Friday, December 9, 2016

REMINDER: CALIFORNIA PROPERTY TAX PAYMENT DEADLINE DECEMBER 12th!

The 1st installment of your California property taxes are technically due November 1st but it is not delinquent until December 12th. It is usually December 10th but since the 10th is a Saturday, it is extended until Monday. If you have not paid your property taxes, DO IT NOW otherwise it is a 10% penalty if not received or postmarked by the 12th!! 

LOS ANGELES COUNTY PROPERTY TAX PAYMENT WEB-SITE

China's Looming Debt Crisis Could Mean Big Opportunities for U.S. Real Estate

The founding partner of Partners Trust China, Sean Mei, just penned an informative article on China’s growing debt problem and how it could mean more investment in the United State, specifically in real estate in the first part of 2017…I am a little more skeptical of Sean about how much money will come from China as foreign investment has fallen off the past six months but will see.

 Article: China's Looming Debt Crisis Could Mean Big Opportunities for US Real Estate


Baldwin Hills Crenshaw Plaza Slated for 2020 Completion…Real Estate Surging In Surrounding Areas

Baldwin Hills and its surrounding areas have been on fire from a real estate perspective for some time and we are expecting that to continue with Expo’s Crenshaw line slated to open in the next five years and information surfacing that the new Baldwin Hills Crenshaw Plaza transformation will be completed in 2020.

Artist rendering of Baldwin Hills Crenshaw Plaza
The Plaza is a much-anticipated project for the neighborhood with plans to turn it into an urban village much like Pasadena’s Americana, including a completely rehabbed retail space, hotel, offices and more.

With housing becoming difficult to afford on the Westside and beautification projects and mass transit redefining the outlook for areas like Baldwin Vista, Leimert Park and Crenhsaw Manor, it is no longer a secret that these areas are a hot spot with investors and young families and we still believe some great opportunities will be had in these up and coming areas for years to come.

Source: Partners Trust Company Blog

Mortgage Rates increase for the fifth consecutive week…hitting a new high in 2016

The 30 year fixed-rate mortgage (FRM) increased to 4.13% for the week ending December 8th. This is up from last week’s 4.08% and 18 basis points higher than this time last year.

The 15-year FRM increased to 3.36%, slightly up from last week’s 3.34% and 3.19% last year. Freddie Mac Chief Economist Sean Becketti stated that the markets are 94% certain of a quarter-point-rate hike.


Interest Rate Chart since Dec. 2015

 Source- Housingwire

Alexis Antin Joins the Team!

Thanks to a wonderful network of clients who have passionately referred us, business has grown over 70% this year and we are excited to announce that Alexis Antin joined the team as an associate partner. Alexis has been a fantastic addition since coming on board providing a ton of positive energy and tremendous customer service. A native of Los Angeles with strong local knowledge of the micro markets of So Cal real estate, Alexis is an ideal teammate in representing the needs of our clients with enthusiasm, integrity and attention to detail. She has a very bright future in this business and looking forward to an even more successful year in 2017 with her on board.

Alexis and her husband Brandon currently reside on the Westside and are active supporters of many local charitable organizations and she is on the advisory board of the Wendy Walk, an annual fundraiser for cancer research.

Articles You Should Read- Real Estate trends for 2017, Realtor.com Housing Forecast and more!

Check out the following articles:

 1- Six things to know about LA’s plans to fix its awful sidewalks

 2- Los Angeles County Home Prices Are up 7 percent 

 3- 5 Big Real Estate Trends To Watch For in 2017 

 4- Realtor.Com 2017 Housing Forecast- The 2017 housing market will be a year of slowing, yet moderate growth, set against the backdrop of a changing composition of home buyers and a post-election interest rate jump that could potentially price some first-timers out of the market, according to the realtor.com® 2017 housing forecast. 

Friday, November 4, 2016

THE SKINNY ON THE WESTSIDE MARKET: Still in the seller's favor however higher-end listings in most micro markets are sitting despite low inventory and strong LA economy

Over the past few weeks I have participated in a few realtor networking groups and spoken with fellow top producing agents to get a gauge on the market.  The general consensus, with very few exceptions, is the entry to mid-level range in each micro area (ex: North of Montana in Santa Monica, North of Venice in Mar Vista, Huntington Palisades, etc) is soliciting multiple offers and continuing to push home values higher in that range. On the flip side, the higher-end properties in these same areas are experiencing a slow-down and sitting on the market longer, with the volume of interested buyers much less than what it was six months ago. 

