Buying real estate for nothing down still possible

Several methods help minimize costs, maximize benefits
By: Robert J. Bruss: Inman News
"Is it really possible to buy a house for nothing down?"

That is the question I was asked by a "twenty-something" young lady at a cocktail party I recently attended.

My reply was, "Absolutely, yes." But then I quickly qualified that statement by adding she needs good income and good credit. Her husband, standing nearby, perked up at that point and suddenly became very interested in the conversation.

Then I regaled them with brief stories of how I bought my personal residence and several rental houses for nothing down. I hope I inspired them to move out of their expensive luxury city apartment and buy their first home.

As I left that conversation, my parting words were, "Your first home won't be your ultimate dream home. But it will be a start toward eventually buying your perfect home."

Personally, the first "nothing down" residence I bought was a modest two-bedroom house, which, looking back, I would now classify as a "major fixer-upper." It was far from perfect, but it was a start.

WHAT DOES "NOTHING DOWN" MEAN?

The simple definition is "zero cash from your pocket to buy your home." However, that definition does not mean the home seller won't receive cash from the sale. In fact, the seller often receives 100 percent cash in a nothing-down home purchase.

If you have good income and good credit, mortgage lenders are thrilled to loan you 100 percent of your home's purchase price. But it won't be cheap!

Lenders usually charge a slightly above-market interest rate for zero-down-payment mortgages. In addition, they require PMI (private mortgage insurance), which requires a monthly premium to protect the lender's top 20 percent, or riskiest part, of the mortgage. PMI premiums are not inexpensive, so be prepared.

If you are a bit short of cash, the nation's largest secondary mortgage market home loan lenders, Fannie Mae and Freddie Mac, will even loan up to 103 percent of your home's purchase price to help pay the closing costs.

Just to be sure you can qualify for a 100 percent home loan, it's smart to shop for a mortgage before you shop for a house or condo. Then you can receive a written pre-approval from an actual mortgage lender (not just pre-qualification, which means nothing) so you will know your maximum mortgage amount.

WHY SMART HOME BUYERS PURCHASE FOR LITTLE OR NO CASH. There are two major reasons for buying a house or condo for little or no cash:

1.) YOU DON'T HAVE THE DOWN PAYMENT CASH.

Just because you are "cash challenged" is no reason not to buy a house or condo. Even if you have lots of cash, why tie it up in your residence? There are many ways to buy a home for zero cash.

2.) YOU ARE A VERY SMART HOME BUYER WHO UNDERSTANDS LEVERAGE BENEFITS.

The second major reason for buying a home with little or no cash is to maximize your leverage benefits.

To illustrate, suppose you buy a $300,000 house for $300,000 cash and that house appreciates in market value at the historic nationwide average rate of 5 percent annually. In 12 months, it will be worth $315,000, or a 5 percent yield on your investment.

Instead, suppose you obtained a $300,000 zero-down-payment mortgage and the house rose 5 percent in market value in the next 12 months. Yes, you had to pay monthly mortgage payments, roughly the equivalent of rent. But now you "earned" $15,000 on zero investment for an infinite yield.

CREATIVE WAYS TO BUY FOR ZERO CASH DOWN PAYMENT.

Presuming you want to buy your next house or condo for little or no cash, there are many ways to do so. The most obvious is to obtain a 100 percent or greater new mortgage. But this method requires good income and good credit, and it can be expensive.

Instead, suppose you don't need 100 percent financing, but you don't want to tie up a bundle of down-payment cash. The first step is to get pre-approved with a mortgage lender for the maximum mortgage you can obtain. Be sure this approval is in writing from the actual lender, not a worthless "pre-qualification letter" from a mortgage broker.

The second step is to use that written lender's mortgage pre-approval to buy the home you want. If you keep the mortgage balance below 80 percent of the home purchase price, you have many alternatives:

One is the 80-10-10 plan where you obtain an 80 percent first mortgage, a 10 percent second mortgage, and pay a 10 percent cash down payment.

Another is 80-15-5 where you pay only 5 percent cash down payment and either the seller carries back a 15 percent second mortgage or the lender arranges a 15 percent second mortgage home equity loan. Either way, you receive maximum leverage benefits, buy your home for practically nothing down, and avoid costly PMI premiums.

FINANCE FIRST, THEN BUY YOUR HOME FOR LITTLE OR NO CASH.

After pre-arranging your home mortgage, and getting a written pre-approval letter or certificate from the actual lender, it's time to start shopping for a house or condo. However, in the back of your mind, be sure to consider how much home you can afford.

Armed with the confidence of a written pre-approval letter from a mortgage lender, you can decide what zero- or low-down-payment choice you prefer. When you see the home you want to buy, this is no time for the "paralysis of analysis."

With the help of your experienced buyer's agent, make your purchase offer before another buyer steals your home. However, be sure your purchase offer contains two key contingency clauses for 1) a satisfactory appraisal of the home, as required by your mortgage approval letter, and 2) a professional home inspection.

Unless you got carried away and offered too much for the house or condo, the appraisal contingency should not be a problem. However, the home inspection is vital. Be sure to accompany your inspector to be certain there are no latent or surprise home defects discovered.
If your inspector discovers a serious undisclosed home defect, then you can either negotiate for a "repair credit" toward your purchase price or cancel the sale and obtain a refund of your earnest money deposit if the seller refuses to be reasonable. More details are in my special report, "Secrets of Buying Your Home or Investment Property for Nothing Down," available for $5 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or by credit card at 1-800-736-1736 or instant Internet delivery at www.BobBruss.com.
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'Everything old is new again'

Baby boomers shape future housing trends by location, lifestyle
By: Jessica Swesey: Inman News
You've probably heard the term "halfback" in football – an offensive player who lines the backfield and carries the ball on run plays. An emerging housing trend among seniors has given "halfback" a new meaning.

Senior housing insiders use the term to describe retirees who moved to Florida from northern states, then relocated halfway back to the Carolinas because they found Florida's weather too hot or the state too crowded, industry figures say.

"North Carolina is fifth in the country in getting other states' retirees," says Dan Owens, senior housing consultant for builders and towns, Carolina's Active Retirement Association.

Florida has always been the "800-pound gorilla" of retirement destinations, but that's changing now. North and South Carolina combined now receive more relocating retirees than Florida, Owens said.

That's just one difference between today's aging baby boomer and yesterday's seniors, known as the G.I. Generation. Don't bother looking for similarities in the two when it comes to retirement housing.

The size of the baby boomer generation - roughly 78 million people born from 1946-64 - puts this generation's habits on everyone's radar. And when it comes to boomers' retirement housing choices, "Everything old is new again," as the saying goes.

Today's seniors don't want to discuss "aging" or "retirement" in those terms and home builders have caught on – creating a burgeoning market for active adult communities that offer seniors physical activities, a sense of community and homes that will accommodate them as they age in more subtle ways than the intrusive steel railings and chair lifts built into yesterday's senior homes.

"We do these things naturally and we don't talk about them," said Dave Schreiner, a demographics expert with Pulte Homes, referring to home design features that make it easier for seniors to move around. Pulte Homes has a separate brand for its active adult communities known as Del Webb.

Del Webb's adult community 25 miles south of Charlotte, N.C., called Sun City Carolina Lakes, has generated a lot of buzz. The community, located in Indian Land, S.C., opened March 18 and anticipates a total of 3,300 homes that range in size between 1,103 and 2,597 square feet and are priced at $167,000-$340,000.

Del Webb has a chain of active adult communities for the 55-and-older group, and each typically features a fitness center and golf course, and offers residents various clubs and classes ranging from ceramics to computers to personal investing, according to a Web site description.

Baby boomers now entering their retirement years are the healthiest and wealthiest group to ever hit this life stage, though Schreiner says these seniors will place heavy emphasis on affordability when making retirement housing decisions. "People are moving in vast numbers to the Carolinas because of affordable homes," he said, and seniors are among them.

Owens expects a fight among Southern cities and towns to attract these retiring boomers. He said that many regions will start to see boomers as an economic development tool and start building more communities with the idea of attracting them there.

And what town wouldn't want boomers as residents? "They are good residents with money to spend," Owens said.

The senior housing consultant also pointed out boomers' interest in college towns as a driving trend for housing. Many boomers, he said, enjoy the interaction with students and spectator sports that a college town provides and the universities are happy to keep generous seniors close by.
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Highrollers are folding in Sin City

Seven glitzy Las Vegas condo projects have stalled. Does this signal a slowdown?
By: Diane Wedner, Times Staff Writer: LA Times
FIRST, the Icon Las Vegas was derailed, then the Hard Rock Hotel and Casino expansion and now the Curve. What's up with Sin City's luxury high-rise condo market?

In the last several months, at least seven marquee Las Vegas condo projects have either been canceled or put on hold, causing a dust storm of rumors to swirl through the city and elsewhere as investors wonder if this is a harbinger of a slowdown. The reasons for the projects' retreats don't bode well for the larger picture: lack of buyer interest and escalating land, construction and labor costs.

But is this really the beginning of the end of the Vegas market? Experts say no and are eager to put things in perspective — an act made more difficult by the fact that the latest high-profile project to halt sales is the $3-billion Las Ramblas luxury hotel and condominiums. The planned casino, boutique hotel and sprawling residential project, backed by actor George Clooney and partners, was to include 11 towers on 25 acres. The resort was billed as a throwback to a bygone era when jackets and dresses were de rigueur at dinner. Today, its future is anybody's guess.

The Las Ramblas reorganization, announced in March, comes on the heels of the cancellations of the Aqua Blue, Krystal Sands and Icon Las Vegas. Ivana Trump's eponymous project, Ivana Las Vegas, is also said to be regrouping, as are the Curve — a proposed mixed-use project with twin 18-story luxury towers on 45 acres — and the Hard Rock condo project, once scheduled to be built next to its hotel and casino, which now are up for sale. The fate of the latter project depends on the new buyers, industry watchers say.

Spiraling costs are a major culprit. Developers who locked in construction prices are faring better. Those who didn't lock in report that the costs of labor and materials have at least doubled in the last couple of years because of a shortage of workers and worldwide demand for cement and steel, said Brian Gordon of Applied Analysis, an independent Las Vegas real estate market analysis firm.

