November 2009 Micro Market Analysis

Compared to last year at this time…

One cannot help but notice that, despite the looming dark clouds on the horizon of foreclosures and unemployment, the momentum has definitely shifted from the financial meltdown that occurred in November of ’08.

Is the market making a come back? Have prices bottomed? It all depends. It depends on what micro market you are analyzing and then what price point you are considering.

Is the market price sensitive? Very. But inventory is low and depending on the price point it can vary from a seller’s market under $1,000,000 to a buyers market in the high-end. Listing prices matter a lot. If properties are listed too high the property languishes on the market and sells for a lower price. If the property is accurately priced, the property sells for more in a shorter time.

The statistics for the markets we track show sales volume is up in 21 out of 34 markets, the number of transactions is up in 24 out of 34, Average sales price is up in 13 markets and the average median price is up in 15 markets. 12 Micro Markets have an increase in sales volume of over 50%! This is comparing closed sales from November 2008 to closed sales of November 2009.

Star markets include Brentwood where the sales volume was up over 300%, the average sales price was up, and the number of transactions was up. Check this market out for November in our Micro Market Report.

Other markets you have to check out are Beverlywood, Cheviot Hills / Rancho Park, Culver City, Hollywood East, West, and Sunset Strip, Malibu Beach, Palms / Mar Vista, and Westwood / Century City. All of these markets have shown shifts in momentum for the same month in the prior year.

Every month, like every market, can be different due to the sampling of inventory or buyers in the market place. The markets are dynamic. We find it very useful for our clients to keep a close watch on the statistics rather than relying solely on gut instincts, the press, and experience.

The bet on the street is that the December Micro Market Report should be even better. Stay tuned.

We wish everyone a prosperous and healthy 2010.

Teles Properties

*Click to view: November 2009 Micro Market Reports on the Teles Properties website.

Monthly Local Summary - Pacific Palisades

By Michael Edlen
The Palisadian-Post

As of November 30, there were 120 single-family Pacific Palisades residences listed in the Multiple Listing Service, which is 18 percent lower than a month ago. So far this year, 161 Palisades homes have sold, and there are currently 39 homes in escrow. The current level of inventory is also 18 percent lower than the available inventory last November 30. This may be an indicator of a market beginning to level out.

Another sign of potential market direction changes is the relationship between new listings on the market and new escrows opening. October 2009 marked the first time since the end of 2007 that the number of new escrows exceeded the number of new listings. More prospective buyers have been looking online and in person recently, more offers are being written on local listings, and multiple offers have occurred again.

Median sale prices remain at $1,950,000, which is 17 percent lower than it was this time last year. The average price per square foot has dropped by 19 percent as compared with the same period in 2008, and is now at $688 per square foot.

The lowest-priced available home in Pacific Palisades, a 2-bedroom, 1-bath on Bienveneda Avenue, is being offered at $879,000, and has been on the market nearly four months. The highest-priced property is on Monaco Drive. This 7-bedroom, 12-bath house on two acres is listed at $29,990,000 and has been on the market for nearly six months.

The lowest sale price so far this year was on Sunset Boulevard ($650,000). The highest sale has been on a “quiet” sale on San Remo Drive in the Riviera neighborhood ($17,550,000).

There are 26 condominiums/townhouses on the Pacific Palisades market. They range from a  2-bedroom, 2-bath on Sunset offered at $480,000, to a 3-bedroom, 3-bath penthouse on Sunset for $1,285,000.

There are currently 20 pieces of raw land available, ranging from a 4,100-sq.-ft. lot on Posetano Road, being offered at $123,000, to $25,000,000 for approximately 33 acres off Pacific Coast Highway (Las Pulgas Canyon).

The 79 current leases here range from a 2-bedroom, 1-bath apartment on Sunset (asking $2,000 per month), to a 5-bedroom, 5.5 bath home on Alma Real Drive asking $30,000 per month.

What’s happening in the Pacific Palisades Real Estate Market?

