U.S. Markets Where Home Prices Are Most Likely to Decline

This week's survey of news from across the Web looks at U.S. metro areas where housing values are expected to fall, cities where the gap between the most expensive and least expensive houses loom large, why sales are at a record low in Massachusetts and South Florida's rosy outlook despite sagging sales.
By: Lauren Baier Kim: RealEstateJournal.com
Here's a look at what's new in real-estate markets across the U.S. from around the Web.

California, Northeast most at risk for price declines

Over the next two years, housing markets in California and the Northeast are the likeliest to see declines in home prices, according to PMI Mortgage Insurance Co.'s U.S. Market Risk Index, released last week. Showing the highest risk for drops in housing prices is the Sacramento, Calif., metro area (Sacramento-Arden-Arcade-Roseville, Calif.) which has a 60.4% chance of seeing price declines, according to the report. Next on PMI's list of markets headed for a fall are the San Diego and Oakland, Calif., metro areas, which both have a 60.3% risk of exhibiting price declines, PMI says. On the East Coast, New York's Long Island (Nassau-Suffolk counties) is the most likely - 60.1% - to see housing-price declines, followed by Boston-Quincy, Mass., at 59.5%, according to the report. The least likely to see falling home prices: Pittsburgh, Pa., with a risk of 6.2%, and the Indianapolis-Carmel, Ind., metro area, with a 6.4% chance, PMI says. The report also provides data on home-price appreciation - Miami showed the most appreciation in home prices between the third quarters of 2005 and 2006: 20%, according to PMI, whereas, Cambridge, Mass., Warren, Mich., and Detroit, Mich., were the only three metro areas surveyed by PMI that saw year-over-year price declines between 2005 and 2006. The index ranks Fort Lauderdale, Fla., as the least affordable housing market and Fort Worth, Texas, as the most affordable.

Markets with large price spreads

Miami has the biggest gap between its most expensive housing and its least pricey homes, according to a new study released by BusinessWeek.com. The report includes a slide show that shows the home-price inequality in 20 metropolitan areas across the U.S. In Florida's Miami-Miami Beach-Kendall region, a house at the 99th percentile ($2.2 million) - where only 1% of homes are more expensive - costs 6.5 times more than a home at the area's median price of $346,000 - the point where half of the area's housing is pricier and half is less expensive, BusinessWeek.com says. The region that has the smallest price disparity between its most expensive and least expensive housing is Silicon Valley (San Jose-Sunnyvale-Santa Clara, Calif.), according to the study. Which doesn't make the area affordable - there, a home in the 99th percentile costs $2.5 million and its median price is $745,000.

Real estate hot in Utah

The housing slowdown hasn't hit the Utah Valley - home to the cities of Provo and Orem, Utah. In the valley, the median price jumped 33%, from $160,000 at the conclusion of 2004 to $213,075 in 2006, according to an article published by the Deseret Morning News. More homes in the valley are selling at higher price tags, with 368 properties purchased for $500,000 or more last year, up from 95 three years ago, the article says. New construction is pushing up local housing prices, the paper says, with home builders charging more for their lots - at one local subdivision a lot comparable to one sold for $75,000 in 2004 recently sold for $149,500, Deseret Morning News says. However, despite the recent run-up in prices, one local real-estate agent quoted in the article expects local housing prices to level off. "Our market is beginning to settle, to stabilize a bit," the agent is quoted as saying.

Massachusetts market hits a 10-year low

Last year, Massachusetts saw its worst housing market in a decade, where the number of homes sold was 41,593, the state's lowest total since 1996, according to a Boston Globe news article. This year, housing prices in the state will continue to decline, the newspaper says. Yet, 2006 sales of condos in the state bucked the downward trend, nearly reaching 2005's record total of condos sold, the article says. In December, condo prices statewide rose 1.9% from a year ago, the newspaper says. With single-family homes costing $1 million or more in downtown Boston, condos present a more affordable option for many home buyers, the article says. Currently, it should take more than 10 months - up two months from last year - to sell a home in the current market, as a high inventory of properties for sale give buyers many properties from which to choose, the Globe says. Contributing to the glut of homes for sale are investors looking to unload their properties, homeowners faced with foreclosure or struggling with home-loan payments, and empty-nesters looking to downsize, the paper says.

Prices up, sales down in South Florida

With the exception of the West Palm Beach-Boca Raton area, year-end home prices were up across South Florida at the close of 2006, despite large drops in the number of homes sold, according to The South Florida Business Journal. Among the South Florida median price rises reported by the newspaper, Miami's year-over-year increase was greatest - 7% - from a median price of $351,200 to $375,800, despite a 21% decrease in the number of homes sold, the Journal says. The median price for a single-family home in Fort Lauderdale rose 2% to $367,800 from $361,100, despite a 26% fall in the number of homes sold from the year before, the Journal says. West Palm Beach-Boca Raton's median home price slipped 1%, while its number of homes sold fell 37% from the same period a year earlier, the paper says. For sales of existing condos, median prices jumped 14% to $220,400 in West Palm Beach-Boca Raton from the year before, while the number of units sold dropped 28%, the Journal says. Fort Lauderdale saw the median price for existing condos increase 10% to $208,600 and sales decrease by 32%, while Miami's median price rose just 1% to $257,500 and the number of condos sold drop fell 24%, the Journal says.
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10 Quick Fixes To Sell a Home Faster

A Minneapolis home stager offers a to-do list of easy fixes that can help a property command the attention of serious buyers.
By: Aimee Blanchette: REALTOR® Magazine Online
Here are 10 quick fixes that make a house more likely to be snagged up by buyers, according to home stager Lori Matzke, founder and president of Centerstagehome.com in Minneapolis:

1. Paint the trim, columns, front door, and the light fixture.
2. Replace the storm door with a full-view one.
3. Clean all the window screens.
4. Add new mulch and a potted plant by the front door.
5. Remove mirrors from over the fireplace so buyers focus on the fireplace.
6. Move furniture 1 1/2 to 2 feet away from the walls to create the illusion of more space.
7. Get rid of any movable storage pieces in the kitchen and take all the clutter off the refrigerator.
8. Clean and regrout the bathroom floor tile.
9. Replace dated bathroom vanities with trendy (and economical) pedestal sinks.
10. Put colorful bedding and matching window treatments in all the bedrooms.
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Frustrated Realtors and Home Sellers Turn to St. Joseph Statues for Real Estate Help

Sales of new and existing homes are down, but sales of St. Joseph statues are increasingly on the rise
RISMedia
Home sellers and Realtors are buying the St. Joseph statues with the intent of burying them head-first in the ground.

The tradition of burying a Saint Joseph statue has its roots in the old Catholic tradition of burying blessed medals in the ground, which was a way of invoking God's blessing on the surrounding area.

Today, many homeowners of all denominations ask for St. Joseph's help in their real estate needs. The popularity of this custom has recently seen a dramatic increase, perhaps due to the frustration felt by home sellers dealing with the downturn of the real estate market.

Online Catholic store MaryShop.com has witnessed a dramatic boom in sales of St. Joseph statues, with many customers buying multiple statues in each order, and others paying extra for overnight shipping. In fact, the St. Joseph Home seller Kit has surpassed all other products by becoming MaryShop.com's most popular item.

"It arrived yesterday," Eileen Nolan wrote in an e-mail to MaryShop.com after receiving her St. Joseph statue home seller kit. "The power of prayer is amazing. I buried the statue as soon as I received it and after no activity with my home sale, today someone came through and my agent is expecting an offer in the next few days… Thank you for getting this to me."

Eileen continued: "I may be ordering another for a friend who is also trying to sell his home."

Each Saint Joseph home-selling kit contains a five-inch resin statue, a full color St. Joseph story card, and a St. Joseph holy card with a Prayer to Saint Joseph. Each kit comes in a gift box.

The Web site St Joseph Statues.org specializes in offering the unique St. Joseph Statue home seller kits, and nothing else. Customers opting to purchase the kits for $9.97 each are redirected to MaryShop.com to complete the sale.

According to the StJosephStatues.org management, many customers are taking advantage of their bulk discounts; an order for 16 or more kits drops the price down to $7.97 each, free shipping and a free display. Realtors are especially fond of the quantity discounts.

As people continue to seek help from above to solve their realty woes, the ancient Christian tradition of burying a St. Joseph should continue to make a major comeback.

For more information, visit http://www.stjosephstatues.org.
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Low-End of Luxury-Home Sector Shows Some Signs of Chill

As the national housing market continues to weaken, prices of houses in the $1 million range are slumping in many parts of the country. Still, analysts say the category is holding up better than the overall market.
By: June Fletcher: The Wall Street Journal Online
In once-golden Sunbelt cities like Miami and Santa Barbara, Calif., as well as in major Midwestern cities like St. Louis and Chicago, prices fell in the fourth quarter of 2006 from a year earlier, in some places by as much as 7.2%. In other areas, prices rose slightly but appreciation was sluggish, with gains of 4.3% or less. Still, analysts say, the category is holding up better than the overall market, which declined 10% during the same period.

These are some of the results of an exclusive report done for The Wall Street Journal by the National Association of Home Builders. "The million-dollar market is slowing down," says NAHB's director of research, Gopal Ahluwalia, who conducted the analysis using information from First American Real Estate Solutions, a Santa Ana, Calif., data provider.

Entry-Level Luxe

See a chart of what's happened to the median prices of starter luxury homes in 32 metro areas.

The report looked at sales of new and existing single-family homes costing between $750,000 and $1.25 million in the nation's top metro areas. In 2005's fourth quarter, 65 metro markets had 100 or more sales in that price range. A year later, that figure had dropped by more than half, to 32. And appreciation was generally lackluster. Nearly half of those 32 markets saw prices in this "starter luxury" market flatten or decline during the fourth quarter over the same period a year earlier, in some areas by as much as 7.2%. Overall, the median price of these 32 markets rose a modest 1.4%, to $890,000.

