Monday, December 14, 2015

Amendments to the Los Angeles Mansionization regulations will most likely be approved in May…

According to the Los Angeles city planning office, it looks like the new Baseline (BMO) and hillside (BHO) mansionization ordinances will be recommended for approval by city council in May. Despite strong opposition from developers and property owners who are looking to enhance/expand their properties, the city planning office states that about 85% of the public input was for stricter building rules.  Some changes may still be made to the proposal but the bulk of it looks like it will be approved.  This is a positive thing for areas that have been impacted developers over-building but it is frustrating for normal property owners with nice homes that need to expand due to a growing family, etc.  A one size fits all approach isn't necessarily fair as the needs of one family differ from those of others. 

Here are some highlights from the proposed update you should be aware of:

*Attached garages will be considered usable living square footage. Garage space has never been considered livable space until this proposal. The typical garage is around 400 square feet. If you want to build a 2,000 sq. ft. house with an attached garage, the house itself would only be 1,600 sq. ft. (quick note- Most homebuyers prefer an attached garage for safety and comfort. Attaching a garage to the house, especially in the front, maximizes backyard space allowing families to take full advantage of the wonderful Southern California weather.)

*Properties with a lot size of 9,000 sq. ft. or less can only be 45% of the lot size with an allowable green building bonus of 20% if your garage is NOT attached. Currently it is 50% with a 20% allowable green building bonus. This is a 10% decrease in sq. ft. and an attached garage would make the decrease more significant.

*Homes on lots above 9,000 sq. ft. can only be 40% of the lot size with an allowable green building bonus of 20% if you garage is NOT attached. Currently, it is 45%.

*Hillside homes will no longer have grading exemptions underneath the footprint of the structure.

*A second story can only be 60% of the first floor footprint.  Right now, it is 75%.  Under the new proposal, if you have a 1,200 sq. ft. first story, the second story addition can only 720 sq. ft. making it very difficult to have two bedrooms. Homeowners looking to expand will probably have to rebuild to have a correct/proper floorplan. 

*The planning department did NOT perform an economic impact report.

*The original BMO/BHO took over 7 years to develop and it was a collaborative effort with real estate professionals. The proposed amendments took a little over a year without any collaboration.

*New amendments could go into effect as early as May 2016.

Personally speaking, I believe you can curtail overzealous builders without being this restrictive.  Cut out some loopholes that allow for the 20% building bonus or require further set-backs but telling someone that where they park their car is considered living space and that 2,300 sq. ft (including attached garage) is enough on a 6,000 sq. ft. lot is unfair.
From an economic perspective, limiting the square footage that can be built from the original BMO/BHMO will negatively impact home values, especially for older homes that need to be remodeled. The cost of land is so expensive throughout most of Los Angeles that a regular homeowner or developer is going to add square footage or build a new house for the investment to make sense. The increase in square footage along with the overall rehabilitation of the property, done in a tasteful manner, increases the value of the neighborhood.

In terms of counting attached garage space as living space, it’s no secret some property owners are using their garage as living space whether it is attached or detached. This is a violation of the city code and it’s not fair for the city to punish homeowners who utilize an attached garage properly due to their inability to enforce the improper use of a garage. Furthermore, if people are using garages as living space, it is an example the typical needs for families are outgrowing the current residence, especially with an aging population in which caring for elderly parents in the home for many years is increasing. It doesn’t seem to make much sense to further restrict the size of a home when families could be forced to expand in non-traditional ways.

You can e-mail the neighborhoodconservation@lacity.org for a draft of the full proposal.

It is not too late to express your thoughts to the city planning office- hagu.solomon-cary@lacity.org and contact your local city councilman as well. In talking to local residents, it seems most typical homeowners are not being heard and it is a vocal minority that is creating much of the noise.

Close some of the loopholes currently being exploited and figure out ways to control overzealous developers but this current proposal seems a bit restrictive.

Friday, November 27, 2015

Earthquake Insurance becoming more affordable

With less than half of California homeowners opting not to get earthquake insurance due to the cost and high deductibles, The California Earthquake Authority (“CEA”) is aiming to change that beginning in January. The CEA will be offering more coverage choices, more deductible options (5% to 25%) and more affordable rates.  The average reduction in rates will be about 10% with up to a 20% discount to those that have had a verifiable earthquake retrofit on a home built prior to 1979. For more information check out the CEA web-site.

http://www.earthquakeauthority.com/insurancepolicies/Pages/default.aspx

Price reductions are more prominent...close to 50% of active listings in some westside areas

 Last month a colleague noted that around 40% of the active single-family residences ("SFR") in Culver City experienced a price reduction. We decided to see if this was a trend in other Westside locations and ran the numbers for the Palisades, Santa Monica, Westchester and Mar Vista as of November 24th.

