Many area bloggers attended the enjoyable venue to chat about blogging and upcoming events in the community. It was a chance to meet new friends and learn of new blogs. The event has been going on 2-3 years and began with  10 – 15 people. Now the gathering has  more than doubled in size. I was impressed to see the turnout. The image below is a list I composed from the sign- in board. Over 35 blog contacts were made from this event. I have viewed 10 sites and plan to visit the rest by weeks end. Please enjoy the list and pass it on.

This is a shout out to all San Gabriel Valley bloggers – Join us for the next picnic …Share your stories, experiences and knowledge …Stay tuned for future details.

Pasadena Income Property

Many self proclaimed real estate investors began looking at income property as a means to increase their wealth. Buying rental property provided a way to spread your risk over more than one property and offered what seemed like a better chance for profit than other investment vehicles. Since qualifying for a mortgage was a relatively easy process, many who delved in ask themselves “Do I have the courage to be rich”? This was an old passage I remember reading from a real estate investment magazine several years ago. The underlying meaning is there is an inherent risk in any future potential reward.

This property, a duplex features two units, each with 2 beds / 1 bath and about 1000 sq ft each. each unit also has its own fireplace. In January ’06 it sold for $750,000. A short sale was approved in November ’08 for $630,000.

This Spanish style duplex was sold in June of 2006 for $795,000. One side featured 2 beds / 1 bath and a bonus room for a third bedroom. The other side was a 2/1. Encompassing about 2200 sq feet, it featured central heat and air. Originally brought on the market for approximately $895,000 in mid 2008, it closed in January ’09 for $535,000. It was listed for $585,000. Another short sale, the bank accepted an offer $100,000 less on this property with more amenities than the above property. As I pointed out in my last article, there is a way to negotiate a short sale and banks are becoming more acceptable to buyers who are eager to make a deal and are well qualified.

Pasadena Single Family Homes

This ranch style home offered many upgrades including newer central heat and air, granite counter tops and new appliances. It also had hardwood floors and upgraded double paned windows. Built in 1959, it offered 3 beds / 2 baths and 1642 square feet. Listed for $575,000, it sold in November ’08 for $559,000. In May of 2006 it had sold for $670,000.

If there is such a thing as an “average” house in Pasadena, this would probably fit the statistical description. The lot size is 7300 square feet, in a picturesque quiet neighborhood.

The last example is a Craftsman style home built in 1905. With 4 bedrooms and 2 baths, it offers 1950 square feet on a 7000 square foot lot. Located more to the west than the other pictured homes, it offers many wonderful upgrades and may qualify for a special property tax exemption. Listed at $525,000 it sold for $515,000 in November ’08. The house was last sold in July 2005 for $640,000

Time for a Property Tax Reassessment?

If you bought your property within the last 12 to 36 months, it would probably be a good idea to contact the LA County Tax Assessors office. If the market value of your property has declined anywhere from $100,000 to $200,000, you could possibly save as much as $2300 in your annual property tax bill.

Is the local Pasadena housing market better or worse than other real estate markets across the country? The factors that must be considered are the number of homes that sell compared to the number of homes that enter the foreclosure process. An increased number of home sales will indicate that consumers are returning to the market and the underlying fundamentals mentioned above are beginning to provide a foundation in which overall consumer confidence is increasing.

The Pasadena home sales for the month of December were just recently reviewed including the median prices and number of units that were sold. I took the single family home sales and plotted them on a map. If you scroll you mouse over the “green pin” and click you can also access the recorded sales price below.

To give you an idea of the disparity that exists in the Pasadena housing market, the second map includes the number of homes where a “Notice of Default” has been filed.

As you can see the problem becomes pretty defined when displayed in a visual context. In addition this may help you understand why the median price of a Pasadena home has declined about $200,000 in the last 12 months.

Several months ago it was almost impossible to find a home in Pasadena under $450,000. There were a few out there, some with 500 square feet or maybe a lot size of 3000 sq ft. If your budget was under a half million dollars a condo or townhome could have been your only alternative.

For some, it seemed they were destined to rent forever. Escalating home prices forced many people to buy now or quite possibly never have another opportunity. Then we entered the equity warp, prices began to deteriorate and home values began their descent as they started to return to more normal levels.

For many, a home priced at $450,000 is still beyond their means. On a national level, that much cash will get you a lot of home provided you can stay away from the west coast or the northeast areas of the county. Even though it’s still high, it does appear that Pasadena is offering more home value for the dollar than in years past.

