Los Angeles Mortgage Refinance

The second largest city in the United States, Los Angeles is home to 3.8 million people living in a sprawling area of nearly 500 square miles (in contrast to the New York area, which has 8.3 million people living in 305 square miles). Los Angeles is comprised of distinctive communities including the downtown area, East and Northeast Los Angeles, Westlake, Echo Park, Hollywood, the Harbor area, the older neighborhoods of Los Feliz and Silverlake, South Los Angeles, the San Fernando Valley, West Los Angeles, and Wilshire. Each neighborhood has its own character and real estate market.

In general, Los Angeles suffers with the same mix of unemployment, oversupply of houses, and tight credit that has plagued other major cities. As of May 2010 the median home price in Los Angeles was $306,000, representing a 40% drop in price from the boom years ending in 2006. With unemployment at over 11%, the city's foreclosure rate is one of the highest for any metropolitan area, with foreclosure filings made against nearly 176,000 homes in 2009. Many of these properties are on the open market, which has further depressed prices. But with an annual median family income of $62,900, Los Angeles remains a place where affordable homes are within reach of many families.

Analysts report that the abundant supply of houses, historically low interest rates, and depressed prices is not yet leading to a brisk market because of tight credit, stricter lending policies, and concern over unemployment. There are some bright spots, including a 4% rise in Southland home prices in December 2009, which represented the first year-over-year rise in L.A. home prices in two and a half years. A report from MDA DataQuick indicated that in May 2010 the median home price in Southern California rose 23% over the previous May, when it was $249,000, coming in at over $300,000 for the first time in nearly two years. The number of sales increased by 7% in the same month, and the increases are driven by a surge in sales in higher-priced coastal areas while cheaper inland neighborhoods continue to stagnate. Buyers are taking advantage of low interest rates and tax incentives, while sellers have become more realistic about the prices they can ask and have become more motivated to sell properties rather than just let them sit on the market. The number of sales of properties priced $500,000 or more has increased since last year, after hitting a relative low in January, 2009, when proportionally more sales were in lower price ranges.

Los Angeles is a collection of neighborhoods, and each is different. In the Hollywood Hills, realtors on the Realty Times Market Conditions report that prices, after declining last year, are now holding steady. In Riverside, the median home price is less than $200,000 and there are bargains galore. Los Feliz was popular with film stars in the early days of the film industry, and offers many fine examples of residential architecture. Recent Los Feliz sales have ranged in price from $560,000 to nearly $5 million and prices are steady - not falling, but not rising very fast either.

For homeowners interested in refinancing, Trulia provides insight into refinancing rates as of June 2010. For a $300,000, 30-year fixed-rate refinance, in the Los Angeles area annual percentage rates (APRs) for highly qualified borrowers range from 5.538% to a low of 4.424% at lenders including UnionBank (the highest), Amerisave Mortgage Corporation, The Money Store, and EmpireAmerica, LLC (the lowest). Homeowners should keep in mind that fees and points will alter the cost of borrowing, and if the value of their home has declined, refinancing may have to be put off until home values rise again.

When buying in the Los Angeles area, engage the services of a reputable real estate agent who knows the neighborhood and price range you want. Look for foreclosure bargains in inland communities and for motivated sellers in more expensive coastal communities.