© 2017 by Hilda Haghnazarian Realtor and Loan Consultant

1033 Foothill Blvd. La Cañada Flintridge, CA 91011

Cell: (818) 445-4835

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January 6, 2018

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Why it's Time to Buy Real Estate in Los Angeles

December 4, 2018

Los Angeles County Real Estate Market Levels Out

 

                The American Dream “the ideal that every US citizen should have an equal opportunity to achieve success and prosperity through hard work, determination, and initiative” (as defined by google) can be difficult to measure. For many it means being able to own their own home, and for many in the great state of California that dream was unattainable.  In fact, Los Angeles county is home to 18 of the nation’s most expensive zip codes. The last few months have shown a steady decline in the number of sales, and the Los Angeles Times reports that October sales came in 7.5% lower than during the same period last year. For potential homeowners scrambling to find their forever home, this can be a breath of fresh air.

 

                If you’ve been looking to buy your first home, then you’ll be excited to learn that compared to this time last year, the Los Angeles/Glendale area is seeing that 16.5% of listings have at least one price cut, compared to 12.1% (according to Trulia data). Real Estate agents are seeing more listings in our area compared to years past, which is likely the primary reason for prices dropping. Buyers are being more conservative with their purchases, and holding out for their dream home. For first time home buyers, this presents an amazing opportunity. You have more homes, at a better price, to choose from than ever before. Do you dream of a Mediterranean family home with stellar views? Check out the prestige Burbank Hills area. Have a few more dollars to spend? Try a Spanish Colonial Revival in Flintridge. Want an affordable cozy condo, in the heart of everything? North Glendale has some beautiful options.

 

                Though this looks like good news, it won’t last long. The FT Journal estimates that there will be some significant price correction in 2019, so these prices won’t last long.  Many people may still have a bit of sticker shock looking at the price of a new home, even with price cuts. Thankfully, California Housing Finance Agency (CalHFA) offers programs geared towards the first-time homebuyer. (Pro-tip: In California you are considered a first-time buyer if you haven’t owned and occupied a home in 3 years.)

 

                If you don’t quite have the money saved up for your down payment, there are options available to you. The first route you may want to consider is to include your family. In California more and more parents are helping their offspring purchase homes, some in place of paying for college. Taking the money they would have put towards their child’s education, parents are allowing their children to use those funds to purchase homes that will gain equity, and give their children a place to live while pursuing their education. In fact, it’s estimated that at least 1 out of every 3 FHA loans include money that the borrower received from their parents (kqed.org). However, if your family doesn’t have the means to do so, or the thought of owing money to relatives keeps you up at night, then you may want to consider one of these options:

 

                Extra Credit Teacher Home Purchase: This program is limited to those who work to further the education of our children. Whether working as a teacher, administrator, school district employee (or other qualifying position), you may be able to qualify to borrow up to 4% of your home loan to put towards the down payment. This program is limited in scope to those borrowers using a CalHFA first mortgage loan.

 

                MyHome Assistance Program: This program has a wider range of qualifying individuals that the School Teacher and Employee Assistance Program, but works almost the same way. This loan can be combined with CalHFA’s programs, and will loan up to 4% of the purchase price to be put towards the closing costs and down payment. The MyHome Assistance Program is a junior loan, allowing payments to be deferred until the home’s status is changed (i.e.: sold, refinanced, or paid off).

 

                This is just the starting point; the down payment is a big reason why people put off purchasing a home. However, if that burden can be eased, even slightly, then it makes it easier for Los Angeles to once again become a land of home owners (instead of real estate investors). We understand, you still need to qualify for that loan in order to get into the house of your dreams. 2018 made that easier than ever to qualify for CalHFA assistance by eliminating the requirement that based qualifying income limits on family size. More small families than ever before will now qualify for CalHFA loans. These loans include the following:

 

                CalHFA Conventional Loan Program: A first mortgage loan program using Fannie Mae and a 30-year fixed rate.

                CalPLUS Conventional Loan Program: A first mortgage loan program using Fannie Mae and a 30-year fixed rate, but which also has a higher interest rate which can be applied to closing costs.

                CalHFA FHA Loan Program: A first mortgage loan program with a 30-year fixed rate.

                CalPLUS FHA: A first mortgage loan program with a higher interest rate, but can pay for closing costs.

                Cal-EEM + Grant: An energy efficiency loan program.

 

                Of course, there are other options out there.  Once of the best ways to find out exactly what you can afford is by talking to your lender, and finding out what options they have available for you. The key here to remember is that you may be more qualified for homeownership than what you realize, and those dreams may not be as far away as you thought. Whether you dream of Burbank or Glendale, La Crescenta or La Canada Flintridge, there is the perfect home waiting for you. Don’t wait for the market to go back up, lock in your low price now and start building your own equity. Now’s the time to take the leap into homeownership, and see how it can change your life for good.

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