By Marco Rufo
The Palisadian-Post

In November, 13 homes, 4 condominiums and 14 leases closed in Pacific Palisades - and we still have 18 homes, 4 condominiums, 1 land and 3 leases pending! That’s great news regarding buyer confidence. A year ago in November, we had 11 homes, 5 condominiums, 1 land and 8 leases close. This means there has definitely been a shift as the year comes to an end. Homes are selling, especially in the $1.5-million to $2-million range.

What is happening that’s making a difference?
The catalyst behind the ninth consecutive month of national gains in the housing market, despite analysts forecasting a decline, is largely believed to be the tax credit for first-time home buyers that was extended into 2010 and expanded to include current owners. Many economists believed that the high unemployment rate and mounting foreclosures would curb growth in November. In reality, pending home sales defied Wall Street’s expectations and rose to their highest level in more than three years, according to many industry reports. The National Association of Realtors reported that its index tracking pending home sales jumped a seasonally adjusted 3.9 percent to read 118.1 in November, marking nine consecutive months of rising sales. Analysts had expected pending home sales to slump by 1 percent.

Where is Wall Street in all of this?
As millions of Americans struggle to hold on to their homes, Wall Street has found a way to make money from the mortgage mess. Investment funds are buying billions of dollars worth of home loans, discounted from the loans’ original value. Then, in what might seem an act of charity, the funds are helping homeowners by reducing the size of the loans. But as part of these deals, the mortgages are being refinanced through lenders that work with government agencies like the Federal Housing Administration. This enables the funds to pocket sizable profits by reselling new, government-insured loans to other federal agencies, which then bundle the mortgages into securities for sale to investors. The strategy has created an unusual alliance between Wall Street funds that specialize in troubled investments (the industry calls them “vulture” funds) and American homeowners.

What are your choices?
While the bursting of the real estate bubble was a national event, the stabilization process is going to be a more localized, region-by-region story driven by existing inventory and the local employment picture. One constant, though, will be that properties requiring jumbo mortgages will continue to struggle because there is no securitization market for jumbo loans right now, making lenders less eager to do business at the high end. continue reading »

Southland home values hold steady

The median sale price is unchanged from August, but down 11% from September ‘08. O.C. has a slight gain.

Southern California’s housing market took another small step toward recovery in September as the median sales price for homes in some areas rose above last year’s levels - the first such increases since the market crashed.

The median price paid for all homes in six Southland counties in September - $275,000 - was unchanged from August and 11% below the same month last year, according to San Diego-based MDA DataQuick.

But in Orange County, the median price rose modestly to $429,000 from $425,000 in the same month last year - the first year-over-year gain since 2007, DataQuick said. If condominium sales are excluded, last month’s median home sales prices in San Diego and Ventura counties also beat their September 2008 levels.

Christopher Thornberg, a Los Angeles economist who was an early predictor of the housing bubble, said several factors converged last month to give home sales a boost.

“Tax breaks, low interest rates and pent-up demand added up to create a surge in sales that’s surely gone some way in stabilizing prices,” he said.

But Thornberg cautioned that prices could fall again.

“The question continues to be, ‘How is this going to stand up when the next wave of foreclosures hits the market?’” he said.

Even if the housing market takes another hit in the coming months, the bulk of the market correction is past, Thornberg said. continue reading »

Can Brentwood Country Mart re-create its success?

The kitschy, barn-themed landmark has been around since 1948. Now landlord and developer James Rosenfield plans to take its down-home yet upscale sensibility to Malibu, Montecito and Marin County.

With its picnic tables, overfed pigeons and fast-food stands, the kitschy barn-themed shopping center looks like a throwback from an era before air-conditioned malls took over the retail world. There are no department stores and no glittering retail names like Tiffany or Chanel.

Built to woo shoppers in a more rural Brentwood neighborhood after World War II, the red wooden structures evoke a country marketplace with stores and stalls that ramble around a courtyard. Along narrow walkways, doors open horse-stall style, offering views inside the smudged shoe repair stand, tiny post office and other shops.