We found Culver City is not unique and the reductions over the last month even increased in Culver City to  14 of the 29 SFR active listings being reduced.

Area  # of Active Listings       # Reduced 

Culver City         29                    14 (2)

Santa Monica      49                    24 (6)

Mar Vista            39                    20 (2)

Westchester         32                    11 (0)

Pacific Palisades 80                    32 (7)

**The # in perenthises are homes the Multiple Listing Service “MLS” mis-categorized as not being reduced. Realtors can come up with tricks to eliminate the reduction label to the public but a check of the listing history of each property can expose this. This practice is more popular in luxury markets.

 The percentage of reductions compared to active listings is inflated due to the holiday season with quite a few sellers holding off to list their homes.  However, the trend of increasing reductions has been consistent since the middle of the summer. Typically we see about 25% of the active listings showing a reduction and over the past few years that number has dipped to 10-15% due to the strength of the market.  The increase in the reductions is a sign the market is settling down a little bit with buyers unwilling to pay the heavy premiums we saw earlier this year.

Though we are seeing this trend, do not be mistaken into thinking the market is headed in a downward spiral. Well priced listings (around the true market value), especially those in premium locations, are still selling in multiple offers with favorable terms for the seller.  The market is still strong but just not at the level it was four to six months ago.

Friday, October 23, 2015

3rd Quarter Market Report

Check out the latest Partners Trust Quarterly statistics report for the third quarter of 2015.  The market report is extensive and covers the Westside, Los Angeles proper, Manhattan Beach, San Gabriel Valley and Malibu.  Please feel free to contact our office with any specific questions about your neighborhood. 

http://www.thepartnerstrust.com/market-stats


Check it out: Interactive Map for noise levels in Los Angeles

An app called HowLoud has created sound profiles of every Los Angeles address and RentLingo has released a searchable map that displays the decibel levels at any given point in Los Angeles, allowing you to see what it is like during the day and at night. This can definitely come in handy when searching for a home and are sensitive to noise. It is interesting to note that some of the trendier and pricey real estate is located in areas where the noise levels are fairly high thanks to restaurants and bars. Check out a few examples of Santa Monica below and why so many neighbors want the Santa Monica Airport to go away (at least the big jets).

Santa Monica Airport

Santa Monica


Source: LA Curbed Blog

Mortgage rates continue to drop

Mortgage rates continued to trend lower, following declining Treasury yields. The 30-year fixed-rate mortgage “FRM” averaged 3.79% for the week ending October 22, down from last week when it averaged 3.82%. In 2014, the 30-year FRM averaged 3.92%. The 15 year FRM averaged 2.98% while averaging 3.03% last week. A year ago at this time, the 15-year FRM averaged 3.08%.

(Source: Housing Wire)

Santa Monica: Lincoln Boulevard to get a makeover

The section of Lincoln Blvd. between the 10 fwy and Ozone Ave (city border with Venice) is in for a make-over to beautify the area making it more inviting to pedestrian foot traffic and cut-down on conflicts between cars and people on bikes. The plan, called Lincoln Neighborhood Corridor, aims to add dedicated peak-hour bus lanes, more crosswalks, nicer landscaping, street furniture and better sidewalk lighting. The plans also calls for adaptive reuse of buildings for more consumer friendly tenants like eateries and coffee shops that will be more community friendly.



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Be Prepared for El Nino!


We talked about the importance of preparing for El Nino a few months back and we are just reiterating it as this could potentially be one of the wettest winters in Southern California history. The largest hurricane in history is about to hit Mexico and is just another reminder of how warm the Pacific Ocean is.

Here is a link to a recent LA Times article outlining 28 things to do to prepare for El Nino.  (Hint: check and fix leaks; clean out gutters and downspouts; inspect windows; Store emergency materials)

(Source: LA Times)

Friday, September 25, 2015

Deal of the Week: 4365 Alla Road #7, Marina Del Rey $829K


IN ESCROW

We rarely advertise properties for sale on this blog unless we strongly feel it is a great opportunity and this fits into that category. We just listed a luxurious 2 bed/2.5 bath, 1,866 sq. ft. Marina Del Rey townhouse that is priced well and a short walk to the Marina Marketplace (Ruth's Chris Steakhouse, Tender Greens, Ra Sushi, AMC Dine-in theater, Yardhouse, Gelson’s, etc).