Locally we have been seeing the median price of a Pasadena single family home fall for several months now. And while $450,000 is a big investment for a home, by historical standards in Pasadena it offers a great opportunity for many who have been hoping one day for the chance to own a home.

I mapped the current inventory of homes for sale less than $450,000. I came up with 50 listings. While most are located west of Lake Street, and north of the 210 freeway new listings are being offered everyday. Some of the newer properties are snapped up pretty fast depending upon the value and the amenities they offer.

I am not going to tell you that now is a great time to buy a house. I will leave that up to the National Association of Realtors. That is a decision only you can make. However, if you are looking for a home, I would encourage you to sign up at one of the many sites available that offers email updates as new Pasadena listings become available.

Just in case you are interested in seeing what your money will buy these days, in addition to the map, you can also check out the pictures and details of all the available
homes listed for sale.

Pasadena Median Price and Days on Market

As indicated, the number of days it is taking a Pasadena property to sell has steadily been on the increase since March of last year. During the same period the median price has dropped about $65,000, as the mix of homes that are sold and in demand continue to favor the lower end of the pricing scale.

The disparity began to increase in November as the two market indicators began moving in opposite directions. Based upon the current direction of these two separate measures, they may continue to move away from each other for a while.

Inventory and Days on Market

The inventory of homes for sale was unusually high for the summer months and has declined considerably as of late. However the declines are not due to an increase in the number of homes sold, but to cyclical factors associated with the winter months as are the increased selling times.

The days on market number measures the current number of days a single family home has been listed for sale and does not include condos or townhomes.

Median Price and Inventory

With the median price and inventory at 9 month lows what is the prognosis for 2009? The months of January and February are usually very low months for real estate activity. However with interest rates and prices corresponding with the declining graphs, it appears this trend could reverse. Only 50 homes were sold in the first two months of last year, so the volume increases could approach twice the previous levels. With the median price off about $200,000 on a 12 month basis, the declines are likely to continue for a few more months. Look for an increasing number of homes sold, but at lower sales prices.

The charts are courtesy of Altos Research LLC, copyright 2009. If you would like to receive weekly Pasadena real estate market reports, send me an email. The reports are courtesy of up2daterealestate.

If a new house is on your holiday wish list, don’t forget to factor into your equation the cost of money. With interest rates coming down in the last few weeks you may be able to qualify for a more expensive home or find out the one you are considering may have become cheaper. On a $500,000 loan amortized over 30 years, the difference in interest rate payments for the first five years is about $12,500 or $208 per month.

In the next few days, I will report on the November sales of Pasadena homes. While that report focuses more specifically on what has sold, the enclosed chart describes the current market with homes currently listed for sale. The data specifically examines the “single family” market, so condos and townhomes have been excluded. The chart is broken down by zip code and includes the overall numbers tied together to give you an idea of how Pasadena is performing as a city. The data looks at four key indicators of the market including

1. The Median List Price – the number which indicates one half of the homes are listed for less and the other half is listed for more.
2. The Average Price per Square Foot – takes the listing price and divides it by the square feet on the property. A smaller house will typically sell at a higher cost per square foot than a larger house.
3. The Average Days on Market – the meter is running indicating the time a house has been on the market
4. Total Inventory – the number of homes listed for sale at this time.

If you would like to receive free Pasadena Market Reports, just enter your information for a complimentary subscription.

The numbers are current as of 12/8/08 and are a courtesy of Altos Research LLC, Copyright 2008.

To obtain LEED Certification, certain requirements must be met on items carted away from the property, thus reducing any negative environmental impact. In simpler words, “keep things out of the landfill”.

River Rock, A Hot Commodity

The versatility of river rock cannot be overemphasized. Although it is not common anymore, it used to be the basis for building a house. In this instance the rock was used as a decorative retaining wall.
River rock foundations can still be found throughout the area on some of the older character homes. These days, one of its primary utilities is found in landscape design.

The local homeowners were eager to remove the rock and use it in their own projects. The rock, which was removed from the lot is now being used as a dry stream bed, which will also encompass a bridge in the design adding a unique and well remembered feature on an adjacent property. A terraced rock wall will also be constructed on another property. Lastly, one other homeowner took an entire bin of the stones to use in general landscaping projects and outlining the flower beds around the house.

Removal of Debris

Some of the other items removed included pavers, and cinder or concrete blocks. Most of these items were hauled away for recycling.
The company, Looney Bins has a documentation process that certifies the compliance with the LEED program. According to the company’s website, they are able to recycle approximately 90% of concrete, asphalt, rocks and dirt.