Speculators also have played a role in the current high-rise slowdown. Buyers looking to flip units for a profit, rather than make Las Vegas a first or second home, flooded the market in 2004, raising prices. Most are expected to sell the units when the projects open their doors, some as early as this summer, said Bruce Hiatt, the owner of Vegas-based Luxury Realty Group. At least 20% to 30% of the units were sold to speculators.

Then about six months ago, speculator interest shifted to other markets, which created a shortage of buyers for the latest Vegas projects. Rising prices and a glut of condos contributed to the exodus.

"The market needs more first-, second- and third-home buyers, rather than flippers," Hiatt said. "This will stabilize the market."

To launch most condo and condo-hotel projects, a percentage of the units typically are pre-sold by developers to help finance the construction. The Curve ran into trouble when the developers couldn't sell their pre-construction target of 75% of the units, said Paula James, Curve's vice president. Some experts believe that the project was a harder sell because of its location near the busy Las Vegas beltway and auto malls.

With the sales office now dark and the well-dressed sales force gone, the company has returned deposits to the 97 buyers with a note saying sorry. The buyers, however, were offered a 150-day extension of their contracts in case the project resumes or new developers take over.

Sally and Mel Goldberg, of Tucson, who put a deposit on a Curve condo a year ago, quickly cashed their check and purchased a condo at the soon-to-be-built Cosmopolitan, a 64-story luxury high-rise condo-hotel next to the Bellagio.

"I didn't feel good about the vibe [at the Curve]," said Mel Goldberg, a frequent Vegas visitor who has bought two other Vegas condos that are under construction. "So I took the money and ran."

Jim Stuart, co-founder of Las Vegas' Centra Properties and a partner in the Las Ramblas deal, said that not only is that project on hold, but he also has postponed development of other land acquisitions for now.

"The high-rise market is catching its breath," Stuart said. "People are scratching their heads, trying to find the right formula for success."

Even with the departure of a few major players, Vegas development is far from stagnant. About 61,000 condo units in the city are under construction or planned for future development. About 45,400 of them are planned for the Greater Las Vegas Valley, which includes the boom cities of Henderson, North Las Vegas and Summerlin, according to Gordon. About 15,600 units are under construction today and will open in the next five years.

But without question, the change of course of the marquee players has rumors flying that investor exuberance for high-rise luxury projects is on the wane.

"It raises everyone's eyebrows when this happens," said John Restrepo, a principal at Vegas' Restrepo Consulting Group.

It's no wonder some projects are foundering, considering the high cost of construction. To make a profit on high-rise projects starting construction today, developers have to charge at least $800 per square foot for luxury condos, or $960,000 for a 1,200-square-foot living space. The square-foot price for condos already under construction is $500 to $700, compared with $300 to $500 for projects such as Park Towers and Turnberry Place, which were built five years ago.

Adding to the condo competition are deep-pocketed casino-hotel owners able to pay cash for expansions. They lock up the limited number of experienced Vegas contractors.

Also, the shortage of Las Vegas construction workers has spurred developers to import laborers from California, Arizona and other Nevada cities. About 11,000 construction-related employees were added to the Vegas labor pool in the last 12 months, according to Applied Analysis.

Despite the setbacks, the Greater Las Vegas housing market has good long-term potential, developers and building consultants say.

The greatest consumer demand is for mid-rise buildings — up to about six stories — with pools and garden patios, away from the central entertainment corridor.

Interestingly, as single-family-home prices have skyrocketed in the Las Vegas suburbs, builders have begun eyeing land closer to the downtown area. These projects are designed for those who want to live near their work and don't mind sacrificing individual backyards for community parks, pedestrian areas and lower prices, Centra's Stuart said.

But for now, with apologies to the city's well-known marketing slogan, real estate investors elsewhere are hoping that what happens in Vegas stays in Vegas.
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Promises, pitfalls in downtown L.A.

Officials win one, lose one in efforts to enhance urban core
By: Dave Myers: Inman News
In a stark contrast between downtown Los Angeles' vast potential and its present-day woes, one of the world's best-known architects today unveiled his long-awaited plans aimed at turning the Civic Center into a 24-hour-a-day "urban oasis," while others mulled an appeal to a court ruling that essentially permits the homeless to continue living in cardboard boxes on its streets.

The cornerstones of the first phase of architect Frank O. Gehry's futuristic plans for the Civic Center are two L-shaped, glass towers that would rise directly across from the recently opened Walt Disney Concert Hall. One of the buildings would have 50 stories and the other would have 24.

The 50-story tower, at the corner of Grand Avenue and 2nd Street, would include a 275-room boutique hotel, 250 upscale condos, restaurants and street-level retailers. The 24-story tower, at First and Olive Avenue, would combine retailers with 150 lofts and condominiums as well as 100 affordable apartments.

The two structures represent the beginning of a three-phase, $1.8 billion plan that will ultimately include even more shopping arcades, a 16-acre park, and eight condominium and office towers.

Gehry's ambitious project, which could take more than a decade to complete, is in an area dominated by office towers filled with 9-to-5 workers. Though it bustles during the day, it's a virtual ghost town at night because there is little housing in the community and few entertainment options.

Local officials hope Gehry's plan will finally turn the area into a vibrant, 24-hour urban hotspot to rival such places as New York, London and Paris.

Frank Gehry's Civic Center project

"This is a major urban plan ... that will enhance the landscape and the lifestyle for the people of Los Angeles and raise our international stature," L.A. Mayor Antonio Villaraigosa said at a press conference today.

But even as Villaraigosa talked about the project's promises, his staff and other city officials were trying to figure out how to respond to a recent court ruling that essentially permits homeless persons to continue sleeping on city streets and setting-up cardboard shanty towns on its sidewalks.

For years, the Los Angeles Police Department has used sleeping on sidewalks as "probable cause" for questioning the homeless – a practice that has uncovered countless other crimes and led to the arrests of hundreds of violent criminals on the lam from authorities.

Most of the arrests were made on Skid Row, not far from where Gehry's project would rise.

But the U.S. 9th Circuit Court of Appeals ruled earlier this month that unless adequate shelter is available, such arrests violate the 8th Amendment's prohibition against cruel and unusual punishment.

The lawsuit was filed by the American Civil Liberties Union on behalf of six downtown L.A. homeless people. The court's decision has put a temporary halt to such arrests, and some legal observers believe the ruling could foster the construction of more cardboard shantytowns in other parts of the city.

L.A. City Councilwoman Jan Perry, who represents the downtown area, is urging the mayor and city attorney to appeal the federal court ruling. So is Police Chief William J. Bratton, who had been hoping to clean up Skid Row by removing homeless encampments.

"I wish the judges would come down to skid row and see the situation," Bratton said in an interview. "If they did, they'd see what a poor decision they have made."
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The Fed May Stand Back and Watch the Numbers for a While

The chairman of the Federal Reserve, Ben S. Bernanke, indicated on Thursday that the central bank was ready for a cautious experiment.
By: EDMUND L. ANDREWS: The New York Times
Despite unexpectedly strong economic growth in recent months, and some evidence of a risk of higher inflation, Mr. Bernanke told Congress that the Fed's policy-making committee might pause temporarily in its two-year campaign to raise interest rates.

"At some point in the future, the committee may decide to take no action at one or more meetings in the interest of allowing more time to receive information relevant to the outlook," Mr. Bernanke told members of the Joint Economic Committee.

"Of course," he added, "a decision to take no action at a particular meeting does not preclude actions at subsequent meetings."

Mr. Bernanke's comment, which he repeated in the same hearing, signaled that the Federal Reserve might stop its rate increases after one more adjustment at its meeting on May 10.

But it also raised the possibility of a "stop and go" approach that would differ significantly from the Fed's typical pattern over the last two decades. Mr. Bernanke suggested that the Fed's actions from now on would be governed by the signals it receives from economic data.

Investors quickly reduced their bets that the central bank might raise interest rates at its late June meeting. Based on prices of federal funds futures, investors reduced the odds of a second rate increase in June by about half, to 30 percent.

At its policy meetings, which are usually held approximately every six weeks, the Federal Reserve has raised the overnight federal funds rate 15 consecutive times in the last two years, to 4.75 percent from 1 percent, and it is all but certain to raise it to 5 percent at its May meeting.

Fed officials made it clear earlier this month that they were near the end of their march toward higher rates. But a pause would let policy makers see if their efforts are having the impact they expected.

"It is quite sensible for them to sit back and see where they are," said Paul Ashworth, senior international economist at Capital Economics, a consulting firm in London.

"The rule of thumb is that effects of rate increases take about 12 to 18 months to come through in the pipeline," Mr. Ashworth said. "One of the things the Fed wants to do is make sure the cumulative impact of past tightening has had the effect it was supposed to have."

The uncertainty is whether moves so far by the Fed will cool the economy enough to keep inflation under control. With unemployment in March at 4.7 percent, the nation is still adding about 200,000 jobs a month — a fairly robust pace.

Mr. Bernanke's game plan assumes that growth will slow from about 5 percent in the quarter that just ended to an annual rate of about 3 percent in the months ahead, which would be enough to keep unemployment low while easing inflation fears.

On Thursday, Mr. Bernanke acknowledged that the economy might have expanded at an unexpectedly rapid pace of nearly 5 percent in the first three months.

But, he added, "it seems reasonable to expect that economic growth will moderate to a more sustainable pace as the year progresses."

Despite an increase in home sales last month, Mr. Bernanke said the housing market and housing prices would "most likely experience a gradual cooling" that would slow the rise in household wealth and consumer spending.

Mr. Bernanke predicted that high energy prices would slow the economy slightly as well, though he expressed more concern that those energy costs would lead to higher prices for other goods and services.

Laurence H. Meyer, senior forecaster at Macroeconomic Advisers, said Mr. Bernanke's comments on Thursday "helped clarify" the Fed's plans and predicted that it would pause after raising rates to 5 percent next month.

By many measures, the federal funds rate is in line with what economists say they believe is a neutral rate that neither provokes inflation nor slows the economy. The Fed's preferred measure of inflation, excluding prices of food and energy, remains about 2 percent a year — just at the top end of what policy makers view as their comfort zone.

If the Fed pushes overnight interest rates to 5 percent next month, it would be nearly three percentage points above the core rate of inflation. That would be in line with historical patterns, and a major reversal from two years ago, when the Fed's benchmark was well below the rate of inflation.