But make no mistake, the Brentwood Country Mart is filet mignon masquerading as meatloaf. A posh Beverly Hills restaurant runs the humble-looking taco stand. Wealthy locals and a sprinkling of celebrities come here to hang out, maybe get a haircut or shop at 20-odd stores that sell merchandise such as mouth-blown Italian vases and hand-painted furniture. continue reading »

Forecast: Recovery a long, hard slog

UCLA Anderson Forecast

The recession may be over, but consumer and business debt — coupled with rising foreclosures and unemployment — will make for a slow recovery, economists with the UCLA Anderson Forecast said in a report released today.

“Although the worst recession in seven decades likely ended in the current quarter, its negative effects will linger well into the next decade,” said David Shulman, senior economist for the forecast, in one of several essays accompanying the report’s statistical forecasts.

The report includes forecasts for housing prices, housing starts, unemployment, mortgage rates, disposable income and other factors affecting housing markets.

Unlike many past recessions, the latest one was spurred by consumers and businesses taking on too much debt rather than imbalances in the “real” economy, Shulman writes in his essay, “The Long Goodbye.”

Because of that, not only will financial institutions be less willing to lend, but consumers and businesses will be less willing to borrow, Shulman predicts.

“This process differs from normal recoveries where there is a natural inclination to borrow and spend after a period of Fed tightening that induced recession in the first place,” Shulman warns. This time around, the Fed started easing monetary policy well before the beginning of the recession, but the economy is only now showing “hopeful signs of recovery.”

In other essays accompanying the report, economists say incentives for homebuyers are needed to bring housing starts back in line with historic trends. continue reading »

Having Problems paying your loan? Loan Modifications & Loss Mitigations

What is loan modification?

Changes in your loan by the lender to help you avoid foreclosure
You basically refinance without paying high costs of refinancing…..
Banks do not want to own your home or prospering from your misfortune

I. Introduction to Loss Mitigation/Loan Modification
We all know that life is unpredictable, and that circumstances often arise that can prevent you from making your mortgage payments. Even hard-working people can encounter unforeseen situations which may affect their ability to pay their mortgage in a timely manner. Many issues can be contributing factors such as interest rate adjusting, illness, loss of job, reduced income, failed business, job relocation, death of spouse, divorce, marital separation, or even high medical bills. Just one of these situations can have a direct bearing on making home mortgage payments.
What is a Loan Modification? Loan Modification- This term has been getting a lot of attention lately and rightfully so. With millions of homeowners stuck in toxic adjustable rate mortgages and no ways to refinance out of them, loan modifications may be the only way to assist struggling borrowers. This term is used when your lender modifies your current mortgage (same loan you have, only changes are made to the note) in order to work with you and make your mortgage more affordable. A modification to your rate, balance of loan, delinquent fees owed, term of loan etc. can be made by the Lender. In the past this was only used when a borrower was delinquent but now we will see it being used before someone is delinquent. This will be the hottest term and the best way to help people avoid foreclosure.
Why, you might ask, would any bank be willing to change or even negotiate your loan terms? The reason is because banks already own over $50 billion in foreclosed properties and the last thing they want is more homes for their portfolio. It is in the banks best interest to negotiate the terms of your loan as an alternative to having to pay the high costs associated with the process of foreclosure. A loan modification is the banks best way to ensure they are paid back any money owed for the mortgage plus interest. This is a win/win scenario with the bank avoiding owning another property and potentially suffering huge losses, and more importantly ensuring your family can not only keep your home, but also maintain a mortgage payment you will have the financial capability to afford.
One of the best parts about this service is that you can potentially attain all of the benefits of refinancing without having to pay all the high costs of a refinance. Refinancing can often cost in excess of $10,000 when you take into consideration the appraisal, title, escrow, and loan origination fees. We realize that “value” in business is hard to come by, and the last thing we want to do is put our clients in a bind that could potentially lead to more financial difficulties down the road, which is why we only charge $2,000 for this service. Compare that with the costs of your last refi! Similar companies are charging anywhere from $4,000-$10,000 for this very same service!

