Monthly Archives: July 2018

Bad MLS Photo Friday is Back! This One Brought Us Out of Retirement.

John LaRosa 07/15/2018

List Price: $680,000

These photos have not been altered from their original display on the MLS (slight disclaimer on that this week) and the photos are from an active listing in a California MLS at the time of this article’s publication. Yes, they’re actually that bad and they are currently being used to market the home to the public.

This one speaks for itself but don’t worry we’ve still got plenty to say about it too.

Full Disclaimer: The original MLS photos do not pixelate the subject’s face, we did that for our own reasons. Trust us, they’re just as awkward without the pixelated face.

Real Estate Photography 101

The NUMBER ONE RULE in real estate photography . . . wait for it . . . There shouldn’t, under any circumstances, ever, ever, ever, ever be anyone in your real estate listing photos. No people. Not ever. Seriously, Never. Don’t try and come up with a reason why there might need to be a person in a photo, it doesn’t exist. Unless, let’s say, there’s some feature of the home that really needs to be displayed so that its proportional size to the human form is clearly visible. I don’t know about you but every time I see a photo of a bathroom I can’t help but wonder if the toilet is actually people-sized. Am I the only one on that island?

Usually, when you see people in the photo, it’s an accident. Don’t get us wrong though, you can look back through the Bad MLS Photo Friday archives and see plenty of examples of awkward and sometimes unnerving people memorialized in MLS listing photos. That being said, we’ve never seen someone posing, smiling at the camera, in a casual manner, sometimes interacting with the setting, in almost every single photo in the listing. It’s like he was trying to get his print modeling portfolio finished while taking the listing photos.

Why does he need to show us how the technology of a table and a chair are meant to function? Were any of you previously unaware of how that contraption worked?

Oh, This Is Just Too Much

The complete list of photos includes a wide exterior, a close-up of the fireplace, a close-up of the stove, a fence in the backyard, and then several of the same photos with a man posing awkwardly (at best) in the remainder of the photos. What is going on here? Seriously, why did this happen? And in case you’re wondering, yes, these photos are all that were posted in the listing.

And what the heck is going on in the photo in the garden? Is he miming what it would be like to garden with an imaginary shovel?

? ? ?

After viewing all 8 photos of this listing I don’t remember a single thing about the home other than the man in the photos. This is the rare air we’re breathing here my friends. A bad real estate photo hunter can go an entire lifetime without a find like this one. Now let us never forget it.

Don’t let the sale of your home become a joke. It isn’t funny.

We don’t do this to make fun of listings. We do this because we take real estate seriously and we want to show our future clients how much of a mistake it can be when you don’t take this business seriously.

Your Home Deserves More Than That And So Do You

Happy Friday!

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What’s Next for the NEW Silver Lake Reservoir Complex?

John LaRosa 07/06/2018

Silver Lake Reservoir

There has been much ado about the Silver Lake Reservoir over the past few years as the historic namesake of this “tragically hip” neighborhood is poised to stand as a proxy in an ongoing cultural battle between public use and the sanctity of affluent neighborhoods.

A New Life for Silver Lake Reservoir

After having been emptied, retrofitted for a year, and then refilled and replaced with non-potable water as part of a federal law that outlawed open-air drinking water reservoirs, the future of the reservoir is the focus of a potentially heated debate.

Now that the reservoir no longer holds potable drinking water, and is instead a reservoir that houses part of the city’s supply of non-potable utility water, the body of water is now available to be used as a recreational park.

Potential Future Plans

Whereas the reservoir now sits behind an 8-foot tall, barbed wire fence, future plans could see the removal of such urban detractors and the installation of all manner of recreational features including beaches or docks, not unlike those found at nearby Echo Lake.

The members of the Refill Silver Lake Now organization along with the Silver Lake Forward and Silver Lake Reservoirs Conservancy were the active force behind efforts to get the reservoir refilled as quickly as possible. Some say this was done to reduce the likelihood of major changes to the structure, whereas it would’ve been less expensive to start making changes if the reservoir was empty.

As a member of the community myself, I can say that refilling the reservoir sooner rather than later was the right move for the area, especially as concerns the impact on the surrounding wildlife. As to whether changes to the complex would be harmful to the neighborhood, I am less certain, though I don’t doubt that it would create complications.

The Refill Silver Lake Now organization, seeking to continue the community momentum it had generated to get the reservoir refilled, has morphed into the Silver Lake Now organization and will likely be arguing against making any additional changes to the complex, other than those they already wish to see completed. Learn more about Silver Lake Now and get involved in the debate.

This statement from 13th District Councilmember Mitch O’Farrell’s website regarding the upcoming May 1, 2018 planning meeting, seems focused on striking a balance between the potential uses of the lake and the concerns of neighboring residents.

“The Master Plan will guide improvements and protection of the reservoirs, and seek to balance its historic character, its use as a community gathering place, its strategic location within the Silver Lake community, and its unique blend of both functional and recreational spaces.”

The meeting’s goal is to discuss the “hiring of a consultant to support the planning process.” What the plan is, exactly, remains to be seen. Read more about the planning meeting on Councilmember O’Farrell’s website.

Residents here in Silver Lake are mixed. Many celebrate new changes, like the opening of the walking path across the South Dam of the reservoir above the dog park, while others don’t care to see any additional changes to the complex for fear of the congestion-related attention.