The spacious floor-plan is excellent for entertaining with high ceilings, oak floors, gas fireplace and a large and open kitchen. This end unit features two large bedroom suites, remodeled master bathroom, great closet space, two car attached garage, laundry area, direct access and a well-run HOA with access to multiple pools and spas.


Please check out www.4365alla.com for photos and more information. Please don’t hesitate to contact John directly at 310-486-5962 if you have any interest. We will be open Sunday from 2-5pm.

Notes on a Realtors Scorecard- Lots of rookie house flippers; Venice Blvd in Mar Vista about to permanently change; a look at some recent sales

- The Westside market is continuing its three year roll of trading at premium prices with multiple offer and above asking sales prices being the norm for over 50% of the properties on the market. We have seen a little slow-down in the upper high-end market ($5M ++) but much of that has to do with unrealistic list prices. The properties that are priced at or near the true market value are moving fairly quickly.

- We are noticing quite a few newcomers getting into the flipping business. The main companies we typically see purchasing re-model/tear down candidates are getting outbid on quite a few properties lately…and in some cases it isn’t even close. An example of this is 3154 Barry Avenue in Mar Vista. A great location with a great walk score on a 7K sq. ft. lot hit the market for $1.098M and sold in multiple offers for $1.350M. A few builders went up to about $1.2M but felt the profit margin would get too tight if you purchase it above that number. Hopefully history won’t repeat itself and the market dynamics are different, but the last time we saw this behavior was around 2006…

click to enlarge
-Venice Boulevard in Mar Vista about to permanently lose car lanes: Venice Blvd. between Inglewood and Beethoven was named as one of the first Los Angeles roads that will be part of LA’s Great Streets program that takes away a lane of car traffic in each direction to create a protected bike lane and four mid-block crossings with their own signaling buttons. Locals wanted a more user friendly Venice Blvd. but the program doesn’t include much of a beautification plan which is needed if you want to attract more foot traffic from the higher-end areas of Mar Vista that are close-by. A more attractive Venice Blvd. would be great for the area, however, geographically speaking, LA seems like a pretty spread out place without nearly enough mass transit to start taking away lanes of traffic in already heavily congested areas. It will be interesting to see how this works out…Please check out an article about this along with graphics via CurbedLA: Part of Venice Blvd. will be getting more hospitable to non-drivers

923 20th Street #2
- A quick look at some recent condo sales in Santa Monica: 923 20th Street #2 has not officially sold but it immediately went into escrow one day after the first public open house. It was listed at $1.529M ($1,149 sq. ft.) but rumor is it sold above that number…it seems like yesterday people thought it was crazy to pay $1,000 a sq. ft. for a home north of Montana. The 1,330 sq. ft. 2 bed/3 bath Spanish Colonial built in 2006 has tons of charm and character but a very small 2nd bedroom.





817 10th Street #307




817 10th street #307 is a top floor 1,394 sq. ft. 2+2 single level unit that was bought at the end of last year for $1.150M and after some upgrades were made to the kitchen and bathrooms, it just sold for $1.4M after being listed for $1.3M. We approximate the seller did about $70K in upgrades.





122 Ocean Park Blvd.#411, a 1,502 sq. ft. 2+2 was bought in 2012 for $1.185M, just under the $1.199M asking price. In pretty much the same condition, this coveted Sea Colony III unit with $800 a month HOA dues just sold for $1.601M, $206K over the asking price! The Sea Colony and the surrounding area is very popular right now with the emergence of Silicon Beach. The seller had phenomenal market timing!




- The foreclosure saga of Sea Ridge’s 1948 Palisades Drive (Pacific Palisades) comes to an end: This rare foreclosure (bought in2006 for $1.4M) was hit with massive sewer and drainage issues that destroyed most of the integrity of the home and annoyed realtors as clients would call thinking they could get a great deal on the condo not knowing that has to be completely remodeled as previous listings of the property were vague when it came to explaining the horrible condition. After a saga lasting over four years, it finally sold through bankruptcy court in an all-cash deal for $1.180M, $280K over the $900K list price. Despite going for $200K over the list price it is not a bad deal for a 3,000 sq. ft townhouse in one of the most coveted complexes in the Palisades.