Quite a few factors seem to be contributing to this.   The strong run-up in market appreciation has created some unrealistic seller’s with overzealous listing prices coupled with buyers who are well educated and willing to wait for appropriate price reductions.  We have also begun to see affordability ceilings develop in terms of what most buyers can/will pay on the higher end of a neighborhood. 

It is also important to note that we typically hit a bit of a sales lull as we head into the holidays.  We experienced it last year but it started picking up again in December…so will see if that pattern repeats itself for the higher end properties. The entry and mid-level properties aren't showing signs of a slow-down. 


Additionally, I attended a presentation by Myers Research, who primarily focus on the Southern California economy, specifically housing trends. They were extremely upbeat about the health of the LA economy and investing in real estate, especially on the Westside.  They believe inventory levels are going to continue to stay at record lows while the region continues to add well-paying jobs.  The Westside is still affordable compared to most luxury markets internationally and with cities like Santa Monica trending toward discouraging new development, it will only make land in the area more valuable.  

Myers Research felt the impact of any national or international economic hiccups would be minimal on Westside real estate.  The major concern when it comes to future appreciation would ultimately be affordability ceilings, which they are seeing becoming a problem in San Francisco, a market they feel is “over-heated.”  

They failed to address what the impact would be on the Westside if the technology sector had major issues in 2017.

MORTGAGE INTEREST RATES HIGHEST SINCE JUNE

The average interest rate for 30-year fixed-rate mortgages rose to 3.57%, up seven basis points since last week and the highest they have been since June.

The average 15-year fixed mortgage rate is 2.87 percent, up 13 basis points since the same time last week.

The average rate on a 5/1 ARM is 3.03 percent, falling 23 basis points over the last week.

Michael Fratantoni, the Mortgage Bankers Association chief economist stated:  "Globally, rates have begun to creep upwards as investors anticipate less aggressive monetary policies from central banks, and U.S. rates are being pushed upwards in response.  Additionally, new data show continued positive signals regarding the job market and rising inflation, indicating that the Fed is likely to hike in December and will continue increasing rates next year."


Sources: CNBC and Bankrate

SANTA MONICA BALLOT MEASURE LV REGARDING COMMUNITY GROWTH HANGS OVER THE CITY

Ballot Measure LV, which some feel is poorly written, could be setting a precedence for allowing voters to have a say on community growth and development if it passes.

The highly restrictive growth limitations presented in the ballot measure would allow residents to weigh in and vote to approve any “major development” exceeding 32-36 feet, with exception to single unit dwellings and affordable housing projects. Please check out the articles below:

LA TIMES: MEASURE LV SANTA MONICA 

KCRW: MEASURE LV BEING WATCHED AROUNG THE SOUTHLAND

SANTA MONICA BALLOT MEASURE DETAIL INFORMATION

ARTICLES YOU SHOULD READ

According to the National Association of Realtors lack of inventory has once again caused home prices to accelerate in the third quarter. NAR chief economist stated that solid job creation and historically low mortgage rates were part of this winning formula for sustained home buying demand all summer long.

HOME PRICE INCREASES SPEED UP IN THIRD QUARTER HIT NEW PEAK

Due to demand and all the regulatory changes in the home appraisal process, appraisals are often holding up the loan approval and closing process

WHY IT TAKES SO LONG TO CLOSE A MORTGAGE

According to a recent LA Times article homebuyers who are unable to afford the traditional 20% down payment for traditional mortgages need not to worry as lenders have begun to fill this gap with new low down payment loan products. Apparently 3% is the new 20% and some lenders are requiring as little as 1% down.

LOW DOWN MORTGAGE PAYMENTS BECOMING MORE PREVALENT

COOKIE CUTTER FEEL FOR NEW CONSTRUCTION


12613 Appleton Way (Mar Vista
We have seen a new construction blitz over the past 24 months and we are expecting it to continue for the next 3 to 5 years. The reality is that many Los Angeles neighborhoods are filled with homes that are close to 80+ years old, and with land values as high as they are we have a strong demand for new/remodeled homes. That said, it would be nice if we could get a little more variation in regards to the interiors and styles that are used by developers. When I am out on Broker Caravan I sometimes wonder if I have seen the same house twice.
12923 Warren Ave (Mar Vista)

SILICON BEACH OPPORTUNITY: 235 OCEAN PARK #C NOW $2.079M- SELLER MOTIVATED!