Nationally, median home prices during the same period fell 10%, to $225,000 from $250,000 the study showed. The National Association of Realtors, which tracks existing-home prices only and will release its fourth-quarter report Feb. 15, is projecting that overall median prices will drop just 3.9%, to $216,500, in the fourth quarter of 2006. (NAHB says its figures differ from those of NAR because they use different geographical boundaries for their metropolitan areas and include data from both new and existing homes.)

Analysts say that the million-dollar market is doing better than the overall market because it wasn't quite as overrun with investors during the boom. "There were more buyers trying to move up rather than make a killing," Mr. Ahluwalia says. Because investors make their money by reselling properties quickly, they're more likely to cut their losses -- and their prices -- as soon as they detect a market slowdown.

The Thrill Is Gone

To be sure, a million dollars today doesn't go as far as it did even a few years ago, before residential real estate in many cities experienced double-digit price increases during the boom. Michael Patterson, a Sotheby's real-estate broker in Santa Barbara, Calif., says that as recently as 2001, $1 million would get you an oceanfront estate. Now it will get you a remodeled two-bedroom house built more than a half-century ago. In Dallas, meanwhile, it will buy a brand-new, four-bedroom lakefront home.

It used to seem like a lot of money, Mr. Patterson says, the entry point to luxury. "It doesn't have the mystique that it used to," he says.

Nor are today's million-dollar-home customers the same as those of five or six years ago. Then, they tended to be cash-rich buyers who were mostly immune to mortgage-interest-rate fluctuations. But during the run-up, as more ordinary homes were pushed into the million-dollar range, those wealthy buyers moved up too, to the "super-luxury" level of $3 million and above. They were replaced by middle-income buyers, some of whom were hoping to cash in on the boom and who stretched to trade up using creative financing like option adjustable rate mortgages -- which allow borrowers to decide how much they're going to pay each month -- and interest-only loans. Now, many are "stuck" with homes whose prices are flat or declining, according to University of Maryland business professor Peter Morici.

The Sunbelt cities that attracted droves of buyers and builders during the boom have fared poorly. Overheated and overbuilt markets finally slowed down by the end of 2006: prices fell 4.2%, to $876,250, in Miami and flattened in Phoenix at $887,660 and in Charleston, S.C., at $937,500. Some Midwestern markets also performed badly. Prices were down 3.3% in Chicago, due in part to the loss of manufacturing jobs there. Things were even worse in St. Louis, which lost 3,300 jobs in the year ending November, second nationally only to Detroit. Prices in St. Louis were down 7.2%, the largest decline in the survey.

Starter luxury homes are doing best in coastal cities where strong local economies support the incomes needed to buy them. The study's highest price increase, 4.3%, was in the Santa Ana-Anaheim-Irvine area of California, which has seen a steady rise in employment over the past year, particularly in the professional- and financial-services sectors, and the highest wage increases in three years. On the East Coast, fat year-end bonuses at many Wall Street firms fed a buying spree in the suburbs of New York, where prices increased almost as much, to 4.2%.

Overall, the survey showed a return to a buyer's market in the million-dollar range. But in some places, like San Francisco, where prices have remained high for years -- the overall median is $740,000, compared with the median price of $870,000 in the city's "million-dollar" category -- buyers aren't rushing in. Fatigued by years of fruitless house-hunting, they "can't quite believe" that the market has finally turned in their favor, according to broker Linda Harrison.

Vienna, Va., housing economist Tom Lawler says buyer hesitation is also being fueled by the change in mentality from a speculative market to one based more on need. During the boom, many buyers bought the biggest house that they could because they saw that as a way to increase their investment in real estate without buying rental property. But now that the market is softening, that strategy no longer makes much sense. Lawyer Beth Joffe and her husband, a physician, recently sold their three-bedroom Chicago home for $760,000 and have moved to a much smaller two-bedroom condo in Madison, Wis., that they bought for $300,000. Though both are far from retirement age, neither wants the hassle or added expense of a bigger place. "We don't need that any more," Ms. Joffe says.

Reverse Psychology

Agents say that in many cities, the shifting psychology is causing sellers to reverse their tactics. During the run-up, sellers usually priced their homes slightly above the market knowing that someone would buy them, even if the price tag later had to be lowered somewhat. Now sellers are trying to undercut the market to sell while their listings are still fresh.

That's especially true in relatively new "semi-custom" subdivisions, where many homes, though chock-full of amenities like built-in wine racks and tumbled-stoned backsplashes, tend to look alike. In St. Louis, Steve Shadrach has just listed his five-bedroom, brick-and-stone-front home with a swimming pool, which he bought more than two years ago for $770,000, for $949,000. If he finds a buyer at that price, he'll make a substantial profit. But his asking price is nearly $50,000 less than a nearby neighbor is asking for a nearly identical property, and about $100,000 less than what his builder is charging to build the same house. "I'd like to price it higher, but I have to compete with them," says Mr. Shadrach, a plastics salesman who wants to move closer to his grandchildren.

Indeed, a surfeit of new homes in central New Jersey is partly responsible for the significant price declines in Edison, where prices of starter luxury houses fell 6.7% in the fourth quarter from the year earlier. Coldwell Banker has a $949,900 listing of a "new" five-bedroom brick house that was actually built in 2005, but interested buyers are few. "People are going for less house," says Joe Thomas, an agent with Coldwell Banker. "They're not stretching any more."

Stretched Out

In many parts of Southern California, prices are still on the upswing, although analysts such as Celia Chen, director of housing economics at Moody's Investor Service's Economy.com, says the area is at "high risk" for a fall. Although the local economy is strong, incomes haven't kept pace with the sizzling double-digit price increases these markets experienced from 2001 to 2005. And with federal regulators pressuring lenders to cut back on creative financing, fewer buyers are able to stretch their incomes to buy million-dollar homes.

That's what banker David Jaffe discovered when he put his five-bedroom stucco home in Ventura, Calif., on the market 2½ months ago for $979,900. Ventura's prices are still rising -- they increased 4% from 2005 to 2006, the study showed -- and Mr. Jaffe attracted an offer close to his asking price soon after he listed it. But the deal fell apart in escrow when the buyer couldn't qualify for the loan.

Mr. Jaffe bought the place in April 2005 for $935,000 in a bidding war, and still hopes to find someone who will meet his asking price. But he doesn't expect to see lines forming at his door, especially since homes in his price range are affordable to fewer people and no longer have quite the cachet that they once did. "The market is changing," he says. "It's definitely a buyer's market now."


***
Entry-Level Luxe
In the fourth quarter of 2006, only 32 metro markets had 100 or more sales in the "starter luxury" category -- new and existing single-family homes costing between $750,000 and $1.25 million-down from 65 markets in 2005. Here's what's happened to the median prices of starter luxury homes in all of those 32 metro areas:

METRO AREA* 4Q 2006 4Q 2005 PERCENT CHANGE DIRECTION
St. Louis $858,500 $925,000 -7.2%
Edison, N.J. $875,000 $937,500 -6.7%
Miami-Miami Beach-Kendall, Fla. $876,250 $915,000 -4.2%
Chicago-Napierville-Joliet, Ill. $870,000 $900,000 -3.3%
San Francisco-San Mateo-Redwood City, Calif. $870,000 $888,000 -2.0%
Santa Barbara-Santa Maria, Calif. $910,000 $925,000 -1.6%
San Jose-Sunnyvale-Santa Clara, Calif. $849,500 $860,000 -1.2%
Riverside-San Bernardino-Ontario, Calif. $850,000 $858,000 -0.9%
Charleston-North Charleston, S.C. $937,500 $942,500 -0.5%
Nassau-Suffolk, N.Y. $885,000 $886,000 -0.1%
Philadelphia $900,000 $899,900 0.0%
Seattle-Bellevue-Everett, Wash. $880,000 $880,000 0.0%
Oakland-Fremont-Hayward, Calif. $870,000 $870,000 0.0%
Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.V. $861,000 $860,000 +0.1%
Los Angeles-Long Beach-Glendale, Calif. $877,000 $875,500 +0.2%
Phoenix-Mesa-Scottsdale, Ariz. $887,660 $882,020 +0.6%
Atlanta-Sandy Springs-Marietta, Ga. $872,500 $862,600 +1.1%
Newark-Union, N.J.-Pa. $885,000 $875,000 +1.1%
Baltimore-Towson, Md. $889,330 $877,000 +1.4%
Sacramento-Arden Arcade-Roseville, Calif. $878,000 $865,000 +1.5%
Cincinnati-Middletown, Ohio-Ky-Ind. $925,000 $910,000 +1/6%
Dallas-Plano-Irving, Texas $889,200 $875,140 +1.6%
Houston-Sugar Land-Baytown, Texas $916,870 $897,750 +2.1%
Bridgeport-Stamford-Norwalk, Conn. $930,000 $907,500 +2.5%
Richmond, Va. $990,000 $960,000 +3.1%
Bethesda-Gaithersburg-Frederick, Md. $895,970 $869,000 +3.1%
San Diego-Carlsbad-San Marcos, Calif. $900,000 $870,000 +3.4%
Salt Lake City, Utah $929,670 $896,420 +3.7%
Minneapolis-St.Paul-Bloomington, Minn.-Wisc. $935,000 $899,000 +4.0%
Oxnard-Thousand Oaks-Ventura, Calif. $900,250 $865,250 +4.0%
New York-White Plains-Wayne, N.Y.-N.J. $906,750 $870,000 +4.2%
Santa Ana-Anaheim-Irvine, Calif. $917,750 $880,000 +4.3%

Areas with 100 or more "starter luxury" sales.