Thursday, September 24, 2015

Los Angeles is the least affordable place to rent in the United States

According to an article from CurbedLA that cites a report from Zumper, Los Angeles residents on average spend nearly 50% of their income on rents! Rents are higher in San Francisco and New York but the household income in those cities is higher. San Francisco checks in around 45% followed by Miami with 43%. New York is 41%.

The median rent for one-bedrooms in Los Angeles in August was $1,830, a 7.6 percent increase from the last three month period. Two-bedroom apartments were up 5.6% from the last quarter, to $2,640. Downtown Santa Monica is the most expensive place to rent in LA with a median one-bedroom renting for $3,220 in August. Downtown LA was the runner up with a one-bedroom median of $2,640.

Check out the map below to see what the median rents are in specific areas of Los Angeles. 

(Source: Curbed LA) 

click on image to enlarge

% of income toward rent in major cities- Click to enlarge

Average rate on 30-year mortgage falls to 3.85%

Long-term U.S. mortgage rates declined this week following the Federal Reserve’s decision to keep interest rates at record lows for now.

Freddie Mac said Thursday the average rate on a 30-year fixed-rate mortgage fell to 3.85% from 3.91% a week earlier. The rate on 15-year fixed-rate mortgages eased to 3.08% from 3.11%.

Rates have stayed below 4% for nine straight weeks. The average fee for a 30-year mortgage rose to 0.7 point from 0.6 point last week. The fee for a 15-year loan was unchanged at 0.6 point.

(Source: LA Times)

New rules will impact residential real estate purchasers who obtain a loan after October 3rd!

The CFBP (Consumer Financial Protection Bureau) instituted new rules to protect consumers and it known as the Know Before You Owe initiative.

The TRID (Truth in Lending Act- Real Estate Settlement and Procedures Act Integrated Disclosure Rule), disclosure rule replaces four disclosure forms with two new ones, The Loan Estimate and the Closing Disclosure. The borrower has up to ten days to review the Loan Estimate before the appraisal can be ordered which means appraisal period will take longer than normal. 

The rule also requires that the borrower has three business days to review the Closing Disclosure and ask questions before closing. This is MANDATORY and NON-WAIVABLE period. Any changes in the loan (i.e. increased buyer credits or reduction in purchase price) will trigger an update to the disclosure and add another three-day review period.

How this impacts a transaction: The average length of escrow may increase anywhere from several days to several weeks! Agents and escrow officers must be diligent early in the process to work quickly with the lender and the buyer to try and avoid the mandatory three business day review period on multiple occasions. Unfortunately this extra step makes it even more difficult when those obtaining a loan are going up against all-cash buyers.  Lenders and escrow companies will also have to be CFBP certified and follow stricter rules. Inevitably, we are preparing for escrows with a 30 day escrow period to possibly end up being more like 40 to 45 days.  Patience and diligence from all involved will be essential while everyone adjusts to the new system. 

Thursday, September 3, 2015

Notes on a Realtors Scorecard- A look at high-end sales; will the recent stock market dip impact the housing market; short-term rentals; Developers going crazy in Venice and Mar Vista and more!

High-End sales (above $5M) still tracking to have a strong year: We have heard some concerns
384 Delfern Drive
from people who own high-end homes that it feels like the market is slowing down in their neck of the woods. After looking at Multiple Listing Service “MLS” data regarding sales in high-end Westside neighborhoods, we found the market for homes above $5 Million is still doing well. We looked at overall sales from March/April compared to July/August and found the total # of sales was similar  with 54 in March/April and55 in June/July. The average days on market dropped to 87 from 100 with properties selling for 96.5% of the list price in July/August compared to 94.65% in March/April. The average sale price dropped to $8.2M from $9.53M but that is partially skewed due to two sales above $45M in March/April headlined by 384 Delfern Drive in Holmby Hills selling for $59.355M (asking price was $75M). The highest sale in July/August was 609 East Channel Road in Santa Monica Canyon selling for $23M (asking price was 27.5M). With the recent stock market turmoil and the strength of the dollar potentially discouraging international bargain shoppers, it will be interesting to see if these numbers continue to hold steady.

