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Monthly Archives: June 2014

The Impact of Rising Interest Rates

Posted in Advice

As you have all heard, interest rates have notably risen in the last few months. Below is a chart to help you understand the impact of rising rates.

On May 1, 2013 a buyer could have purchase a home for $500,000 with a 20% down payment at an interest rate of 3.25% on a 30 year fixed loan and had a monthly housing payment of only $2,361.66.

Today, that same house at the same price with the same down payment could be purchased for an interest rate of 4.5% on a 30 year fixed loan with a monthly housing payment of $2,647.57; an increase of 12% or $285.91 per month .

If that same buyer waits too much longer, they could conceivably be faced with much higher interest rates and payments. Today, market news came out with unemployment data improving more than anticipated. This sent rates on another hike. If we can make a hypothetical projection based on the increase we experienced in the last 3.5 months to continue into the next 3.5 months, a 30 year fixed interest rate could increase to 5.75% which would make the same house cost $2,995.97 a month; an increase of 13% or $348.40 per month.

The outstanding question is, are we going to experience a bubble in home values to offset the rising rates? As far as we can tell, this isn’t happening nor will it. Please take action to get the fullest benefits from the current historically low interest rates. Feel free to contact us with any questions.

Five Key Take-Aways on America’s Housing Market

Posted in News

Fannie Mae’s chief economist, Douglas G. Duncan met with the L.A. Times editors and reporters to share his views on where the housing market is headed. Here are five key takeaways:

Housing isn’t really going gangbusters. Despite those eye-popping price jumps, housing is not in a bubble or even a boom. Real estate is also not likely to be the same economic driver it once was, Duncan said. “We are of the view that housing is continuing to grow, but we are not of the view that it is robust,” he told The Times. While home prices have posted double-digit increases this year, those gains are just bounce-backs from very low bottoms. Meanwhile home builders have been slow to acquire land and hire adequate help, and that has made housing’s overall contribution to the economy smaller than it would be otherwise. When construction finally does get humming along at full tilt again, the industry will probably contribute a million fewer jobs than it did during the boom, Duncan said. Those jobs will simply have to come from other parts of the economy.

The rise in mortgage interest rates will not choke off the recovery. Economists at Fannie Mae recently studied the relationship between a sharp increase in mortgage-interest rates and home prices. They found there is little correlation between the two. Sales may decline but prices are still likely to increase. Duncan also doesn’t expect mortgage-interest rates to surge again. Expect a more gradual increase, he said. “I don’t think that the rate rises will be as sudden as the first piece we saw,” Duncan said.

Homeownership is the goal but renting has lost its stigma. The homeownership rate has fallen drastically since the boom years, raising questions about whether America will become a rental society. But much of the growth in the rental market has come from the single-family housing market, as investors have snapped up homes and turned those properties into rentals, meaning that former homeowners have tried to re-create their experiences. While the homeownership rate is not likely to rise anytime soon, even those people who lose their homes are likely to become homeowners again. The aspiration to be a homeowner remains unchanged by the crisis, and most renters would still like to own a home, Duncan said.

It is indeed a good time to buy. Home prices are still down considerably, even though they are up from their bottoms. Mortgage-interest rates are still very low despite the recent spike this year. But you should only buy a house if you can afford it, Duncan said.

Investors pose a possible risk. Big investors have become a significant factor in the housing market’s recovery. The question is, will new home construction increase supply, just as big investors decide it’s time to sell their holdings? If they were to do so, that could usher in another decline, though not one of the same magnitude as the last housing downturn, Duncan said. Investors should be watching the home builders closely. “If I were them, I would have a close eye on what’s actually happening in construction, because that is going to be one form of competition,” Duncan said. Another form of competition for both investors and builders will be homeowners who are freed up to sell their house after spending years “underwater.”

Source: http://articles.latimes.com/2013/sep/11/business/la-fi-mo-housing-fannie-mae-20130910

Prop 60 & 90 Allows for One-time Transfer of Tax Base for Seniors 55+

Posted in Advice

Proposition 60 and 90 is an affordable way for Senior Property Owners age 55 and older to move since it allows them to transfer their tax base one-time.  The Replacement property has to be equal value or less and must be purchased within two years.  Please note Riverside County began participating again on September 13, 2013. 

Please click here for Qualification Criteria, Eligibility Requirements and answers to Frequently Asked Questions for Los Angeles County.   For more information on Riverside County, please click here.


Household Hazardous Waste Event on 6/21 at Pasadena’s Rose Bowl

Posted in Events

We encourage you to check out this coming Saturday’s Household Hazardous Waste Event on June 21, 2014 from 9 a.m. to 3 p.m. at the Pasadena Rose Bowl, Parking Lot K. Sponsored jointly by the Los Angeles County Sanitation Districts and the Department of Public Works.  The Household Hazardous Waste (HHW) Collection Program  gives Los Angeles County residents a legal and cost free way to dispose of unwanted household chemicals that cannot be disposed of in the regular trash.


  • Motor Oil, Antifreeze, Paint, Paint Thinner.
  • Turpentine, Cleaners with Acids or Lye.
  • Pesticides and Herbicides.
  • Household and Car Batteries.
  • Old Computers and Television Sets.
  • Sharps or Used Needles.
  • Expired Pharmaceuticals and Mercury Thermometers.


  • Explosives, Ammunition or Radioactive materials.
  • Waste from Businesses will NOT be accepted.
  • Trash or Old Tires.
  • White Goods such as Washers, Stoves, Refrigerators or Air Conditioners.


  • In general there is a limit of 15 gallons or 125 lbs. per vehicle.
  • Bring items in a sturdy box, preferably in their original labeled containers.
  • Be prepared to leave your containers.
  • Do not mix products together.