Is it better to buy now while interest rates are low, or is it better to wait for prices to come down?

Scenario #1: Higher Purchase Price, Lower Interest Rate$1,000,000 Purchase (20% Down Payment)

1st TD $800,000@6.0% $4,797.96

Taxes $1,041.67

Total $5,839.63

After Tax $4,125.46 Assuming 33% tax bracket

Principal $9,575.52 1^st Year

Interest $48,000 1^st Year

Scenario #2: 10% Price Reduction, 1.5% hike in Interest Rate$900,000 Purchase (20% Down Payment)

1^st TD $720,000@7.5% $5,035.51

Taxes $937.50

Total $5,973.01

After Tax $4,124.26 Assuming 33% tax bracket

Principal $6,426.12 1^st Year Interest $54,000 1^st Year

As you can see from the above scenarios, the difference in monthly payment would only be $1.20 more per month (after tax). However, after the first year, you would have $3,150.00 more in equity if you bought today. As the years go on, the amount you pay towards your principal would increase, and the amount you pay towards interest would decrease, making it even more advantageous to buy in today’s market. Please give me a call if you would like further detail or a more specific scenario.

Single Family Residential Home, Townhomes and Condominiums.
Statistics as of February 20, 2007 compiled from MRMLS South Bay Association of Realtors®.

Manhattan Beach

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Hermosa Beach

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North Redondo Beach

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South Redondo Beach

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El Segundo

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Summary:

The significance of list price over sale price is that buyers were able to negotiate a lower sales price than the

sellers were asking for their properties. Also, this means that it is a buyer’s market and a great time

to make an investment in real estate.

Current Number of “Active” Properties on the Market:

Manhattan Beach: 157Hermosa Beach: 95North Redondo Beach: 154South Redondo Beach: 137El Segundo: 41

By law (CA Civil Code Section 1365.2) homeowners within a community development are entitled to the following paperwork provided by the community manager or HOA President. If you’re interested in looking up the code and printing it for yourself, see the Official California Legislative Information page for exact wording and details.