Short Sales, Not that Fun

Short sales: A tough road

By Diane Wedner
Los Angeles Times Staff Writer

June 15, 2008

RESIDENTIAL short sales sound like a picnic: Owners need to sell their homes for less than they owe, lenders forgive the difference and buyers grab a good deal.

If only. This is one picnic that requires a long wait for dessert. The only “short” thing about short sales, buyers and sellers say, is one’s patience.

“The waiting is torture,” said Mark Shandrow, a Keller Williams Realty agent in Long Beach who specializes in such transactions. “The banks are overwhelmed with short-sale requests, and some make sellers wait five months for an answer.” That answer, in many cases, he added, is “no.”

Yet despite the obstacles to successful short sales — lenders holding the first and second mortgages don’t agree on the terms, buyers often ditch the deal midstream or banks nix the agreement just before escrow closes — they’re on the rise. Countrywide Financial Corp. of Calabasas, the largest U.S. home lender, reports a nearly 60% increase in those transactions nationwide in April, the latest month for which statistics are available, from the same period a year earlier.

In the Santa Clarita and San Fernando valleys, the number of short sales increased from at least 31 sales from May 2006 to May 2007 to at least 1,956 sales from May 2007 to May of this year, according to the Southland Regional Assn. of Realtors.

The reason for the rise, experts say, is that as more financially strapped homeowners fall behind on their mortgage payments — and see their homes’ values plummet to less than what they owe — they’re turning to short sales as an alternative to foreclosure. Banks, once loath to take on short sales because, among other reasons, they were understaffed for the application onslaught, are tackling them now mainly because they’re more cost-effective than foreclosures.

“Banks aren’t happy about short sales,” said Sherri Frost, a senior loan officer with Sherman Oaks-based Metrocities Mortgage, “but they have few options.”

Unlike a foreclosure, in which the lender takes ownership of a property after a borrower misses several payments, a short sale is a transaction in which the owners, not the bank, sell the home; they receive no proceeds from the sale. In a foreclosure, the defaulting owner may receive sales proceeds once the lender has been paid, if the amount exceeds that of the outstanding loan.

If a short-sale borrower owes $500,000 on a home, the bank may accept a payoff amount of $450,000, the amount a buyer has offered to pay. The sellers need not be in default — meaning they stopped making mortgage payments — in order for a lender to consider a short sale, but they must be able to show a real hardship to receive the debt forgiveness, which may have tax consequences.

Then there’s the wait

It sounds straightforward, but the short-sale road is a long one. Once sellers have an offer, they must assemble a package to present to the bank, including a “hardship letter” explaining why they had to put the house up for sale — loss of employment, a spousal death, a divorce, a disability or a mortgage resetting, for example — and asking the bank to accept a short sale, according to a Countrywide spokeswoman.

The sellers also must provide income verification, their most recent bank and income-tax statements, the listing history of the house and other documentation. Then comes the wait. And frequent follow-up calls to the bank to make sure the file isn’t buried.

“Banks won’t grant face-to-face interviews because of the volume of short sales and foreclosures,” said Mary Ebersole, a Re/Max Realty Specialists agent in Long Beach. Even if the seller gets approval, she added, “there’s only room for cautious optimism.”

That’s because impatient buyers sometimes head elsewhere while the bank’s loss-mitigation officer, or negotiator, sifts through the pile of short-sale packages. Or buyers put offers on five or six other properties to see which comes through first.

Sometimes, while awaiting a bank’s decision, interest rates go up and buyers no longer qualify for a previously approved loan because their lock-in rates expired. Worse yet, a seller may get an initial approval from the bank, but in the eleventh hour the bank adds a contingency that skewers the deal, or pulls the plug without explanation, agents say.

