Saturday, November 18, 2017

Skinny's notes on the market

*Please remember to pay your property taxes! They will be considered late if they are not received by December 10th and the fines are hefty!

*According to National Association of Realtors (NAR) 34% of home buyers nationwide are millennials.

*The city of Santa Monica is requiring earthquake retrofitting for over 2,000 buildings over the next four to six years. Depending on the building age and size, the cost per unit could be $8,000++. This new disclosure has led to buyers wanting a credit from sellers to help pay for the assessment if the building does not have a strong enough reserve to absorb the cost.

*The Pango group (owns multiple escrow companies in Southern California) reported that they had 951 escrow openings in October with 685 closing, leading to a 73% close rate. In October 2016, they had 839 openings and 671 closings for an 80% close rate.

*The two main financial forces we are seeing behind buying property on the Westside are from the technology sector (i.e. Silicon Beach) and families that are already living in the area and purchasing property or providing major assistance when it comes to a down-payment for their children. From a Silicon Beach perspective, the elite are making a lot of money and tend to be fairly young. As Silicon Beach grows to become a major player worldwide, Westside real estate looks like it will continue to appreciate over the next few years unless something unforeseen happens.The areas benefiting the most are Venice, Mar Vista, Santa Monica, Playa Vista, Culver City and Westchester.

*It is really difficult for typical single family home buyers below the $1.5M price point. Since land has become so valuable along with the demand for luxury homes in West L.A, Mar Vista, Playa Del Rey, Westchester, etc being so strong, developers/builders are willing to knock down or add square footage to a home that would otherwise easily be fixed up by a young family. The builder comes in with an all-cash offer with a very limited contingency period that a normal buyer acquiring a home cannot compete with.

*Typically, multiple offers are a close fight but in speaking with colleagues, the majority of multiple offers are won by one party that is paying significantly more than others. One quick example- A home listed for $1.750M in Hollywood Hills with just five offers ended up selling for $2.250M…the next closest offer was below $2M.

*Los Angeles County is expected to add 1 million more residents by 2035. With housing already scarce, development restrictions in place in many areas and people living in their homes longer than ever before, how is Los Angeles going to deal with this influx?

*If Trump’s new tax plan passes in the manner that it is currently constructed, it will not only take away important deductions from the majority of homeowners in the Westside/South Bay, but it will also further discourage current homeowners from selling, further intensifying the inventory shortages that are plaguing the region.  Check out our latest blog post on the subject which includes key highlights and tons of information from our economist.

Trump's new tax plan limits deductions and could further intensify inventory shortages

While the proposed tax plan promises to save an American family about $1,182.00 per year, some of the proposed changes will negatively impact current and future California homeowners. Even with favorable changes to the tax bill in the Senate version, many of the proposed changes will be a challenge to the California housing market, especially in Los Angeles.

Here is a quick summary of a very informative article on the subject provided by our chief economist Selma Hepp. We highly recommend you check out her recent Economic Straight Talk as well as this recent article in the Los Angeles Times - Realtors are worried about Trump’s new tax plan. California homeowners should be too

A few key takeaways-

*The tax proposal increases the standard deduction from $6,350 to $12,000 for individuals and $12,700 to $24,000 for married couples. Thirty-four percent, or about 6.12 million, California taxpayers itemized their deductions in 2015, with average total itemized deductions equaling about $36,800. This will make a notable difference in their adjusted gross income.

*Removes the ability to deduct state and local income taxes which will markedly increase taxes for many California residents with incomes above $75,000.

 *The proposed changes are more impactful on future homebuyers since some of the proposed changes would apply to newly originated mortgages.

*The lower cap on the mortgage interest deduction would be particularly detrimental to buyers in Los Angeles communities where median prices exceed $1million. For example, a buyer of a $1.2 million home with a $1 million mortgage would pay almost $40,000 in amortized interest in the first year. However, at the $500,000 mortgage interest deduction cap, the buyer would be able to deduct only half of that interest, thus losing about $20,000 in deductions. Again, if this is a first-time buyer and falls in the income range of between $100,000 and $200,000, the loss of a $20,000 mortgage interest deduction would make a notable difference, not only in the resulting tax bill but also on the decision to purchase a home. (The current senate proposal has adjusted this cap back to $1 million.)