(a) A pro forma operating budget, which shall include all of the
following:
(1) The estimated revenue and expenses on an accrual basis.
(2) A summary of the association’s reserves based upon the most
recent review or study conducted pursuant to Section 1365.5, based
only on assets held in cash or cash equivalents, which shall be
printed in boldface type and include all of the following:
(A) The current estimated replacement cost, estimated remaining
life, and estimated useful life of each major component.
(B) As of the end of the fiscal year for which the study is
prepared:
(i) The current estimate of the amount of cash reserves necessary
to repair, replace, restore, or maintain the major components.
(ii) The current amount of accumulated cash reserves actually set
aside to repair, replace, restore, or maintain major components.
(iii) If applicable, the amount of funds received from either a
compensatory damage award or settlement to an association from any
person or entity for injuries to property, real or personal, arising
out of any construction or design defects, and the expenditure or
disposition of funds, including the amounts expended for the direct
and indirect costs of repair of construction or design defects. These
amounts shall be reported at the end of the fiscal year for which
the study is prepared as separate line items under cash reserves
pursuant to clause (ii). Instead of complying with the requirements
set forth in this clause, an association that is obligated to issue a
review of their financial statement pursuant to subdivision (b) may
include in the review a statement containing all of the information
required by this clause.
(C) The percentage that the amount determined for purposes of
clause (ii) of subparagraph (B) equals the amount determined for
purposes of clause (i) of subparagraph (B).
(D) The current deficiency in reserve funding expressed on a per
unit basis. The figure shall be calculated by subtracting the amount
determined for purposes of clause (ii) of subparagraph (B) from the
amount determined for purposes of clause (i) of subparagraph (B) and
then dividing the result by the number of separate interests within
the association, except that if assessments vary by the size or type
of ownership interest, then the association shall calculate the
current deficiency in a manner that reflects the variation.
(3) A statement as to all of the following:
(A) Whether the board of directors of the association has
determined to defer or not undertake repairs or replacement of any
major component with a remaining life of 30 years or less, including
a justification for the deferral or decision not to undertake the
repairs or replacement.
(B) Whether the board of directors of the association, consistent
with the reserve funding plan adopted pursuant to subdivision (e) of
Section 1365.5, has determined or anticipates that the levy of one or
more special assessments will be required to repair, replace, or
restore any major component or to provide adequate reserves therefor.
If so, the statement shall also set out the estimated amount,
commencement date, and duration of the assessment.
(C) The mechanism or mechanisms by which the board of directors
will fund reserves to repair or replace major components, including
assessments, borrowing, use of other assets, deferral of selected
replacements or repairs, or alternative mechanisms.
(D) Whether the association has any outstanding loans with an
original term of more than one year, including the payee, interest
rate, amount outstanding, annual payment, and when the loan is
scheduled to be retired.
(4) A general statement addressing the procedures used for the
calculation and establishment of those reserves to defray the future
repair, replacement, or additions to those major components that the
association is obligated to maintain. The report shall include, but
need not be limited to, reserve calculations made using the formula
described in paragraph (4) of subdivision (b) of Section 1365.2.5,
and may not assume a rate of return on cash reserves in excess of 2
percent above the discount rate published by the Federal Reserve Bank
of San Francisco at the time the calculation was made.
The summary of the association’s reserves disclosed pursuant to
paragraph (2) shall not be admissible in evidence to show improper
financial management of an association, provided that other relevant
and competent evidence of the financial condition of the association
is not made inadmissible by this provision.
Notwithstanding a contrary provision in the governing documents, a
copy of the operating budget shall be annually distributed not less
than 30 days nor more than 90 days prior to the beginning of the
association’s fiscal year.
(b) Commencing January 1, 2009, a summary of the reserve funding
plan adopted by the board of directors of the association, as
specified in paragraph (4) of subdivision (e) of Section 1365.5. The
summary shall include notice to members that the full reserve study
plan is available upon request, and the association shall provide the
full reserve plan to any member upon request.
(c) A review of the financial statement of the association shall
be prepared in accordance with generally accepted accounting
principles by a licensee of the California Board of Accountancy for
any fiscal year in which the gross income to the association exceeds
seventy-five thousand dollars ($75,000). A copy of the review of the
financial statement shall be distributed within 120 days after the
close of each fiscal year.
(d) Instead of the distribution of the pro forma operating budget
required by subdivision (a), the board of directors may elect to
distribute a summary of the pro forma operating budget to all of its
members with a written notice that the pro forma operating budget is
available at the business office of the association or at another
suitable location within the boundaries of the development, and that
copies will be provided upon request and at the expense of the
association. If any member requests that a copy of the pro forma
operating budget required by subdivision (a) be mailed to the member,
the association shall provide the copy to the member by first-class
United States mail at the expense of the association and delivered
within five days. The written notice that is distributed to each of
the association members shall be in at least 10-point boldface type
on the front page of the summary of the budget.
(e) A statement describing the association’s policies and
practices in enforcing lien rights or other legal remedies for
default in payment of its assessments against its members shall be
annually delivered to the members not less than 30 days nor more than
90 days immediately preceding the beginning of the association’s
fiscal year.
(f) (1) A summary of the association’s property, general
liability, earthquake, flood, and fidelity insurance policies, which
shall be distributed not less than 30 days nor more than 90 days
preceding the beginning of the association’s fiscal year, that
includes all of the following information about each policy:
(A) The name of the insurer.
(B) The type of insurance.
(C) The policy limits of the insurance.
(D) The amount of deductibles, if any.
(2) The association shall, as soon as reasonably practicable,
notify its members by first-class mail if any of the policies
described in paragraph (1) have lapsed, been canceled, and are not
immediately renewed, restored, or replaced, or if there is a
significant change, such as a reduction in coverage or limits or an
increase in the deductible, as to any of those policies. If the
association receives any notice of nonrenewal of a policy described
in paragraph (1), the association shall immediately notify its
members if replacement coverage will not be in effect by the date the
existing coverage will lapse.
(3) To the extent that any of the information required to be
disclosed pursuant to paragraph (1) is specified in the insurance
policy declaration page, the association may meet its obligation to
disclose that information by making copies of that page and
distributing it to all of its members.
(4) The summary distributed pursuant to paragraph (1) shall
contain, in at least 10-point boldface type, the following statement:
“This summary of the association’s policies of insurance provides
only certain information, as required by subdivision (f) of Section
1365 of the Civil Code, and should not be considered a substitute for
the complete policy terms and conditions contained in the actual
policies of insurance. Any association member may, upon request and
provision of reasonable notice, review the association’s insurance
policies and, upon request and payment of reasonable duplication
charges, obtain copies of those policies. Although the association
maintains the policies of insurance specified in this summary, the
association’s policies of insurance may not cover your property,
including personal property or, real property improvements to or
around your dwelling, or personal injuries or other losses that occur
within or around your dwelling. Even if a loss is covered, you may
nevertheless be responsible for paying all or a portion of any
deductible that applies. Association members should consult with
their individual insurance broker or agent for appropriate additional
coverage.”