Second and third mortgages and even home equity loans can further complicate matters. Last fall, Pam Kennedy, a Coldwell Banker Ambassador agent in Whittier, was disheartened when her short-sale client’s lender demanded, after a long wait and with a buyer already on board, that the seller sign a promissory note for $15,000, which would be interest-free and amortized over 10 years. The seller had taken out a second mortgage awhile back to buy a recreational vehicle for $25,000 and pay off some debt. The lender wanted to recoup some of the loss it was absorbing.

The seller was going through a divorce, starting a new job and was afraid she couldn’t make the payments. Also, despite months of effort, she couldn’t sell the RV — an asset, in the bank’s opinion. The deal fell through and the bank foreclosed on the property. The experience left a bitter taste in Kennedy’s mouth.

“I avoid short sales and advise buyers to avoid them,” Kennedy said. “They are miserable.”

Sticking it out

True, most participants say, but some eventually have happy endings.

Mari and Joe Abrams found the house of their dreams in Porter Ranch in December. They got quick loan approval to buy the four-bedroom, three-bathroom home, and feeling optimistic about the new purchase, they put their Encino home on the market.

The couple offered $650,000 for the new house, which had been listed earlier in the $699,000 to $749,000 range. They paid a $10,000 good-faith deposit, agreed to pay all of the escrow fees (which usually are split between seller and buyer) and agreed to buy the property as is.

They expected the bank to quickly counter-offer. For one thing, the seller’s second-mortgage holder already had agreed to the sale, a major hurdle in short-sale transactions. But without the first bank’s approval, the deal stalled. (Both the first and second mortgage holders must settle to complete a short sale.)

The couple’s own house sold three months into the process, so they moved, with their toddler, Daniel, and 50-pound dog into Mari’s mother’s condo.

By April, Mari, 32, started peppering the first lender with daily phone calls, seeking a response to their offer. As the deal dragged, the Abramses extended the escrow. It closed, finally, on May 2. The family plans to move in later this month.

“Our hearts sank a hundred times,” Mari said. “It was a roller coaster.”

“If we didn’t like the house so much, we wouldn’t have hung on that long,” Joe, 37, added. In the end, however, they’re glad they stuck it out. It is, Mari says, just what they wanted. Even if they didn’t get the “deal of the century,” Joe said.

Bargain bins

Lenders will not accept short-sale offers that are far below market value. To the contrary, many banks “net about 90% of the current market value” on many of these sales, agent Shandrow said. Also, the homes usually are sold as is, which sometimes can mean a missing kitchen sink, ripped-out bathroom fixtures and stained carpets.

Marty Rodriguez, a Century 21 agent in Glendora, says she won’t take a short-sale offer to the bank unless it’s reasonable. “The negotiator doesn’t want to look at 12 offers,” Rodriguez said. “He wants the best, highest and the most qualified ones.”

Buyers looking for bargains should wait until short-sale and foreclosure prices are down about 35% from the peak market in their search area, said James Joseph, owner of Century 21 Ambassador in Brea and Whittier.

“Short sales and foreclosures are the nails in the floor of the market,” Joseph said. “That’s where the bargains are.”

diane.wedner@latimes.com

Home Will Sell if the Price is Right

To sell home, make sure the pricing is right

By Lew Sichelman
United Feature Syndicate

June 15, 2008

WASHINGTON — You can spruce up the outside of your house to the point where it stops passersby in their tracks. You can “stage” the inside so it looks roomy and brand-spanking new. You can give away a car or vacation to your eventual buyer. You can even offer a cash bonus to the selling agent.

But in today’s market, if your place isn’t priced correctly, it probably isn’t going to sell. More than likely, it will languish on the list of unsold inventory until the market adjusts back up to your asking price. And that could be months — or even years in some places.

A far better plan is to adjust your price to local market conditions, and let the market come to you.

“I have learned that a great strategy for sellers who are serious about getting their homes sold is to price the property ahead of the market,” said Michael Selvaggio, president of the Council of Residential Specialists and a broker in Townsend, Del.