*While the proposed tax plan reduces the number of tax brackets, not everyone’s tax rate will decrease, and these deductions will play a big role in where a household falls along the income spectrum.

*A $10,000 cap on real estate property taxes would also impact those buying a home priced above $1 million, since California property taxes are around 1.2 percent. In Los Angeles metro, 20 percent of home sales year to date were priced higher than $1 million. For example, a buyer of a $3 million home would lose $20,000 in property-tax deductions. 

*The proposed change that limits the capital-gains exemption used by homeowners when they sell would be another major blow for supply conditions. Under the new proposal, homeowners must have owned and lived in the home for at least five of the last eight years to qualify for the exemption. Currently, the rule is two of the last five years. The exclusion would also be limited to one sale every five years rather than one every two years. In addition, households with incomes over $500,000 if married or $250,000 if single lose the exclusion. With the current capital-gains exemption limit at $500,000, it already poses a constraint on many current owners whose homes have appreciated significantly since they purchased them and who consequently choose not to sell. Further limiting the use of the capital-gains exemption will slow housing turnover even more. At the end of the day, while severely undersupplied inventory may help push prices higher, the proposed changes would lead to fewer home sales and an even more difficult environment for first-time buyers.

Mortgage rates increase to 4-month high hovering just below 4%

Mortgage interest rates increased to their highest point in four months, and now hover just below the psychologically important 4% mark, according to Freddie Mac’s latest Primary Mortgage Market Survey.

The 30-year fixed-rate mortgage increased to 3.95% for the week ending Nov. 16, 2017. This is up from last week’s 3.9% and up slightly from last year’s 3.94%.

The 15-year FRM increased to 3.31%, up from 3.24% last week and up even more from last year’s 3.14%.

However, the five-year Treasury-indexed hybrid adjustable-rate mortgage decreased slightly to 3.21%. This is down from 3.22% last week, but up from 3.07% last year.

Source: Housing Wire

Friday, November 17, 2017

Saturday, October 28, 2017

Mortgage rates surge to highest level in 3 months

The 30-year fixed-rate mortgage increased to its highest point in the past three months, nearly hitting the 4% mark, according to Freddie Mac’s latest Primary Mortgage Market Survey.

The 30-year fixed rate mortgage increased to 3.94% for the week ending October 26, 2017. This is up from 3.88% last week and 3.47% last year.

The 15-year FRM also increased, hitting 3.25%. This is up from 3.19% last week and 2.78% last year.

The five-year Treasury-indexed hybrid adjustable-rate mortgage came in at 3.21%, up from 3.17% last week and 2.84% last year.

Source: Housing Wire

Forecast- California home prices will continue to rise in 2018

Home prices in California will continue to increase next year, but at a slower pace, said a forecast released by the California Association of Realtors. The median price of a home is expected to rise 4.2 percent in 2018 to $561,000, less than the expected 7.2 percent increase this year, according to California Association of Realtors chief economist Leslie Appleton-Young.

Affordability constraints stop the increases from rising higher because of the gap between income increases and home prices. Young also spoke about the impact of decreasing inventory and the impact of international buying with Chinese purchasing not having as drastic of an impact.

Check out the full article- California home prices will continue to rise in 2018

Neigbhorhood Spotlight- Manhattan Beach

Here is a quick blurb from the LA Times about the most sought after place to live in the South Bay. Extremely popular with pro athletes and young families who love the beach lifestyle and top-rated schools, Manhattan Beach is one of the most expensive and toughest places to find a home in So Cal.

Article- Neighborhood Spotlight- Manhattan Beach

How the Wine Country wild fires will affect its housing market

Even though this article has nothing to do with Westside real estate, we thought it would be good to share with you an economist outlook on the future of wine country after being devastated by one of the largest wildfires in California history,  destroying 5,700 structures, charring 245,000 acres and ultimately claiming 41 lives.