SOURCE: National Association of Home Builders
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New products say it loud: They're green and they're proud

The "most exciting" green products of 2006 aren't terribly rousing. They include recycled concrete flooring, for example, and a water-efficient showerhead. Ho-hum.
By: Lew Sichelman: latimes.com
But they are innovative, and at a time when energy costs are going through the roof, being inventive seems far more important than being thrilling.

Take the polished-concrete system from Advanced Floor Products of Provo, Utah. Called RetroPlate, the process involves grinding, polishing and chemically hardening concrete slabs so they can serve as the finished floor surface.

The process mixes old-world know-how and a little American ingenuity — European stone-grinding and polishing technology is combined with hardening agents used in this country — to create a durable, easy-to-maintain surface that cuts heating and cooling loads.

But most important, no other materials are needed to go over it.

Such "multiple environmental attributes" are among the key things about the Top 10 Green Building Products named late last year by Environmental Building News and GreenSpec Directory, co-editor Alex Wilson said.

As in previous years, the best and the brightest innovations in green products are drawn primarily from the directory. Though more than 250 listings were added to the book's database last year, not all of the winners are new. Indeed, some have been around for a while.

"We like to see evidence of success in the real world," Wilson said.

Still, the pace at which green products are coming to market — GreenSpec now includes more than 2,100 listings — shows just how far the environmental movement has come. Designers "are looking for green products," Wilson said, "and manufacturers are responding."

It's a good thing too because during the next 25 years, about 40 million houses and 20 million square feet of commercial space will be built to accommodate America's swelling population. Not only will these structures require energy to heat and cool, they'll also require a significant amount of energy to build.

According to a recent report by Global Insight, an economic forecasting firm, these new homes, office buildings and shopping centers will use an additional 4 quadrillion BTUs of energy. That's in addition to the nation's current energy consumption.

With that in mind, here's a look at the fifth-annual list of green products that appear to have the clearest residential applications:

• Triton Logging manufactures a number of lumber products made from trees in underwater forests. The trees were submerged decades ago when hydroelectric dams created man-made reservoirs and lakes, and there are a lot of them. Worldwide, the company believes, there might be more than 100 billion board feet standing below the surface.

Triton uses remote-controlled logging submarines to clamp onto a standing tree and attach inflatable floats. Then, with an electric chain saw, it cuts the tree, which floats to the surface and is loaded onto a barge. Because the trees are cut, the lake floor is not disturbed and no sediment is created.

The Canadian company recovers Douglas fir, western white pine, lodgepole pine, hemlock and other species year-round. All of the milled wood is certified as "SmartWood Rediscovered" by the Rainforest Alliance.

• Delta Faucet has a new showerhead that uses only 1.6 gallons of water per minute yet still delivers "superb performance," according to the directory. Most low-flow showerheads create very small water droplets or aerate the water. Either way, the water cools quickly, making for a less-than-satisfying experience. But Delta's new fixture uses "H2Okinetic Technology" to produce "fairly large" droplets that have better heat retention.

• Environmentally, the best option for landscaping is usually native plants appropriate to the climate that do not require much water. But when irrigation is necessary, efficiency is essential. Yet more than half of the water used for outdoor irrigation is wasted, according to HydroPoint Data Systems in Petaluma, Calif.

To prevent waste, HydroPoint's WeatherTRAK control system creates watering schedules based on such physical landscape features as soil type, slope and plantings, as well as weather data beamed wirelessly to the controllers every day.

Although most irrigation controllers base water delivery on time-of-day metering, sometimes with override controls for soil moisture, HydroPoint's system uses actual local weather conditions to examine "evapotranspiration" rates and regulate water delivery so that irrigation will occur in the correct amounts — but not if rain is predicted or falling. The controllers are fully compatible with most irrigation systems.

• SageGlass has developed an electronically tintable exterior glazing that provides glare control on demand while still preserving views.

SageGlass is a multilayer, thin-film coating that is as durable as low-emissivity coatings. The glazing switches from a clear to a tinted state and back again.

The Faribault, Minn., company is partnering with numerous window, skylight and curtain-wall manufacturers to produce both residential and commercial applications.

• You've heard of concrete countertops, granite countertops, marble, engineered stone and laminate countertops. Now, there's PaperStone, a dense, hard, water-resistant, solid-surface composite made from cellulose fiber and a nonpetroleum phenolic resin derived, in part, from a natural oil in cashew shells. Made by KlipTech Composites in Hoquiam, Wash., the latest PaperStone is 100% post-consumer recycled paper.
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Housing Glut Gives Buyers Upper Hand

Amid a continuing oversupply of homes for sale in most of the country, consumers looking for a house should have plenty of choices and lots of bargaining power in the spring selling season - typically the busiest time of the year.
By: James R. Hagerty and Ruth Simon: The Wall Street Journal Online
Amid a continuing glut of homes for sale in most of the country, buyers should have plenty of choices and lots of bargaining power in the spring selling season - typically the busiest time of the year.

Many builders and real-estate brokers, for their part, hope the housing market will start recovering this year as buyers respond to price cuts and other sweeteners offered by increasingly nervous sellers. In some markets, agents say, buyer traffic has picked up in the last month or two.

But any recovery is likely to be gradual. Donald Tomnitz, chief executive officer of D.R. Horton Inc., a home builder, told investors this week that the market, which began slumping in 2005, may bottom out by mid-2007, but that "we don't see any rapid improvement thereafter."

Given all that, sellers should expect buyers to take their time and be tougher negotiators. David Lee, who recently moved to Wenham, Mass., to take up a post as an associate professor of physics at Gordon College, has rented a home for his family and says they plan to be "quite picky and choosy" as they look for a home to buy. Dr. Lee doesn't feel any pressure to decide quickly because he figures prices won't rise in the near term and could fall further.

A quarterly survey of housing conditions in 28 major metropolitan areas by The Wall Street Journal showed that the inventory of unsold homes at the end of 2006 was up substantially in nearly all of the markets from the already plentiful level of a year earlier. The biggest increases were in the metro areas of Miami-Fort Lauderdale, Orlando, Tampa and Jacksonville, Fla.; Phoenix; and Portland, Ore. (Unlike the other cities, Portland had a lean supply of homes a year before.)

The survey also includes recent pricing trends - nearly all negative - based on surveys of real-estate agents by Banc of America Securities in New York, a unit of Bank of America Corp., as well as data on late mortgage payments and job-creation prospects from Moody's Economy.com, a research firm in West Chester, Pa. Employment figures have a huge effect on housing demand.

Home-price trends vary greatly from one region to another and even within metro areas. For instance, housing demand remains weak in the Detroit area, sapped by auto-related job losses, while the chic urban zones of San Francisco and Manhattan -- where space for new construction is extremely limited -- generally have stayed firm, though price appreciation is far slower than a year or two ago.

The good news for home sellers is that unemployment remains low in most areas, wages are growing and energy prices have fallen from their recent peaks. What's more, mortgage interest rates are still low, allowing people with good credit records to obtain 30-year fixed-rate loans at around 6.2%.

But many lenders are growing more cautious about how much debt home buyers should be allowed to take on and more inclined to ask for proof of income. This tougher attitude will exclude some marginal buyers from the market, hurting demand, even as a rising number of foreclosures throws more supply on the market. DataQuick Information Systems, a research firm in La Jolla, Calif., said yesterday that mortgage lenders sent 37,273 default notices to California homeowners in the fourth quarter, up 145% from a year earlier and the highest in more than eight years.

Meanwhile, home builders still have lots of unsold homes that they will unload by further cutting prices and dangling such incentives as help with closing costs or kitchen upgrades. Discounts on new houses, in turn, will make it harder for some sellers of previously occupied homes to attract buyers.

Some of the biggest gluts of new homes are in Florida, Phoenix and the outer suburbs of Washington, D.C., says Ivy Zelman, a Cleveland-based housing analyst for Credit Suisse Group. Many of the gluts are due to frantic building of condominiums over the past few years. The supply of condos listed by real-estate agents is up 86% from a year earlier in the Las Vegas metro area, 43% in Washington, D.C., and 21% in the Northern Virginia suburbs of Washington. In Florida's Miami-Dade and Broward counties, the listed condo supply has more than doubled from a year earlier.

In Miami-Dade, the number of existing condos on the market is enough to last 27 months at the current sales rate, says Jack McCabe, a real-estate consultant in Deerfield Beach, Fla. The oversupply will grow, he says, as about 8,000 condos are expected to be completed this year and 12,000 in 2008.

"It's going to get bloody down here," Mr. McCabe says. He estimates that condo prices in Miami-Dade fell between 8% and 10% last year and will drop 20% in 2007. Eventually, he predicts, hedge funds and other investors will step in to buy surplus condos in bulk at huge discounts.

10,000 Condos for Sale

In California's San Diego County, developers have more than 10,000 condos available for sale in new buildings, projects under construction or properties being converted from rentals, says Peter Dennehy, a senior vice president at Sullivan Group Real Estate Advisors, a consulting firm based there. He says that supply is enough to last more than 20 months at the current sales rate. That number excludes several thousand condos being offered for resale by speculators and others.

Mr. Dennehy estimates that condo prices have fallen at least 15% to 20% in the county over the past year, though it's hard to measure price changes because sellers often give incentives such as free upgrades or help with closing costs that aren't reflected in the price.

In the Boston area, lower-priced homes in blue-chip neighborhoods are moving pretty quickly. But ones that are overpriced or located on main streets are languishing, says Sam Schneiderman, broker-owner of Greater Boston Home Team. "It's got to be a really good deal," he says. "An OK deal doesn't quite cut it. Buyers are holding out."

The glut in inventories is likely to increase in some markets as sellers try to take advantage of what they hope will be a stronger selling season. Some sellers pulled their homes off the market late last year, intending to relist them in the spring.