Now priced under what the market appreciation has been since the owner bought it, this stunning architectural 3 bed 3 bath (over 2,000 sq. ft.) + loft with rooftop deck in the heart of Silicon Beach is just one block from Main Street and 3 blocks from the beach. Take advantage of this great opportunity that was originally listed at $2.349M!

Check out the PROPERTY WEB-SITE and please contact us if you would like to set up a showing. 

Friday, September 23, 2016

Mar Vista Community Council “MVCC” Recommends R1V New Zoning to the Department of City Planning and not the Extremely Restrictive R1V2 Proposal.


 After hearing public comments Wednesday night where the majority of the public speakers were against the City Planning Commission's proposal for a R1V2 zone change on single-family homes in Mar Vista neighborhoods, the MVCC voted 6 to 2 in favor of recommending R1V New to the City Planning Commission. The new zoning recommendations will replace the existing Interim Control Ordinance “ICO” regarding the Baseline Mansionization Ordinance “BMO” that are set to expire next year. This does not mean the City Council will elect to implement the R1V New zone for Mar Vista but it would be very surprising if they went against the wishes of the Community Council. The R1V2 proposal limits building height and floor area ratio “FAR” significantly compared to the current BMO and would hurt property values.  It is an over-reaction to the developers who took advantage of the 20% green building bonus the past seven years and in many cases over-built homes to make more of a profit.  The R1V New proposal seems to be a fair compromise which still allows people to remodel and build larger scale homes while curtailing some of the “over-building” by developers. The above chart outlines the options that communities in Los Angeles can choose from.  The Department of City Planning will be providing its recommendations to the City Council and people are encouraged to voice their opinions via e-mail to neighborhoodconservation@lacity.org. Here is the link to the full R1 Variation Zone Code Amendment Update as of August 25, 2016

FED has Decided Against Increasing Rates, Mortgage Rates Decline!

The Federal Open Market Committee (FOMC) announced they decided against raising interest rates this month. The FOMC stated that although the case for a rate increase has strengthened they have decided to wait for further evidence on continued progress towards their objectives, and allow the markets to recover from the initial impact of the U.K. choosing to leave the European Union. Minutes from the FOMC meeting also suggest that they may not even raise rates until December or later. Chief Economist Curt Long, from the National Association of Federal Credit Unions stated that despite the temporary hold, the committee also sent a strong signal that a rate hike is imminent. While Capitol Economics Chief Economist, Paul Ashworth said that this seems to have been one of the most diverse FOMC meetings in recent memory, as 3 of the 10 board members dissented and proffered an immediate rate hike. On the Lender Side, Freddie Mac stated Thursday that the average 30-year fixed rate mortgage has declined to 3.48% from 3.50% last week, and 3.86% only a year ago. Only .17% away from it’s all time low of 3.31% from November 2012! The 15-year fixed mortgage rate eased to 2.76% from 2.77%, and the yield on the 10-year notes declined to 1.63% from 1.70%

Must Read Articles!

We found some good articles regarding Los Angeles real estate on the CurbedLA web-site.

Have LA’s Home Prices Peaked for 2016?- So Cal’s median home price has held steady for months
 
LA’s Cheapest and Most Expensive Places to Rent Easy to Read Graph showcasing Rents down 3.5% compared to last month

Where Gentrification is Happening in Los Angeles Click to see the interactive map, UCLA researchers have created to reflect Los Angeles gentrification and the effects of the new light-rail

Friday, September 2, 2016

Skinny's market thoughts as we head into the 4th quarter

The market is jumping all over the place. Certain areas remain hot while others are beginning to see price ceilings develop. Buyers are definitely pickier right now and with more valuation technology, they are strongly in-tune with what a property is worth from a numbers perspective. In many cases they are willing to pay a premium for properties with very few objections, however, the objections are definitely ringing louder if the listing is priced higher than what the market will bear and often attract buyers who are in a mood to negotiate further and press for an even lower price even if the listing has been reduced.

Overall, the market has pumped its breaks a bit with a typical August lull as people were on vacation and getting kids back to school. Last year we experienced a similar August but the market charged forward for the rest of the year. It will be interesting to see how the rest of 2016 plays out. With interest rates still around record lows, we anticipate the market will continue to sway in the seller's favor.

Hot Spots: Mar Vista up to about $2.4M: The area continues to be very popular with the silicon
beach crowd and young families. On the flip side, despite seeing 8 homes sell for over $3M this year (3 sold for over $3M last year), we are seeing buyers getting hesitant to spend more than $3M unless the property comes with great views or a larger lot. 4056 East Blvd, a 4,000 sq. ft. house on a 8,300 sq.ft. lot originally listed for $3.4M is now reduced to $2.995M despite the house next door, 4060 East Blvd. (4,292 sq. ft. with a nice guest house 4056 doesn’t have) by the same builder selling for $3.350M.