 Will the recent stock market dip actually help the real estate market?: The dip in the stock market will hurt potential buyers in terms of overall net worth and possibly detour the number of international buyers we have seen, however, many local economists remain bullish when it comes to the short-term future of Southern California real estate. Another factor that will help those looking to purchase a home is the interest rates have been dropping as the stock market drops allowing for the consumer to have more purchasing power. The FED to delay raising the benchmark rate, since some fear a hike in interest rates could push the American economy back into a recession. Here is an article from the LA Times to check out: Real Estate and recent Stock Market turmoil 

Short Term rentals take 11 units off the LA rental market everyday: A report released earlier this year from the Los Angeles Alliance for a New Economy showed that short-term rentals are taking good apartments and homes off the regular market they can be rented out at huge mark-ups on sites like Airbnb. Rentals prices have spiked over 20% in the 2.5 years with the average person paying half of their income toward rent (typically you want your rent to be no more than 35% of your income). Curbed LA writer Adrian Kudler wrote an extensive article on the situation.

Developers going crazy in Venice: When you combine Abbott Kinney being considered one of the
sexiest streets in America, Silicon Beach becoming a major player in the LA economy attracting highly paid tech executives, you get developers salivating for properties in the area. 1519 Louella, a 850 sq. ft. home on a 5,900 sq. ft. lot sold for $1.4M on August 1st to a developer in an all-cash transaction. The house was in decent shape and had a pool but word is it will be torn down. To give you an idea on how much property values have jumped, we sold 1509 Louella, similar in sq. ft, lot size and interior, for $942K in May of 2013.

Small house in Mar Vista bordering SM Airport is in escrow for over $1.150M: 12701 Dewey
Street, a 3+1, 1,092 sq. ft. home on a 5,591 sq. ft. lot was listed a few weeks ago for $1,050M and promptly received 8 offers and is currently in escrow for $100K+ over the asking price. Over $1,000 a square foot! Dewey is a nice street but it does border the Santa Monica Airport. On two separate occasions, this house was listed in 2011 and 2012 for $715K and then for $750K and they couldn’t sell it. This is a rare occasion where they are extremely happy it didn’t sell three years ago.

The Eastside is hot as well…20 offers for a 2 bedroom home in Silver Lake/Echo Park: I had a
well-qualified client make a strong over-asking offer on 1742 Kent Street which is perched above Echo Park Lake.  This 2+3 1930’s Spanish with an UN-permitted artist studio converted from of the three garage stalls, is in great conditions with a beautiful city view from the living room. The house was listed for $849K and received over 20 offers! The emotional appeal of the home kept buyers from focusing on the less than aesthetically pleasing adjacent homes and immediate area it is situated in. It is currently in escrow for over $1M! It sold in the same condition in May of 2013 for $735K.

Thoughts on the future of the Los Angeles housing market

Until this year, the acceleration in housing prices in Los Angeles the past few years was largely driven by investors. We expect the housing market to continue to appreciate over the next 12 months as employment and incomes continue to improve.  The Westside and South Bay will continue to see a multiple offer environment with the continued growth of Silicon Beach bringing high paying tech jobs to the area to supplement the already strong demand in a low inventory environment.  A potential hiccup would be if the current stock market correction continues a strong downward spiral that would hit the tech sector hard enough that the growth of Silicon Beach is stalled.

click to enlarge
Despite home sales volume rising over last year, we still predict volume to stay low compared to historical standards with people reluctant to give up low interest rate loans and lower property tax base for a more expensive property that is also difficult to find in this market.

Though the outlook looks good in the near future, sine real estate economists feel the impending Fed rate hike will lead to a decrease in home values from late 2016 into 2018. History has shown us that prices naturally fall 9-12 months following a sustainable increase in mortgage rates as the rise in rates will decrease the amount of principal homeowners are able to borrow with the same mortgage payment. This will hit the market at all levels with more of the impact felt on the lower and mid-tier markets. Obviously rates will need to increase for this outlook to take shape and rates have been expected to rise for the past 12-18 months and it has not happened.

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The most sustainable prerequisite to a long-term rise in prices occurs when access to full-time jobs is optimal and according to economists, we will start to see that again in 2018. Once the international markets stabilize, we will see another strong international push to acquire Los Angeles real estate which is also predicted to begin around 2018-2019.

The start of another price appreciation run should be upon us at the end of the decade. In the long run, Westside real estate has proven to be a phenomenal leveraged investment and it will continue to be that way as it is one of most desired places to live in the world. However, prices will depreciate, as we saw from 2007-2009, and as long as you have a long-term outlook and are not constantly borrowing against the equity in your house, it will be one of the best investments you can make.