In a seller’s market, Selvaggio said, there’s nothing wrong with setting your price a little higher than the last one because prices are steadily rising. But in a flat or declining market, your price should be a little lower than the last comparable sale.

And not just a few percentage points lower, either.

“When was the last time you rushed out to the mall to take advantage of a 2% sale?” asked the 32-year real estate veteran. “You need to have a real sale, so how about 5% to 10% off, for starters?”

Price adjustments

Owners instinctively know, perhaps with a little prodding from their agents, that they’ll have to adjust their price if their homes are not in great condition. Ditto for houses that are not in the greatest locations. But many sellers today are reluctant to trim their asking numbers in a “challenging” market, clinging unflinchingly to the notion that their homes are worth what they paid for them — and then some.

Sellers who have the best results realize the logic and marketing advantage behind placing a realistic price on their homes, Selvaggio said. “Make no mistake about it — price sells.”

If some sellers haven’t yet gotten this message, some real estate agents haven’t either. There are plenty of agents who continue to accept overpriced listings on the theory that if you throw enough mud against the wall, some should stick.

But according to Robert Jenson of the Jenson Group, a luxury Las Vegas real estate agency, an overpriced house will wither on the listing vine, putting it at a strategic disadvantage to other, newer listings.

Ultimately, Jenson said, the owner of an overpriced property is often forced to accept less than what he might have sold it for had he been more realistic in the first place.

Market controls

Howard Brinton, a sales trainer from Boulder, Colo., said too many agents let the market control them, instead of the other way around. An agent, he says, needs to be a counselor and educator as well as a salesperson.

“Pricing, specifically correct pricing, is the only answer for today’s changing market and the most important thing a Realtor can do for his client,” Brinton said.

To price your home properly and achieve a prompt sale, you need to anticipate the market and get in front of it. “You never want to get caught chasing the market down,” the realty educator said. “You want to get ahead of it.”

To price their homes properly, sellers need to know how fast properties in their specific market segment are being sold. You also need to know how much competition you have for today’s skittish buyers, most of whom are worried about jumping into the ocean while the tide is still going out.

And you need to know market statistics such as absorption rates (the number of homes sold in any given time frame), inventory (the number of unsold houses) and days on the market (how quickly or slowly houses are selling).

Of course, it is difficult, if not impossible, for sellers to perform this kind of research on their own. And if your agent can’t do it for you, find one who can.

Above all, heed Brinton’s final bit of advice: Selling houses is like standing in line at the grocery store. Eventually, you are going to get to the cashier. But if someone breaks in line with a more competitively priced property, you are going to have to wait longer.

Lew Sichelman can be reached at lsichelman@aol.com.

Will Rogers State Park Saved!

In an article on Wednesday plans to close to state parks was abolished.  Read below:

If state’s numbers don’t come up, bet on a sales tax hike

By Evan Halper and Jordan Rau
Los Angeles Times Staff Writers

May 14, 2008

SACRAMENTO — In his latest plan for closing a budget shortfall now estimated at $17.2 billion, Gov. Arnold Schwarzenegger will propose giving voters a choice between borrowing against the state lottery and paying more sales tax.

The sales tax proposal is a turnabout by Schwarzenegger, who came to office as an anti-tax crusader and throughout his tenure has steadfastly insisted he would never consent to new taxes. In recent days, the administration repeatedly denied reports that it has been laying the groundwork for a sales-tax increase.

Deep cuts in services would still be needed to balance the budget. According to advocates and lobbyists briefed by the administration, Schwarzenegger will propose reducing health services for the poor even further than he had suggested in January, in his initial spending plan.

At the same time, he is walking away from some cuts he proposed then that triggered loud howls of protest.

Schwarzenegger Communications Director Matt David said the latest proposal restores billions of dollars in school spending and abandons plans to close 48 state parks and release tens of thousands of prisoners early.

