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Jun, 2022 The housing market tips as ARM share rises, mortgage applications plummet

ARM share rises, mortgage applications plummet

  The housing market tips as ARM share rises, mortgage applications plummet

Mortgaged homebuyers running up against rising interest rates are now facing another obstacle: tightened access to mortgage credit. The result has been a drastic cut to mortgage application numbers in recent weeks.

Purchase mortgage application volume decreased in the week ending June 3, 2022, down 18% from the prior week. This was also down 21% from a year earlier, according to the Mortgage Bankers Association (MBA).

These factors have produced the lowest level of mortgage loan application volume in 22 years — foreboding news for future home sales volume.

Further, even as fewer homebuyers and refinancers are applying for mortgages, lenders are granting fewer approvals. Called mortgage availability, this index declined for the third month in a row in May 2022 to 30% below pre-pandemic lending standards, according to the MBA. Wary of the financial fallout from rising interest rates and the impending recession, lenders are tightening their purse strings in advance of the coming storm.

See Full Commentary: The housing market tips as ARM share rises, mortgage applications plummet

March 2022 California home sales volume: the slow, agonizing death of buyer enthusiasm

California home sales volume

  March 2022 California home sales volume: the slow, agonizing death of buyer enthusiasm

California home sales volume increased in March 2022 from the prior month but was down from a year earlier. This month-over-month increase was a typical seasonal adjustment, as sales volume typically rises from an annual low point experienced each January to a mid-year peak.

44,500 new and resale home transactions closed escrow in California during March 2022. The number of homes sold in March was 12,700 more than the prior month but 2,700 fewer than a year earlier, amounting to a 6% year-over-year decrease. For reference, the rapid pace of sales experienced in California since 2020 began to taper off in the second half of 2021, continuing in 2022.

The steep annual sales volume rise that occurred earlier in 2021 was thanks to homebuyers taking advantage of low interest rates and stimulus boosts. Homebuyers were influenced by a fear of missing out (FOMO) on a low inventory of homes for sale. Historically low inventory continues in 2022. But as the effects of stimulus are now behind us and interest rates are increasing rapidly with the Federal Reserve’s (the Fed’s) bond taper, homebuyers have begun to ease off the gas and sales volume is slowing.

Along with a deep cut to home price potential, 2022’s rapidly rising interest rates are causing sales to stall. In response to a recent firsttuesday poll, 34% of readers report escrow cancelations due to the recent interest rate hike.

See Full Commentary: California home sales volume: the slow, agonizing death of buyer enthusiasm

  First-time homebuyers and households of color most impacted by interest rate hikes 04/15/2022

First Time Homebuyers

  First-time homebuyers and households of color most impacted by interest rate hikes 04/15/2022

The obstacles continue to pile on for homebuyers in 2022, with certain groups likely to feel more pressure than others.

California home prices are up a whopping 19% from a year earlier as of January 2022. At the same time, mortgage interest rates have surged in recent months. For example, the average 30-year fixed rate mortgage (FRM) rate has increased from 3.2% a year ago to 4.7% at the end of March 2022. The result for purchasing power has been devastating, with significantly less mortgage money available to today’s homebuyers due to interest rate increases alone.

Today’s record-smashing home prices and rapidly accelerating mortgage interest rates impact homebuyers from all backgrounds. But — absent a decrease in homebuyer demand — rising interest rates will push homeownership further out of reach for groups most reliant on mortgages.

This is especially true for homebuyer groups already at a disadvantage when it comes to achieving mortgage approval — specifically households of color — according to the JPMorgan Chase Institute.

Here in California, the mortgage application denial rate is:

. for white applicants;
. 10% for Asian applicants;
. 13% for Latinx applicants; and
. 16% for Black applicants, according to data collected through the 2020 Home Mortgage Disclosure Act (HMDA).

The disparity in mortgage denial across race and ethnicity is clear. While systemic discrimination plays a part, the high mortgage denial rates for non-white and non-Asian households can be traced to many observable factors, including:
. down payment size;
. credit history;
. debt-to-income (DTI) ratios; and
. job security.

For example, the average U.S. Black mortgage applicant listed a 3.5% down payment, well below the 8.9% down payment from applicants averaged across all races, according to Zillow.