And it does beg the question, does the neighborhood lose what made it special and cherished with these types of sweeping changes or is there anything that can be done about that when you are a part of a complicated and sprawling metropolis seeking to meet the needs of its 4 million residents?

Silver Lake may be the focus of this cultural battleground currently but this is nothing new to homeowners throughout Los Angeles. Homeowners will always fight to keep things the way they are but they are up against the machinations of a massive urban population in the midst of one of the most desirable locations on the planet. Sometimes, no matter how deep the connections, there is simply nothing that can be done to prevent change.

Nothing stays a secret forever

For all its bucolic splendor, it is easy to forget that Silver Lake resides not far from the iconic epicenter of California’s most urbanized and populated city, nearly 3 times over. When dealing with an urban, political, socio-economic behemoth such as the City of Los Angeles, sometimes there are only two choices, adapt or leave.

CoreLogic Reports At Least Half of U.S. Metro Real Estate Markets Overvalued

John LaRosa 07/05/2018

CoreLogic housing market real estate bubble

Real estate housing markets are heating up across the U.S. Metro markets are overvalued.

CoreLogic’s latest Home Price Insights report has been released for April 2018 and the biggest news is that CoreLogic reports that half of the 50 largest metro housing markets in the United States are “overvalued.” That’s a word that may have many homebuyers running for the hills shouting about bubbles and crashes but it’s far from that simple.

Click here to read the full press release from CoreLogic

So what does “overvalued” mean?

It does not mean the same thing as a bubble. Though it is obviously true that in order for a bubble to exist some commodity has to be overvalued it does not necessarily correlate that an overvalued commodity is, necessarily, a sign of a bubble.

Bubbles always occur because of some kind of rampant fraud when it comes to housing. Though in some cases, when involving a highly specialized product, there is no fraud if a single company controls the production of the product. In those cases, the company helps falsely inflate the value by only producing a limited amount. Beanie Babies, remember them? Maybe you don’t.

Yes, Beanie Babies were like a bubble. There was overwhelming demand and then there wasn’t. So the value washed up, the bubble burst, and the people with Beanie Babies in their hands were the ones who lost out the worst. Beanie Babies, however, are not a necessity for living and at worst, their peak price was hundreds and, in a couple of cases, thousands of dollars. It’s hard to compare that to the housing market. True there was no fraud but that’s because the commodity is priced relatively low, it isn’t a necessity, and it was controlled by a single company.

When it comes to housing the only way that home prices are able to be falsely inflated during a bubble is due to large-scale fraud that must be allowed to occur at multiple levels. Mainly, the type of fraud that occurs when government regulations on the financial industry are relaxed and removed.

So if it isn’t a bubble, then what does overvalued mean and what are the consequences of that?

If a market is overvalued it means that homes in that area are more expensive than most people can afford in that area based on the prevailing wages for that area. It’s really more about wages than it is about home values. In this type of market, it is the buyer who can extend themselves to the highest price point in order to purchase who ends up setting the value of homes. It doesn’t mean that homes are being sold for more than they are worth because the only value that you can ascribe to any home is the dollar amount that a buyer is willing and able to pay for it. Home prices are “high” because wages in the area haven’t been growing commensurate with home prices. Were wages increasing alongside the housing market, it would be unlikely that most people would be complaining about the market being expensive, except that buyers will ALWAYS be complaining that prices are too high 😉

So in an overvalued market, it is the buyers who are the ones creating the overvaluation. It is not the sellers. Here’s an example. If you put your home on the market in a “hot” area and you decide that you want to be fair and offer your home for sale for a reasonable price (which no one actually ever says). So you list the home and you get 27 offers ranging from asking price to well above asking price. Do you choose the lowest priced offer because you want to be fair? If you truly wanted to be fair you would accept the lowest price as the purchase price and then do a random pick to choose the offer that “wins”. That’s “fair”.

But you’re not going to do that, and neither is anyone who is actually selling their home. Everything in life costs money and homes cost the most money. When YOU sell your home you want to be rewarded for your hard work and persistent upkeep. You put tens or hundreds of thousands of dollars into the home (on top of paying for it) and every seller expects the biggest reward possible for that hard work. That’s how you would feel if you were selling your home.

But again, Sellers can only accept the offers they receive.

When you have a housing crisis it means you need to make more living spaces and you need to produce them in a manner that doesn’t cause prices to soar even further.

What happens when a market is overvalued?

Well if there isn’t any fraud involved then the market will do what every market does when it is overvalued. The market will respond by slowing home price increases until they more strongly align with incomes. This is called “price correction” and this is what is supposed to happen in an overvalued market. It didn’t happen in 2005 (when it should have) because the banking industry was busy collecting huge paychecks by committing the most elaborate, although ultimately quite transparent, fraud that has ever been perpetrated. Well, maybe not “ever”.

The result we’re hoping to see in overvalued markets is a slowing of price increases and in some markets small drops in value, so that home prices can return to prices that a larger number of people can afford based on their incomes.

You shouldn’t be worried about a bubble, they’re extremely rare actually, even in real estate. And they’re even rarer when everyone is worried about a bubble happening. Side note; the time to worry about a bubble, is when no one is worried about a bubble happening because they’re so busy making money. What could possibly go wrong?

You should be worried about what your government (especially state and city) is doing to incentivize increased housing production and you should be equally worried about what your government is doing to make it easier for fraud to be perpetrated and go undetected. Regulation is the only tool that exists to prevent the financial industry from doing only what is in their best interests, even when that means breaking the law.

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