The governor’s new plan, to be released today, has already drawn resistance from GOP lawmakers, who have pledged to vote against any new taxes.

The lottery proposal, according to David, would come before voters as early as November and hinges on administration estimates that California could borrow against future profits to generate as much as $15 billion over three years.

The governor also will propose changes to the lottery intended to lure more gamblers, such as increasing payouts and updating the games offered by the state to include blackjack and poker themes.

Under the plan, if voters rejected the borrowing, or if the proposal fell through for any other reason — such as lawsuits or lack of a viable lender — state sales taxes would automatically increase by 1 cent to cover the loss.

The sales tax increase would stay in effect until the state’s finances were out of the red, for up to three years. A 1-cent sales tax increase would generate roughly $6 billion per year, according to state statistics.

Republican lawmakers, who support squeezing more cash from the lottery to help close the budget gap, said the governor’s plan to link it to a sales tax is a deal breaker.

“This is not something we can support,” said Assembly Republican Leader Mike Villines of Clovis. “The lottery is a great asset that we can use to pay down debt, but tying that to a tax increase is fundamentally the wrong way to go.”

The tax trigger would not go before voters but would need approval by two-thirds of the Legislature, requiring the support of at least eight Republicans.

Administration officials defend their plan as a responsible way to bring long-term balance to state finances.

They note it includes spending restraints, which would also go before voters, that would force the state to put billions of dollars into a rainy-day fund. It also would refund some of the new sales taxes if the state began generating budget surpluses.

Democrats say they will keep an open mind. State Sen. Darrell Steinberg (D-Sacramento) said the state will need even more new revenue than Schwarzenegger is proposing.

“But we may not have the luxury of discounting any potential source of revenue to avoid devastating cuts,” Steinberg said.

A similar plan was enacted under former Gov. George Duekmejian in the early 1980s. But voters never had to pay the tax because revenues picked up and the state made its way out of the red before the 1-cent sales tax kicked in.

Schwarzenegger’s proposal may be more likely to hit voters in the wallet.

It is linked to changes to the lottery that could run into legal trouble and resistance from well-funded gambling interests that could finance a significant campaign against competition from an expanded lottery.

Some of the biggest new cuts in the governor’s budget are aimed at Medi-Cal, which provides healthcare for the impoverished, including people receiving in-home support services.

The January version of the budget had $4.7 billion in healthcare cuts, including termination of Medi-Cal coverage for dental work and optometry, and increases in premiums for the state’s Healthy Families program.

Healthy Families provides medical care for about 800,000 children whose parents earn more than the poverty level but still are low-income.

The changes restrict eligibility for these programs. But defenders of in-home supportive services, which the governor has selected for cuts in the past, have noted that it is far cheaper to care for ailing people in their own homes than to put them in nursing homes.

The administration sought to brace healthcare advocates in a private briefing Tuesday. Aides to the governor said they have not given up trying to expand healthcare in California — the goal of a $14-billion Schwarzenegger proposal that the state Senate rejected in January — but it would have to wait at least until next year, according to people at the meeting.

Healthcare advocates said they were not assuaged and plan to loudly criticize Schwarzenegger’s proposal when it is formally released.

Schwarzenegger’s decision to drop his prisoner release plan will allow him to avoid continued protest against it. The proposal infuriated law enforcement and victims’ groups, and no state legislator has agreed to sponsor it in the nearly five months since he offered the idea.

Matthew Cate, Schwarzenegger’s newly appointed secretary of corrections, said projections for the state prison and parole population had fallen enough that the early release plan was no longer needed to save money.

“We agreed the first thing we’ve got to do is take the early release off the table,” Cate said. “We’ve got a golden opportunity here to do that, and that’s what we’ve done.”

Since January, the state has cut its projection for the prison population next year from 177,000 to nearly 171,000, and the estimated number of those on parole was cut from 133,000 to 123,000.

evan.halper@latimes.com

jordan.rau@latimes.com

Times staff writer Michael Rothfeld contributed to this report.