning the foundation of the home itself. In other words, housing starts numbers are used to measure the health of the real estate market and the nation's economy as a whole.

The good news is that in January, US housing starts numbers were higher than what experts projected. Today, the US Commerce Department said housing starts rose 2.8% from the previous month, and 23.4% from the April 2009 low-point.

“Despite the mixed performance at the start of the year, the outlook for growth in housing activity remains positive,” Commerce Under Secretary Rebecca Blank said.

Rising foreclosures will continue to slow recovery, but with consumer confidence on the rise, and unemployment numbers continuing to decline, 2010 is off to much stronger start than the same time last year.

Sources:
1. US Department of Commerce
2. Investopedia
3. Bloomberg

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US Homeowners Foreclosing at Record Rates & Austrian Millionaire Gives Personal Fortrune to Charity

It's such a strange contrast. According to a Zillow report, 21.4% of US homeowners owed more on their homes than they were worth. And the number of home foreclosures hit a high in December, with one out of every thousand homes going under--the biggest number since Zillow began recording data in 2000.

Meanwhile, across the Atlantic is a story of a millionaire who is giving his entire estate to charity. Karl Rabeder amassed $4.7 million in his lifetime only to find himself completely unsatisfied with wealth.

"My idea is to have nothing left. Absolutely nothing," he told the UK Telegraph. "Money is counterproductive--it prevents happiness to come."

His plans? To sell his 3,455 square foot mountain retreat, his farmhouse in Provence, among other highly sought after possessions. After which he'll move into a small wooden hut or a modest home in Innsbruck.

So here we have two vastly different circumstances with nearly the same outcome. The fourth quarter Zillow report states that 1/5 of US homeowners are underwater. As a result, Americans are being forced to turn the keys to their homes into their banks. On the other hand, an Austrian millionaire is giving up all the wealth he acquired by choice.

Sources:
Zillow
UK Telegraph

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Madoff's Right Hand Man Gives Up Dead Fish

Frank DiPascali, the former CFO of Madoff's investment advisory, has been in prison since August, when he pleaded guilty to 20 felony counts. He faces up to 125 years in the pokey if convicted. This week, he and his wife agreed to give up their home and all its furnishings, even any dead fish, according to the public report.

The assets the government is taking from them include a home in New Jersey, all furniture, TV's, a boat, and motorcycle.

As you recall, Madoff's heist was the biggest swindle in US history. Estimates range client losses at $13-65 billion dollars. The figure varies because it's based on falsified investment statements that Madoff provided his clients.

When asked about the trades that took place on behalf of Madoff's clients, DiPascali said, "It was all fake. It was all fictitious. It was wrong, and I knew it was wrong at the time."

His arrest, so far, has been a disappointment. I was hoping DiPascali would spill the beans and reveal information regarding Madoff's sons and wife, Ruth. But it's months since DiPascali was put in prison, over a year since Madoff's arrrest, and still no new news. Which still leaves Madoff's family's role in the swindle a mystery.

Sources:
1. Bloomberg
2. New York Times

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Home Prices Climb, San Antonio Houses Fall

Both home prices and consumer confidence are on the rise according to a S&P/Case-Shiller study. November saw a 0.2% gain in the study's home price index. Sounds small, but it's the highest we've seen in a year. According to the Bloomberg report:

"Home values since May have regained about a 10th of the record 32 percent plunge over the past three years, showing the industry that precipitated the worst economic slump since the 1930s has much ground to make up. A 10 percent jobless rate means Americans will be slow to regain the comfort needed to restore spending to levels seen during the last expansion."

Which leads to the conclusion that we've seen the bottom of the pit whose nadir was uncertain.

That's a positive picture of the overall real estate market. In more regional news, no amount of consumer confidence or home price gains will make the residents of a San Antonio housing development feel better about their purchases.

About 80 homes were evacuated on Monday because of collapsing hillsides. The day before, the earth moved at a rate of 4 inches an hour. Some lots saw fissures 15 feet deep, which crushed fences, tore apart backyards, and exposed foundations. Fortunately, no one has been injured so far.

Preliminary reports from engineers say that cause was most likely due to a faulty 1,000 foot long retaining wall, one that the builder constructed without a permit.

Interestingly, the AP report states the neighborhood as "upper middle class" with homes selling for $250,000. $250,000? It's all relative. For that price, studio and one bedroom condominium owners across Los Angeles can now consider themselves upper middle class.

Source: Bloomberg.com and Yahoo.com

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Myra Nourmand HAUTE LIVING Profile

To read the profile on Haute Living's website, click here.

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Myra Nourmand in January 2010 HAUTE LIVING Magazine

Click on the following link to read the "Real Estate Power Players" article in the January 2010 edition of Haute Living Magazine. My profile is number five, to find it, scroll to the bottom of the page and click on 5. Real Estate Power Players

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US Consumer Confidence Is on the Rise

I'm a self-professed optimist. My sunny-side disposition has been put to the test these past couple of years with the real estate slump. But I remain hopeful, and it's not a belief rooted in fantasy but on fact.

Today, Bloomberg released a report pointing to increased US consumer confidence (Oddly, the report is dated 21 January, while it's still the 20th.) We all know the stimulating effect confidence has on the economy.

Moreover, the article reports that in a survey that sought out market professionals from Asia, Europe, and the US, the respondents said that the global situation is improving. (43% think things are getting better versus 37% in October.)

Which leads me to my world. Real estate will definitely benefit from the global positive outlook, it's just a matter of when.

Speaking of real estate, Mother Nature has way of slamming the brakes on showings. The Los Angeles storm front that started on Monday and will continue throughout the week has put my colleagues and me on forced furlough: Buyers don't want to look at wet properties, and sellers don't want wet buyers with their muddy shoes and dripping umbrellas walking through their high end houses

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