According to minutes from the Fed's policy meeting in March, most policy makers thought they were near the end of raising rates and several "expressed concern about the dangers of tightening too much."
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The Weekend Guide! April 27 - April 30, 2006

The Weekend Guide for April 27 - April 3o, 2006.
Full Article:
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Second homes not just for rich and famous anymore

Boomers snatch up vacation, investment properties
By: Ilyce R. Glink: Inman News
In the last three years, a couple that I am acquainted with has bought three investment properties in a mountain resort town about three hours from where they live.

The first townhouse they bought was for weekend getaways, but now it will probably more than cover its costs through summer and fall rentals, the couple reports. One of their properties is now on the market for nearly double what the couple paid. In fact, prices in the 3,000-acre community have at least doubled since it opened five years ago.

That kind of activity has been replicated in vacation-home areas across the country in the past few years, according to Paul Bishop, manager of real estate research for the National Association of Realtors.

NAR recently released a new study that looks at the vacation- and investment-home markets. Last year, 40 percent of all homes bought were vacation homes or investment properties. That's up 16 percent from 2004, to a record 3.34 million homes.

"We don't have good numbers on this, but the information we do have is a lot of the activity is from buyers who buy one to two or more properties over the course of a year or two," Bishop explained. "The majority of these folks are actively in the market to buy investment properties as opposed to people buying a one-off home to rent. They are serious residential investors."

Bishop said the study showed there is a clear distinction between the people who buy vacation homes and those who buy investment properties.

"Buyers of vacation homes look for lifestyle opportunities, and perhaps residences for retirement. Investment property buyers want to purchase property close to their homes," he noted. "We're talking about both groups together, and that's a pretty broad brush. They have entirely different motivations."

The Midwest is the strongest area for second-home or investment-property purchases, Bishop added. Donna Hofmann, a Coldwell Banker agent located in Chesterton, Ind., says that 90 percent of her vacation- or second-home buyers come from the Chicago metropolitan area, and 80 percent live in the suburbs.

"Most of our buyers want somewhere that is close to the office that they can visit on weekends and get away from the city for awhile. Most of them are purchasing second homes in order to turn them into a retirement home some day. They plan to move there eventually," Hofmann said,

In Alpharetta, Ga., RE/MAX Greater Atlanta agent Tom Zaccaro is working for a new vacation-home division called Resort Connection, selling resort properties in the Florida panhandle to Atlanta-area residents.

"Panama City Beach is where the big boom is now. They're putting in an international airport. It's next to Destin, which is a big hot spot. What's going on there are beachfront condos for $1,000 per foot," he said, adding that "dumpy" hotels are being replaced by exclusive resort property. "Panama City Beach properties are going for $425 per square foot."

Investors, Zaccaro said, are gobbling up everything for sale.

But in Phoenix, which has been one of the hottest markets for more than a decade, Coldwell Banker agent Ann Morgan said there appears to be an oversupply of lower-priced homes in the outer regions of the greater Phoenix area.

At the same time, home prices at the upper end are growing quickly.

"Homes priced at $400,000 a couple of years ago are now priced at $600,000. Retirees and snowbirds are looking in Scottsdale because it's a nice, clean, safe environment. They want the stainless steel appliances, granite tile, an updated house and they're spending $300,000 to $400,000 without thinking about it," Morgan explained.

According to Bishop, the median price of a vacation home in 2005 was $204,100, up 7.4 percent from 2004. The typical investment property cost $183,500 last year, up 24 percent from a year earlier. Eleven percent of all homeowners own two properties, while 4 percent own three or more properties.

What's contributing to these second-, third-, and fourth-home purchases? Bishop says it's the Baby Boom generation (born 1946-1964) flexing its financial muscle.

"The median age of vacation home buyers is about 52, so this is the first wave of Baby Boomers, and about one in five is planning on using the second home they've purchased as a primary residence someday." Bishop explained. "They're thinking about lifestyle issues and their future retirement."

Past research has shown that people aged 55 to 65 are the most active second-home buyers, followed closely by those aged 45 to 55. Since the Baby Boomers are just turning 60, the first wave of Boomers is just hitting their peak second-home-buying years.

Bishop said that with Boomer buying power, second homes could remain a large percentage of all home purchases for the next 20 to 30 years.
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More Single Women Opt to Buy Instead of Rent

Last year, 21 percent of all U.S. homes were purchased by unmarried women.
RISMedia
Stephanie Ghelman is buying a condo for the second time. She's 33.

Ghelman, who was a renter in her 20s, decided four years ago to build some equity and buy a studio condominium at Independence Harbor in Edgewater, N.J. Now, she's getting ready to close on a one-bedroom condo in the same complex and sell the studio.

Three of the five bidders on the studio are, like her, single women. And so are an ever-growing number of home buyers throughout the country.

"Women are much more independent than they've ever been as far as education and career," said Ghelman, who works in medical sales. "More and more women are getting married later because they are focusing on their careers. They are saving money and can afford to buy."

Last year, 21 percent of all U.S. homes were purchased by unmarried women, up from 10 percent in 1985, according to the National Association of Realtors. The association's figures include single-family houses, condos and town houses.

Only about 9 percent of homebuyers last year were single men, and some observers say that women are more likely to see home ownership as a path to financial security.

"Women are buying into the investment aspect of real estate," said Fort Lee Realtor Nelson Chen, who is Ghelman's agent. "Even if they're thinking of marrying soon, they're saying, 'Why not buy something rather than continuing to rent.'"

The trend is especially prominent in the condominium market, where properties are less expensive than single-family homes. Four in 10 condo buyers in 2005 were single women, according to the NAR. Many women find condos to be particularly attractive because they offer a maintenance-free lifestyle and security features such as gates and doormen.

Middle-school teacher Rebecca Samuels bought her first home last month, a condo in The Mill at Little Falls. Samuels, 25, who saved for a down payment by living with her parents, said she decided that real estate is a sound investment that doesn't have to wait for marriage.

"Whoever I share my life with, I'll be able to set myself up for a better financial future," Samuels said.

Of course, many single buyers are well into their adult life. Some are divorced or widowed and are simply downsizing. Others never plan to get married. In 2004, 31 percent of all women between the ages of 50 and 54 were unmarried, according to the U.S. census.

Real estate agents are increasingly paying attention to women buyers, who, according to some observers, might have been treated with skepticism just a few decades ago if they approached a broker looking to buy a house.

Partly because so many women are now likely to have lengthy credit histories and solid incomes, they are also getting warm treatment from lenders.

Some builders have taken note of the trend, as well, and include features in their single-family homes that they say are especially appealing to women. Los Angeles-based KB Homes, for example, says features that appeal to women include large walk-in closets and spa-like bathrooms with whirlpool tubs.

What's not clear is why single men aren't buying at a similar pace.

"Our survey doesn't explain why," said Walter Molony, a NAR spokesman. "It gets down to being as simple as women have a better understanding of housing as a long-term investment. Single guys are more interested in consumption. They don't get serious about real estate until they meet the right woman."

Laurence H. Michelson, author of "Getting the White Picket Fence Without a Man!" has a different theory.

"Men and women think differently about money," Michelson said. "Women are looking for the nesting feature. Men really don't care. Men can nest in their car."

Wendy Wineburgh Dessanti of Weichert Realtors in Tenafly said Realtors these days recognize that women are decision makers, whether they're single or married.

"Today, agents try to be open-minded about who the buyer is," Dessanti said. "It's not the old stereotype that it's the man who is the primary breadwinner or decision maker."

Ghelman said the winning bid for her home came from a married woman who is planning to fill the studio with a tenant. But three of the four other offers came from single women. The fifth offer came from a single man.
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NAR: Existing-Home Sales Rise Again in March

NAR: REALTOR® Magazine Online
Sales of existing homes edged up in March following a strong rebound in February, according to the NATIONAL ASSOCIATION OF REALTORS®.

Total existing-home sales — including single-family, townhomes, condominiums, and co-ops — rose 0.3 percent to a seasonally adjusted annual rate of 6.92 million units in March from a pace of 6.90 million in February, but were 0.7 percent below a 6.97 million-unit level in March 2005.

David Lereah, NAR’s chief economist, says sales are leveling out. “It’s a good sign to see home sales holding close to the level of a strong rebound in the month before,” he says. “This is additional evidence that we’re experiencing a soft landing. We may see some minor slowing in home sales as interest rates rise, but the market clearly is stabilizing.” Lereah expects 2006 to be the third strongest year on record for home sales.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.32 percent in March, up from 6.25 percent in February; the rate was 5.93 percent in March 2005.

“We now see appreciation cooling to single-digit rates of price growth — another sign that the market is normalizing,” Lereah says. The national median existing-home price for all housing types was $218,000 in March, up 7.4 percent from March 2005 when the median was $203,000. The median is a typical market price where half of the homes sold for more and half sold for less. Historic price data has been revised back to 1989, including updates to reflect geographic changes over time, but price patterns are consistent with previously reported data.

Total housing inventory levels rose 7.0 percent at the end of March to 3.19 million existing homes available for sale, which represents a 5.5-month supply at the current sales pace.
NAR President Thomas M. Stevens from Vienna, Va., says changes in the housing market mean consumers need more professional guidance.

“Changing waters require navigational adjustments, and this is especially true for home sellers in most areas who are now dealing with buyers on equal footing — it’s no longer a seller’s market,” says Stevens, senior vice president of NRT Inc. “Most buyers in today’s market are well-informed and have agents that represent their interests, so sellers need good advice on how to show and market their homes in the current environment, as well as negotiation skills — critical values that real estate agents bring to the table.”

Single-family home sales rose 0.3 percent to a seasonally adjusted annual rate of 6.07 million in March from 6.05 million in February, and were 0.5 percent below the 6.10 million-unit pace in March 2005. The median existing single-family home price was $217,300 in March, up 7.8 percent from a year ago.

Existing condominium and cooperative housing sales increased 0.2 percent to a seasonally adjusted annual rate of 854,000 units in March from a level of 852,000 in February, but were 2.0 percent below the 871,000-unit pace a year ago. The median existing condo price was $225,500 in March, up 6.1 percent from March 2005.