Westchester up to about $1.8M. Kentwood and Loyola Village continue to be wildly popular with young families and Westport Heights, which used to be the red-headed step-child of Kentwood and Loyola Village is seeing its fair share of sales above $1M. 7800 Westlawn in the Kentwood area was listed for $995K, a bit low for a 1,400 sq. ft. house on a 6K lot, received over 7 offers and is rumored to have sold at or close to $1,250,000. Inventory is steadily growing in all price ranges though and we are seeing new construction around $2M sitting for a bit longer…

Pacific Palisades (El Medio Bluffs, Alphabet Streets, Huntington): With the new Caruso development approved and starting construction, areas within a short distance of it are seeing buyers willing to pay a little more of a premium for easy access to this new and exciting development the Palisades has lacked.

Westwood: Westwood’s appealing centralized location along with the wildly popular Westwood Charter Elementary School has created quite the frenzy. 2035 Manning was listed by a colleague at $1.849M and she felt they priced it right around what it would sell for. This 2,100 sq. ft. house on a 6,700 Sq. ft. lot received 17 OFFERS and is in escrow for over $2.1M!! 

EXTREMELY IMPORTANT: THE NEW BASELINE MANSIONIZATION PROPOSAL “BMO” AND PROPOSED NEW SING-FAMILY ZONE OPTIONS FEELS LIKE AN OVER-REACTION TO OVERZEALOUS DEVELOPERS AND UNFAIR TO HOME OWNERS…YOU MUST VOICE YOUR OPINION!!

The Planning Department is working on two separate, but related, programs to address concerns about the size of houses in the City’s single-family (R1) neighborhoods: (1) amending the Citywide ordinances (BMO and BHO) that regulate the development of single-family homes, and (2) adopting new single-family zone options that will be applied to neighborhoods currently subject to Interim Control Ordinances (ICOs).

As a resident of Mar Vista, I despise the big, unimaginative cookie-cutter boxes erected all over Los Angeles, especially those with roof-top decks that take away the privacy of neighbors in smaller homes. I hear and agree with these valid complaints and changes need to be made! At the same time, what is currently being proposed, especially for the new single-family zone option for Mar Vista/East Venice and Kentwood (Westchester) is extremely restrictive and irrational.

As a realtor I must disclose that I occasionally work with developers. However, I have NOT been happy with their aggressive push on maxing square footage and using un-imaginative structures to increase profit margins. Unfortunately, this has created the uproar against “McMansions” and the people who are ultimately going to pay the price with highly restrictive square footage rules is the regular homeowner while also de-valuing the land they currently own. Many growing families will not be able to remodel as they intended when they purchased their home under the previous BMO ordinance.

The latest proposal for the Mar Vista/East Venice/Kentwood neighborhoods is extremely restrictive. Until a recent moratorium (ICO), homeowners/developers were allowed to build up to 50% of a lot size with a 20% and sometimes 25% allowable green building bonus. The ICO got rid of the green
building bonus which was a reasonable response to the over-building. However, the loud voices of the anti-mansionization movement have frightened the City Council into making deeper cuts into the size of a house that can be built. The proposed new single-family zones for Mar Vista/East Venice and Kentwood would involve a zone change from R1-1 to R1V2 and would regulate floor area, depending on lot size, to between only 35% and 45%. Currently, if one owns a 7,001 sq. ft. lot in Mar Vista, they can build a 3,500 sq. ft. house. Under the new R1V2 proposal, they would only be able to build up to 41% of the lot size meaning the house can only be 2,870 sq. ft. This is almost a 20% reduction in size and that doesn’t take into account if you have an attached garage where 200 sq. ft. of that would eat into your overall square footage, further reducing your livable square footage to 2,670 sq. ft.!

To give you some perspective on the size of these cuts, see the table below which also takes into account the financial impact this would have on most families largest financial investment. Land value is paramount in Los Angeles and principles will pay less money for land in which less square footage can be built on.


 *valuation is based on overall market knowledge and figuring the home is in very good condition. Current land value for a 7,001 sq. ft. lot is around $1.35M+ and will drop overnight if the proposal is passed.

I would also like to address what many homeowners in my neighborhood have expressed to me. They didn’t realize the severity of this proposal and frankly many of them are dual income families with children without the time or energy to show up to the public hearings about this topic.