Wednesday, September 2, 2015

The cost of homeownership adds up in California

A recent report on the hidden costs of homeownership by Zillow and Thumbtack analyzes costs often overlooked by homebuyers, such as property taxes, homeowners insurance and utilities and the most common homeowner maintenance expenses, which are house cleaning, gardening/lawn mower, landscaping, carpet cleaning; and specific regional costs like air conditioner maintenance, gutter cleaning and pest removal.

These “hidden” homeownership costs add up to a national average of $9,477 per year. Los Angeles has a higher average at $11,333 and San Francisco checks in at a robust $13,287 (second highest in the nation behind Boston, MA). The reason Los Angeles is above the national average is mainly due to California’s high cost of living. Things are just more expensive in California, including the cost of domestic labor, which is included under common homeowner maintenance expenses cited in the report. Ultimately, California’s pleasant climate and bountiful opportunities come with a price.

Homebuyers shouldn’t necessarily be scared away by the higher level of homeownership costs in California — not all homeowners hire a cleaner or gardener, as this analysis assumes. But there are definitely some extra costs new homeowners need to keep on their radar. Also, it is important to remember the occasional maintenance expenses that can come out of nowhere and end up costing more than a homeowner imagined. Therefore, homeowners should always set aside savings for big expenses that come along every few years. A few examples are roof repair and replacement; termite damage; water damage; mildew removal; paint/sealing (especially exposed wood) and appliance repair and replacement.

Articles you should read

The Hamilton Project recently released a report stating that retirees are becoming more and more dependent on home equity:  Housing Increasingly a source of net worth in retirement 

Cash buyers paying premium prices are making it a difficult market for those obtaining a loan, especially at the middle-class level: Cash buyers and premium prices leave middle-class home seekers locked out 

Thanks to job growth, low mortgage rates and continued investment from both domestic and international sources, Southland sales hit a nine-year high:  Southland home sales hit a nine-year high; prices up 5.5%

According to a recent article on CurbedLA, Los Angeles has the biggest difference between normal travel times and rush hour travel times in the nation- it is 43 percent slower during rush hour than non-peak hours: The worst day and time to drive on every LA Freeway

Saturday, July 25, 2015

Notes on a Realtors Scorecard - Buyers staying longer, the Chinese aren't just buying, prepare for El Nino and more!



Buyers plan to stay put longer and the process of finding a home is taking more time- A recent survey of buyers by the California Association of Realtors “CAR” stated that buyers are planning to stay longer in their homes…for an average of 20 years! This is far above the six years that home buyers were forecasting in 2013.  The survey also noted the process of buying a home is the longest it has been since CAR has been tracking the statistic.  Even before contacting agents, buyers spent an average of 14 weeks exploring properties and neighborhoods. Once they engaged an agent, the process took an average of 12 weeks to get a home in escrow.  The process is typically taking even longer in the nicer areas of Los Angeles due to low inventory. 

Mar Vista closing the gap on South Santa Monica but not on the high-end: The popularity of Mar Vista with the young families and the Silicon Beach crowd has resulted in 17 homes in Mar Vista selling for over $2M in the first half of 2015. Only 10 sold for over $2M in the first half of 2014. No sales were made above $3M.  In comparison, South Santa Monica (90405) had only 16 home sell for over $2M the first half of this year but five sold for over $3M. The average sale price was $2.658M while it was only $2.358M in Mar Vista.  The appeal of Santa Monica’s school system, city services and better walk score will always create a value difference despite Mar Vista’s surge in popularity. 

Chinese investors have been very busy purchasing property in LA, but some are selling…is this a sign?- For the past three years the international buyer, especially the Chinese, have made a big impact on Los Angeles real estate.  In 2014, $22 billion in Southern California real estate was purchased by the Chinese.  We are still seeing strong purchase activity from China but not at the rate we were seeing a year ago.  With the Chinese stock market on shaky ground, we have seen an uptick of luxury homes being sold by Chinese property owners.  With the financial markets in China predicted to continue to struggle, will this begin to negatively impact the So Cal housing market? In the mid to late 1980’s, the Japanese bought quite a bit of west coast real estate and were quite aggressive much like the Chinese have been.  When the Japanese stock market crashed in the early 1990’s, a massive sell-off of Japanese owned property shortly followed and contributed to a fairly significant drop in Southern California real estate values.  The dynamics are different but it is something to keep an eye on.  
  