Regionally, existing-home sales in the Northeast rose 1.7 percent to an annual sales rate of 1.19 million units in March, and were 2.6 percent higher than a year ago. The median price in the Northeast was $275,000, up 5.0 percent from March 2005.

Existing-home sales in the Midwest increased 1.2 percent to a pace of 1.63 million in March, and were 3.8 percent above March 2005. The median existing-home price in the Midwest was $160,000, up 2.6 percent from a year earlier.

In the South, existing-home sales slipped 0.7 percent in March to a level of 2.67 million, but were 1.5 percent higher than a year ago. The median price in the South was $181,000, up 6.5 percent from March 2005.

Existing-home sales in the West eased 0.7 percent to an annual pace of 1.43 million in March, and were 12.3 percent below March 2005. The median price in the West was $341,000, up 8.3 percent from a year ago.
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Real estate sales pick up in March

U.S. median existing-home price reaches $218,000
Inman News
The rate of existing-home sales climbed for the second straight month in March but was 0.7 percent lower than the March 2005 level, the National Association of Realtors trade group reported today.

Total existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 0.3 percent to a seasonally adjusted annual rate of 6.92 million units in March from a pace of 6.9 million in February, but was below the 6.97 million-unit level in March 2005.

The rate of existing-home sales dropped from 7.21 million in August 2005 to 6.57 million in January 2006 before the recent rebound.

The seasonally adjusted annual rate is a projection of a monthly sales total over a 12-month period, adjusted for seasonal fluctuations in sales activity.

The national median existing-home price for all housing types was $218,000 in March, up 7.4 percent from March 2005 when the median was $203,000. The median is a typical market price where half of the homes sold for more and half sold for less. Historic price data has been revised back to 1989, including updates to reflect geographic changes over time, but price patterns are consistent with previously reported data.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.32 percent in March, up from 6.25 percent in February – the rate was 5.93 percent in March 2005.

Total housing inventory levels rose 7 percent at the end of March to 3.19 million existing homes available for sale, which represents a 5.5-month supply at the current sales pace, the association reported.

Single-family home sales rose 0.3 percent to a seasonally adjusted annual rate of 6.07 million in March from 6.05 million in February, and were 0.5 percent below the 6.1 million-unit pace in March 2005. The median existing single-family home price was $217,300 in March, up 7.8 percent from a year ago.

Existing condominium and cooperative housing sales increased 0.2 percent to a seasonally adjusted annual rate of 854,000 units in March from a level of 852,000 in February, but dropped 2 percent below the 871,000-unit pace a year ago. The median existing condo price was $225,500 in March, up 6.1 percent from March 2005.

Regionally, existing-home sales in the Northeast rose 1.7 percent to an annual sales rate of 1.19 million units in March, and were 2.6 percent higher than a year ago. The median price in the Northeast was $275,000, up 5 percent from March 2005.

Existing-home sales in the Midwest increased 1.2 percent to a pace of 1.63 million in March, and rose 3.8 percent above the March 2005 level. The median existing-home price in the Midwest was $160,000, up 2.6 percent from a year earlier.

In the South, existing-home sales slipped 0.7 percent in March to a level of 2.67 million, but increased 1.5 percent over March 2005. The median price in the South was $181,000, up 6.5 percent from March 2005.

Existing-home sales in the West slid 0.7 percent to an annual pace of 1.43 million in March, and fell 12.3 percent below March 2005. The median price in the West was $341,000, up 8.3 percent from a year ago.

David Lereah, NAR's chief economist, said in a statement, "It's a good sign to see home sales holding close to the level of a strong rebound in the month before. This is additional evidence that we're experiencing a soft landing. We may see some minor slowing in home sales as interest rates rise, but the market clearly is stabilizing." Lereah said he expects 2006 to be the third-strongest year on record for home sales.

"We now see appreciation cooling to single-digit rates of price growth – another sign that the market is normalizing," Lereah said.

Thomas M. Stevens, NAR president and senior vice president of NRT Inc., said in a statement, "Changing waters require navigational adjustments, and this is especially true for home sellers in most areas who are now dealing with buyers that are on equal footing – it's no longer a seller's market."

The National Association of Realtors represents about 1.2 million members in the residential and commercial real estate industries.
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A who's who and history too

By: Ruth Ryon, Times Staff Writer: LA Times
Its role as home to film stars has spanned decades. Now the distinctive Los Feliz house is on the market for $3.1 million.

Christina Ricci, the current owner, bought it after Diane Keaton, and Keaton took her cue in the 1990s from matinee idol Ramon Novarro, who purchased the house shortly after it was built in 1928.

But having had three famous owners is only part of the story behind the unique-looking house.

"It is a piece of Los Angeles' architectural history," Ricci said, "and there is something incredibly magical about the feel of the house and its grounds."

Lloyd Wright designed the house, now owned by Christina Ricci, making extensive use of concrete.

The home is a city of Los Angeles historic-cultural monument known as the Samuel-Novarro House, built for Louis Samuel, Novarro's business manager, who sold it to the silent-screen star.

Lloyd Wright, son of architect Frank Lloyd Wright, designed the three-level house, using a type of reinforced concrete-block construction that he developed with his father. Hand-hammered copper friezes and panels featuring the arrowhead as a design element cover the home. The house also has concrete floors, built-in shelving and a pool.

Typical of Lloyd Wright's style, many of the indoor spaces have adjoining outdoor living spaces. There is a deck off the master bedroom, overlooking the pool. The dining room opens to a patio. A second master bedroom or den has tall glass doors leading to an outdoor seating area and several levels of gardens, walkways and patios. The house is in the Oaks, an exclusive neighborhood in Los Feliz.

The home was preserved and updated in the '90s by Keaton.

Ricci has owned the 2,690-square-foot house with three bedrooms and 3 1/2 bathrooms since June 2005. The 26-year-old, who played daughter Wednesday in two "Addams Family" films, made the transition from child star to adult actress in "The Ice Storm" (1997). She started filming in January on the movie "Penelope," which stars Reese Witherspoon.
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Bargains forecast

After a dry spell, foreclosures are on the rise. But landing a deal requires know-how.
By: Gayle Pollard-Terry, Times Staff Writer: LA Times
WHEN his landlord raised the rent one time too often, John Polite decided it was time to buy. But on a new minister's salary, he would need to find a bargain.

"That's the only way I was going to get into anything," he said.

So in 2002 he did what many wanna-be homeowners have pondered from time to time. He bought a property that was in foreclosure through a real estate agent.

Polite ended up with a bank-owned, 1,400-square-foot town house in Sylmar with three bedrooms, 2 1/2 bathrooms and a patio for barbecuing. The home "was a mess," he said, but it was structurally sound. He paid $137,200, while comparable houses were selling for $230,000. Today it is worth $400,000.

The foreclosure process — initiated by a lender when a homeowner falls anywhere from 30 to 90 days behind on payments — offers several stages at which buyers can make such a bargain purchase: directly from a homeowner whose loan is in default because of missed payments; at a public auction after an owner has defaulted; or through a real estate agent, for property that has reverted to the lender because no minimum bid was made at the auction.

Foreclosures have been at historically low levels during the last few years. Steep appreciation gave homeowners plenty of equity to tap if they got into financial trouble and buyer demand made it easy to sell homes quickly and at a profit.

Since the beginning of the year, however, foreclosed properties have started coming on the market in increasing numbers. Nationwide, they are up 63% since March 2005, according to RealtyTrac Inc., an Irvine-based company that monitors foreclosures. In Los Angeles County, first-quarter figures from Pittsburgh-based Default Research Inc. show a 63% increase in the number of foreclosures from the same period last year. And there are reasons to expect there will be more ahead.

"Over half the loans on the books today are less than 3 years old," said Douglas Duncan, chief economist of the Mortgage Bankers Assn. "Loans tend to peak in terms of going into delinquency in years three to five."

Adjustable-rate loans have become more popular in the last couple of years, he added. These loans tend to have a higher rate of delinquencies than fixed-rate mortgages. Plus, in the last five years more high-risk buyers have qualified for mortgages. "Borrowers who have not always paid car loans or credit card bills on time," Duncan said, "and are at greater risk of missing mortgage payments."

The Sacramento-based website Foreclosures.com also reports more activity.

"Foreclosures are up for the first time in seven years," said President Alexis McGee. "California's been on a down trend, but the numbers are starting to go up."

Those numbers are tempting Tanya McCalebb, who wants to come off the sidelines. A veteran real estate investor, she's in the hunt for foreclosures.

McCalebb bought her first bank-owned property about a decade ago during a buyers' market. She paid $174,000 for a three-bedroom house in Hawthorne and put about $10,000 worth of improvements into it.

"I changed the roof because it needed it," she said. "Nice paint job. Carpet. A lot of cosmetics." She sold it for $225,000.

She bought her fourth and most recent foreclosure five years ago just before the housing market took off and the deals dried up.

When they were plentiful in the early '80s and mid-'90s, foreclosures could be purchased for as little as half of market value, according to Joseph Harrison Soaris, an agent with Keller Williams Realty Marina/L.A. who has been selling bank-owned properties for 25 years. Today, California foreclosures sell on average for 88 cents on the dollar, according to Rick Sharga, of RealtyTrac.com, which collects and sells data on foreclosures from 2,500 counties in the U.S.

Finding residential foreclosures in Southern California requires perseverance.

"The best deals are buying from the owner before the foreclosure," said McGee of Foreclosures.com, "the minute the notice of default is filed."

Notices of default, as well as public auctions of foreclosed properties, for Los Angeles, Orange, Riverside and San Bernardino counties are published in the Daily Commerce, a legal newspaper. The notices, which indicate a homeowner may be headed for foreclosure and a public auction, are also published in the Los Angeles legal daily Metropolitan News-Enterprise and on paid websites such as foreclosures.com, redloc.com, realtytrac.com and http://www.defaultresearch.com .

"Last year, when we pulled defaults in 90008 [Baldwin Hills, Leimert Park], 90056 [Ladera Heights] and 90043 [View Park, Windsor Hills], we had three pages," said Patricia Penny of Pat Penny Realtors. A recent search yielded 13 pages.

Another way to find properties in the pre-foreclosure stage is through word-of-mouth.

Two years ago, Penny, who specializes in southwestern Los Angeles, got an unsolicited call from a man who was losing his home. He wanted her to sell it.