At the Coldwell Banker Residential Brokerage office in Scottsdale, Ariz., near Phoenix, listings are up roughly 30% since the end of December. The office expects listings to increase further in late February and early March as sellers who pulled their homes off the market before the holidays relist them.

Some of last year's strongest housing markets now are showing signs of cooling a bit. In the San Francisco Bay area, the median price paid for new and resale homes in December was $612,000, up just 0.5% from a year earlier, according to DataQuick. But prices fell in parts of the Bay Area; they were down 6.3% from a year earlier in Sonoma County and down 5.1% in Solano County, DataQuick says.

One of California's weakest markets last year was the Sacramento area. Anthony Graham, an analyst at Trendgraphix Inc., a provider of housing data, says sellers of previously occupied homes there have had trouble competing with the huge discounts and incentives offered by builders.

Mr. Graham expects average home prices in the Sacramento metro area to fall between 6% and 8% this year, but believes the market will begin to recover modestly by the fourth quarter, assuming that home builders continue to cut their production. Greg Paquin, president of Gregory Group in Folsom, Calif., which gathers data on new home construction throughout the state, also thinks Sacramento is stabilizing after last year's price cuts. "Buyers who were on the fence are starting to say, 'Hey, this is a pretty good deal,' " Mr. Paquin says.

California's Central Valley, which includes such cities as Bakersfield, Fresno, Merced and Stockton, may take longer to absorb excess new-home inventory and bring prices down to more affordable levels, Mr. Paquin said. He said that area may not bounce back until next year.

In Manhattan, big bonuses recently doled out by Wall Street firms will help support the market in this year's first half, says Jonathan Miller, chief executive officer of Miller Samuel Real Estate Appraisers in New York. But a rash of new condo developments will help moderate prices. He expects price increases this year to average 5% to 6% in Manhattan. On Long Island, he believes prices are likely to be flat to slightly higher this year.

In New Jersey, "I'm optimistic that home sales will begin to rebound in the spring," says Jeffrey Otteau, president of Otteau Valuation Group Inc., an appraisal and research firm in East Brunswick, N.J. "However, that would signal the end of the decline - not a return to higher prices."

Mr. Otteau figures home prices fell an average of about 10% in New Jersey last year. For 2007, he believes homes costing less than about $600,000 are likely to rise modestly, around 3%, while homes above that level are about flat. In the luxury end of the market, prices may edge down again this year, Mr. Otteau says.

In the Chicago area, some homes that have sat on the market are finally moving, says Barbara O'Connor, an agent with Baird & Warner. But some sellers have had to accept far less than they had hoped for. Jody Andre, a restaurateur, put her three-story Victorian-style home in the Edgewater neighborhood on the market in August at $679,000. She later lowered the price to $634,900 but still got no offers. "This is a hot neighborhood and a lot of people couldn't understand why the house didn't sell," says Ms. Andre, who accepted a $605,000 offer last week. "I waited too long to put it on the market," she says.

Buyer Traffic Picks Up

The end of the year is normally a slow time, but in some parts of the country traffic has increased in the last month or two, helped by unseasonably warm weather. In Philadelphia's Center City, buyer traffic began to pick up in November and has continued to climb over the last two months, says Mike McCann, an associate broker with Prudential Fox & Roach, Realtors.

A recent open house for a three-bedroom home priced at $469,000 drew 17 parties, Mr. McCann reports. In the summer and early fall, he says, "we didn't want to do open houses because it was a wasted day." Sales are also increasing, but negotiations are taking longer and many offers are contingent on the buyers selling their current homes, Mr. McCann adds. Prudential Fox & Roach is also seeing more people asking to get pre-approved for a mortgage, a sign that they may be ready to buy.

In Atlanta, where the housing market began to soften in August, business started picking up again in December, says Lewis Glenn, president and chief executive of Harry Norman, Realtors. "There's more negotiation," and builders are cutting prices and offering concessions, such as buying down the borrower's mortgage rate, he says.

In Scottsdale, some sellers are cutting prices by 10% or more, says Dale Pavlicek, sales manager for the Coldwell Banker Residential office there. "There are a lot of vacant homes on the market," he says. Sellers who bought in the past year or two are barely breaking even or are coming to the closing table with money to pay off their mortgage and other costs, he adds.

Houston remains one of the nation's more buoyant housing markets, supported by job growth in the energy industry. Rob Cook, chairman of the Houston Association of Realtors, says the supply of homes on the market is enough to last about six months at the current sales rate - what he calls a "balanced" market. Prices are rising only modestly, though, because Texas has plenty of room for new construction. "We just keep expanding out farther and farther," Mr. Cook says.

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Sales Sluggish in Starter Luxury Markets

Sales of homes $750,000 to $1.25 million have declined substantially recently, coupled with slowing appreciation. See what metro areas are facing the steepest declines.
By: June Fletcher: REALTOR® Magazine Online
The market for homes $750,000 to $1.25 million is feeling the pinch, according to a study by The Wall Street Journal and The National Association of Home Builders.

Homes in this price range have been more immune to the general malaise of the market. They haven’t been as affected by investors; the average buyer in this market are middle-income families trading up, according to the study. But appreciation has been sluggish in most areas, and the number of homes sold in this category has declined substantially.

In the 2005 fourth quarter, 65 metro markets had 100 or more sales in that price range. A year later, that figure had dropped by more than half, to 32. Nearly half of those 32 markets saw prices flatten or decline during the fourth quarter compared to the same period a year earlier. Overall, the median price of these 32 markets rose a modest 1.4 percent to $890,000.

Real estate professionals say that in many markets competition is great with eager sellers dropping prices.

Metro markets with the largest decline in prices are St. Louis; Edison, N.J.; Miami and Miami Beach; Chicago-Naperville-Joliet; and San Francisco-San-Mateo-Redwood City.
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2006 Third Highest Sales Year on Record

Existing-home sales eased but prices stabilized as inventories tightened in December, according to the latest research by the NATIONAL ASSOCIATION OF REALTORS®.
REALTOR® Magazine Online
Existing-home sales eased but prices stabilized as inventories tightened in December, according to the NATIONAL ASSOCIATION OF REALTORS®. Nevertheless, 2006 marked the third highest sales year on record. NAR began tracking home sales in 1968.

David Lereah, NAR’s chief economist, says home sales remain historically high. “Despite all of the doom-and-gloom stories and dire predictions over the last year, 2006 was the third strongest year on record for existing-home sales,” he says. “It looks like we’re moving beyond the low for the housing cycle last fall, and buyers are responding to historically low interest rates and competitive pricing by home sellers. In addition, a tightening inventory of homes on the market is supporting prices.”

Total existing-home sales — including single-family, townhomes, condominiums, and co-ops — eased 0.8 percent to a seasonally adjusted annual rate of 6.22 million units in December compared with 6.27 million in November. Sales were 7.9 percent lower than a 6.75 million-unit pace in December 2005.

There were 6,480,000 existing-home sales in 2006, down 8.4 percent from a record of about 7,075,000 in 2005. The second highest total was 6,779,000 in 2004.

A Closer Look at the Numbers

Total housing inventory levels fell 7.9 percent at the end of December to 3.51 million existing homes available for sale, which represents a 6.8-month supply at the current sales pace — down from a 7.3-month supply in November.

The national median existing-home price for all housing types was $222,000 in December, which is unchanged from December 2005. The median is a typical market price where half of the homes sold for more and half sold for less. The 2006 median price was also $222,000, up 1.1 percent from a median of $219,600 in 2005.

Meanwhile, the national average commitment rate for a 30-year conventional, fixed-rate mortgage was 6.14 percent in December, down from 6.24 percent in November, according to Freddie Mac. The December rate was the lowest since October 2005 when it averaged 6.07 percent.

Furthermore, single-family home sales slipped 1.3 percent to a seasonally adjusted annual rate of 5.44 million in December from 5.51 million in November, and were 7.2 percent lower than the 5.86 million-unit pace in December 2005. In 2006, single-family sales declined 8.1 percent to 5.68 million, the third strongest total on record.

The median existing single-family home price was $221,600 in December, which was unchanged from a year ago. The median single-family price for 2006 was $222,000, up 1.4 percent from 2005.

Existing condominium and cooperative housing sales rose 2.1 percent to a seasonally adjusted annual rate of 777,000 units in December from an upwardly revised level of 761,000 in November. Last month’s sales activity was 12.2 percent lower than the 885,000-unit pace in December 2005.

After setting 10 consecutive annual records, condo sales in 2006 fell 10.4 percent to 803,000 units, the third highest year on record. The median existing condo price was $227,000 in December, which was 0.3 percent above a year ago. The median 2006 condo price was $221,800, down 0.9 percent from 2005.

By Region

Here’s what happened regionally in December:

    • Existing-home sales in the Midwest rose 4.3 percent in December to a level of
      1.47 million, but were 5.8 percent lower than December 2005. The median price
      in the Midwest was $167,000, which is 2.9 percent below a year ago.

    • Existing-home sales in the South increased 0.8 percent to an annual sales rate
      of 2.49 million in December, but were 7.1 percent below a year ago. The median
      price in the South was $182,000, unchanged from December 2005.

    • Existing-home sales in the Northeast declined 2.8 percent to a level of 1.04
      million in December, and were 5.5 percent below December 2005. The median
      existing-home price in the Northeast was $283,000, up 3.7 percent from a year
      earlier.

    • Existing-home sales in the West fell 9.1 percent to an annual pace of 1.20
      million in December and were 15.5 percent lower than a year ago. The median
      price in the West was $349,000, up 1.5 percent from December 2005.

Expect Steady Gains

NAR President Pat Vredevoogd Combs, from Grand Rapids, Mich., and vice president of Coldwell Banker-AJS-Schmidt, says the market has clearly settled with some minor monthly fluctuations. “We expect home sales to rise modestly over the course of this year,” Combs says. “Although local markets vary, price appreciation will be below normal in most of the country this year, but we’re looking for slow, steady gains in both home sales and prices through 2008.”
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Cleaning House: Do We Really Have to Do It?