Fun Fact: Only 11% of California homes (including both renter- and owner-occupied homes) have an earthquake insurance policy, according to the California Earthquake Authority.

Mortgage note- If you pay $150-200 more a month toward your mortgage you will be surprised how much you will end up saving in the long-run even at the historically low interest rates we are currently experiencing. 

Why should the homeowner lose the right to have grass?  Is it fair for the government to dictate how much grass you can have in your yard? New construction and extensive remodels will require that only 25% of the landscaping be grass.  We are in a significant drought but will that always be the case?  Shouldn’t a land owner have the right to pay a higher rate for water if they choose?  Instead of bothering homeowners who only account for a very small percentage of the state’s water use (state agriculture is the major water user) the state and local municipalities need to focus on capturing storm run-off and figure out more efficient ways for farmers to water crops.  With a strong El Nino expected, it would be nice if Southern California could take better advantage of what is expected to be a significant rainy season.

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Speaking of El Nino…Prepare your property!- We strongly encourage all of our readers to deal with any potential drainage issues (ex- water not draining away from your home/foundation, clogged gutters, drains) sooner rather than later.

Home of the week- Quick $3.2M sale in Santa Monica near Pico- 2432 32nd street is a brand new 3,363 sq. ft. traditional 5+4 home on a large 9,007 sq. ft. lot that came on the market for $3.2M and immediately sold right after the broker caravan.  The builder did a very nice job with the details of the home and when you combine its emotional appeal and large lot, one can start to look past the ½ block proximity to a stretch of Pico that is not the most aesthetically pleasing.   The house features a large gourmet kitchen that opens to the living room, huge windows providing tons of natural light, vaulted ceilings, luxurious master and drought resistant landscaping with the majority of it featuring turf. 


Second quarter market report reflects robust housing market in Los Angeles

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The Los Angeles housing market continues to be robust with no signs of abating in the near future. Average sale prices hit record highs in many areas (both single family and condos) and the number of sales rose to the highest second-quarter total in a decade. . The Westside luxury market (ex. Santa Monica, Pacific Palisades, Beverly Hills) saw strong growth, proving the enduring value of these communities commands a premium.

Manhattan Beach reflects the vibrant and strong South Bay market where prices are up by double digit percentage points and the decreasing days on market shows a tight inventory crunch.

Property in areas where prices are a little lower such as Mar Vista and Westchester saw some of the largest appreciation. 

Overall, Los Angeles County is on the rise as the value of all assessed taxable property in the county has risen 6.13% in 2015, the largest jump since 2010.

Please click on the image below to download the full report and if you need more detail on your neighborhood please contact us and will be happy to help.


http://www.thepartnerstrust.com/market-stats

Average rate on 30-year mortgage falls

The average rate on a 30-year fixed-rate mortgage declined to 4.04 percent from 4.09 percent a week earlier. The rate on 15-year fixed-rate mortgages slipped to 3.21 percent from 3.25 percent. As in recent weeks, mortgage rates followed the yield on the key 10-year Treasury note, which declined.
Bond yields for Treasury’s were pushed lower by a rise in bond prices.

The average fee for a 30-year mortgage was unchanged from last week at 0.6 point. The fee for a 15-year loan also held steady at 0.6 point.

With mortgage rates at low levels and the economic recovery in its sixth year, home-buying has recently surged as more buyers have flooded into the real estate market. Data issued Wednesday by the National Association of Realtors showed that Americans bought homes in June at the fastest rate in more than eight years, pushing prices to record highs as buyer demand has eclipsed the availability of houses on the market.

Mortgage rates still remain relatively low due primarily to near-zero short-term borrowing rates set by the Federal Reserve, as well as the present lack of investment opportunities for the excess sums in bonds and on deposit with the Fed. This allows homebuyers to borrow more mortgage funds with relatively unchanged incomes. However, mortgage rates will likely begin to increase steadily in late 2015 as the bond market anticipates the Fed’s inevitable short-term rate hike.

The median home price has climbed 6.5 percent nationally over the past 12 months to $236,400, the highest level — unadjusted for inflation — reported by the Realtors.

Sources: LA Times and Housing Wire

Westchester residents excited about 30 million dollar facelift set for Howard Hughes Center


Westchester and Playa Del Rey residents received some welcome news when the new owner of the Howard Hughes Center announced they would be spending $30 million dollars to upgrade the facility. With Playa Vista continuing to grow with a new Cineplex, restaurants and a Whole foods, the close access to these amenities will continue to fuel the surge in popularity with young families that Westchester has been experiencing over the past four years.