She and her husband, Roland Jones, bought the dilapidated California bungalow for $305,000 — a bargain at that time for a three-bedroom house in the Crenshaw District when comparable homes were selling for more than $400,000.

"It needed a lot of work and updating," Jones said. "We tore the kitchen out … put in better heaters. Had the hardwood floors redone. We fixed up the garage and landscaped it to give it more curb appeal. It sold almost before we finished it."

The couple put $75,000 into the house and sold it for $425,000.

If a defaulting borrower doesn't sell but loses a house, a public auction is scheduled. This is perhaps the hardest stage at which to buy a foreclosure. Public auctions in California require payment by cashier's check for the entire bid. Because the final amount cannot be predicted, buyers must bring one check for the minimum bid, typically the amount owed on the property, and additional incremental checks for any overbidding.

"A lot of people make the mistake of thinking the right place to start is at the auction sale," said Sharga of RealtyTrac.com. But "that's the highest risk point of the foreclosure buying process," he said, because the buyer is limited to a drive-by inspection of the house and doesn't know the condition inside.

"Unless you've done your homework, you could be liable for other liens," such as a second mortgage, he added. "You probably want to work with a professional to get through the first purchase."

That's why home buyers frequently turn to agents.

Polite, for example, learned about his bank-owned town house from an agent who knew a member of his church.

To find properties for his clients, foreclosure specialist Soaris works with 10 banks. When he has bank-owned property to sell, he often turns to repeat investors. He cautions that the homes often are in bad shape.

Of course, not everyone who ends up with a foreclosure started out looking for one. Tom Farrell and Fredrick Stephenson have purchased two. They bought their Palm Springs home a dozen years ago.

"It was owned by a bank in Texas," Farrell said. "They had no idea what they had.

"It was on a big plot of land. It was close to downtown. It has a really neat fireplace."

The pair paid $101,000 for the three-bedroom, three-bath cinder-block home in 1994, when homes with fewer amenities averaged $110,000.

Then eight years ago they bought a cabin in the mountains via foreclosure. They paid $46,000 for a two-story, three-bedroom cabin on three lots in Cedarpines Park.

"There was no doubt this was a bargain," Farrell said. At the time the pair bought, similar properties were going for $80,000.

They heard about both deals from real estate agents.

"Twice, we've been extraordinarily lucky to happen on a foreclosure," Farrell said. "We just stumbled on them."



*

(INFOBOX BELOW)

Where to look, and how to buy

Want to buy a foreclosure? Here's how the process works in California, according to Alexis McGee, of Foreclosures.com, and Grant Nelson, a UCLA law school professor who is an expert in real estate finance law and property law.

• After the property owner fails to make a loan payment or, in most cases, several payments, the lender sends a default notice to the borrower and anyone who has an interest in the property, such as an institution holding a second mortgage. That notice is filed with the county recorder's office and published in select newspapers and online.

• Ninety days after the default notice is sent, the lender files a Notice of Trustee Sale with the county. The property owner is notified by letter. So are the lenders. The public is notified through ads in legal newspapers that the home will go up for sale within the next two to five weeks at public auction. "Right up until five days before the foreclosure sale, the buyer has the right to pay off all the payments that are late, and certain other costs," to redeem the property, Nelson said.

• After at least 104 days have passed since the original default notice, an auction is held. Bidders are required to pay by cash or cashier's check.

• If no one bids the minimum set by the lender, the property reverts to the lender. At this stage, the home is called an REO (for Real Estate Owned) and can be purchased directly from the lender. Because many lenders use real estate agents at this point, and the properties are listed on the market, these foreclosures are generally the easiest to find.
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A Grand Vision for Downtown L.A.

Gehry Sees His Glass Towers Transforming Downtown L.A.
He Hopes to Foster a Vibrant Urban Scene
By: Cara Mia DiMassa, Times Staff Writer: LA Times
Frank O. Gehry's Grand Avenue project, to be unveiled today, will seek to create a vibrant urban scene while transforming the Downtown skyline.

Architect Frank O. Gehry plans to erect a translucent, glass-curtained tower rising 47 stories above his landmark Walt Disney Concert Hall as the centerpiece of the Grand Avenue project, a bold statement that would alter downtown Los Angeles' skyline and reinforce the civic center area as a hub of cutting-edge architecture.

GRAND VISION: Architect Frank O. Gehry (left) and Craig Webb plan to erect a translucent, glass-curtained tower rising 47 stories above his landmark Walt Disney Concert Hall creating a vibrant district where people would live, shop and dine.

His schematic designs, which have been eagerly anticipated in world architecture circles for months and are to be unveiled at a news conference today, call for two L-shaped towers, the 47-story structure and a 24-story building, at opposite ends of the block east of the concert hall.

The designs are for Phase 1 of an ambitious plan by developer Related Cos., philanthropist Eli Broad and top city and county officials to transform a part of downtown known as a 9-to-5 office community that turns off the lights at sunset into a vibrant place where people would live, shop and dine.

"I think that there is a desire on the part of the city and county to do something special there," Gehry said. "We are trying to make that happen, so that that connectivity would result in a sense of place that's bigger, that the whole would be greater than the sum of the parts."

The plans to be disclosed today will detail the initial step in a $1.8-billion, three-phase project, which ultimately would include eight condo and office towers, shopping arcades, a 16-acre park and a boutique hotel.

City and county officials see it as a way of tying together many of the cultural monuments that line Grand Avenue, including the Museum of Contemporary Art, the Music Center and the Cathedral of Our Lady of the Angels.

"This area is not a thriving residential, high-end section yet," Gehry said. "It needs a mix of populations. It's got to be a mix of different age groups, economic groups and ethnic groups to really function."

The design attempts to connect the new buildings to the Disney Hall by installing a grid of light strings crisscrossing Grand Avenue, from the towers and pavilions to the hall. Also to that end, Gehry wants to repave Grand Avenue in a pattern of varying shades of stone, to create connections among the street, the buildings and the planned civic park nearby.

The taller of Gehry's buildings would be covered in a dramatic glass design. Preliminary models show either striped panels of alternating shaded glass or a pleated glass surface that looks like fabric folded around the building. The smaller building would have a more austere form, looking like a light-filled glass box.

Three shopping and dining pavilions would rise near the base of the two towers, mimicking the undulating lines and rough forms of Disney Hall but constructed of stone and glass rather than steel. Elaborate plantings of trees and other greenery on above-ground floors would create the effect of a hanging garden.

By placing the tallest buildings at opposite ends of the block and the lower ones between them, Gehry's design would preserve sightlines to Disney Hall, assuaging concerns that the project would essentially block the view from many points downtown.

Gehry's foray into high-rise design — his first major retail development — gives the project and the surrounding area an instant architectural cachet. Along with Disney Hall, Jose Raphael Moneo's cathedral and Thom Mayne's headquarters building for the California Department of Transportation, the plan creates a pocket of world-class building design in the city center.

Most large-scale downtown projects built in the last few decades have been primarily functional, said architectural historian Robert Winter. As a result, he said, downtown has suffered, "with all that money wasted on mediocre and sort of dumb architecture."

"There's very little good modern architecture in downtown Los Angeles," said Winter. He had not yet seen Gehry's designs but said he was "terribly delighted" by their possibilities.

The Grand Avenue project is part of a major renaissance in downtown Los Angeles, which after decades of decline has become a destination for professionals, artists and others, who are moving into long-vacant former office buildings-turned-lofts and new condos.

The completion of Disney Hall in 2003 helped spark downtown's revival.

And with 20,000 new residents expected in the next decade, officials hope this project will help provide services, including a market, restaurants and other businesses, that downtown dwellers say they need.

"We are working on designing the buildings in scale with what's around us, so we create an open village or community relationship to the buildings that exist," Gehry said. "And doing it in a California way, so it looks and feels like L.A., with plantings and trellises and stuff like that."

Gehry's plan is the latest in a long string of proposals touted by city leaders over the last six decades to improve the area around Bunker Hill. Once a charming if seedy residential district dotted with Victorian homes, the area was flattened by the city in the 1960s to make way for office towers and cultural institutions.

City officials have long talked of turning this part of downtown into a 24-hour district on par with parts of New York, Chicago, London or Paris — without success.

It now falls to Gehry and his partner, Craig Webb, to create the "urban mix."

"This is an opportunity for us to expand the continuum, to shape the neighborhood," said Webb. "We're trying to respond to what is there now and what will be there in the future."

Related Cos., which recently completed the Time Warner Center in Manhattan, was signed two years ago by the Grand Avenue Committee, chaired by Broad. The park is included in the first phase, though designs for it will be unveiled later.

The second phase is to be built on the block south of Disney Hall, with preliminary plans calling for two 30- to 35-story residential towers, one five- to six-story residential building and more retail stores and parking. The third phase would go east of Disney Hall. Preliminary plans call for a 35- to 40-story residential building that would include some retail shops and possibly a 15- to 20-story building that would be be office space or condos.

Completion of a draft environmental impact report on Phase 1 is expected by summer, after which it will go before the County Board of Supervisors and the city's Community Redevelopment Agency. The timetable for the rest of the project is less clear, though Related's contract states that it must begin Phase 2 by 2011 and Phase 3 by 2014. No architect has been selected for the second and third phases.

Related officials said they hoped to start work on Phase 1 — on land that now has a multilevel parking garage — late this year and complete the project in 2009. They have estimated that construction will cost about $750 million.

Financing for the project is complicated because the city and county own the land on which the first two phases are to be built.

Related is essentially leasing the land for 99 years. Last year, it wrote the city and county a check for $50 million, which is the projected rent the developer owes the agencies for Phase 1 and part of Phase 2.

The city and county plan to pour the $50 million back into the development of the park and street improvements.

Plans for Phase 1 call for a variety of pedestrian and vehicular entrances. A 50,000-square-foot market and a major bookstore would have separate entry-points; a light-filled elevator shaft and escalator lobby from the parking garage at the east end of the property would also take people into the development.

Webb said the designers' aim was "to create a unique L.A. building, with a focus on landscape and outside terraces," working with landscape designer Laurie Olin.

The taller tower — projected to rise 600 feet above the pavement — would include three rooftop pools as well as 250 high-end condo units, a 275-room hotel, a spa and an Equinox health club.