Jeff Opdyke always thought paying for a housekeeper was an off-limits expense, but now wonders if domestic help is an unnecessary luxury or a modern necessity.
By: Jeff Opdyke: The Wall Street Journal Online
How hectic is our life? Here's one recent sign: Amy, my wife, took half a day off from work recently just to catch up on the laundry.

The problem (I say defensively) isn't that I'm a slacker husband. In fact, I'm often washing and folding clothes, and I do most of the grocery shopping, cooking and kitchen cleanup. My point, rather, is that like so many working couples, Amy and I frequently find that even if we had 30 hours in a day we couldn't get around to everything on our to-do list. The upshot is that many household chores - such as the laundry - get punted from one day to the next... and then to the next. I can't tell you how many times my mother-in-law stops by and groans about the Laundromat that has exploded in our laundry room.

Amy and I don't disagree, and as a result, we're considering something that a couple of years ago would have been unthinkable: hiring someone to come in once a week to clean and do the laundry. We've yet to make that final leap, though. And our indecision boils down to this question: Is domestic help an unnecessary luxury, or is it a modern necessity?

* * *
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I realize that paying for a housekeeper is beyond the pocketbooks of many people, and that this whole debate may feel like an indulgent exercise. I've always thought it was off-limits for me, too. Amy and I both come from a background where the only housekeeper we knew was TV's Hazel. Such lavishness fell to a moneyed crowd, and both of us grew up in neighborhoods where Hazel was more likely to live than work.

We still find ourselves stuck in that mind-set. While we've reached a point where we can afford a person once a week, at some level it's not really about the cost so much as it is the perception. Isn't keeping your own house clean part of life? And doesn't a housekeeper imply we have no better use for our money than to spend it on the extravagance of hiring someone to handle our mess?

Or is our mind-set simply too dated?

I talked to several people about this, and to my surprise, they all insisted that a housekeeper was either a necessity or something that was well worth considering.

"It is an absolutely essential investment in the sanity and well-being of my family," says Alex, a friend in New York. She and her husband, John, are a dual-career couple. When the workday ends, Alex isn't looking to put her feet up and relax. She wants to cook for her family and spend time with her daughter. But that doesn't leave time for folding clothes and cleaning the bathroom.

"For us," Alex says, "coverage on the home front allows me and John to do what we do professionally, and come home to a clean house, the errands done, so that we can focus on engaging with our daughter." A few hours after talking to Alex, she shot me an email to say that she and her family discussed this topic over dinner and that all had "agreed that we'd trade off vacations for the family benefit of having a housekeeper help us keep things clean and in order."

Another friend says that while he could "never argue that I have to have a housekeeper and that I couldn't live without one," the reality is that he has one come in every Monday to clean the house. "Economically and psychologically, the cost [$70] is well worth it to me," he says. "I could do the cleaning, and it would take me at least three hours. But those are hours I'd have to take from somewhere else -- specifically, from spending time with my daughter. I look at it like this: I'm paying $70 a week to have three hours of relatively uninterrupted time with my daughter. That's money well spent."

Yet a third friend, a single mom, has struggled for a long time with the question of whether a housekeeper is a luxury or a necessity. Her arguments sound a lot like mine and Amy's. "I hate to waste money on things I can do myself," she says. "I am absolutely capable of doing the dishes, vacuuming a rug and scrubbing a bathtub. Hiring a housekeeper seems like such an indulgence."

But while she can do it herself, she often doesn't, because between her work and her daughter, housework gets pushed down the priority list. Laundry piles up. Floors aren't swept. It all "creates an added level of stress," she says. "When we don't have the right clean clothes, that makes small things like getting ready for school in the morning more complicated."

She can't afford the $75 a week that a housekeeper would cost, and trimming that back to once every other week seems pointless. Her compromise: Since laundry is her biggest bogey, she says, "I drop it off at the wash-and-fold place down the street whenever I start to get behind. It costs me about $25 to $50 a month, a cost I can live with. It has eased the housecleaning burden just enough to make my life more manageable."

* * *
In my conversations, I kept hearing the same refrain: In the luxury vs. necessity debate, kids are the X-factor.

When our life revolved around me and Amy, we had no need for domestic intervention. It never crossed our minds. But kids have altered our math. Our weekends are now defined by soccer games and Cub Scout meetings, birthday parties and homework. While I'm at the market with our 3-year-old, Amy's home cleaning what she can while helping our 10-year-old study.

During the week, the scheduling is generally worse because the obligations are crammed into far fewer hours in the evening. We try to press our son into duty on occasion, but by the time he gets home from school or soccer practice, completes his homework, eats and bathes, his time is as squeezed as ours. If he has free time, we want to play with him as a family. We don't want him to feel his days are a monotonous blur of work at school and more work at home.

Talking to friends has sealed the deal for me. Though I still feel queasy hiring someone to manage a mess I think we should be managing ourselves, I recognize that we're only creating a level of unnecessary tension in our life. Really, Amy shouldn't have to take vacation time just to fold clothes. Neither of us should have to walk past the laundry room feeling guilty for ignoring the mountain because we have another cliff to scale first.

So, we're going to look for someone to come in once a week to manage the laundry. The rest of our chores we can handle.

I'm not convinced it is a necessity, but I know it will feel like a luxury not to have to worry about that pile of clothes Amy and I were supposed to get to yesterday.
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Why Women Pay More for Mortgages

''There is some research indicating that women are less likely than men to bargain for credit transactions,'' says one expert.
By: Bob Tedeschi: REALTOR® Magazine Online
Women are 32 percent more likely to carry mortgages with high interest rates than men with similar incomes, even though women generally have better credit scores, according to a study released recently by the Consumer Federation of America.

The study also found that wealthier women were 50 percent more likely to carry expensive loans than their male counterparts. In 2005, 10 percent of women who took out mortgages received the highest-cost sub-prime loans, compared with about 7.5 percent of men.

Why do women pay more? Allen Fishbein, the federation’s director of housing and credit policy, speculates that the most likely reason for the disparity was that women were less familiar with the mortgage market than men and didn’t shop around.

''There is some research indicating that women are, on the whole, less likely than men to bargain for major consumer purchases and credit transactions,'' he says.
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List it, spruce it, show it, but first make sure its price is right

Question: Our home has been listed for sale for more than five months.
By: Robert J. Bruss: Inman News
The local market is very slow. The listing agent has the house on her website and occasionally holds a weekend open house. We need to sell before we can buy another home near my husband's new job. What else can we do?

Answer: If your home has been listed for more than five months, something is wrong.

The primary reason a house doesn't sell is because it's overpriced. Ask the listing agent to prepare a new comparative market analysis. This form shows recent sales prices of similar nearby homes, the asking prices of neighborhood homes (your competition) and the asking prices of recently expired comparable listings (usually overpriced).

If your home is overpriced, it's time to face reality and reduce the asking price.

Be certain your home is correctly listed in the local Multiple Listing Service and on the local MLS website, the agent's most powerful marketing tool. Ask the agent to detail what she has done and is doing to properly market your home. How often does she advertise it in the newspapers and in local home sales magazines? She should be holding a well-advertised open house at least once a month.

In addition, she should network with agents who sell homes like yours to be certain they are aware of your property. Lastly, ask the listing agent if she recommends staging your home to show it at its best, such as by removing old-fashioned furniture and sprucing up the interior.

Cost of new roof is not deductible

Question: We recently had our roof replaced. It cost $23,000. Can we depreciate the roof over its 20-year life expectancy?

Answer: No. Home repair and improvement costs for your personal residence are never tax deductible. However, you can add the cost of that new roof, which extends the useful life of your home, to your residence's adjusted cost basis.

When you eventually sell the home, you could then reduce the amount of your capital gain.

Dad could opt for a reverse mortgage

Question: My elderly dad lives in his home alone. He refuses to sell, even though he owns the $700,000 house free and clear. He could live like a king in a luxury rental apartment. The house needs repairs, especially a new roof. His banker suggests a home equity loan. But I wonder if that is smart because he has a limited income from Social Security, stock dividends and a small pension. What do you recommend?

Answer: The banker wants to sell a home equity loan because he gets a commission, whereas the local bank probably doesn't make senior reverse mortgages. Such a mortgage can provide your dad with the money needed for a new roof and other expenses he might have.

He will have the choice of a lump sum, a lifetime monthly income, a credit line (except in Texas) or any combination. Most seniors choose the credit line and use the available funds as they need them, such as for a new roof, a new car or a vacation.

The big advantage of a reverse mortgage is that no repayment is required as long as your father lives in his home. But a home equity loan requires monthly payments.

Because your dad's income is limited, adding a monthly payment for a home equity loan to his burden might not be wise.

Few agents like home-share sales

Question: Is there a market for partial interests, in this case a 50% interest in a vacation home?

Answer: There is no organized market for partial property interests. Most real estate agents refuse to take a listing for a 50% interest in a property. Ask your friends and relatives if they want to buy it. If somebody is interested, expect to sell at a huge discount from 50% of the fair market value for the entire property.

Keep shopping for reverse mortgages

Question: My husband and I own a house worth about $750,000. We need a reverse mortgage. But the FHA and Fannie Mae will give us only a $61,000 lump sum or $400 per month. These amounts seem extremely low. What should we do?

Answer: When a principal residence is worth more than $500,000, the best reverse-mortgage lender is often Financial Freedom.

