12:15pm | Editor’s note: This is the third installment in a series of question-and-answer sessions with Long Beach real estate experts — Realtors, mortgage brokers, bankers, economists. There’s a lot of information about the national real estate market out there, but it’s tough to find good local information on residential real estate — until now.
Experts in the greater Long Beach real estate scene are invited to submit themselves as a Real Estate Q&A candidate regardless of whether they have good or bad things to say about the local market. Interested parties should send an email to [email protected].
While Richard Daskam’s name has become synonymous with the million-dollar-listings on Signal Hill that started popping up after the turn of the millennium, the Keller Williams agent is also quite active in Long Beach, a city on which he maintains a positive outlook when it comes to property.
Q) There’s a lot of uncertainty in the market. How do you discuss this with your clients?
A) With sellers I always start with what their goals are. If they need to sell within the next 12 months, then the discussion is how to go about preparing the property for immediate sale and pricing it to market, etc. If they are not sure/don’t have a specific timeframe, then we discuss having a five- to seven-year plan for them. Discussions about possibly renting their house out if they can’t get the price they want, owning two homes, etc., are the normal scenarios at that point.
With buyers, the historically low mortgage rates are always the first discussions. We compare today’s home values with what the buyer thinks prices will do over the next year or so, and then look at what the mortgage rates are predicted to do in that time frame. Every time I’ve run this scenario with a buyer the monthly payment for them has been lower in today’s market versus what they feel the market will be in another year. Then we talk about their quality of life renting an apartment versus owning their own home or condo. I make sure I discuss the likelihood of the conforming jumbo loan limits dropping from $729,750 to $625,000 soon, and how this will affect both buyers and sellers.
Ultimately, it’s up to the clients, whether buyers or sellers, as to when they want to make a move. I’m just there to work with them to come up with ideas, scenarios to consider and help them make an educated decision.
Q) Which sectors are hot, and which are not? (luxury, middle-range, entry-level, condos)
A) Middle-range homes appear to be the hottest right now. There is competition with Investors & Owner-occupied buyers in this price range. For now, loan limits ($729,750 for conforming jumbo) allow for this price range to take advantage of the best mortgage rates. When the loan limits drop, it is likely that values of the Luxury & middle-range homes will be affected.
Q) Where in Long Beach, or surrounding areas, can one find any deals?
A) Deals can be found in almost every neighborhood, it just takes time and dedication to hunt them out and find them. I’ve seen some great deals in Los Altos, in the larger condo buildings, as well as the new homes at the top of Signal Hill. One thing that any buyer can be confident in is that they over pay for a property right now, unless they pay cash. Banks are very stringent with their appraisals and I’ve seen more appraisals come back lower than the contract price than I’ve seen come in at or higher than the contract price. It’s a good confidence feeling for a buyer to know that someone else will be looking closely at the value.
Q) Where in Long Beach, or surrounding areas, should buyers avoid?
A) I can’t say any area should be “avoided” but I do tell buyers about the old adage that it’s always best to buy the “worst” home in the “best” neighborhood, rather than the “best” home in a “bad” neighborhood.
Q) Speaking of deals, where are all these foreclosures deals we’ve all been waiting for? Are they happening, or going to happen? If so, where and when?
A) My team works with some REO companies as well as companies that assist the banks with valuing their foreclosures, so we have a good pulse on the foreclosure market, and right now it our requests for values (BPO orders) are down by at least 50 percent. This tells me that banks aren’t completing taking their delinquent loans forward to foreclosure and they aren’t requesting as many values for their short sales either. When they will be coming onto the market is anyone’s guess right now.
Q) When the last spate of foreclosures hit Southern California, it negatively impacted many communities, creating blight in the form of unoccupied homes and uncared for communities. Are you seeing this in Long Beach? If so, which communities?
A) Surprisingly, I do see some of this in almost every neighborhood. And it’s not just the homes that have already been foreclosed on, it’s also the short sales and loan modifications. My neighbor is trying to do a loan modification and hasn’t cut his grass in months. I guess he thinks that if the outside looks terrible then the bank will grant his loan modification!
Q) Is the bottom here, near or in another year (or more)?
A) There’s the $64,000 question. Or is it the $1,000,000 question now, due to inflation? There are way too many factors that can positively or negatively affect the housing market to truly answer that one. We’ve got the reduction in loan limits starting in September. We’ve got fewer new unemployed people. We’ve got more new hires.
Unemployment in Long Beach is well into double-digits. There are too many factors pointing in opposite directions to answer that with just a guess. Hindsight will be 20/20, though.
Q) Name two or three good deals out there on the market?
A) Anything that is a good deal today won’t be there tomorrow. There are way too many investors out there looking for deals, especially in the local area. I wrote 6 offers today for an all-cash investor client, and it’s Saturday. They don’t rest and they don’t wait for someone else to make an offer.
Q) What are a few things about foreclosures that might surprise potential buyers? Is there anything they need to look out for?
A) Banks will actually negotiate the price/terms after the contract has been signed and escrow open, if the buyer finds a material defect in the property. I’ve gotten price reductions of almost 2 percent on one property and almost 5 percent on another. Buyers just need to work with an agent willing to fight for them and willing to irritate both the seller/bank and the listing agent and be willing to walk away if they don’t get what they want.
Q) Do you think the job market and economy has shaken the confidence of some prospective home buyers?
A) Definitely. The job market worries buyers, amongst many other things. But more than just the overall job market, each buyer has his/her own issues and questions about the job.
Q) Real estate is an extremely local business. How is Long Beach different or unique compared to other communities?
A) Long Beach has more to offer than most other cities in the area. We have new high-rise condos in the downtown area, 1900s historic homes just up the street, homes built from 1930 to today throughout the entire area, plus large condo complexes. Long Beach has beachfront properties, urban properties, suburban neighborhoods built after WWII plus large, custom homes built on golf courses. Compare that to Orange County cities that are all planned developments with just a few styles of homes.
Bio
Name: Richard Daskam
Affiliation: Real estate broker, Keller Williams Realty
Residence: Long Beach