The second tower, at 250 feet, would include 100 rental units — designated as affordable housing — and 150 condominiums, as well as the supermarket at the corner of 1st and Olive streets.

The 47-story tower would extend downtown's skyline north, a trend that would continue if some of the other towers planned in Phases 2 and 3 are built. Gehry's building would be the 13th tallest downtown, 20 feet shorter than the 611 Place tower on 6th Street and more than 400 feet shorter than the 73-story U.S. Bank Tower, the West Coast's tallest.

The buildings would be Gehry's first skyscrapers in Los Angeles and among his first anywhere to reach completion if they are finished on schedule. Several other Gehry-designed skyscrapers are in the works, including some that are part of a large-scale project on the site of the Atlantic Rail Yards in Brooklyn, N.Y. for developer Forest City. But so far, no Gehry tower taller than 12 stories has reached completion, according to his office.

Robert Harris, professor emeritus in USC's School of Architecture, who had not yet seen Gehry's plan, said the project's first phase is "critical" to downtown's future.

If the project is successful, he said, it would be catalytic and "stimulate and encourage subsequent stages, and other projects by other people. It has to provide such an important experience that we notice it, we enjoy it, we remember it, we may even have a chance of associating symbolic meanings with it."
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Taking It To the Top

Proposed skyscrapers would be West Coast’s tallest residential towers
By: ANDY FIXMER: Los Angeles Business Journal
First came the rental lofts, then market-rate condos and now developer Rod Wolterman is proposing a $500 million project to build downtown L.A.’s first multi-million dollar apartments.

Wolterman’s Rodmark Inc. has filed plans with the City of Los Angeles to build two towers – one 60 stories, the other 49 stories – that would contain 320 units at the southeast corner of Grand Avenue and Olympic Boulevard.

Dubbed the Olympic and the City House, the two towers would boast large apartments – some with multiple floors and 12-foot ceilings – and sport amenities matching luxury hotels.

“This is really a pioneering effort,” said Jerry Brown, a real estate attorney at Fainsbert Mase & Snyder LLP and a Rodmark partner. “We’re bringing Wilshire Corridor quality high-rises to downtown Los Angeles.”

Designed by architect Richardson Robertson, the New Beaux Arts style towers will contain 800,000 square feet and become the West Coast’s tallest residential towers.

Robertson designed the Olympic with smaller units that cater “to a younger, more hip” buyer, while the City House has been designed for a “higher-end, more established” buyer.

Wolterman’s towers are proposed for the South Park neighborhood, which is where all of downtown’s new residential construction is taking place. (The remainder of downtown’s new housing has come from adapting vacant office buildings.)

In South Park, the South Group is building three high-rise residential towers and has proposed two more. And the Hanover Co. is building a 26-story apartment tower across from the Staples Center at Olympic Boulevard and Figueroa Street.

“We won’t be competing with other towers,” Brown said of the Olympic and City House. “Ours is a completely different market niche.”

Rodmark has had the roughly acre-and-a-half site under contract for six months, and Brown expects the firm to close the transaction in 60 days. Rodmark struck a deal with the property’s owner, Jim Myron, for an upfront cash payment and making Myron a partner in the project.

Financing is being arranged through New York-based Ackman-Ziff Real Estate Group LLC. Brown said the financing hasn’t closed, but he expects the package to be in place within 60 days.

“We got surprisingly good interest from the financial markets,” he said. “Except we didn’t get a lot of interest from California banks. I guess they have a hard time comprehending what’s going on in downtown.”

Challenging hurdles
California’s lenders aren’t the only ones having a hard time seeing Rodmark pulling off its project.

Besides having no experience in high-rise construction, Wolterman’s largest residential project seems to have been a 29,000-square-foot Bel-Air mansion.
Aside from Rodmark, Wolterman has run two other companies: InterActive New Media Inc., an Orange County dot-com no longer in business, and Toner Systems International Inc., which was liquidated six years ago under Chapter 7 bankruptcy.

Also, larger developers with far deeper pockets than Rodmark have recently begun having a difficult time making their residential high-rise projects in downtown L.A. pencil out.

The Related Cos. had to re-work its deal with a public board overseeing the $1.8 billion reconstruction of Grand Avenue. And the South Group, a partnership of Gerding/Edlen Development Co. and Williams & Dame Development Inc. – reduced the size of a tower near Figueroa and 12th streets to make the project more economical.

Also a partnership of LNR Property Corp., Lennar Corp. and KB Home walked away from a deal to build 40-story and 27-story condominium towers near the Staples Center.

“There’s a big difference between mansions and high-rises,” said Tom Cody, a Gerding/Edlen principal. “Nothing can really prepare you for the challenges of a high-rise project.”

Brown admits the Olympic and City House towers will be a large undertaking for Rodmark, but he believes the firm has the right vision and is up to the challenge.

“Some deals just come together,” he said. “This wouldn’t have been a deal that we would have started off on, but everything seemed to fall in place.”

Critics of downtown’s residential development point out that despite the hoopla only two new condo towers are under construction. It remains unclear if any of the remaining 52 high-rise projects that are in various stages of development downtown will ever become reality.

The success of the projects also depends on the region’s housing market remaining strong in the face of rising interest rates and other economic factors.

Even downtown boosters, such as Central City Association president Carol Schatz, say that even though downtown units have been snapped up quickly, that doesn’t mean all of the projects will make it off the drawing board.

“I can’t imagine anyone in the real estate world would say at any given time that all those plans will proceed,” Schatz said. “We know from living, that’s not the case.”

Still, Schatz believes plenty of demand exists for units at all price levels.

“This market has developed exactly as we thought it would,” she said. “It started with rentals that were relatively affordable, then we created a market for new construction and now we’re moving to high-rise and high-end condos.”
Mark Tarczynski, a CB Richard Ellis Group Inc. senior vice president specializing in downtown’s housing market, also was optimistic about the market, saying there’s a strong demand for ultra high-end apartments in downtown L.A.

Some of the first condos to sell at 1100 Wilshire Blvd., for example, were the penthouse units, which fetched more than $3 million each. With a number of large corporations located in downtown L.A., executives in those companies may be interested in buying high-end apartments.
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Home is where the retirement money is, survey says

Survey indicates many will move or downsize when they retire
Inman News
About 85 percent of Americans view their homes as a reliable source for funding their retirement, beating out other options such as IRAs, savings, and working in retirement, according to a report by Prudential Real Estate Affiliates Inc., the real estate brokerage franchise unit of Prudential Financial Inc.

The report, Building Security at Home, found that American homeowners believe the increase in the equity in their homes has been the most effective means of improving their retirement prospects. Just under half (44 percent) agree that their home is their most important financial safety net for retirement.

The report is based on surveys conducted for Prudential. Prudential Financial conducted a Workplace Report on Retirement Planning study that focused on retirement issues among near-retirees. About 1,023 full-time employed Americans 55-64 responded to questions about their retirement knowledge, goals, actions and plans for that report.

A second study, Roadblocks to Retirement, surveyed a cross-section of Americans in December 2004 as they contemplated both the year that had just passed and the coming year. That survey is on an online national random sample of 621 Americans between 30-69 who were asked about their financial priorities, retirement preparation and their retirement concerns and challenges.

About 65 percent of survey participants said historically high real estate values have significantly helped their outlook for a financially secure retirement, while about 28 percent said that job security have assisted their retirement preparedness and 20 percent credited increases in the stock market with retirement preparedness.

About 54 percent of participants said employment-based retirement plans improved their retirement outlook, and 42 percent said income growth is a contributing factor to their retirement future security.

The biggest threats to a secure retirement come from the increased cost of living (71 percent) and health care costs (70 percent), according to survey responses. "Increased home values have been one of the most effective counter-punches to cost of living and health care inflation," Prudential said in an announcement about the surveys.

Other findings:

    • To access the equity in their homes and also to reduce living costs, 62
      percent said they expect to move or downsize sometime in their retirement.
      While many recognize the potential need to sell their home, 18 percent will
      only do so in an emergency and 23 percent will hold on to their home as long
      as possible, selling later in retirement, according to the survey results.

    • About 75 percent of survey respondents indicated they do not know how to
      generate an income in retirement using home equity.

Prudential Financial companies offer a products and services including life insurance, mutual funds, annuities, pension and retirement-related services and administration, asset management, banking and trust services, real estate brokerage franchises, relocation services and – through a joint venture – retail securities brokerage services.
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Homeowner faces nearly $1M in fines for building without permits

Illegal additions alleged to be 'public nuisance'
By: Robert J. Bruss: Inman News
In 1999, Jimmy Jen purchased a dilapidated single-family house. Based on prior experiences with the local building inspectors, he applied for a permit to do only $2,500 of minor dry-rot repairs.

Instead, Jen added a two-room extension, plus a second-floor addition, altered the basement to create four habitable rooms and a garage, constructed new decks on the roof, and installed extensive new plumbing and electrical wiring.

The building inspector learned about the work that was not authorized by the building permit for dry-rot repairs. A "stop-work notice" was posted at the house, but Jen continued work. He also ignored a second stop-work notice and continued construction.

In 2000, Jen submitted another building permit application. But the building inspection department and the city-planning department ruled the non-permitted work was a public nuisance that had to be removed.

Jen was ordered to remove the entire three-story addition and obtain a new building permit to rebuild. But he refused to comply.

In late 2000, the city filed this lawsuit against Jen, alleging a public nuisance (there were no fire-stops between floors in the construction), violation of state housing laws, failure to comply with an abatement order, and unlawful business practices.

If you were the judge, would you impose a civil fine on Jen and order him to pay the city's legal expenses to enforce its building permit rules?

The judge said yes!

The evidence in this case is overwhelming, the judge began, that Jimmy Jen did not comply with city building requirements to obtain a permit before beginning construction work.

Even after being cited for building permit violations, Jen continued construction and he was cited again, the judge explained.

When a property owner fails to obtain building permits before beginning construction, the city is entitled to order the illegal construction demolished, the judge emphasized.

Because Jen was such a flagrant law violator, he is ordered to pay a $150,000 civil fine plus the city's attorney fees of $837,000, the judge ruled.

Based on the 2006 California Court of Appeals decision in City and County of San Francisco, 37 Cal.Rptr.3d 454.
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Younger generations spending more on real estate

Gen X, Y buyers want bigger homes than boomers
Inman News
Generation X and Generation Y buyers tend to spend more for their first home than baby boomers and this represents a larger portion of their household income, according to a Century 21 Homebuyer Survey released this week.