To find local reputable reverse-mortgage originators for all three nationwide lenders in all states, go to http://www.reversemortgage.org .
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Sales down, prices up for 2006 housing market

Southern California's housing market lost much of its spark last year but wrapped up 2006 setting a new price record even as the number of sales hit a decade low, data released today showed.
By: Annette Haddas: latimes.com
The median price paid for a home in the six-county region was $495,000 in December, a new high. That was up 3.3% from a year ago and up 1.6% from the month before, according to DataQuick Information Systems, a La Jolla-based research firm that compiles monthly real estate statistics.

A total of 22,485 new and resale homes were sold in Los Angeles, Orange, Ventura, Riverside, San Bernardino and San Diego counties last month, which was a 22.3% drop from a year ago. Yet, volume was up 10.3% from November.

December is one of the strongest months for real estate activity, as buyers and sellers seek to complete deals before the end of the year. Last month's improved showing in sales compared to previous months helped push the Southland's median home price to a record, DataQuick said.

Moving into 2007, however, analysts expect the region's market to continue to decelerate, particularly in comparison to recent years when the real estate market was booming at above-average rates.

"The market is still readjusting after the frenzy of 2004 and 2005," said DataQuick President Marshall Prentice. "In any real estate cycle, when prices peak, they don't level off at that peak, they come down some. The question is, how much?"

In San Diego County, which was the first in the region to see price depreciation last year after six years of gains, the December median fell 6.4% to $483,000 from $516,000. In November, the median had dropped 6.9%.

Analysts are watching the San Diego market closely as a leading indicator for the rest of the Southland.

Orange County, which had no growth in prices year over year in November, saw its median tick up 3.4% to $642,000, while sales fell 28.9% to 2,719.

The median price in Riverside County logged a new record, rising 5.1% to $432,000. Sales there fell 31.5% to 4,318.

San Bernardino County, which is considered the most affordable, saw its median climb 3% to $372,000 as sales declined 31.1% to 3,154.

Ventura County posted a fourth consecutive month of depreciating growth as its median fell 5.9% to $593,000 and sales fell 13.8% to 978.

As reported earlier, Los Angeles County's median rose 6.5% to $522,000 while sales dipped 12.9% to 7,703.

The previous median price peak was $493,000, which was set in June. Year-over-year price increases have been in the single digits for nine months.

"We need to remember that prices have gone up 100% in Southern California in the last four years," Prentice said. "Most of that increase is here to stay."

The median price is the price at which half of all homes sold for more, half for less.
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The Year of Listing Patiently; Sales Are Slow for Pricey Homes

Last year proved to be a tough one to sell a house, and the high end of the market wasn't immune. A look back at those featured in 'House of the Week' finds that only 30% have sold - and most at steep discounts.
By: Ben Casselman: The Wall Street Journal Online
Last year proved to be a tough one to sell a house. In many parts of the country, sales were down, inventories were up and homes lingered longer on the market. In August, the median price of an existing single-family home fell 1.7% compared with a year earlier, the first year-to-year price decline in more than a decade, and prices continued to fall for the remainder of 2006, according to the National Association of Realtors.

The high end of the market wasn't immune, either, as evidenced by the lackluster sales of the homes highlighted in Weekend Journal's "House of the Week." Of the 46 houses featured between October 2005 and September 2006, only 14 have sold, most at steep discounts -- an average of 16% below the asking price published in our column; another four are in contract. Timing was also critical: Only one house featured since June has found a buyer. (None of those featured in the fourth quarter of 2006 have sold, but they aren't included in this survey because most have only recently come on the market.)

Homes featured in House of the Week aren't representative of the national housing market. For one thing, they tend to be high-end properties: the average asking price for the homes in our sample was nearly $10 million, while only one asked less than $1 million. They are also selected for other qualities - noteworthy architecture, colorful histories or singular locations - that set them apart even from other luxury homes.

House of the Week

See a photo slide show of this week's House of the Week.
Still, their sales performance has generally followed national patterns. Overall sales volume peaked in mid 2005 and then declined steadily throughout most of 2006, according to the National Association of Realtors, and existing home sales in November 2006 were down 11% compared with the previous year. The same held true for the Houses of the Week. Of the 23 properties featured from October 2005 through March 2006 - when the overall market was relatively strong - 12 have sold or are in contract, compared with just six of those featured during the following six months.

The properties that were most likely to find a buyer were those with the highest price tags. Half of the Houses of the Week with asking prices of $15 million or more have sold, versus just over a quarter of those asking less than $15 million. That, too, follows a national trend, according to Jonathan Miller, president of the New York appraisal firm Miller Samuel. "Super luxury" homes have continued to sell in high numbers, he says, though not necessarily close to their asking prices. In fact, one reason they tend to sell, Mr. Miller says, is because their owners can be more flexible; these deals don't live or die over a $5 million difference. And unlike the general housing market, which is strongly affected by interest-rate fluctuations, upscale home sales tend to be more sensitive to the stock market and the overall economy because buyers are more likely to pay in cash.

San Lee, the owner of a 10,000-square-foot waterfront mansion in Palm Beach, where the market remains healthy, actually raised her asking price recently, to $22 million from $18.5 million. That builds in room to negotiate, says listing agent Wallace Turner of Sotheby's International Realty. At the same time, "the buyers feel that they're getting a value, even though we're settling it at about the same price in the end," Mr. Turner says.

Most sellers, however, moved in the opposite direction. About half of the House of the Week properties still on the market have had a price cut since they appeared in the column, in one case by 35%. Others have been taken off the market entirely, although many sellers say they will try again when the market improves. It may be a while, according to Mark Zandi, chief economist for Moody's Economy.com. "There's still a lot of oversupply," even at the high end, he says. "I think the correction really has a year left to run."

Here's a sampling of four Houses of the Week in different parts of the country.

SOLD: Southern California oceanfront contemporary, for $27 million.

This 3,544-square-foot home in Carpinteria, about 12 miles south of Santa Barbara, sold for 77% of its $35 million asking price, but Charlene and Sherrill Broudy say that's still far more than they expected before they put it on the market in the spring. The asking price was "a shot in the dark," Ms. Broudy says. The value in the 1.7-acre property lay primarily in its seaside location - with 150 feet of beachfront - rather than the house itself - a four-bedroom home built in 1980 (which Ms. Broudy says needed work). Listing agent Kathleen St. James of Sotheby's International Realty moved into the house while the owners were away in Costa Rica and cleaned it up, a project that included pressure-washing and oiling its redwood exterior. The May 5 "House of the Week" sold in 60 days. The buyer, local venture capitalist Brian Kelly, saw the property in its first week on the market, before Ms. St. James's cleaning job, and submitted the only serious bid. "You don't have that many people calling you up to spend that kind of money," Ms. St. James says. "Sometimes you get lucky."

AVAILABLE: 319-acre Montana ranch on the Yellowstone River. Asking $13.5 million.

Dan and Barbara Todd recently cut 10% off the $15 million price of their ranch in Livingston, about 26 miles southeast of Bozeman, after it had been listed for about a year. Mr. Todd says the price cut was a response to a softening market -- Montana ranch sales volume is down from last year, though prices have continued to rise -- and to signal that he is ready to make a deal. The property includes a recently built six-bedroom, 6,400-square-foot main house, a guest cottage and a one-bedroom barn/artist studio.

This is the eighth ranch that the Todds have bought and sold, but the first that is primarily recreational, not agricultural. "When I show the property, I don't know whether someone wants to shoot a deer or look at it," Mr. Todd says. He isn't concerned that the house, which was featured on March 17, has yet to attract a buyer. Listing agent David Johnson of Hall & Hall says ranches usually stay on the market at least a year.

SOLD: Connecticut midcentury modern with pedigree, for $3.75 million.

This Philip Johnson-designed house in New Canaan went into contract within four months of being listed, albeit at a 12% reduction, from $4.25 million. The sale closed in just six months. Meanwhile, sales volume in Fairfield County, Conn., was down nearly 15% in the first three quarters of 2006 compared with the same period in 2005. Listing agent Susan E. Blabey of William Pitt Sotheby's International Realty attributes the modern home's speedy sale to its being "100% pure Philip Johnson," practically unchanged since the award-winning architect designed it in 1950. Not that there weren't challenges to overcome, including strict preservation easements that protected the land, the house and even some of the interior features. The "House of the Week" for June 9, had also been vacant two years and needed work.

But Craig Bassam and Scott Fellows knew what they were getting into. The buyers run the design firm BassamFellows and also own another vintage modern in New Canaan, which they're selling.

AVAILABLE: Low Country home on a South Carolina island. Asking $1.95 million.

This four-bedroom, nearly 5,000-square-foot home on Daufuskie Island, a second-home area about a mile from Hilton Head Island, came on the market in July 2005, just missing the area's primary selling season. Interest picked up the following spring, says listing agent Catherine Donaldson of Cora Bett Thomas Realty, but then the market hit a severe slump in the summer. (The home was featured on June 16, 2006.) The owners - Detroit Red Wings center Robert Lang and his wife, Jennifer - cut the price in August, but by then it was too late, Donaldson says. She adds that the 21% cut has generated interest, but mostly low-ball offers. "When you drop a price that much, you give the impression that it's a fire sale, and it's not." It doesn't help that Daufuskie Island is accessible only by water. "It is tough to sell a home on an island you can only get to by boat," she says.
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NAR: Home Sales To Rise Gradually Into 2008

A steady improvement in existing-home sales will support price appreciation moving forward, says NAR Chief Economist David Lereah.
REALTOR® Magazine Online
After bottoming in the fourth quarter of 2006, existing-home sales are forecast to gradually rise through 2007 and into 2008, while new-home sales should turn around by summer, according to the latest forecast by the NATIONAL ASSOCIATION OF REALTORS®.

Annual totals for existing-home sales in 2007 will be comparable to 2006, says David Lereah, NAR’s chief economist.

“Keep in mind that we were still in boom conditions during the first quarter of 2006 with a high sales volume and double-digit price appreciation,” Lereah said. “We are starting 2007 from a relatively low point, so even with a gradual improvement in sales it’ll be pretty much of a wash in terms of annual totals.”