With less skin in the game, lower down payments translate to greater risk for the lender. Thus, low down payment mortgages are denied more often — and when they are originated, the interest rate tends to be higher to cover the lender’s (and mortgage servicer’s) higher risk of loss.

With interest rates already rising rapidly in 2022, homebuyers who were on the verge of rejection before will fall into the gap, unable to attain homeownership.

Higher interest rates widen the homeownership gap

First-time homebuyers — who lack equity (cash) from a prior home sale — stand to lose the most from today’s rising interest rates. Those with access to down payment gifts will be the exception.

In fact, parental transfers of wealth, including down payment gifts, account for 30% of the Black-white homeownership gap, as found in a study by the Consumer Financial Protection Bureau (CFPB). In the U.S., young white households are twice as likely to be homeowners as are young Black households.

Increasingly unable to access mortgage financing, the generational homeownership gap will continue for today’s would-be homebuyers.

But there are some steps real estate agents and brokers can take to help mortgaged homebuyers navigate today’s higher interest rate environment.

For example, there are special down payment programs for first-time homebuyers which can be found in local communities. Further, suggesting homebuyer clients check out their local credit unions rather than large banks can result in more mortgage options. All mortgaged homebuyers ought to apply with at least three lenders to ensure the best rate and terms.

When all else fails, it’s helpful to continue encouraging homebuyers to build up their down payments and continuing to check in with their progress over time.

Posted by Carrie B. Reyes First Tuesday

  How to Make Downsizing a Smooth Transition for Both You and Your Pet 04/01/2022

Torabi.com LAMarket.net Real Estate Broker

  How to Make Downsizing a Smooth Transition for Both You and Your Pet 04/01/2022

Selling your home and moving into a smaller residence is often a smart money move. Unfortunately, it can also be highly disruptive for both you and your fur-baby. So to make the transition a little easier, here’s some valuable advice from Ehsan Torabi.

Prepping Your Home for Sale

Attracting the highest bids requires making your home as inviting as possible. Start by decluttering . Schedule a few days to focus exclusively on throwing away items you no longer want or need. This has the added benefit of lowering moving costs, as movers often charge by the pound. Your space will subsequently look larger, making it more appealing to potential buyers. Some individuals have difficulty parting with inanimate objects; if you suspect you have hoarding tendencies, professional psychological treatment may be necessary.

While you're tossing items, reduce the stress this causes your four-legged friend by putting all of his or her bedding and toys in one area and securing your dog in the space with baby gates. If that isn't enough to create calm, dedicate an entire room that your pet can use as a temporary home.

Next, stage your house to maximize its appeal. You can do this yourself, but hiring an expert may be the optimal alternative. Minor repairs might be necessary. Like with staging, they can be handled independently. However, locating a fix-it professional is often a wiser decision. A fresh coat of paint usually does wonders. Swap bold colors for a more neutral color palette. Think like a buyer and never neglect the importance of outside curb appeal.

Finding Your New Home

It'll take time to locate a residence where you can picture yourself living. A recent study suggests that homebuyers spend 2.5 months on average searching for someplace new. Remain patient and know that with enough looking, you'll eventually discover a residence that suits your needs.

Once you do pinpoint somewhere worth calling home, you must act fast before another buyer outbids you. Speed the process by getting preapproved for a mortgage. Doing this helps figure out how much you can comfortably borrow. The sooner you secure the perfect living arrangement, the quicker you and your pet can settle in together.

Last but not least, in terms of the actual move, do yourself a favor and hire professionals to get the job done. You’ll already have enough on your plate without trying to do it all by yourself. Simply search “ local moving companies near me ” and browse ratings and reviews, as well as request a quote in advance.

Keeping Your Pet Safe and Comfortable

As moving activity increases, it's likely your dog will experience increased anxiety. Reduce these feelings by placing your furry friend in a calming vest. These time-tested outfits create reassurance by mimicking a hug. Postpone washing your pup's bed and blanket until after the move since canines naturally like stinky things. The same goes for cats. Intensify the smells your pets like by spraying synthetic pheromones in strategic areas.

Before moving into your new space, pet-proof it by securing cabinets, as well as keeping harmful foods and substances out of reach. Also, inspect your home for any other potential dangers, like faulty electrical outlets or sharp corners. Gradually acclimate animal buddies to their new homes by introducing them to one living section at a time. Showing them where toys, food, and water are located gives them everything they need to start feeling at home.

