The California Composite Index of Consumer Confidence increased to 84.2 in August, slightly higher than the May reading of 82.7, according to a survey conducted by the Anderson Center for Economic Research at Chapman University. An index level lower than 100 reflects a higher percentage of pessimistic consumers compared with those who are optimistic. The Chapman Survey contrasted with a similar survey conducted by the University of Michigan, which showed that consumer confidence at the national level had a lower reading in August than May.

The index measuring consumers’ spending plans on big-ticket items improved to 77 in August, while the index measuring current economic conditions increased to 71.9. The index measuring future economic conditions showed a decline to 100.1 in August from a reading of 105.1 in May.

Calif. median home price: July 2010: $314,850 (Source: C.A.R.)
Calif. highest median home price by C.A.R. region July 2010: Santa Barbara So. Coast $871,250 (Source: C.A.R.)
Calif. lowest median home price by C.A.R. region July 2010: High Desert $128,950 (Source: C.A.R.)
Calif. First-time Buyer Affordability Index – Second quarter 2010: 64 percent (Source: C.A.R.)
Mortgage rates: Week ending 8/26/2010 30-yr. fixed: 4.36 Fees/points: 0.7% 15-yr. fixed: 3.86% Fees/points: 0.6% 1-yr. adjustable: 3.52% Fees/points: 0.7% (Source: Freddie Mac)
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On Friday, the Los Angeles City Council is likely to pass an ordinance preventing many landlords from raising rents for four months. This is a step in the wrong direction. Instead, the council should revoke the city’s Rent Stabilization Ordinance entirely.

Rent control policies have laudable goals, especially in populous and undersupplied housing markets like Los Angeles’. However, the city’s law, like all rent control, has failed to accomplish its objectives in the more than 30 years since it was passed. Rent control is widely accepted by many economists to have had an adverse effect on both the quantity and quality of housing.

L.A.’s rent stabilization law has many flaws. First, it applies only to projects of a certain size and age. All residents within such projects are protected, regardless of income or net worth. Thus, an eight-unit building built in 1977 is subject to rent control, while a 10-unit building built in 1979 is exempt. It also wasn’t designed to protect those who most need it. A lawyer earning $200,000 a year renting in a pre-1978 building would be afforded the benefits of rent control, whereas a struggling retiree living off Social Security, but renting in a post-1978 building, would not be. This, of course, makes little sense. Moreover, the outcomes of rent control are entirely predictable, based on simple economic principles. The negative effects include:

A shortage of apartments and artificial inflation of rents, because the limited stock of unregulated units must absorb the excess demand for rent-controlled units.

A reluctance on the part of owners to build new apartments out of fear that rent control laws will be extended.

A tendency of owners to defer repairs and renovations because of the limited prospects for return on their investments. This has a job-killing effect too, because landlords aren’t hiring as many carpenters, painters, electricians, plumbers, roofers and landscapers.

Lowered property tax revenue, because landlords covered by the rent stabilization ordinance can demonstrate that their buildings are less valuable.

An incentive for landlords to remove units from the rental market to achieve higher returns through other means, such as condo conversions.

Home values rose 3.1 percent in the second quarter of 2010 compared with the first quarter, but declined 0.2 percent compared with a year earlier, according to Freddie Mac’s Conventional Mortgage Home Price Index (CMHPI).

Home values rose in all nine Census Divisions, marking the first time since the second quarter of 2009 that all Census Divisions experienced positive changes in home values. In the Pacific Division, which includes California, home values rose 3.1 percent in the second quarter of 2010. Over the last 12 months, home values increased 4.2 percent, and during the last five years, home values have decreased 14.7 percent, according to Freddie Mac. property management Los Angeles

Fannie Mae, in cooperation with participating MLSs across the nation, recently developed the Short Sale Assistance Desk to assist real estate professionals with handling issues that may arise following a short-sale offer. Post-offer short sale issues may relate to servicer responsiveness, the existence of a second lien, or those involving mortgage insurance.

The Assistance Desk will collect and submit information to Fannie Mae using a dedicated submission form on the member’s MLS Web site. The form then is submitted to Fannie Mae with data to help improve valuations and make quicker decisions regarding short-sale requests.

The Assistance Desk is designed to assist real estate professionals in cases where the standard approval channel has slowed down, and where Fannie Mae’s intervention may serve as a means for progress towards a resolution. The Assistance Desk is not intended to replace the standard approval channels, nor is it intended to serve as a compliance or enforcement function, or as a potential appeal for decisions the real estate professional believes to be unfavorable.
REALTORS® who would like their MLS to take advantage of the Short Sale Assistance Desk, should contact their MLS directly.