It is nice to see a positive outlook coming out of such a heartbreaking event. Article: How the Wine Country wild fires will affect its housing market


Friday, October 13, 2017

Skinny's notes on the market

*The current temperature of the market is warm and sunny with some areas/price points still experiencing the heat wave of this past spring while others are trending toward the cooler holiday weather earlier than expected. Anything below about $1.3M in proper Westside locations (both condo and house) is commanding quite a bit of attention. As you start to climb into the middle to high-end of a certain area, we have noticed the “pretenders/lookey-loos” aren’t bouncing around as much and buyers aren’t in as big of a rush to snap something up. The Silicon beach impact is keeping the heat index high in Venice, Mar Vista, South Santa Monica, Playa Vista, Marina Del Rey, Playa Del Rey and Westchester.

*We are noticing a fairly strong ceiling develop along most price points and areas when it comes to different types of inventory. Once you move away from the entry level price points, buyers across the board are much more hesitant to cross certain thresholds that were set earlier this summer. It will be interesting to see if this continues into 2018 or if we will break through thresholds like we did earlier this year. 

*Staging and first impressions is as important as ever with the new generation of millennial buyers. The extra expense the seller incurs with staging and prepping the unit is WORTH IT!

*According to a recent USC Economic forecast, renters in Los Angeles will pay roughly $136 more a month for housing in 2019. The increase is attributed to low housing availability and a roaring Los Angeles economy.

1525 San Vicente
*Some big deals went down in recent months in North Santa Monica. After Modern Family co-creator Steve Levitan sold his 43,379 sq. ft. mansion on Woodacres Road, which borders Riviera Country Club, for a record Santa Monica price of $41.08M in an off-market transaction, Colony Capital billionaire and President Trump’s right-hand man Tom Barrack Jr. sold 1525 San Vicente Blvd., a 23,500 sq. ft. home that sits on 1.35 acres overlooking Riviera, for $34M. This was also an off-market transaction. Barrack purchased the home in 2014 for $24.5M. Barrack did have the home listed last year for the absurd price of $46.5M. Interestingly, and under the radar, Barrack recently purchased 2219 La Mesa Drive for $13.1M. The 6,800 sq. ft. house was on the market last year for $14.775M.

*In honor of the late great Tom Petty, check out this cool LA Weekly article from 2008 that outlines Tom Petty’s LA

*Update- Judge clears way for SM Airport runway reduction after court order had delayed it

After an abrupt turn of events and then a reversal, the City is back on track with plans to shorten the runway at Santa Monica Airport from nearly 5,000 feet to 3,500. A last-minute attempt by two local pilots to stall the project only managed to delay plans for a week – the City says construction will begin this week.

Check out the Santa Monica Daily Press article here- Judge clears way for runway reduction

Earlier this month-

For those South Santa Monica and north Mar Vista residents that were eagerly anticipating the runway reduction at the Santa Monica Airport, you are going to have to wait a little bit longer.  A federal court has issued a temporary restraining order preventing the City of Santa Monica from pursuing the project. City Hall plans to remove 1,500 feet of runway in an attempt to discourage jet flights and the first phase of the project was set to begin on October 18th.

Check out the Santa Monica Daily Press article here- Court order delays runway reduction

Mortgage rates increase for the second week in a row

Mortgage rates increased once again, edging closer to the psychologically important 4% mark, according to Freddie Mac’s latest Primary Mortgage Market Survey.

The 30-year fixed-rate mortgage increased to an average 3.91% for the week ending October 12, 2017. This is up from last week’s 3.85%. Last year at this time, the 30-year mortgage interest rate was 3.47%.

The 15-year FRM increased to 3.21% this week, up from 3.15% last week and from 2.76% last year.

The five-year Treasury-indexed hybrid adjustable-rate mortgage, however, decreased to 3.16%. This is down from 3.18% last week but up from 2.82% last year.

Source- Freddie Mac and Housingwire

Saturday, October 7, 2017

Preparing your home for an earthquake - Get it done!

If you find yourself feeling tense about California’s San Andreas Fault, you’re not alone. The 3.6 magnitude earthquake that struck near Westwood Village earlier this month, followed by the devastating 7.1 earthquake in Mexico, has brought the issue of natural disasters closer to home for all of us. In a matter of seconds, one’s entire world can be turned upside-down, yet in just a matter of minutes, one can also take thoughtful actions to becoming the most quake-ready household on the block. Here are steps that you can take before an earthquake strikes.