1365.1.  (a) The association shall distribute the written notice
described in subdivision (b) to each member of the association during
the 60-day period immediately preceding the beginning of the
association’s fiscal year. The notice shall be printed in at least
12-point type. An association distributing the notice to an owner of
an interest that is described in Section 11212 of the Business and
Professions Code that is not otherwise exempt from this section
pursuant to subdivision (a) of Section 11211.7, may delete from the
notice described in subdivision (b) the portion regarding meetings
and payment plans.
(b) The notice required by this section shall read as follows:
“NOTICE ASSESSMENTS AND FORECLOSURE

This notice outlines some of the rights and responsibilities of
owners of property in common interest developments and the
associations that manage them. Please refer to the sections of the
Civil Code indicated for further information. A portion of the
information in this notice applies only to liens recorded on or after
January 1, 2003.  You may wish to consult a lawyer if you dispute an
assessment.

Last night in a 4 – 1 decision by the Manhattan Beach City Council approval was granted to the Parks and Recreation Department to allow dogs on leash at Bruce’s Beach park in Manhattan Beach. In addition, the Council voted unanimously to expand on-leash walk-through areas at Sand Dune Park and Polliwog Park. The meeting included community involvement by people on both sides of the issue. Most people came out to speak out about Bruce’s Beach Park. Residents with dogs around the park spoke in favor of being able to have equal access to the park and residents without dogs spoke against. The big issue? Waste. Stepping in, running around or laying a blanket on a place where there is or once was dog waste was the argument against opening the park to dogs. Dog owners argued that there was no evidence that NOT opening the park to dogs legally (as people are illegally using it now) would prevent the dog waste issue. By allowing dogs legally in the park, it would create a community of owners who valued the benefit so much they would be extra vigilant in cleaning up after their pets and other’s pets who were less responsible.

At the end of the night, after about 3 hours of community speakers, the City Council gave approval for access to dogs on leash for a trial period of 3 months. During this 3 month “test”, residents would be asked to make reports of any problems and the Community Dog Advisory Committee would be asked to report all complaints and responses to the access to City Council at the end of the trial period. In addition, the Council advised the committee to go back and do homework on a location within Polliwog park that could be used for the same purpose.

This is a huge success for those of us who have fought for equal access in the parks here in Manhattan Beach! We are a unique city, in that we are the only city within miles who do NOT allow dogs on leash in parks. It seems that no one knows where this ban began or why. We’re working an uphill battle for equal access in all parks. As we move forward, we will be working on community requests for more dog parks, access to parks with our dogs and on leash access to walkways connecting our city areas. Hard to believe it’s this challenging to share our city with our furry friends. Enjoy your sunsets here and clean up after your pets!

Whole Foods Market CommUnity 5% Day Benefiting Chrysalis!

Wednesday, September 19, 7am-10pm
2201 Wilshire Blvd, Santa Monica

Shop at Whole Foods Santa Monica on September 19 and your grocery dollars will help LA’s poor and homeless become self-sufficient through jobs. As part of their incredible Community Giving program, Whole Foods has selected Chrysalis to receive 5% of the Santa Monica store’s net sales on the day of the event!

For information, contact Brad Rowe at 213.500.8170 or brad.rowe@sbcglobal.net.

Go to www.changelives.org for more information on how you can volunteer and make a difference in the community to some very deserving folks.

