Burbank Real Estate Blog

Last week was quite eventful.  We saw Existing Home Sales in August come slightly lower than expected, they came in at an annualized pace of 5.50M.  The big story, however, was the Home Inventory numbers at an all time high!  New Home Sales were down 8.3% to an annualized level of 795,000, lowest level in 7 years.

The Case-Shiller home price index fell by 3.9%, and the 10-city metro index fell 4.5% on a year-over-year basis.  This was the steepest drop in sixteen years according to this index.

Other items of note:

Rumors that Warren Buffet and a few Chinese banks were considering an "investment" in Bear Stearns......ummm, seems like a bail out to me. 

GM and UAW strike came to an end.  UAW will now be managing the trust fund that is supposed to take care of the 275,000 retired GM workers.  Hopefully UAW will do a good enough job managing it so they don't come asking for a bailout down the road! 

Consumer Confidence fell to 99.8, much lower than expected, the number was supposed to come in at 104.3.

Personal Spending was up .6%. 

Earnings warnings from Target and Lowes.

Both Goldman Sachs and Alan Greenspan made comments to the effect that they are concerned about a looming recession, so needless to say that was a damper on market activity. 

As we close out the third quarter, it is interesting to note how eventful it was as we saw the subprime mess implode and take Bear Stearns, Countrywide, hedge funds with it as well as wreaking general havoc abroad.

More to come on Sunday when I put out the Week Ahead post!!!

Are you looking for something to do?  If so, don't forget to peruse the Season at the Falcon Theater:

Leap   September 5th-October 7th

"All poor Bob wants to do is jump out the window, but first, he'll have to go through Heaven and Hell in this metaphysical farce."

The Enchanted Nightingale  August 18th-November 4th

This is the classic story of boy gets bird, boy loses bird, boy gets bird back. But there's a twist! The songbird is really the beautiful Princess Jade trapped under an evil spell. With fan dancing, martial arts, and a healthy helping of comedy, this modern adaptation celebrates the wealth in generosity and the magic and beauty of the Far East.

Sheldon & Mrs. Levine  October 17th-November 18th  Starring Penny Marshall

This production is the story of an ultra-possessive mother and her 31 year-old neurotic runaway son told through their exchange of outrageous and dysfunctional letters. In this love-hate relationship, Sheldon (Desmond Harrington) blames his mother, Mrs. Levine (Penny Marshall), for breaking up his marriage and ruining his life. His domineering mother can’t understand why something so trivial should bother her ungrateful son. Travel the globe and share in the angst, aggravation, madness and mail of a mother and son, who although thousands of miles apart, are still too close to each other for their own good.

Gary Marshall's Falcon Theatre  is located at 4252 Riverside Drive, Burbank Ca.

This is a great, intimate venue where you can enjoy quality productions with amazing cast members for a fraction of the cost!  If you have never been to the Falcon Theatre, it's worth putting on your must do list! 

For your Burbank Real Estate needs please visit my website at anaconnell.com!

There are items from last week worth mentioning:

City Council approved new and revised energy efficiency programs for businesses and homes.  What it means to you is that the city will be offering more rewards for energy efficient homes.  Cm. Golonski dissented as he objected to the program's inclusion of non-profit centers. 

Items of note for  this week:

Item 7 CONSIDERATION OF RESIDENT-ONLY PARKING PRIVILEGES ON EVERGREEN STREET NORTH OF MAGNOLIA BOULEVARD:

Item 8   PARKING CONDITIONS IN THE 300 BLOCK OF LOMITA STREET NEAR JORDAN MIDDLE SCHOOL:

City of Burbank has a General Plan that sets out goals and is essentially a policy guide for growth and development.  Whatever is in this plan will serve as a blueprint for all future development.

The Planning and Transportation Devision is in the process of updating this plan and will hold a special City Council and Planning Board joint study session to discuss the housing element update. 

According to state law this element has to be updated and what's interesting is that Burbank has to show that it can plan for "it's fair share" of housing based on regional needs.  One of the proposals is to increase residential densities, another is to allow residential in commercial areas and/or a blend of these two alternatives.

Either way, it's an issue that directly affects our quality of life. 

I do think that any proposals to increase housing densities needs to have an adequate transportation plan to go with it.  The inability to create a viable and executable transportation plan along with a housing density increase will negatively impact Burbank residents.

If you are interested in attending, here are the details:

Date: Tuesday, October 2, 2007

Time: 6:00 p.m. (regular City Council meeting time)

Place: City Council Chamber, Burbank City Hall, 275 E. Olive Avenue, Burbank, California

If you are unable to attend the meeting, please tune into the local city channel (channel 6 on Charter Cable) for the live feed of the meeting. 

My website is under development, but come visit me at anaconnell.com!

There is  legislation that is currently on the floor of the California Legislature called AB258, that will put much more stringent rules in place to prevent nurdles from reaching our oceans.

It's about nurdles......so what, you ask, is a nurdle?

Nurdles are pre-production plastic pellets and resin materials used in manufacturing. 

The problem is that  they are continually discharged during the transport, packaging and processing of plastics.

According to Greepeace, nurdles account for 10% of litter on beaches all over the world.  Heal the Bay, says that they account for almost 98% of litter in Orange County beaches!

The problem is the toxic nature of nurdles.  They contain micropollutants such as toxic plastic additives, that when ingested by marine life can be devastating. 

So if you are interested in helping our marine environments, contact your California State Representatives in favor of this Bill!

My website is under development, but come visit me at anaconnell.com!

Apparently the 818 area code will run out of numbers by 2009 due to the demand for cell phones! The California Public Utilities Commission is proposing splitting the San Fernando Valley into two pieces and have a new area code, 747, for part of the area.