One piece of uplifting information is that in recent years, Los Angeles and several other cities have required retrofitting of buildings that experts say are most vulnerable to collapsing in a major quake. It would be wise to take the same precautions by inquiring whether your home needs a retrofit—i.e. being bolted to the foundation so that it doesn’t slide off in an earthquake.

You can also consider earthquake insurance, which can give homeowners (and renters) the ability to have funds to repair their homes quickly after a massive disaster.

A simple action that you can do right now is go to your nearest hardware store and find the tools you need to strap or secure objects to the walls or floors that they rest on. Securing objects in and around the house will help limit property damage and reduce the risk of injury to you and your family. That means strapping bookshelves to the wall, televisions to their stands, and even microwaves onto the countertops. Don’t forget about your gas heater! You can also install safety latches on kitchen cabinets to keep blenders and plates from toppling on you during a quake.

Preventative Measures that can Save your Life
*Keep stored wine low to the ground—or in wooden boxes—as opposed to displayed up high.
*Affix a safety film to windows that will leave shattered glass in its place.
*Have a fire extinguisher (or two) on hand and keep them far away from the stove.
*Portable battery packs and emergency plug-in lights are extremely useful in an extended power outage.
*Keep the tank in your car three-quarters full as gas stations require power to pump gasoline.
*Don’t rely on data to navigate you around town post-quake…download maps of your city for reference now.
*Have cash on hand—ATMs won’t work without electricity.
*Tie a pair of sneakers together and store underneath your bed so that you can walk to safety after the earthquake.

Earthquake Kit
Lastly, experts highly suggest that each household prepare an earthquake kit. You can also make an additional kit to keep in your car and at your place of work for extra peace of mind. Place your stash on a shelf that’s easily accessible, and don’t forget about your pets! Pack food, water, medicine and anything else you’d need for at least 72 hours, but several weeks is a better bet. Key things to buy: canned proteins like fish (don’t forget the can opener), chicken or beans; canned fruit (which has sugar); and peanut butter. Don’t forget about replacing water jugs; they can degrade over time and leak.

During an Earthquake
If you find yourself experiencing an earthquake, take heed of this expert advice: Drop, Cover, and Hold On—always. Cover your head and neck with your hands and try to position yourself underneath a table to avoid being in a vulnerable position where something could fall and injure you. If you live near the shore, and severe shaking lasts 20 seconds or more, head to high ground in case a tsunami has been generated. Move inland two miles or to land that is 100 feet above sea level and don’t get in your car—start walking.

Source: Partners Trust Blog

Mortgage rates continue upward trend

The 30-year fixed rate mortgage increased to 3.85% for the week ending October 5, 2017. This is up from last week when mortgage rates held steady at 3.83%, and from last year’s 3.42%.

The 15-year FRM also increase two percentage points from 3.13% last week to 3.15%. This is up from 3.72% last year.

However, the five-year Treasury-indexed hybrid adjustable-rate mortgage decreased slightly to 3.18%, down from 3.2% last week but up from 2.8% last year.

Source: Housing Wire

Saturday, September 23, 2017

New Santa Monica listing- 954 20th Street #A- 2 bed/2.5 bath + den, 1,700 sq. ft. $1.449M - Open Sunday 2-5

Don’t miss an excellent opportunity to live in a truly charming, 1700+ sq.ft., north-of-Wilshire townhouse! This front-facing, 2-bdrm, 2.5-bath unit features an inviting living room with a high ceiling, gas fireplace and access to a patio; a large dining area overlooking the living room; a separate den/office; an eat-in kitchen; and a spacious master suite with a walk-in closet and a beautifully remodeled bathroom. Additional highlights include attractive hardwood floors, abundant light and volume, direct access from the private 2-car garage with plenty of storage, and only one common wall elevation. Monthly HOA dues of $425 include earthquake insurance. The coveted location is within the Franklin and Lincoln school boundaries, and affords easy access to shops and restaurants on Montana Avenue and Wilshire Boulevard.Please contact us if you would like more information or to schedule a showing.

Mortgage rates increase for the first time in two months

Mortgage rates increased for the first time after two months of straight declines, according to the latest Primary Mortgage Market Survey from Freddie Mac.