When you’re touring open houses without an agent, you are really looking at just the shell of the property without any knowledge of the unique features of the property and its history. What an open house does for the buyer is give them a chance to look at the inside of a house they would otherwise never see. If this were all that mattered, every house would sell during open houses. Let’s face it, most buyers want more than just the feeling they get when looking at someone else’s property for 10 minutes before deciding to make an offer.

For example, in Manhattan Beach and Hermosa Beach where I work, I may meet 20-25 people a day during weekend open houses. Some may be neighbors, some may be looky-loos and some come with agents, but some are real buyers searching for their next home.

Almost none of them ask me specific questions about the property I am working.

Does that surprise you? It surprises me! Unless you’re working with a sharp agent who is traveling you to each house and giving you specific explanation of its features, time on market, sales history, market value and neighborhood particulars, you need to be asking some specific questions to educate yourself about the property. It may be a better value than you think, or it may be a great value that someone has decorated poorly making you underestimate its worth.

Questions and tips for viewing open houses:

1) Wear comfortable clothing and shoes that you can slip in and out of. Many open houses these days require you to remove your shoes or wear booties over your shoes. This can be a real pain if you’re in cowboy boots for the day.

2) Make a map for the day. Make a map of each location and even a driving map from location to location. This will really save you time. Get onto the net and figure out a good driving route for your day. Many times you will be out with a list of properties and zig zag all over town trying to get to them all. This is a huge waste of time. Make it easy on yourself and plan ahead for those properties you’re really interested in and go only to those properties.

3)Don’t be afraid to ask the agent in charge of the open house questions about the property’s value. What do they think of the price? What are the comps for the property? How long has it been on the market? Do they have a list of the comps? Have they received any offers? What do they think is the best time to buy and why? (By the way, they may want to sign you up with them as a prospective client and if you feel that they are forthcoming with information, honest, good listeners, think seriously about allowing them to put you on an email list — but only allow ONE agent to do this and choose carefully! If you are already working with an agent, let the agent in charge know their name right off the bat. Thanks, but we’re working with so and so.)

4) Does the house have any upgrades or special features that you should look for while you are walking through the house? Sometimes, people walk right by some really fantastic upgrades and special features that the house has without ever noticing or realizing their value. Upgraded brand name tiling, special hardwood flooring, upgraded windows, plumbing fixtures, sound systems and other extras you won’t want to just walk by. This may raise your interest in the property and help to justify pricing.

5) Take photos. If you’re like most buyers, you are visiting a dozen or so houses in one weekend, it is a challenge to keep them straight. Most agents won’t mind this, however, you might want to ask the agent in charge if it is okay to take photos. Take one of the outside and then features inside that you like and do not like.

6) Look closely. When walking through the house, look for important clues to potential problems. Watermarks on floors can indicate flooding. Moldy shower grout, moisture in the shower air, musty smell and mildew under sinks all have potential for bigger problems down the road. Are windows properly sealing? Are there cracks in any of the walls or flooring? Is the house built on a pad or is there a crawl space? Where is the water heater and can you see it? Is the house forced air heating? Is there air conditioning? Do light switches work? Most items are disclosed during purchase, but finding out whether the house has been well maintained or not from the time you enter an open house can make a huge difference to your bottom line when making an offer.

7) Look at the house features NOT the owner’s decorating style. Not everyone has the taste or ability of an interior designer. This is why staging companies get paid so well for helping sellers stage their houses with rented furniture and pictures. Look beyond the personal items and photographs and get familiar with the “bones” of the house. Can you imagine the house with your furniture, your rugs, your photos and art and maybe even with a new coat of paint and new carpet? Someone else’s funky things can be a turnoff, but don’t let it deter you from seeing a really great property.

Decide in the car what you would pay for the house. Even if you don’t think it’s right for you, start educating yourself on the property values and narrowing your list of “must have” features. The most important thing to realize is that you CANNOT have everything. Realizing that most buyers have a budget, you must figure out which features you are willing to live without and stick to it.

9) After you’ve finished for the day, pat yourselves on the back for a hard days work well done. You can now sit over a glass of wine or coffee and talk about what you liked and didn’t like and how to approach the next day out shopping. Good luck!