The good news, he says, is that a steady improvement in sales will support price appreciation moving forward.

2006 Sales Third-Highest on Record

Existing-home sales for 2006 are expected to come in at 6.50 million, the third highest on record, with a total of 6.42 million seen in 2007. New-home sales in 2006 should tally 1.06 million, the fourth highest on record, with 957,000 projected this year.

Total housing starts for 2006 are likely to be 1.81 million units, with 1.51 million forecast in 2007, which would be the lowest level in a decade. Builders are pulling back on new construction to support prices of remaining inventory.

The 30-year fixed-rate mortgage will probably rise to 6.7 percent by the fourth quarter of 2007. Last week, Freddie Mac reported the 30-year fixed rate at 6.18 percent, far below earlier consensus forecasts.

“The current interest rate environment and housing inventory levels present a window of opportunity for potential buyers,” Lereah says.

The national median existing-home price for all of 2006 is expected to rise 1.1 percent to $222,100, and then gain 1.5 percent this year to $225,300. The median new-home price, after rising only 0.3 percent to $241,600 in 2006, is projected to grow 3.0 percent in 2007 to $248,900.

Soft Landing for Housing

“With all the wild projections by academics, Wall Street analysts, and others in the media, it appears that much of the housing sector is experiencing a soft landing,” Lereah says. “Despite the doomsayers, household wealth will not evaporate and the economy will not go into a recession. If you’re in it for the long haul, housing is a sound investment.”

The unemployment rate is likely to average 4.8 percent in 2007, following a rate of 4.6 percent in 2006. Inflation, as measured by the Consumer Price Index, is expected to be 2.2 percent 2007, down from 3.2 percent last year, while growth in the U.S. gross domestic product is seen at 2.5 percent in 2007, compared with 3.3 percent last year.

Inflation-adjusted disposable personal income should grow 3.4 percent this year, following a rise of 2.7 percent in 2006.
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How to Cut Your Property Taxes; IRAs for Home Purchases

As many as 60% of homes are assessed for too much, and about 33% of property-tax appeals succeed. We offer tips on how to lower your load. Plus, whether an IRA can be used to pay off a mortgage.
By: Kimberly Lankford: The Wall Street Journal Online
Question: The rural county where I live has just reassessed real estate values, and my home's assessment more than tripled, as did most others in the country. The assessed value is now more than my most recent property appraisal. Should I appeal? What information would I have to present?

Answer: Go for it. As many as 60% of homes are assessed for too much, estimates Pete Sepp, of the National Taxpayers Union, and about 33% of property-tax appeals succeed.

Procedures vary, but you generally have 30 to 60 days after receiving an assessment notice to file an appeal. Ask the assessor's office for a copy of your property card, which documents the information on which the assessment was based. If the card lists the wrong number of rooms or square footage, for example, you may be able to get your assessment changed without a formal appeal.

If the information is accurate, go to Zillow.com to see how your home's assessment stacks up against others in your neighborhood. If you find that similar homes are assessed at a lower value, you may have a strong case.

If you spot big discrepancies, check your local assessor's office's records for more details on homes with similar features and lower assessments. Or find comparable assessments and explain why your home's value should be lower, says Sepp, whose organization publishes the helpful brochure How to Fight Property Taxes ($6.95). Some jurisdictions also allow you to submit as evidence market-value information, such as your recent appraisal.

Question: My wife and I just bought our first house. Within a week after closing, we found out that you can use your IRA toward a first-time home purchase, and each person can withdraw $10,000 toward "qualified acquisition costs." We have an 80-10-10 mortgage (80% from the first mortgage, 10% second mortgage, 10% down). Can each of use withdraw $10,000 from our IRAs without paying a penalty if we put the money toward paying off the second mortgage?

Answer: Good idea, but the answer is no. You can't take an IRA distribution to pay off any mortgage, regardless of whether it's a first or a second loan.

First-time home buyers (which the IRS defines as anyone who hasn't owned a house within the past two years) can avoid the 10% early-withdrawal penalty only if they use the IRA money to pay qualified acquisition costs for a principal residence before the end of the 120th day after withdrawing the money.

Qualified expenses include acquiring, constructing or rebuilding a residence. Closing costs are covered, but paying off a loan isn't, says Greg Rosica, a tax partner with Ernst & Young. Nor can you withdraw the money after the fact and treat the distribution as though the cash had been used for the down payment you've already made, says Bob D. Scharin of Thomson Tax & Accounting.

For more information about rules for IRA withdrawals, see IRS Publication 590, Individual Retirement Arrangements.
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Developers Now Required To Post Project Descriptions At Work Sites

LOS ANGELES - Beginning Tuesday, developers will be required to post a brief project description and other information at all construction sites in Los Angeles.
nbc4.tv
The initiative is aimed at reducing noise and enforcing rules at job sites to minimize disruptions sometimes caused during construction projects.

"At some time in our lives, we've all been inconvenienced by the noise, dust and traffic delays caused by construction in residential areas," Mayor Antonio Villaraigosa said Friday.

"This new ordinance will step up enforcement of these disturbances and encourage good relationships between residents and builders."

The ordinance will require developers to:

    • avoid street closures during peak traffic hours
    • park construction vehicles on-site, rather than on residential streets
    • ensure safe pedestrian access
    • promptly clean-up and spills or construction debris
    • avoid interfering with trash pick-ups

Councilman Jack Weiss introduced the "Good Neighbor Posting Initiative."

"This construction doesn't have to disrupt otherwise peaceful neighborhoods if developers and builders are good neighbors," he said last week. "By informing builders and residents about the rules, I hope we can reduce nuisances during construction and ensure that city laws are followed."
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Home prices climb in county

L.A. County home prices rise to record.
By: Annette Haddad: latimes.com
The L.A. median rises 6.5% in December from a year earlier despite a 12.9% drop in sales.

Don't talk to Brandon Brennan about it being a buyer's market for real estate.

Despite a widespread slowdown in sales, Brennan made bids on four Westchester houses — all below asking price — and was rebuffed by sellers waiting for a better offer.

"I didn't feel like it was a good time to pay full price for a house," said Brennan, relocating from Ventura because of a job transfer. "But with every offer, the sellers didn't bother to counter because they were getting other offers."

Such was the housing market at the end of 2006: Although Los Angeles County's median home price rose 6.5% from the previous year to reach a record $522,000 in December, the number of sales fell 12.9%.

"What we're seeing is a market that is rebalancing itself after the surge we had," said John Karevoll, chief analyst for DataQuick Information Systems, the La Jolla research firm that compiles monthly numbers. "The question, as we come off the top, is how far off the top we're likely to come."

As real estate agents like to say, homes that are selling these days are those that are "priced right" — at or slightly below the prevailing market rate. That means there can still be competition for certain houses in certain neighborhoods — as Brennan found.

Meanwhile, the majority of houses sit. The average days on the market for existing homes in L.A. County rose 5% from November to December to 104 days, according to multiple-listing service figures compiled by brokerage ZipRealty Inc. In the same period, the number of homes on the market declined 14% to 32,363.

"Buyers are going after the same few homes, the low-hanging fruit that are the good deals," said Michael Davin, executive vice president of CataList Homes, a Hermosa Beach-based brokerage.

The transactions that were completed in December closed at slightly higher prices, allowing L.A. County to recover appreciation lost in the previous five months. The December median price of $522,000 was up 2.4% from November's $510,000 and was the highest since the previous record of $520,000 set in July.

The median price is the point at which half of all homes sell for less, half for more.

For the full year, Los Angeles County's median home price rose 8.5% in 2006, while sales fell 16.8% compared with 2005. Price appreciation for the county peaked in 2003, when the year-over-year median price rose 24% from the previous year.

Throughout 2006, price appreciation slowed considerably from the double-digit gains logged in the previous three years as sales exploded. Karevoll said he expected price growth to continue to "bounce around" in the coming year — rising year over year one month, decelerating the next — as sales return to a more normal pace.

One trend Davin of CataList Homes has noticed in the last 45 days is the rise in the number of pending home sales that are subject to the buyer selling an existing home.

"A lot more homes in escrow are contingent on the sale of the down-leg property," he said. "There are fewer first-time buyers now because of the high prices. They realize they won't be making the same great appreciation."

December is typically one of the strongest months for real estate activity as buyers and sellers work to close deals before the end of the year, usually for tax or other bookkeeping reasons. That trend was particularly evident in the new-home category last month as sales rose 1.7% from the year before and the median increased 14.8% to $511,000, DataQuick said.

First-time buyer Dennis Hsii found more of a buyer's market when he was ready to purchase a new home late last year.

Hsii, 28, who works in technology, was able to negotiate with builder Standard Pacific Corp. to get a discount on a condominium under construction in Playa Vista that was listed in the mid-$700,000s.

He also received $20,000 in incentives to put toward upgrades, homeowners dues or mortgage costs.

His home was supposed to be ready in mid-December, but construction delays have pushed back his move-in date to February. In the meantime, the builder has given him an additional $4,000 to defray living expenses.

"I'm not disappointed," Hsii said. "But I'm eager to move in. It's a big deal being a new homeowner."

Brennan, the Westchester house hunter, and his wife, Christina, eventually had an offer accepted on a fixer-upper that had been reduced to $799,000, in part because they were willing to close within two weeks. They wound up paying about 2% below the asking price, but that was still more than they had hoped to spend.

"We went through a major ordeal," Brennan said, "trying to find a decent deal."

Data for other regions of Southern California are expected today.