On average, the impact on the household income was 21 percent of boomers' income as compared to 25 percent of Generation X and Generation Y's household income.

The survey also reveals that baby boomers were driven to purchase their first home based on family reasons, while Generation X and Y buyers are more likely to buy or have bought a home as a "safe investment."

In addition, Generation X and Y buyers tend to take longer to buy their first home as compared to baby boomers. Today's Generation Y buyers are also purchasing first homes at a younger age than their Generation X and baby boomer counterparts.

The national online survey collected responses from 1,514 U.S. home buyers and was equally distributed among baby boomer (people born between 1946-64), Generation X (born between 1965-78) and Generation Y (born between 1979-94) consumers. The study was conducted by International Communications Research for franchisor Century 21 Real Estate LLC.

Today's Generation Y first-time home buyers are younger than their Generation X and baby boomer counterparts. The average age for first-time home buyers was 26 among Generation Y respondents, which is three years younger than Gen-X (29) and baby boomer (29) survey participants.

Of the survey respondents, the average boomer polled was 51 years old, followed by Generation X at 34 and Generation Y at 25. Among those polled, 72 percent of Generation Y respondents were single women, followed by 56 percent of Gen-Xers and 59 percent of baby boomers. About 25 percent of Gen-Xers surveyed are single and have not married, compared to 5 percent of baby boomers.

Baby boomers were more likely to have purchased a first home based on a life event, including marriage or birth of a child. Their counterparts, Generation X and Y buyers, tend to purchase a first home based on its appreciation value, according to the survey responses.

"Safe investment" is a key driver among Generation X (42 percent of survey respondents) and Generation Y (39 percent) versus 35 percent of baby boomers who are more likely to invest in a first home for "family reasons."

Baby boomers identified price as a key concern when purchasing a home (51 percent) as compared to Generation X (42 percent) and Generation Y (39 percent). Generation X (8 percent) and Y (10 percent) buyers are more concerned with proximity to work for their first home as compared to boomers (4 percent), according to the survey.

A majority of baby boomers (53 percent) ranked real estate brokers and agents as their primary source for shopping for information on their first home, followed by 45 percent of Generation X and 34 percent of Generation Y buyers. Generation Y home buyers (42 percent) search the Internet more than their Generation X counterparts (26 percent).

About 40 percent of all survey respondents noted that the best way to find a broker or agent was through friends and relatives. About 21 percent of Generation X and Y members use the Internet to find an agent to work with for their first home purchase, while about 17 percent of baby boomers used yard signs to find a broker or agent in their first home purchase.

In all three groups of buyers, the majority preferred more frequent contact from their broker or agent when buying a first home (more than 50 percent want contact every few days), according to the survey.

Generation Y respondents ranked the Internet as their primary source of home-shopping information, though it took them longer on average to purchase their first home. Baby boomers were the quickest first-time home shoppers polled, averaging 4.3 months to buy their first home, followed by Generation X at 4.6 months and Generation Y at 5.4 months, according to the survey.

Baby boomers (26 percent) are more likely to stay in their first home for more than 10 years as compared to Generation X (13 percent) and Generation Y (9 percent).

Today's youngest home buyers are more likely to live with family to save money than other groups. Of those polled, more Generation Y buyers (22 percent) live with parents or in-laws prior to purchasing their first home as compared to baby boomers (3 percent) and Generation X (7 percent).

About 11 percent of baby boomers said size is important in a dream home. About 17 percent of Generation X buyers and 19 percent of Generation Y buyers stated that their ideal homes are over 5,000 square feet. The average size of a dream house for boomers is the smallest at 3,340 square feet, with Generation X at 3,840 square feet and Generation Y at 3,810 square feet. In reality, the average size of a first home is about 1,546 square feet, according to the 2005 National Association of Realtors profile of home buyers and sellers.

About 33 percent of baby boomers cite the Southeast as the dream home location vs. 27 percent of Generation X and 25 percent of Generation Y buyers.

Younger buyers are attracted to the Northeast as the location for their dream home, the survey revealed. About 22 percent of Generation Y and 18 percent of Generation X buyers prefer this region, compared to 9 percent of boomers.

The Southeast and Southwest are the two favorite regions for a second home for all groups of home buyers surveyed. The Northeast is favored by Generation Y buyers (14 percent) ahead of boomers (9 percent) and Generation X (11 percent).

The survey including responses from first-time buyers in their first year of home ownership along with active first-time home shoppers, and was conducted from March 17-31.

The Century 21 system includes about 7,800 independently owned and operated franchised broker offices in 42 countries and territories worldwide.
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The Weekend Guide! April 20 - April 23, 2006

The Weekend Guide for April 20 - April 23, 2006.
Full Article:
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Cash-strapped homeowner gets advice on property repairs

Home equity line of credit may be answer to monetary issues
By: Ilyce R. Glink: Inman News
Q: I have lived in my house for 10 years and it needs some major repairs, including septic tank problems, possible foundation problems, and other big-ticket items.

I never did much maintenance to the house through the years due to marital problems and financial difficulties. My credit isn't the best, so I cannot get a home equity line of credit.

I'm thinking of selling, but I know I will sell the house for a loss and maybe get stuck owing cash on the mortgage. What can I do? Thank you.

A: You're in a difficult situation financially, without a lot of options. But, you may have more than you think.

First, get a copy of your credit history and credit score through www.annualcreditreport.com. You're entitled to a free copy from each of the three credit reporting bureaus. When you go there, you'll be asked if you'd like a credit score. You'll pay $6.95 for this, but it's a good value. You'll see what lenders are going to see.

Next, talk to some top-rated mortgage lenders, such as a national company, a big local bank, a local credit union, and a mortgage broker you know and trust. For the national companies, you can go to JD Power and Associates (www.jdpower.com) to see which companies rank highly for customer service.

These companies are well qualified to tell you what kind of interest rate you'd qualify for and how much you'd pay for a home equity line of credit.

What most folks don't understand about credit these days is that almost no one is turned down. Although your credit score may not be the highest, it may be good enough to get a line of credit or a home equity loan at a fairly decent rate.

If you can refinance your mortgage and take out some of the equity that you have, you may be able to do some of the repairs and improvements you need to do to continue living there.

It's also possible that the house and its problems aren't worth saving and the value of your property is in the land. Talk to a local real estate agent about what's going on in your neighborhood in terms of teardowns. Hopefully you can sell the house for at least what your mortgage balance is.

Finally, if you are going to sell and you'll be in a short-sale position (that is, the house is worth less than the mortgage balance), know that you're going to get a tax bill for the difference between what you owe and what the bank settles for, the following April 15th.

The Internal Revenue Service treats short sales as phantom income, and you'll be expected to pay tax on the difference between what you owed and what the bank accepted. For example, if you owe $50,000 on the property, but the house sells for $40,000, and the bank agrees to take $40,000 and close out your account, the IRS will treat the missing $10,000 as income and you will pay federal and state tax on that amount.

It sounds unfair, but that's the law. You've got some work to do here, to figure out which direction will be best for you. It won't be easy, but I know you can get through it.

Contact Ilyce through her Web site, www.thinkglink.com.
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Housing Markets That Are Hot And Those That Are Not

It's a mixed bag for residential real estate across the U.S. In some locales, home buyers are gaining ground, while in others, sellers have the upper hand. This week's roundup of reports from across the Web takes a closer look.
By: Lauren Baier Kim: The Wall Street Journal Online
Here's a look at what's new in real-estate markets across the U.S. from around the Web. (Some links may require registration or subscriptions.)

Los Angeles median price hits record high

Home prices in Los Angeles County continued to rise last month, despite indications that the market may be slowing, says the Los Angeles Times. In March, the median home price rose to $506,000, surpassing the half-million-dollar mark for the first time in the region's history, the article says, double the median price of four years ago. However, there's also slowing price appreciation, fewer sales and more houses for sale, all signs of a slowdown, the Los Angeles Times quotes an economist from the University of California, Los Angeles as saying. Using conventional financing and a 20% down payment, a household would need an annual salary of at least $120,000 to purchase an area home at the current median price, according to the article.

A seller's market in San Antonio

A half a million dollars could go a long way in San Antonio, Texas, where the median price was $131,900 in the first quarter of this year, up 9% from the same period a year before, says San Antonio Express-News. Area sellers continue to have the upper hand there, where the number of existing homes on the market dropped to 7,702 at the end of March, down 8.5% from the number of houses available in March 2005, the article says. However, home buyers are unlikely to face getting priced out of the market or find a lack of homes to choose from, thanks to plenty of new-home construction in the area, the Express-News says.

Sluggish luxury-home sales in Greater Boston area

It's not a rosy picture for sellers of very high-end residential properties in the Greater Boston area. Home owners who purchased a property for at least $4 million or more in this market a "short time ago" could face steep discounts if they try to sell now, says the Boston Business Journal. Earlier this month, the inventory of homes on the market in this price category was up 70% from a year ago, the trade journal says. Properties that have a waterfront view and plenty of acreage tend to sell better, it reports. Residential properties priced at $2 million or more are garnering 89% of the original asking price, the Boston Business Journal says. (Whereas single-family homes over the area's entire price range are selling at 94% of the original asking price and condos are going for 92% of the initial asking price.)

Cheaper condos in Myrtle Beach

Condominiums along the Grand Stand, a coastal resort destination in South Carolina's Myrtle Beach, are taking longer to sell, says The Sun News of Myrtle Beach, S.C. In the first quarter of this year, the number of condos for sale was three times the number of those on the market in the same period last year, the article says. The number of condos sold in the first quarter of this year was 4% less than the number of those sold in the first three months of last year, The Sun News says. A 24% increase in median condo price between the first quarters of 2005 and 2006 has spurred many condo owners to put their properties on the market, the paper says. This, coupled with a lessening demand and a greater supply of units available, is giving buyers more bargaining power, the article says. "Folks are realizing that the housing boom is drawing to an end," the paper quotes a senior economist for Wachovia, a financial-services company based in Charlotte, N.C., as saying.