In a recent Daily Breeze article “Inventory Glut Pushes Median U.S. Housing Value Down, But in California Prices Actually Increase 3.2 Percent”, Martin Crutsinger of The Associated Press reports on the glut of housing inventory nationwide, while California shows up the rest with an increase of 3.2% over the last 5 months. The article espouses what many real estate professionals in the Southern California region have been saying for years: The housing market is different here. We are a market of local value, local businesses, desirable locations and high paid professionals.

The statistics often reported in the headline news are derived from the National Association of Realtors and can fail to describe what’s really happening in certain states, counties and local cities. These news headlines can hurt our market by creating uncertainty in the buyer’s minds. One article may be all it takes to make a buyer decide to wait for better times. Oftentimes that means they are going to pay higher prices. The housing market is strong and stays strong because we have a highly desirable finite product. Real estate values in certain California cities can stay the black year after year. In fact, according to Dataquick, a third party group, the numbers look like this for local appreciation:

Manhattan Beach (percentage appreciation in median price of single family homes year over year)

2000 14%

2001 2%

2002 17%

2003 24%

2004 24%

2005 13%

2006 5%

Hermosa Beach

2000 8%

2001 1%

2002 20%

2003 23%

2004 19%

2005 19%

2006 1%

Redondo Beach

2000 10%

2001 10%

2002 16%

2003 17%

2004 25%

2005 15%

2006 3%

Not only is the South Bay different from Los Angeles and the rest of the state and country in its real estate values, it’s also a great place to live. Link to the resources in this article for more information and sourcing.

The Parks and Recreation Department led by the sub-committee Pet Owners for Quality of Life is recommending to the City Council of Manhattan Beach that dogs and their owners have some access to local parks. This access would be on a trial basis allowing the community to be fully involved in reporting problems and successes with the access if permitted. Manhattan Beach is one of the only cities in California with no access for pets and thier owners in community parks. This committee, at the request of the community, seeks to address this issue by finding solutions that work for all of the citizens of the city.

Recommendation:

The recommendation is that the Parks and Recreation Commission approve, on a trial basis, the following expansion of dog access in city parks:

1. Expand current on-leash dog access to the upper trails at Sand Dune Park, excluding the north steps. (See city website for diagram)

2. Establish on-leash dog access for the western most path at Polliwog Park.

3. Expand on-leash dog access to include entire Bruce’s Beach park. This would allow walking or sitting on the grass, but no off leash activities.

A meeting with the City Council and residents is set for Tuesday, September 18th 6:30pm to discuss this issue.

Manhattan Beach is beach volleyball! Once again, we will be graced by the presence of greatness with some of the best volleyball players in the California Beach Volleyball Association. Top four teams from each division win complementary berth into the U.S. Open of Beach Volleyball.

Cal Cup Tournament to be played in Manhattan Beach on September 1st and 2nd on the South side of the Manhattan Beach Pier.

Tournament begins at 8am.

For more information see the CBVA website. Or go to the City of Manhattan Beach website for information on parking and local restaurants.

As your local resource for housing and information, I can make the following parking and restaurant recommendations:

Parking: Once you enter Manhattan Beach west of Sepulveda on Manhattan Beach Blvd., pass over Ardmore Drive and Valley Drive. You will immediately see a shopping center on your right called Metlox. You can take the next right at the Pomodoro restaurant. Halfway down the block you can turn right into an underground parking structure. The lowest floor has the longest metered parking for all day beach-goers. Be sure you have quarters! There are no change machines.

Meals: We do have the usual Starbucks and Coffee Bean or Noahs bagels. If you want to venture to some of the best food in town, see Uncle Bills on Highland just North of Manhattan Beach Blvd. Sometimes you’ll wait 15 minutes, but it is well worth it. Lunch: Sandwiches from Becker’s Bakery at Manhattan Avenue around 10th should hit the spot. If you’re still around and ready to celebrate after the tournament, I suggest you go for the coldest beer in town at Shellback’s on the corner of Manhattan Beach Blvd., just above the pier. Have the Chicken Nuggets. They’re made with beer batter and they are awesome!

Have a great time! Be safe!

This great rental is only one block to the beach in beautiful Manhattan Beach. 1 bedroom, 1 bathroom lower level apartment with garage! These are hard to come by.

See the link below for info.

www.geocities.com/tomruffrentals/home.html