Attached Garages: Since when would an area in which you park your car be counted against the
livable square footage? It is NOT fair to assume that everyone uses an attached garage as extra living space. Attached garages are essential for safety, especially when a spouse is a frequent business traveler. Attached garages allow for people to build a home that creates a larger backyard which is an essential component for maximizing California living and one’s own land value. I have yet to hear a rationale argument as to why an attached garage should be counted against the allowable floor area of a lot especially when non-attached garage square footage is considered exempt.

Caring for elderly parents/grandparents: People are living much longer. Even though society is having less kids then they did 20+ years ago, the size of families living together is INCREASING. Due to medical and health advancements, some households will have four living generations in them. “By 2025, as many as 25% of the U.S. population will be in multi-generational households and the demand for a different kind of residential property will accelerate over the next decade to meet this demand” (Strategic Advantage Real Estate newsletter). When you combine this with astronomically high rents forcing children to live at home longer than ever, does it really make sense to further restrict a homeowner in regards to what they can do with their property? Also, as a father and someone who grew up with five siblings, I have a serious problem with many of the proponents for the new proposal arbitrarily telling people they can make due in smaller houses. They don’t know the specific needs of a certain families that might require more space, etc. We all have different needs and that should be respected.

Why make the ugly boxes even more valuable?: By passing the proposed ordinance, it will have the unfortunate impact of making those unsightly/over-built shoe boxes even more valuable. They will never be torn down since the homeowner would have to build a significantly smaller house. Since these homes will not have any competition, their value will end up trading at premium prices…so the people with the homes that everyone loves to hate will be in an even better financial position.

Can we just meet in the middle? We need changes but they don’t need to be this dramatic. Why not a proposal that targets the problem areas, but is not an arbitrary reduction in allowable square feet, such as the following proposal:

*A 50% floor area ratio without any bonuses. The 45% proposed in the recent BMO is also too restrictive. 

*Create a second floor ratio or an architectural requirement that takes away the boxy nature of larger homes. *Attached garages should NOT be counted against the floor area ratio. 

*Roof-Top decks would not be allowed unless explicitly approved by neighbors that would be impacted. 

FYI: Pacific Palisades residents have loudly voiced their opposition to this and those outside of the Coastal Zone will have an allowable floor area between 55% to 65%.

LET YOUR VOICE BE HEARD (written submissions are encouraged!):
Contact: Christine Saponara, Department of City Planning-
christine@saponara.lacity.org
Phyllis Nathanson, Department of City Planning- Phyllis.Nathanson@lacity.org/ phone: 213.978.1474

FILL OUT THE ZONING INPUT FORM: Provide your address and e-mail and answer three questions. Shouldn't take more than two minutes unless you add extensive comments.

For more information check out the Neighborhood Conservation Update web-page

PUBLIC HEARING INFORMATION

Mar Vista/ East Venice, Kentwood and Pacific Palisades
When: Tuesday, September 13, 2016
Time: Open House at 5:30 p.m., Presentation at 6:30 p.m., Public Hearing at 6:30 p.m.
Where: Henry Medina Building, 11214 Exposition Blvd. Los Angeles, CA 90064

Lower Council District 5, Inner Council District 5, Beverlywood and Fairfax
When: Tuesday, September 20, 2016
Time: Open House at 5:30 p.m., Presentation at 6:30 p.m., Public Hearing at 6:30 p.m.
Where: Henry Medina Building, 11214 Exposition Blvd. Los Angeles, CA 90064

Will the luxury home market take a hit with the new disclosure law?

The luxury market has cooled off a bit and it will be interesting to see how the new law requiring the identity of individuals behind shell companies making all-cash purchases “Geographic Targeting Orders” above $2M will impact the market as the new disclosure requirement was implemented this week in Los Angeles.

This law was enacted earlier this year in Manhattan and Miami and the number of cash deals in those markets has dropped significantly. High-end condo prices in New York are off 15% according to Corelogic who tracks national real estate sales.

Through this program the federal government is already investigating 20+% all-cash purchases for “suspicious” activity related to money laundering. Up until this identity requirement was put in place, the US real estate market has been known across the globe as a great way to launder money with no questions asked. On another related note, according to Corelogic, Chinese investment is down 15% for the year.

Despite this new disclosure requirement, the Brexit vote should lead to added demand for American real estate. Investors look at U.S. real estate as a reasonable alternative to the London market, in addition to the fact that the U.S. government has made international investment easier. A non-U.S. citizen can now invest or own up to 10% of a REIT before incurring federal taxes…up from 5%...while some foreign pension funds are exempt from taxes on their U.S. property holdings.