*

(INFOBOX BELOW)


Home sales

Median price and number of homes sold in L.A. County

Sale prices Year-over-year
(In thousands) Dec. '05 Nov. '06 Dec. '06 Chng.
Resale houses $520 $540 $550 +5.8%
Resale condos $400 $410 $412 +3.0
New homes $445 $483 $511 +14.8
All combined $490 $510 $522 +6.5
Number of sales
Resale houses 6,276 5,167 5,405 –13.9
Resale condos 1,542 1,277 1,254 –18.7
New homes 1,027 907 1,044 +1.7
All combined 8,845 7,351 7,703 –12.9


Source: DataQuick Information Systems
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Blueprint for home sale: Price it right

Preparing to sell in 2007
By: Dian Hymer: Inman News
The current market value of your home may be more than, less than or the same as it was last year depending on where you live and what you have to sell. Nationally, the median sale price of homes sold in October 2006 dipped 3.5 percent from October 2005, which was an exceptionally strong month. But there are still pockets of the market, such as Portland, Ore., where prices are still going up.

Recently, a San Francisco home seller was relieved to close the sale of her condo after six months on the market - a market that was flooded with condo listings. Across the bay in the trendy Upper Rockridge neighborhood of Oakland, a listing sold in less than one week with two offers, both for significantly more than the asking price. But, there was nothing else on the market to compete with this listing.

HOME SELLER TIP: Regardless of whether you're in an area with a surplus of unsold inventory or one where listings are in demand, the blueprint for a successful sale in 2007 is the same. Price your home right for the market. Properly prepare your home for sale. And, make sure that your listing receives extensive market exposure.

Overpricing will get you nowhere in the current market. Buyers have been barraged by negative press on the housing market; they are cautious and won't pay a penny over market value. They aren't in a hurry. The threat of the market escalating in the near future is slim in most areas so buyers are holding out for value.

Sellers often wonder whether it's worth it to spend money fixing a home up for sale, especially if they aren't looking at selling for a huge profit. It's not only worth it, but also can be critical to a sale for the highest price possible, particularly in areas where the inventory is high. In some areas, resale homes are in competition with brand-new homes.

When there is a lot to choose from, buyers can afford to be picky. If your home has a dated décor you may need to invest in replacing items such as outmoded light fixtures, floor coverings and paint colors. Also, plan on correcting deferred maintenance, or discount your price accordingly.

Imagine that you're the buyer and have a choice between a house that you can move into without lifting a finger and one that needs a complete overhaul. Most buyers won't even consider the house that needs a facelift.

Be sure to select an agent that will promote your home on the Internet as well as to the local community. The Internet is the most important venue for residential real estate advertising. Realtor.com is the most comprehensive Internet site. Buyers in all price ranges, even multimillion-dollar buyers, use Realtor.com to search for new listings.

Although Realtor.com is the best in terms of reach, the limit on photos per listing is six. However, your agent can link a visual tour to your home's listing on Realtor.com for more effective marketing. Check your agent's advertising copy before it goes live to make sure it's accurate and includes the features you like best about the house.

Home-sale activity is affected by supply and demand dynamics in the local marketplace. For this reason, it may be beneficial to plan on marketing your home early in 2007. Inventories of homes for sale tend to rise in the late spring and summer months. Another factor that could work in favor of early-bird sellers is interest rates.

THE CLOSING: Interest rates continue to be at historically low levels but are expected to rise later in the year.

Dian Hymer is author of "House Hunting, The Take-Along Workbook for Home Buyers" and "Starting Out, The Complete Home Buyer's Guide," Chronicle Books.
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Single Women Take No. 2 Spot in Home Market

Laurie Minchew has been in her new home for only about a week.
RISMedia
But the 35-year-old single woman says she made the right decision to buy the three-bedroom house in Red Oak, Texas. The appeal was both the lifestyle and investment potential of homeownership.

"It was about 50-50," says Minchew, who was previously living with a friend. "It's still all very new for me, but I like it."

The latest housing industry surveys show that single women are the fastest-growing segment of home buyers-now second only to married couples. They account for nearly one in four home buyers and purchase houses at more than twice the rate of single men.

Researchers say it's a combination of social changes and finances that's causing the increase.

"More women are simply living alone-either never married or formerly married-and are much more active in career paths earning more money than ever before," says James Gaines, an economist with Texas A&M University's Real Estate Center.

Gaines says it is also "no secret that for the past five years or better, homeownership has been a very desirable investment position."

He also points out that "historically, this was a small group in terms of homeownership, so any increase will look large in percentage terms."

Over the last 10 years, single female buyers have been the fastest-growing segment of the housing market, according to surveys by the National Association of Realtors.

In 2006, they made up about 22% of home buyers, compared with 14% in 1995, Realtors' research shows. At the same time, the number of married couples in the market has fallen by almost 10 percentage points to 61%, and single male buyers have remained unchanged at about 9%.

Whatever the reason, home builders are catching on to the shift in the market.
"We are looking for opportunities to address this market," says builder Steve Wall, who sold Minchew her home. "Having products that address each of the buyer groups is important."

"There was a time when you had a one-size-fits-all mentality," Wall says. "We have to give people what they want, not what we want to build."

Real estate agents are also refocusing efforts to attract single female buyers at a time when the overall housing market is a bit soft.

"I've had a lot of female buyers this year," says Kim Fowler, with David Griffin & Co. Realtors. "My average age of the five or so single women I have sold to this year has been about 28."

Fowler just sold a two-bedroom condo in Oak Lawn to Laurie Self, who's in her mid-30s.
"The rent just went way up at my apartment-that was part of my motivation," Self says. "Mortgage rates are good now, and it's a buyer's market."

"I saw how real estate prices were going up like crazy," she says. "I can flip it in a few years and have some equity."

It isn't just builders and home sellers who've seen an uptick in single female customers.
"We have had a lot more single-female renters than we initially thought downtown," says Ted Hamilton, with Hamilton Properties, which has successfully converted several downtown office buildings into rental housing.

Hamilton estimates that about 40% of his single renters are women and that many of them like the security aspect of the buildings.

The turnaround in the central business district has also caught the attention of these renters, he says.

"The more vibrant downtown gets, the more appealing it will be to single females."
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Some like it haute

Watch out, Melrose. Picfair Village is on its way to becoming L.A.'s next trendy place to live and play.
By: Jessica C. Lee: latimes.com
Watch out, Melrose. Move over, Robertson. The Mid-City West neighborhood of Picfair Village — once rarely garnering a second look — is on its way to becoming L.A.'s next trendy place to live and play.

Beginnings

By 1922, the Santa Monica Land and Water Co. had developed the area into a residential community called Pico Boulevard Heights and lauded it as "the New Wilshire ... [and] a delightful place for a home," according to the neighborhood association website.

Although various communities in Los Angeles had covenants determining who could and could not live there, Picfair Village was accessible to minorities and attracted many Jewish and African American residents.

Picfair Village, a part of L.A.'s Mid-City West district, is south of Pico Boulevard, north of Venice Boulevard, west of Hauser Boulevard and east of Fairfax Avenue — hence its name, derived from Pico and Fairfax.

What it's about

In November 2004, Picfair Village was named one of Los Angeles Magazine's "10 Most Overlooked Neighborhoods in Los Angeles." Less than a decade ago, auto-body shops and vacant retail spaces lined Pico. But residents say those days are over.

According to the Picfair Village Community Assn., Pico has undergone a renaissance over the last five years. "There's a movement of more boutique business in the area, and I see it improving [Picfair Village] positively," said Alissa Solomon, an agent with Prudential California Realty's John Aaroe division.

With high-end clothing stores such as the Pinky Rose Boutique and organic cuisine at Bloom Café, Solomon said that Picfair Village could easily become the next Melrose Avenue or Robertson Boulevard.

The annual Picfair Village Street Fair has given a shot of life to the community as well. The August event is celebrated with food, live music and dancing.

Insiders' view

"People stay here a long time. It's not the kind of place where people move in and leave," said 13-year resident Diane Isaacs. Isaacs added that the improvements in the area contribute to that "staying-put" attitude.

She said she was initially drawn to Picfair Village because of its proximity to the Santa Monica Freeway and major arteries including Fairfax and Pico, but she also cherishes its cohesive atmosphere.

Sydney Stinette, who's lived in Picfair Village since 1978, says she finds comfort in knowing her neighbors on a first-name basis.

"I actually speak to my neighbors," she said. "It's just the most wonderful feeling."

Good news, bad news

Police say crime in the community, which has its share of gang-related tagging, has decreased over the last five years.

More negatives? Well, there's nothing quite like old sycamore trees to give streets a majestic feel, but the roots of the ones in Picfair Village are wreaking havoc on sidewalks, causing cracks and making them difficult to walk across.

And finding parking for guests can be a bear along the many permit-only streets.

Housing stock

Most of the homes were built in the 1920s and 1930s and are Spanish Colonial Revival, English Cottage and traditional in style. Houses range from 1,200 to 1,800 square feet and typically have two to three bedrooms and one to two bathrooms.

One downside to some of these homes is fireplaces that are in need of a new foundation due to the high levels of lime used in their construction.

On the market now is an 864-square-foot traditional-style home priced at $675,000. Built in 1927, it has two bedrooms, one bathroom, a remodeled kitchen with stainless-steel appliances and a new gas fireplace.

A 1,928-square-foot Spanish-style home built in 1935 is listed at $799,000. This home has three bedrooms, two bathrooms, a den and hardwood floors.

For $849,000, home seekers can purchase a completely renovated, 1,656-square-foot traditional-style house. Built in 1937, this home has three bedrooms, two bathrooms and is gated.

Report card

Picfair Village is served by the L.A. Unified School District. Many residents seek to enroll their kids at Mid-City Magnet School for kindergarten through eighth grade. The school scored 723 out of 1,000 on the 2006 Academic Performance Index Growth Report. Children from kindergarten through the fifth grade also attend Saturn Elementary, which scored 676. Mount Vernon Middle School and Los Angeles Senior High scored 578 and 523, respectively.
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