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.