Next Steps

The lot was surveyed and the boundaries were marked this week. The actual construction should begin soon with the first step being to grade the lot in accordance with the slope and drainage requirements. It will be interesting to see how the parcel begins to take its shape. We will be providing future updates on the progress of the Eco House along with information on the unique new building processes and energy saving components of the home.

The same can be said of the Pasadena real estate market. The market overall continues to pick up steam. We continue to see unit volume increases, indicating that buyers are returning to the market which is good news. On the flip side those buyers are opting for many of the foreclosures and bank owned properties in Pasadena.

Unfortunately we can not confuse an increase in unit sales as being beneficial. Currently an inverse relationship exists with the number of houses that are being sold and the median price. Right now as more homes are sold, the median price continues to decline as short sales and foreclosures are eliciting multiple offers.

Market Action

In a slower market homes that are priced in the mid price ranges ($700.0 – $999.0) are usually prone to slower selling times. The reason is many buyers and investors look for opportunities to buy below market value in the the lower price ranges. In the higher end homes above $1MM, home buyers are not as susceptible to the increased demands of loan qualification, therefore homes are more likely to turnover.

The big question to which there is much speculation is “Is Pasadena real estate close to a bottom?”

If the projected sales numbers for November are any indication, the answer is “not yet”. Of the homes currently in escrow the median price appears to be lower than what was recorded for the month of October.

Pasadena Homes Market Report

The enclosed slides break out the numbers for the overall residential market. Included are single family along with condominiums and town homes. The report is best viewed by using the full size icon in the lower right hand corner.

In real estate the old adage was to buy the least expensive home on the best street. Most home buyers have a particular budget in mind when they shop for a home and what they can qualify for in terms of a loan and house payment. At least these days they do, the banks are seeing to that.

Neighborhood Value Considerations

Why does South Pasadena real estate seem to hold its value better than Pasadena?

1. Number of households -with So Pas having approximately 1/5 the number of housing units there is less diversity and much more homogeneity. Pasadena had better opportunities for entry level home buyers due to its history of lower median prices, while South Pasadena has been more of a move up market.
2. Distressed Properties – more housing units in Pasadena and lower entry prices have resulted in more properties in the foreclosure process, depressing home prices in the area.
3. More Equity, Less Leverage -when home buyers move up, they typically put more of their own money into the transaction meaning less volatility in market ups and downs.
4. Public Schools – schools in So Pas enjoy a very good reputation. Does a correlation exist between high home prices and good public schools? A recent comment by one of our readers made an excellent point about public schools. It would be interesting to see the effect on Pasadena home prices if the public schools had the same reputation as South Pasadena.
5. Other factors – neighborhood amenities, (retail, worship, topography, traffic, local services) and crime statistics can also have a role in the overall purchase decision, however these things may be more subjective to a large degree with the exception of crime in an area. If a home buyer is concerned about neighborhood crime, it is always a good idea to talk with the local police department.

When markets are bullish, we see prices rise across the board with no real concern of quality or value. The tech bubble comes to mind, followed by the real estate bubble. However when prices begin to fall, neighborhoods or cities that successfully address the above criteria will be less susceptible to market gyrations.

Again, rather than insert a matrix of numbers and try to explain each segment of our real estate market you will recognize the graphic at the end of the paragraphs. All of the market data is now put into a PowerPoint presentation and delivered via a slideshow. To me, the synopsis is much easier to read and therefore easier to understand.

Allow me to elaborate on a couple of the highlights in September. Inventory (meaning homes and condos available for sale) is beginning to decline. The main emphasis for this has to do with seasonal occurrences rather than increasing home sales. We are not however seeing the monthly volume swings that we used to experience when the market was much more active. In last month’s report I had suggested that we would see a big increase in the number of homes (units) that were sold. We did, by almost a 3:2 ratio. That could easily continue for the next several months. The reason is that in the 4th quarter of 2007, home sales fell off the radar screen, so today’s increase is against last years poor performance. Units will increase, however the same will not be applicable to prices. October and November’s median price last year was $655,000 and $654,000 respectively. That elevator has a way’s to go before we see those kinds of prices again.

However the long journey begins with a short step!

Hit the “full screen” icon in the the above frame for easier viewing

Pasadena Homes – Sales Report by Month

Pasadena CA Real Estate August Sales Report

Pasadena Real Estate July Sales Report