The other option on the table , which they are calling the "overlay" option involves just giving new customers the 747 area code.   

If you are interested in learning more about this issue, they will be holding public meetings.  The Burbank meeting will be at 7pm, October 22 at the Buena Vista Library.

This will be your opportunity to learn the details of the plan and voice any concerns you may have! 

My website is under development, but come visit me at anaconnell.com!

Monday 24

3 & 6 Month Bill Auction 

Tuesday 25

Existing Home Sales-consensus 5.50M..... Year to year this number has dropped 9% and housing supply for July was at 9.6 months. 

Case-Shiller Home Price Index

ICSC-USB Store Sales  Tracks comparable weekly sales from major retail chains and represents 10% of total retail sales.  Is considered to be one of the most timely indicators of consumer spending.

Redbook a timely indicator of consumer spending and also represents about 10% of total retail sales.  This measure tracks weekly sales from discounters, chain and department stores.

Consumer Confidence -Consensus 104

4 Week Bill Auction 

Wednesday 26

MBA Purchase Applications measures applications at mortgage lenders.  This is considered a leading indicator for single family home sales and housing construction.

EIA Petroleum Status Report reports on crude oil inventories in the U.S. 

Durable Goods Orders Consensus  -3.1%-This report takes into account the current and future number of orders placed with factories.  By showing how busy factories will be in the coming months you can get an indication of economic activity and health of the overall economy.

 2 Year Note Auction 

Thursday 27

New Home Sales Consensus 835,000  New Home sales were slightly higher in July at 870,000.

GDP Consensus 4.0%

Corporate Profits 

Jobless Claims Unemployment claims.  Consensus 320K

Help Wanted Index  

EIA Natural Gas Report-Tracks natural gas inventories.

Farm Prices

3 and 6 month Treasury Bill Announcement Investors use this data to attempt to predict future Federal Reserve policy.

5 Year Auction 

Money Supply

Friday 28

Personal Income Outlays-Consensus .3% Consumer spending Consensus is .4% Another measure to gauge consumer spending power.

NAPM-Chicago-Consensus 52.9-Business conditions in the Chicago area, another measure of economic growth.

Consumer Sentiment Consensus 84.3

Construction Spending-Consensus -.5% Good indicator of the economy's momentum.

My website is under development, but come visit me at anaconnell.com!

Last week was quite eventful as we saw the Fed lower interest rates by 50 basis points to 4.75%!  This is the first easing in four years!

They forcefully responded to concerns of economic weakness by lowering both the Discount and the Target rate, which are two key rates.  This is huge and many are now looking for the Fed funds rate to reach 4% next year. 

Noteworthy are the continued weakness of the dollar and the low consumer confidence levels.  Whether the start of rate decreases will be the shot in the arm that real estate needs remains to be seen, at least in the short term.  Economic data has been mixed, showing moderate growth overall with no compelling case for impending recession. 

Hopefully the predictions of another 6-18 months for a rebound on the housing market are wrong! 

More to come on Sunday when I put out the Week Ahead post!!!

Wow, I just read a post by Jeff Turner, entitled, Google Completes the Missing App-Presentations Arrive!

So, of course, I wanted to check this out!  

For fun I took the post I wrote yesterday, Buy or Rent? and turned it into a slide presentation on Google Presentation.

You can view the end result here!

What's amazing is that it took me ten minutes to play with the application and put this together.

Worth checking out!!!

I'm frequently asked if buying makes more sense than renting.  The answer is that there is no one answer as that decision depends on many factors, not the least of which involve your financial situation, job stability etc.

It warrants a good look and before I go any further, for the purposes of this discussion I'm going to assume that the person asking me this question meets the following parameters:

• solid job history

• no out of area relocation planned, at least for a few years

• good credit history and fico scores 

• stable income

If you look at rents in the Burbank area, here are the ranges:

• Studio apartments         $950-1175

• 1 Bedroom    " "              $950-2475

• 2-3 Bedroom " "             $1300-2815

Next item on my list is to ask what are you currently paying and are you interested in a condo or home?  Very important, as condos/townhomes bring association fees that can range from $180-400 or more per month.  This amount will cut into your monthly amount available for the mortgage.

Here's what the available inventory looks like for homes and condos $300k-600k(nothing available below 300k):

• 62 homes available between the prices of $399k-600k  

• 86 condos available between the prices of $298k-599k
  

Assuming a 6.31% average for a 30 year fixed(rate obtained from Ricardo Bueno's excellent Industry Report) you will pay the following amounts per month(excluding taxes or PMI):

• $300k..............$1858.87 

• $400k..............$2478.5  

• $500k..............$3098.12

• $600k..............$3717.75

The discussion should then turn to a review of what you are paying and how that compares to the home inventory.  In addition, how comfortable are you with your current payment?

If you have left over monies each month and have been able to save up for a down payment of at least 5%, you are probably in a good position to own a home.  If you are struggling each month, be careful to jump into a home with the same payment as they can bring unexpected repairs with them.

You should talk to a CPA before you purchase a home to see what tax benefits you could derive from the purchase in terms of an annual tax deduction for the interest you pay out each year on your loan.  That extra incentive could make the difference if you are on the fence.

As you can see this is not a simple yes or no answer and much of the decision depends on your personal financial situation and goals. 

Having said all that I think home ownership can be an extremely beneficial tool, not just for your enjoyment but from a financial planning standpoint.  Depending on where you purchase a home they can average decent returns.  It's also a great way to build equity as opposed to doling it out each month to a landlord.

We need to appreciate the benefits of home ownership while respecting the fact that if you can't afford a home you are better off waiting until your financial situation allows you to more comfortably purchase a home. 

That's my short answer!

Please visit me at anaconnell.com!