Moving is a major stress factor for humans. Imagine how difficult it can be for pets. Be mindful of how transitioning to a new living situation can be made more pleasurable for everyone, both human and non-human. Ehsan Torabi is a Real Estate Analyst and Real Estate Broker focusing in Greater Los Angeles Areas serving special private clients such as you that are planning to buy or sell property in Greater Los Angeles Areas. Call 310.740.3737.

Post prepared by Cindy Aldridge.

  Broker vs. sales agent 03/20/2022

Brokers are in a distinctly different category from sales agents. Brokers are authorized to deal with members of the public to offer, contract for and render brokerage services for compensation, called licensed activities. Sales agents are not.

A real estate salesperson is strictly an agent of the employing broker. Agents cannot contract in their own name or on behalf of anyone other than their employing broker. Thus, an agent cannot be employed by any person who is a member of the public. This is why an agent's license needs to be handed to the employing broker, who retains possession of the license until the agent leaves the employ of the broker.

Only when acting as a representative of the broker may the sales agent perform brokerage services which only the broker is authorized to contract for and provide to others, called clients.

Further, a sales agent may only receive compensation for the real estate related activities from the employing broker. An agent cannot receive compensation directly from anyone else, e.g., the seller or buyer, or another licensee.

Thus, brokers are the agents of the members of the public who employ them, while a broker's sales agents are the agents of the agent, the individuals who render services for the broker's clients by acting on behalf of the broker.

As a result, brokers are responsible for all the activities their agents carry out within the course and scope of their employment.

When a broker employs a sales agent to act on behalf of the broker, the broker is to exercise reasonable supervision over the activities performed by the agent. Brokers who do not actively supervise their agents risk having their licenses suspended or revoked by the DRE.

Here, the employing broker's responsibility to the public includes:
- on-the-job training for the agent in the procedures and practice of real estate brokerage; and
- continuous policing by the broker of the agent's compliance with the duties owed to buyers and sellers.
The sales agent's duties owed to the broker's clients and others in a transaction are equivalent to the duties owed them by the employing broker.

The duties owed to the various parties in a transaction by a broker, which may be carried out by a sales agent under the employing broker's supervision, oversight and management, include:
- the utmost care, integrity, honesty and loyalty in dealings with a client; and
- the use of skill, care, honesty, fair dealing and good faith in dealings with all parties to a transaction in the disclosure of information which adversely affects the value and desirability of the property involved.

Talk About Real Estate 03/15/2022

Talk About Real Estate 03/15/2022

It’s what’s underneath that’s important

The usability of a piece of land is determined by many obvious factors, easily recognizable to the average homebuyer.
For example, if a road runs through the middle of the property, this will cause the homeowner to deal with a whole new set of issues.

Less obvious, but just as important, zoning can also pose a problem, for example, if a property is zoned for residential use and the buyer wishes to build a commercial building.

But what’s not visible to the naked eye (or even the county’s office) is the land’s most important characteristic: the soil.

Beyond whether or not a site has the ability to grow crops, the soil’s characteristics determine whether a home can even be built in that spot. Further, just because a neighboring lot has a home does not mean the lot in question is also safe to build on.

Soil is identified by its:
• texture;
• grade;
• color;
• permeability; and
• density.

Soil types

Three types of soil exist:
• clay, which has a fine texture, is extremely dense and limits the land’s use;
• loam, which has a medium texture and has the fewest limitations for use; and 12 Video Renewal Course: Real Estate Made Reel™
• sand, which has a coarse texture, is very permeable and is most susceptible to erosion.

The soil in your backyard is a mixture of clay and sand, as well as a smaller amount of silt (rock sediment). If it is majority clay, then it is considered clayey, and if it’s mostly sand with a little bit of clay, it’s considered sandy. If it is a mostly even mixture, your soil is loamy.

A soil’s grade is measured by the size of its grain. For instance, gravel has a very high grade, while clay has a lower grade. The lower the grade, the less permeable and less susceptible to movement the ground is.

Light-colored soil is more susceptible to erosion and has fewer nutrients. Darker soil is more nutrient rich and has a smaller erosion factor.