Be careful when showing neighbors your converted Garage...you might get reported

I have recently been hearing quite a few stories of homeowners that have converted garages into living spaces being reported to the cities of Los Angeles and Santa Monica for non-conforming use. Neighbors can really frown on this so make sure you take this into consideration when showing off to neighbors, or when renting or selling your property. If caught by the city you may be cited for non-conforming use and the conversion would have to be removed and turned back into a garage.

Partners Trust comprehensive 2nd quarter report

http://media.thepartnerstrust.com/files/rich_content_company/275/263/Report_File/
Here is the second quarter Los Angeles real estate market report for 2016. This quarter was marked by colossal milestones in sales amongst our team. We closed June sales at $318,205,953, a 48% increase over last June, and Q1 and Q2 closing at a combined $1,074,215,420, a 19% increase from last year. You will find detailed sales figures and trends within each major region of Los Angeles in the report. Average home sales price’s in the Los Angeles market increased 7.4% this quarter over last year.

Rents in LA are rising much faster than incomes

A report from Apartment List analyzed rental prices in Los Angeles between 1980 and 2014 and the city saw one of the largest disparities between income growth and rental increases in the nation. Rents have spiked 55%, while income levels have ticked up just 13%.

Other coastal cities, like New York and San Francisco, saw even higher rent spikes however incomes in these areas seemed to also swell significantly more than they did in Los Angeles. Putting Los Angeles in the company of Detroit and Indianapolis as one of the places where renters fortunes have deteriorated the most.

Source: Apartment List/Housing Wire

Saturday, May 14, 2016

New Listing: Beautiful Charmer in Sunset Park (Santa Monica)- 2417 Hill Street Open Sunday May 15th 2-5pm List Price: $1.599M




Rare opportunity to purchase a wonderfully updated home on an expansive 7,000 sq. ft. lot on one of the most coveted streets in Sunset Park. This 3+2, 1,351 sq. ft. home features a remodeled kitchen with custom cabinets and granite countertops, two remodeled bathrooms, re-finished hardwood floors, central air and heat, fireplace, dual-pane windows and an automatic driveway gate leading to a full garage. Large park-like backyard and tremendous curb appeal with fenced front lawn surrounded by roses. One block from Clover Park and close to the hip restaurants and shops on Ocean Park. Come by and check it out on Sunday! Check out the property web-site for more details and photos: 2417 Hill Street

30-year mortgage rates fall to lowest levels in 3 years

Continuing the trend for most of the year, mortgage rates dropped again, falling to their lowest point in three years.

This marks the third consecutive week of declines. “Disappointing April employment data once again kept a lid on Treasury yields, which have struggled to stay above 1.8% since late March. As a result, the 30-year mortgage rate fell 4 basis points to 3.57%, a new low for 2016 and the lowest mark in 3 years,” said Sean Becketti, chief economist with Freddie Mac.

Prospective homebuyers will continue to take advantage of a falling rate environment that has seen mortgage rates drop in 14 of the previous 19 weeks.
Click image to enlarge

The 30-year fixed-rate mortgage averaged 3.57% for the week ending May 12, 2016, down from last week’s 3.61%. A year ago at this time, the 30-year FRM averaged 3.85%.

Also dropping, the 15-year FRM came in at 2.81%, falling from 2.86% last week. A year ago at this time, the 15-year FRM averaged 3.07%.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 2.78%, decreasing from 2.80% a week ago. A year ago, the 5-year ARM averaged 2.89%. The chart below shows just how low mortgage rates are now.

Source: Housing Wire

Most real estate economists and professionals believe Westside/South Bay real estate will continue steady appreciation at least through 2017

The South Bay and Westside real estate markets are continuing to see an influx of buyers and investors despite many highly desirable areas being up over 40% in the past 4 years. A lack of inventory combined with low interest rates, foreign investment and a thriving white collar Los Angeles job market (Silicon Beach) will continue to drive market appreciation. Though we have seen a slight slow-down lately with buyers seeming to be a bit pickier and value conscious (especially above the $2M price point), multiple offers are the norm on properties that are listed at market value.