Central Oregon sees rising prices

There's no sight of a real-estate slump in Central Oregon, where housing sales are still strong, says The Bulletin of Bend, Ore. In most areas there, the number of homes sold in the first quarter of this year exceeded the number sold during the same quarter last year. Madras, Ore. is experiencing a boom, as the number of houses sold in the first quarter jumped 184% to 54, compared with the same period last year. For the most part, price tags are also up - in Bend, Ore., the median price of a single-family home rose at the end of the first quarter to $327,500, a 30.5% increase from 2005. Driving the boom are home owners relocating from more expensive markets, and local buyers trading in their residences for larger ones, The Bulletin says.

Join a reader discussion about the residential real-estate market.

Send links to articles about residential-real-estate markets to Lauren Kim at lauren.kim@wsj.com.
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SoCal Home Prices Edge Over $500,000

By: Jesus Sanchez, Times Staff Writer: LA Times
Southern California's median home price edged over the $500,000 level for March despite deteriorating sales, according to a real estate report released today.

It was the first time the regional figure had crossed $500,000, though some counties had reached that level before.

The median sales price for all residential properties in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties jumped 14.1% from the same month last year to $501,000, according to the research firm DataQuick Information Systems.

Sales, however, dropped more than 9.7% on a year-over-year basis to 29,509 new and existing homes.

San Bernardino County led the region with a 23.2% spike in the median sales price to $367,000. San Diego County, which has experienced a pronounced slow down in sales activity, came in last with an increase of 5.7% to $504,000.

Orange County, the Southland's most expensive market, posted a 10.3% increase in the median sales price to $623,000. The median price rose 14% in Ventura County to $610,000.

The Los Angeles County median sales price, which was reported last week, climbed 15% to $506,000.

"We still expect the annual increase in median to go down into the single digits sometime this summer," said DataQuick President Marshall Prentice in a statement. "San Diego County is still the market furthest along in this cycle. Price increases there have been below ten percent the last eleven months."
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Hedge Your Buying Bets With Housing Futures

By: Conrad Aenlle: REALTOR® Magazine Online
The Chicago Mercantile Exchange expects to begin offering a series of futures and options that let home owners bet on the rise and fall of home price indexes across the country.

The deal could work this way, according to Christopher J. Cordaro, a partner at RegentAtlantic Capital, a New Jersey investment firm. Sellers put their $1 million house on the market while they search for a new one that costs $1.5 million. They spot the perfect house, but they don’t buy because they fear the price of their old place is falling.

So the sellers sell futures contracts on the S&P/Case-Shiller home price index for New York. Each contract is worth $250 times the index level, which recently was around 210. To hedge against a $1 million home, the sellers would need to sell about 20 contracts.

If home prices decline in the region, the couple would receive $5,000 for every point that the index fell, an amount that should offset a drop in the value of their home. If prices rose, they would have to pay $5,000 for every point of increase in the index, but their house should be appreciating by a similar amount.

Similar deals could be available in Boston, Miami, San Diego, Washington, D.C., Chicago, Denver, Las Vegas, Nev., San Francisco, and Los Angeles.
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It's a vacation on the house

Southland homeowners are renting out and reaping the rewards.
By: Ann Brenoff, Times Staff Writer: LA Times
TAPPING into our houses for cash isn't a new concept. People have treated their homes as piggy banks for the last few years by opening equity lines of credit or taking cash out when they've refinanced.

Since Southern California is a popular vacation destination, it was probably only a matter of time before homeowners began seeing tourist dollar signs on their front doors as well. Transient rentals — in which people turn the keys to their homes over to strangers for anywhere from two days to six months in exchange for wads of cash — have picked up with a vengeance. Although no one is keeping track of the numbers, the anecdotal evidence is strong, particularly in beach communities.

What's spurred the surge, said Christine Karpinski, author of "How to Rent Vacation Properties by Owner," is the Internet. The growth in websites that deal with short-term vacation rentals is a natural evolution of the Internet, Karpinski said. "Travel is one of the principal reasons people turn to the Internet. And many people prefer to stay in a fully equipped home over a hotel room. This is just a service whose time has come."

Although a few local Realtors still dabble in rentals, most now shy away from short-term leases. A day spent showing a client vacation rentals won't yield the same fat payday as one spent showing homes for sale.

The Internet has, in some cases, eliminated the middleman, Karpinski said. People can locate multiple properties, look at photos and read feedback from others who have "been there, done that."

A good example of the speed at which this burgeoning online industry is growing is JetLiving.com, a website that less than two years ago was a mere glint in the eye of its 27-year-old founder, Brandon Ezra. The site, which matches homeowners with vacation renters, now handles more than 1,000 properties worldwide. About 100 of them are along Southern California's shoreline. And business is lucrative. Ezra just landed an $80,000 monthly rental for a client on Broad Beach in Malibu.

Some websites function as listing services, pointing vacation renters in the direction of what's available and letting them work out the details directly with the owners. Others, such as JetLiving.com, function as property management companies, screening tenants, collecting deposits, checking on damage. JetLiving.com takes a percentage of the rent — from 10% to 30% — (excluding the deposit and cleaning fees) or charges a service fee to the renter for locating a property.

But the websites all have one thing in common: owners who want to make their houses work for them instead of working for their houses.

Take Jo Giese, who owns a 4,000-square-foot home that she just made available for short-term rentals. It sits above Broad Beach, and it has what she describes as "the best view of the best beach" in Malibu. The radio journalist decided to take a sabbatical and plans to use it to travel — practice tai chi in China, hike in Big Sur, study Spanish in Mexico.

"Why should my house sit empty?" she asked.

Why, indeed? She plans to charge $2,000 a day in the peak summer season.

For Giese, the notion of renting out her home came as something of an epiphany.

"When I met the man who would be my husband, a doctor, and learned that he rented out his Malibu Colony beach house when he went to the south of France in the summer, I thought that was the weirdest thing I'd ever heard. I mean, I'm from Seattle, where a home is your personal residence, your hearth, your private family place. It's not an investment where from time to time you pack up your personal treasures and rent it out to strangers.

"So, for me to be able to rent out my home during my sabbatical means I've come 180 degrees. My husband died two years ago and I think right now he's smiling and thinking, 'Atta girl!' "

Or there's producer Yvonne Bernard, who four years ago, with her then-boyfriend, bought a 2,400-square-foot oceanfront home along the Strand in Hermosa Beach for $1,475,000. (Appraisals last spring put the house's value at $3.6 million to $4.2 million.) The house has four bedrooms and four baths, plus there's a 650-square-foot, one-bedroom, one-bath guesthouse in the rear, and it sits on a corner lot, just steps away from the sand. The house has original small-slat wood floors, a wood-burning fireplace and a rooftop sun deck with protective wind glass.

To buy out her boyfriend last year, Bernard needed to come up with cash.

She now rents out the main house for $28,000 a month in the summer and $18,000 a month off-season and has moved into the rear guest quarters with her two golden retrievers.

Who are her clients? Mostly families or couples from the East Coast who pick her place based on the photos they see on the Internet. She advertises on several websites. Her clients must cough up a hefty deposit — although Bernard said she has "no horror stories" about damage to report — and must carry their own insurance.

Bernard provides bikes and beach chairs, beach toys and boogie boards; the home has high-quality linens and towels — and she stocks it with fresh flowers for each new arrival.

The small touches, she said, help her command top dollar. That and the killer views and proximity to the beach.

A few doors away is a home owned by Andee Abad of Rancho Palos Verdes. Last spring, she and her husband bought the 2,800-square-foot beachfront home in Hermosa Beach, expecting to live in it themselves.

"Too small," was her finding. And perhaps too soon to resell. They are renting it out to vacationers for "what the market will bear" — in this case, $18,000 to $20,000 a month. The property is listed on several websites. So far, she has had several tenants, and a few upcoming bookings.

As rosy a picture as homeowners may present while they jingle that extra cash around in their pockets, the rental process is not without some bumps.

Owners are urged to check whether their insurance policy covers leasing out the property. In some cases, tenants insurance may be necessary or a rider covering personal liability.

And damage does occur. JetLiving.com's Ezra says that, despite the strict screening of tenants, one in about 10 rentals winds up with some of the deposit being used to cover damage costs.

"Things break," he said. "This isn't college kids having wild parties — we discourage that and won't lease to people looking for that experience. But sometimes, a glass of red wine does spill on a white sofa."

Another issue to investigate is whether your community or homeowners association frowns upon private homeowners offering nightly or weekly rentals. Certainly, nearby inns, which must collect and pay hotel taxes, aren't fans of the practice. Some people are leasing out their homes for short periods under the radar, while others require a monthly lease in adherence with regulations.

Author Karpinski said that in her 10 years of renting out her condos in Florida, she has yet to come across a complex that restricted short-term rentals. But if this is the intended use, would-be purchasers should check first with the homeowners association, she said.

Rental income for up to 14 days a year is tax-free, under IRS rules. Beyond that, it is taxable as income.

Still, for homeowners like Giese who are about to embark on a vacation paid for by her house, this is, as she put it, "found money."

*

(INFOBOX BELOW)

A Web of rentals

There are many sites to assist people wanting to find a private home vacation rental.

• The site http://www.greatrentals.com was started by a Michigan couple in 1997 dissatisfied with the service they got from the company handling their condo rental in Indian Shores, Fla. It lists 7,000 to 10,000 properties and gets 3 million hits a month. Owners are charged to list on the site. A one-year listing is $158; six months, $110.

• Owners get a free 30-day pass at vacationrentals.com, which then charges $120 per year ($150 in Florida). At both Great Rentals and Vacation Rentals, prospective renters and owners deal with each other directly; renters are also cautioned to ask for references and to check representations about the property thoroughly.

• There are no advertisements on http://www.jetliving.com , which is paid a percentage of the rent. The company screens prospective renters, collects deposits and offers policies for tenants without insurance. It also offers financing to pay for the vacation.

Other sites include:

• http://www.socalbeachrentals.com features San Clemente properties.

• http://www.socalbeachcribs.com offers homes for both vacation rentals and filming locations.

• http://www.valuevacationrentals.com covers all of California.

• http://www.cyberrentals.com also lists properties worldwide but with fewer Southern California properties.

• www.vrbo.com is short for vacation rentals by owner.

• http://www.californiabeachresorts.com covers the California coast from Santa Barbara County to San Diego County.
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