How permeable the soil is also affects the building site. For instance, soil with high permeability — meaning water passes through the soil rapidly — causes difficulty for septic systems. On the other hand, septic systems cannot operate in soil with very slow permeability, such as clay, which can also cause problems for foundations.

Before beginning construction, the builder will ensure the soil is compact, or dense enough to establish a foundation. Compaction is completed by basically smashing down the soil, reducing the space between grains.

Finally, land with a shallow soil depth will make it hard to establish a foundation, landscaping and a septic system. Generally, the higher the depth — the distance from the topsoil to the bedrock or the water table — the easier it is to build the home and its required support systems.

All of this soil science matters not just for building, but for safety, as California is susceptible to earthquakes.

Liquefaction zones

Liquefaction occurs when soft soil moves or collapses during an earthquake. The ground “liquefies” or behaves like s and at the beach, and the buildings on top lose all stability.

Areas susceptible to liquefaction — called liquefaction zones — are found mostly in low-lying areas along the coast. In the Bay Area, the U.S. Geological Survey claims most of San Francisco’s residents live and work in a liquefaction zone.

Liquefaction can also occur on artificial landfill — common in urban areas — and other young deposits, such as those near streams and rivers.

A liquefaction zone is a type of seismic hazard. Thus, the presence of a liquefaction zone needs to be noted in the Natural Hazard Disclosure Statement, which is delivered by the seller or their agent to the buyer. The seller needs to disclose the presence of natural hazards, no matter the type of property. [CC §1103.1(b); see RPI Form 314]

Talk About Real Estate 03/01/2022

Talk About Real Estate 03/01/2022

Physical and legal aspects of real estate

For most situations, the term "property" means a physical or tangible thing. However, property can be more broadly defined, focusing on the rights which arise out of the object. Thus, property is referred to as a bundle of rights, which for the purposes of this material is real estate.

Bundle of rights

Further, property is anything which may be owned. In turn, ownership is the right to possess the property owned and use it to the exclusion of others. [Calif. Civil Code §654]
The right to possess and use property includes the rights to:
• occupy;
• sell or dispose;
• encumber; or
• lease.

Property is divided by types into two primary categories:

• real estate, also called real property or realty; and
• personal property, also called personalty. [CC §657]

Real estate is characterized as immovable, whereas personal property is movable. [CC §§659, 657]
Personal property is defined, by way of exclusion, as all property which is not classified as real estate. [CC §§658, 663]

While the distinction between real estate and personal property seems apparent at first glance, the difference is not always so clear.

Cutting up the real estate

Real estate may be physically cut up by severance of a part of the earth (i.e., removal of minerals). Title to real estate may also be cut up in terms of time, providing sequential ownership.

For example, fee ownership may be conveyed to one person for life, and on their death, transferred by the fee owner to another. Time sharing is another example of the allocation of ownership by time, such as the exclusive right to occupy a space for only three weeks during the year.

Title to real estate may also be fractionalized by concurrently vesting title in the name of co-owners, such as tenants-in-common, who each hold an undivided (fractional) ownership interest in the real estate.

Possession to real estate may be cut out of the fee ownership and conveyed for a period of time. For instance, the fee owner of real estate acting as a landlord conveys possession of the property to a tenant under a lease agreement for a fixed term, called a tenancy. When the tenancy expires or is terminated, possession of the property reverts to the landlord. The landlord retains fee title to the real estate at all times, subject to the lease.

Possession may also be cut up by creating divided interests in a property, as opposed to undivided interests. For example, an owner may lease a portion of their property to a tenant. The tenant, in turn, may sublease a portion of their space to yet another person, known as a subtenant.

Other non-possessory interests in real estate may be created, such as liens. Liens are interests in real estate which secure payment or performance of a debt or other monetary obligation, such as a:
• trust deed lien; or
• local property tax lien.

On nonpayment of a lien amount, the lienholder may force the sale of the real estate to pay off and satisfy the lien.

Thus, an owner's rights in a parcel of real estate extend beyond the mere physical aspects of the land, airspace and improvements located within the legally described boundaries of the property.

Real estate components

The physical components of real estate include:
• the land;
• anything affixed to the land;
• anything appurtenant (incidental rights in adjoining property) to the land; and
• anything which cannot be removed from the land by law. [Calif Civil Code §658]

Real estate includes buildings, fences, trees, watercourses and easements within a parcel's horizontal and vertical boundaries. Anything below the surface, such as water and minerals, or above the surface in the air space, such as crops and timber, is part of the real estate.