However, we would see a slow down and lose the positive momentum if the tech industry boom in Los Angeles starts to sputter. Some economic analysts are expressing concern that the tech sector could see a wave of lay-offs in the near future with venture capital funding more difficult to come by in 2016 and young companies not showing the profits that were expected. Despite this possibility looming, most economists that study Westside/South Bay real estate feel the market will stay in the seller’s favor in the foreseeable future and here are the reasons why:

Lack of Inventory- Homeowners are not in a hurry to move. According the California Association of Realtors, first-time homebuyers typically moved to another home within 5 years in the 1980’s and 90’s. Now, the average first-time homebuyers is staying in their property for 8-10 years. Many property owners see value in renovating their current home and keeping the lower property tax as opposed to buying a new home and seeing a dramatic property tax jump. The younger generation of homebuyers also witnessed the housing crisis from 2007-2010 and are a bit gun shy when it comes to pushing affordability on the homeownership front.

Interest Rates- Some economists believe the economy, especially the real estate sector, could not handle much of a jump in interest rates with society acclimating to low interest rates for a prolonged stretch. A jump in rates could paralyze the economy. Those that can afford homeownership are taking advantage of the low rates and with rents continuing to increase at break-neck speeds, the incentive to buy continues to stay strong. Though it is tougher to qualify for a loan, when you do qualify, banks are extremely competitive for the mortgage business. Real estate has proven to be a great long-term leveraged investment and being able to borrow at low rates drives those with money to acquire property. Despite a jump in rates over the past two weeks, rates for a 30 year fixed mortgage are still below where they ended in 2015 (3.64% vs. 3.86%).

Strong Los Angeles job market- With the continued growth of Silicon Beach (i.e.- google constructing a 12-acre campus in Playa Vista), high paying jobs are rolling into the area and unless a tech bubble develops, we don’t see this ending anytime soon. The Los Angeles County Economic Development Corp. released a report showing that the area has more high-tech jobs (368,600) than Boston-Cambridge, Santa Clara County and New York City. The direct high-tech workforce generated over $32 billion in wages back in 2013, accounting for 16.8% of all wages paid in L.A. County, the report said. Silicon Beach has continued to grow at a strong pace over the past two years and Google won’t open its campus for at least another year. The latest report from the LA Economic Development Corporation showed that Los Angeles County should continue to add jobs at a 1.7% annual rate this year and personal income is expected to grow by 4.4%.

Foreign Investment- Overseas investors have had a tremendous impact on the Westside/South Bay markets in the past four years feeling it was safer to put money into American real estate than invest in their own countries. Though the pace of that investing has slowed down over the past six months, it is still happening and will continue with programs like the EB-5 Visa. In its simplest form, the EB-5 visa program enables foreign investors to gain permanent residence status if they invest $1 million dollars in business development or $500,000 in a high un-employment area. Once this investment is made, they usually buy personal residences typically in an all-cash transaction. California is by far the most popular destination for EB-5 investors. The amount of EB-5 applications that are accepted every year is capped around 10,000, with 60,000 applicants awaiting processing. From a global perspective, Los Angeles real estate is considered a good buy when compared to other major cities and will continue to draw strong interest from the Pacific Rim and Canada.
 

IMPORTANT: City of Los Angeles revises draft of Baseline/Hillside Mansionization Ordinances…check out the changes and voice your feelings

Despite a strong initial push from some frustrated Los Angeles residents who want to curtail the building of larger homes in their neighborhoods, the city planning office has retreated from its initial draft released earlier this year. The loud objections and pleads from residents, developers and architects who felt the draft was extreme and ill-conceived were finally heard.

The initial draft of the Baseline Mansionization Ordinance “BMO” called for counting an attached garage as part of a home’s square footage and only allowing a home to be 45% of the lot size on lots under 7500 square feet and 40% on lots over 7500 sq. ft. In the new draft that was released in late April, these proposals have been scaled back to the original BMO which states a home’s square footage can be 50% of the lot size for lots under 7,500 sq. ft. and 45% on lots over 7500 sq. ft.

However, the new proposal does not allow for any of the 20% bonus that one can currently qualify for by following green building codes, etc., although some areas have already done away with the bonus by passing an interim control ordinance (ICO).

They have also addressed the scale/size of single family homes with the second story of the home only allowed to be 60% of the first floor and deeper side set-backs so it is important that Los Angeles residents familiarize themselves with this proposed ordinance and share your thoughts via e-mail with the city at neighborhoodconservation@lacity.org.

This proposal will impact the future value of your property and it is extremely important that you voice any concerns you have with this proposal before the end of May.  Please click here for the revised draft.