The large-scale overhaul will be designed by Jerde Partnership (which designed Universal CityWalk and the open-air renovation of Santa Monica Place) and aimed at creating smoother entries into the compound for walkers, like a new crossing planned for Center Drive. Meanwhile, the courtyard across from the Cinemark Theaters will become the "center" of the complex and get a new outdoor film screening area and a fire pit. By Laurus's estimates, Howard Hughes Center "will soon hold nearly 3,200 new multifamily units," including the luxury Altitude apartments, "and more than 1.3 million square feet of office space." That's a lot of potential shoppers. Renovations are supposed to begin immediately.

Sources: LA Times and Cubed LA

Two mixed use projects proposed for Downtown Santa Monica

The Santa Monica planning commission is recommending two development agreements with NMS properties that will create much larger mixed use sites than what currently occupy the land. The locations are 1560 Lincoln Blvd. (currently Denny’s) and 1415 5th street.

Both projects are right near the light rail line connecting Downtown Los Angeles with Santa Monica. The increase in residential units will continue to add to the congestion that already plagues the area.

Check out the full article here: Mixed use projects recommended for Downtown Santa Monica

(Source: Santa Monica Daily Press)

Monday, June 22, 2015

Notes on a Realtors Scorecard- Hot market persists despite some realtors slowing down...is your title insurance up to date...Future housing realities in SM...3 quick sales in Mar Vista

Hot market but cooling off for some realtors:  While talking to colleagues that represent many of the different brokerages that service the Westside, the majority noted they have slowed down compared to 2014. Last year was great for many of us so a slow-down is understandable yet the market is still appreciating and sales volume overall is higher, making it puzzling that many of these reputable/high producing agents have slowed down. The reasons given for the slow-down are the lack of inventory, frustrated buyers deciding to step away from the market and more competition from out of area agents. It will be interesting to see if this trend sticks as we expect the market to continue to appreciate and see multiple offers on market price homes through the rest of this year.

Future housing realities in Santa Monica?: Check out this opinion piece, "Housing Realities in the Bel-Air by the Sea", which appeared in the Santa Monica Daily Press about the amount of housing being built and what Santa Monica can actually handle. Very interesting…sounds like traffic could get even worse in #gridlockcity.

Is your title insurance up to date? A common mistake we see is when owners voluntarily transfer title to other family members or entities like Trusts, LLC’s, Partnerships and Corporations. If the title company insuring the owner/property is not notified and asked to insure the transfer into the entity through a policy endorsement 107.9, then the title insurance is nullified. This is something that can be easily fixed through a policy endorsement which generally ranges from $50-100 depending on the insurer. If you come across this scenario, please contact your title representative, or, if you don’t have one, please contact our office and we will get you connected with the right person.

The skinny on three homes that just went into escrow in Mar Vista: 

3330 Keeshen Drive- Located on Mar Vista hill, this 4,220 sq. ft. 2007 built Traditional on a 5,786 sq. ft. lot, hit the market on June 11th for $2.689M and promptly went into escrow after the broker caravan. The rumor is they had a solid offer come in right off the bat and the seller accepted it. The home features high-end finished throughout, cook’s kitchen, huge master bed/bath with city views and a backyard with a fire pit and built-in barbecue. We were a little surprised this sold as fast as it did with a small yard but it is tough to find homes in Mar Vista that are over 4,000 sq. ft.

3568 Veteran- This brand new Cap Code Westside Village home hit the market on June 10th with a list price of $1.795M. They immediately received a very strong offer the day after the first open house and accepted it on June 15th, despite telling agents that offers were due on the 17th. The house is a 5 bed/6 bath consisting of 3,611 sq. ft. on a 6,174 sq. ft. lot. It is a great family home with high-ceilings, large living room, cook’s kitchen and each bedroom has its own bathroom.

3540 Ashwood Avenue- This simple 3+3, 1,508 sq. ft. home sitting on only a 4,900 sq. ft. lot was listed on June 4th and received nine offers at the $1.295M list price. The listing agent countered the top five initial bidders with a price of $1.4M and no appraisal contingency period. A response to this counter offer was accepted a few days later. If the $1.4M counter was accepted, this charming south of Palms home with an open floor plan, sold for over $925 a sq. ft.! Wow!