Ask Pete, Chapter 3

What is the third in the series called? The threequel?  Whatever, "Ask Pete" is back, your biweekly chance to pose questions to the blogger.

You know the drill: Use the comment section to ask questions about real estate, the housing market, the news business, the blog, etc. You ask them, I answer the easy ones. Get your questions in by 4 p.m. today, I'll publish answers by 6 p.m.

See previous Ask Pete columns here (#1), and here (#2).
Photo Credit: Getty Images.

Comments

[Jackie Romulo]

Is it possible that even though foreclosures are skyrocketing and prices are plummetting, some neighborhoods (i guess you could call them the better ones) are still competitive when it comes to buying? I've been monitoring Lakewood (90713) and it seems that even though there are great deals out there, they are still getting snatched up quickly. So in order to even compete, you would have to make a reasonable offer with the idea that there are still 2 or 3 other people willing ot outbid you. Thanks Peter.

[EG]

What are the chances of an 'overcorrection' downward? There was at least a minor overcorrection during the early 90's downturn. Not sure what factors into it. Probably would also depend on the area (IE vs Westside).

[IToldu2CashOut]

What do you see happening with downtown real estate in the next few years? Where you aware of the how the Chapman Flats condos (now rentals) had been misrepresenting square footage? How do you think news such as this and construction stoppage will effect development? I feel downtown apartments are nice but grossly overpriced for the state of redevelopment, do you agree?

[MyLessThanPrimeBeef]

A few years back, a Playmate decided to give up her profitable modeling career for one in real estate investment.

That marked the top for me.

Can you find out how she is doing today?

I am looking for a bottom indicator.

[candice]

What do you think will happen to Countrywide?
a) How will that affect the housing markey? Do you think it could lead to tighter lending? Is it already?
If they have layoffs or downsizing, this could affect unemployment and other factors which affect the LA housing market. Could this have a double-whammy affect for LA? Or is there a large enough banking sector here to absorb the employees?

What about the health of other sectors - Actor's strike? Other industries that may affect the LA housing market in the near term ... thoughts?

[WP]

Two Questions:

1. Do you think these props to remove rent control will actually pass? My thinking is that we'll see more rent control legislation in the coming years as more residents of LA are forced to rent and rental prices begin to shoot up.

2. Based on your estimate of prices leveling off by next year (if I recall correctly, that's what your guess has been in some of your previous postings) do you expect to buy next year or perhaps sometimes later in the future?

Love your blog.

-Will

[dclogang]

I'm looking at what happened to Japan's housing back in the 90's (have you seen the charts?!?!? yikes!) and am shocked to see that it's still declining. It looks like the same current bubble for Los Angeles.

Considering what is happening to the world'ss finances, recession, loss of jobs, price of gas and food, do you still feel like the housing market in LA will continue to fall through the end of 09' to 10' OR do you think it will linger on until 2011 or 2012 and later now? I'm really leaning towards later... but I'm certainly no expert although I was smart enough not to overpay for a house during the boom.

[JPG]

If the recent (i.e. last 30 years) history of the L.A. real estate market is any guide, the prevailing wisdom of the posters on this blog is probably correct, and prices will continue to go down and possibly over correct, followed by a long period of mostly flat prices. But as recent posters such as bruincstone have pointed out, there are signs that "people in the know" are getting back into the market, perhaps signaling an imminent turn around.

Is there any historical precedent (in LA or anywhere else for that matter) of a market that declined as rapidly as LA has over the last year and then turned around quickly without a long period of stagnant growth? This is as much a question for Peter as it is for anyone else with knowledge on the subject.

[doubledogdare]

Pete, great work on the blog. Even though I recently moved out of the LA area, I still read your blog every day. So, simple question: How much time do you have to devote to creating so much content? It seems like it would almost be a full-time job.

[Greginthevalley]

Peter,

Do you think BofA will complete the Countrywide merger given the enormous downside? If they do walk away, what happens to the the 1000's of Countrywide jobs in the area?

[Pasadena91106]

What's the buzz on online appraisal services. Our house is listed for $606K on Zillow and $1.3M on Cyberhomes. Makes me think Cyberhomes is being run by the real estate industry...

[Hank Venture]

Where does LA Land rank out of the LA Times blogs, in terms of number of posts by you, and number of comments by us?

[Laker]

Peter,
Do you think this weeks median price will be lower, same or higher than last week $450,000....
(hopefully you will answer this before housing tracker publishes its numbers....)

[GDC]

Pete,

For "high end" Westside areas ($1m - $2m), when do you think the market will reach a bottom? Also, how much do you think these areas will drop from today's prices?

[E]

Aren't you just giddy about the amount of option-ARMs that are going to explode in the nicer parts of L.A. from 2009-2011?

That's when I expect the "nicer areas" to crumble.

[mbob]

Skirting the deadline here but a query:

real estate and employment numbers tend to be trailing indicators of economic well being. If you accept that, then how long before the contraction cycle of
vanished equity as ATM
reduced purchases
rising transport, heating & cooling energy costs
layoffs

all begin to make an imperfect storm of downward
pressure on housing?

[Pat]

I realize I just missed the cut off, but I would like a follow up report from Leo Nordine. It would be good to hear what he has to say about the market and his own business.

[mike]

can candice let us play too????

[TrojanDLA]

How low are banks going when "modifying" a loan balance? Are they meeting fair market value and reducing the balance by at least 35% to 50% (Riverside, Anaheim, Santa Ana, SFV) or are they all rhetoric and when it comes to "renegotiating" they are only attempting to reduce by an ineffective 15%-25% which does nothing really for the home owner who is in dire straits?

[pugtv]

If you can still fit it in, great. If not, no biggie.

How much of the writedowns, so far, are related to subprime vs. option ARMs?

If it hasn't been written down yet, what is the estimate for the option ARM writedowns?

[Arlene]

I don't have a typekey account.

I'm an LA resident who owns a home in Arizona. Do any of your readers know about a service called
justwalkaway.com ?
they are supposed to help owners forclose AND repair their credit...sounds too good to be true.