For example, the rental of a boat slip includes the water and the land below it, both of which comprise the total of the rented real estate. Thus, landlord/tenant law controls the rental of the slip. [Smith v. Municipal Court (1988) 202 CA3d 685]

In the case of a condominium unit, the air space enclosed within the walls is the real estate. The structure itself, land and air space outside the unit are the property of the association or all the owners of the separate parcels of air space within the condominium project, creating what is called a common interest development (CID). [CC §4125]

The boundaries of real estate

A parcel of real estate is located by defining its legal description on the face of the earth. Using the property's legal description, a surveyor locates and sets the corners and horizontal boundaries of the parcel.

The legal, horizontal boundary description of real estate is documented in numerous locations, such as:
• deeds;
• public records of the county where the parcel is located;
• subdivision maps; and
• government surveys relating to the property.

Real estate is three-dimensional and reaches perpendicular to the horizontal boundary. In addition to the surface area between boundaries, the classic definition of real estate consists of the soil below to the core of the earth as well as the air space above to infinity.

All permanent structures, crops and timber within this inverse pyramid are also a part of the parcel of real estate. The three-dimensional aspect of real estate has its source in the English common law. [Calif Civil Code §659]


The first component of real estate is land. Land includes:
• soil;
• rocks;
• other materials of the earth; and
• the reasonable airspace above the earth. [Calif. Civil Code §659]

The soil and solid materials, such as ores and minerals, are considered land while they remain undisturbed as a part of the earth. For example, unmined gold dormant in the earth is real estate.

However, when the gold is mined, it becomes personal property since it is no longer embedded in the earth. The gold has been converted from something immovable - part of the rock below the soil - to something movable.

Minerals in the soil are severable from the earth. Also, fee ownership to the soil and minerals may be conveyed away from the ownership of the remainder of the land.

When ownership of minerals in a parcel of land is transferred, the transfer establishes two fee owners of the real estate located within the same legal description - an owner of the surface rights and an owner of the mineral rights beneath the surface.

These parties are not co-owners of the real estate, but individual owners of separate vertically-located portions of the same real estate. Both fee owners are entitled to reasonable use and access to their ownership interest in the real estate.

For example, an owner sells and conveys the right to extract minerals to a buyer. On conveyance, there now exists:
• a surface owner; and
• a mineral rights owner.

Later, the surface owner conveys the real estate to a developer. The developer subdivides the parcel of real estate and plans to construct homes on the lots.

The mineral rights owner objects to the construction, claiming the homes, if built, will interfere with their right to enter the property and remove their minerals.

Is the mineral rights owner entitled to enter the property to remove the minerals?

Yes! But only as necessary to use their mineral rights. The rights of the surface owner and the mineral rights owner are thus balanced to determine the precise surface location to be used to extract the minerals. [Callahan v. Martin (1935) 3 C2d 110]

The right to remove minerals from another's real estate is called a profit a prendre.

  About LA Market Real Estate 02-10-2022

  About LA Market Real Estate 02-10-2022

Benefits of working with local experienced real estate advisor, agent broker Buying or selling home or property could be very tricky and overwhelming or risky, especially without any guidance or assistance of an experienced expert. Working with a knowledgeable, local real estate advisor, agent and broker throughout the purchase or sell of home is extremely wise and beneficial.

Having the right local real estate broker by your site could make or break your home buying or selling experience. No one have knowledge of local area and local market such as Greater Los Angeles Areas like a well-known, experienced local broker, Ehsan Torabi at LA Market Real Estate. You will be served and guided with an expert along this journey that save you enormous amount of time and stress throught the home buying or selling process. You can reach Ehsan Torabi, experienced California Real Estate Broker at https://Torabi.com or at LA Market Real Estate site https://LAMarket.net

Knowledge of experienced Local Real Estate Broker, Advisor is not replaceable even with latest computerized Artificial Intelligence, as the true example of half a billion dollars lost by so called number one authority in online Real Estate Business, Zillow:

This is an article published in Advances in AI and posted by Jason Li on February, 1, 2022

How Zillow’s AI lost half a billion dollars. The post then referred a Commentary in GeekWire by Dr. Oren Etzioni is Chief Executive Officer at AI2