Partners Trust report for the 1st quarter of 2016

While what is called buying season traditionally begins in spring across the country, it always starts a little early in Southern California where we don’t have to worry about the weather. This year, however, the season kicked off earlier than usual, leading us to have our busiest January ever.

Click on image above to view report
While we have seen some slowing at the high end of the market, most of the real estate market in Los Angeles is highly active and highly competitive. Recently Freddie Mac predicted that 2016 could be the best year for the real estate market during this decade. Sales, housing starts, and housing prices are all expected to rise, reaching their highest point since 2006. Mortgage rates are expected to remain low throughout the year and continued job growth may ease the afford ability crunch. The Fed has indicated that there will likely be two modest hikes in the interest rate in 2016 as inflation rises and the economic fundamentals remain solid, the Fed has not indicated yet when this year’s first hike will take place.

The biggest challenge that the real estate industry continues to face is low inventory. According to the California Association of Realtors®, the statewide inventory level hovers under the five-month mark (six months supply is the historical average). Partners Trust Associates continue to see strong competition for entry-level and move-up homes with multiple offers common. There is some slowing at the high-end of the market as homes over $6 million linger on the market. In the Bel Air/Holmby Hills area for example, sales were down -46.67% and prices fell -22.21%.

 Neighborhoods where prices have continued to strongly increase include Los Feliz, where the average sold price is now $2,019,572, up 34.54%; Santa Monica where the average sold price is now $3,291,342 up 26.69%, year over year; the Beverly Hills Post Office area where the average sold price clocked in at $3,453,303, up 40.49%. Please note these numbers are somewhat inflated when comparing sales over a three month period. For example, more higher-end home sales may have sold in that particular time frame compared to last year. Comparing sales over a full calendar year provides the best perspective but these numbers provide a good indication of what is currently going on with the market.

Please visit our Market Stats section for this latest report.

Need parking for the Metro? 221 guaranteed spots up for grabs Sunday Morning!!

With the Metro Expo Line extending its service to Santa Monica beginning May 20th, a total of 221 Metro Expo Line parking spots will be up for sale Sunday morning, enabling early-morning commuters a guaranteed place to park at three Expo stations.

The passes will be available at Expo/Sepulveda, Expo/Bundy and 17th St/SMC as part of a 2-year pilot program that will be evaluated every three months.

The passes will allow access to spaces on a first-come, first-served basis from 4am to 9am, Monday through Friday. After 9am the spaces become available to all. An additional 239 spaces will also be available for a daily rate of $2 at the same stations, Metro announced Tuesday.

Expo parking: • 17th St/SMC: 67 spaces of which 13 are reserved for monthly permits. • Expo/Bundy: 217 spaces of which 131 are reserved for monthly permits. • Expo/Sepulveda: 260 spaces of which 77 are reserved for monthly permits.

A new walk-and-bike path parallels most of the Expo Line extension as well to facilitate reaching stations by foot or bicycle. Bicyclists will have the option to bring their bikes on trains or place them in bike racks or lockers at the new Expo station.

Due to limited parking at the new Expo stations, Metro encourages customers to consider walking, biking or taking the bus to reach the trains. To buy a spot head to lametroparking.net.

Source: Edited article from the Santa Monica Mirror

Designer to meet with residents about the Santa Monica Airport Park Expansion

Mark Rios, recently hired by the City of Santa Monica to design the 12-acre expansion of Airport Park at Santa Monica Airport, will give a talk to residents at a special meeting hosted by the Santa Monica Airport2Park Foundation, on Friday, May 13th, at 7:00 p.m., at Mount Olive Church, 1343 Ocean Park Boulevard, Santa Monica.

According to Neil Carrey, President of the Airport2Park Foundation, “The evening will be an opportunity for the community to hear from acclaimed designer Mark Rios about the parameters of the project for expanding Airport Park on land the City has reclaimed from aviation use, and Mr. Rios’ preliminary ideas for the possibilities there, as well as give feedback to Mr. Rios on what residents would like to see in the expanded park.”

Mr. Rios’ firm, Rios Clementi Hale (RCH), has been tasked by the City with community outreach, research feasibility and concept design, and ultimately design of the park expansion. RCH previously worked in Santa Monica on Euclid and Douglas Park and also designed iconic parks and public spaces in Southern California, such as Los Angeles Grand Park, the Rancho Cienega Recreation Center and the L.A. Zoo Event and Play Space.

The park expansion became possible in 2015 when the City’s 1984 Agreement with the Federal Aviation Administration expired, freeing up land that had been used to park airplanes, which have recently been removed.

Source: Article from Santa Monica Mirror