The 30-year fixed-rate mortgage increased to an average 3.83% for the week ending September 21, 2017. This is up from last week’s 3.78% and from 3.48% last year.

The 15-year FRM also increased, rising from 3.08% last week and 2.76% last year to hit 3.13% this week.

The five-year Treasury-indexed hybrid adjustable-rate mortgage increased to 3.17%, up from 3.13% last week and 2.8% last year.

Source- Housing Wire

LA Times neighborhood spotlight- Cheviot Hills

Cheviot Hills is a highly sought after Westside community with a centralized location that is very popular with those that work in Century City and even Downtown LA. It has the perfect mix of great elementary schools and a diverse range of housing options. Check it out-Neighborhood spotlight- Cheviot Hills 

A look at the pace of job creation and growth in California and L.A. County

The California economy started 2017 on a high note, yet how has the state—and Los Angeles in particular—been performing in more recent months?

Here to report on the subject is Partners Trust’s Chief Economist and Vice President of Business Intelligence, Selma Hepp. In Hepp’s latest Economic Straight Talk analysis, she points out that over the last 12 months, California has added about 265,000 jobs, which is a 1.8 percent increase and still outpaces the national growth rate of 1.4 percent.

Nevertheless, as this year’s numbers have indicated so far, overall job growth and creation has slowed from previous years. Regarding California’s unemployment rate, Hepp reports that the state has incurred a slight increase to 5.1 percent in August, which is largely due to a sizable addition to the labor force of 31,600 new workers. This is the largest monthly increase in the labor force since the spring of 2010. Sectors that lost jobs include leisure and hospitality, while sectors that gained jobs include services—which encompasses personal-care services and equipment and machinery care—manufacturing, retail, trade, and healthcare.

When focusing on Los Angeles County specifically, Hepp notes that L.A. has added 8,300 jobs with the largest increase occurring in the government sector. Professional and business services saw notable gains, as well as job additions in the trade, transportation, and utilities. The information sector also posted a strong increase. Similar to other metro areas, Los Angeles’ leisure and hospitality industry posted the largest month-over-decline, with 67 percent of the decrease in accommodations and food services.

Source- Partners Trust Blog

Thursday, September 7, 2017

Skinny's notes on the market

Welcome back from the August real estate holiday…but don’t let the lull fool you- We saw some multiple offer activity on well price properties in August but it has become apparent over the past few years that activity drops-off enough in August that people wonder if the market is changing…yet, it then picks right back up in Mid-September for a solid six week run before the end of year holiday season. With interest rates at their lowest point for 2017 and a very strong LA economy, we fully anticipate a flurry of activity over the next few months.  

Escrow cancellation rates are at all-time lows: In speaking with local escrow officers, cancellation rates are at all-time lows (give or take 10%) compared to rates that were triple that five years ago. A few other observations from the escrow side of things- *shorter escrows (15-21 days) with little to no contingency periods are becoming more frequent. In fact, some are able to still get loans closed within 21 days. We have buyers from San Francisco/Silicon Valley to thank for this trend. In the hyper competitive Bay Area market, all contingencies are being removed upfront on some deals, even on homes that don’t need much renovation.

Packing up and moving to the Northwest and Texas?- We are noticing a trend of more people willing to sell and relocate out of So Cal and take advantage of the equity they built in their home. Companies relocating to more reasonably cost real estate is obviously playing a significant role. The popular destinations seem to be the Pacific Northwest and areas around Dallas, Texas.

Moving in…New Yorkers fleeing to Los Angeles: A recent Linkedin report shows New Yorkers are on the move to Los Angeles. We are definitely seeing this trend on the Westside and are currently working with multiple parties from the New York area…Article- New Yorkers fleeing to Los Angeles  

Homeless concerns impacting buyers in Venice and Santa Monica?- The homeless issue on the Westside seems to be more noticeable to out of town buyers. We don’t know if the metro has provided easier access to Santa Monica from skid row, but in showing properties in affluent areas (especially Venice and area near the metro in Santa Monica) we are definitely hearing comments on property tours.

Mar Vista/Westchester and Playa Del Rey solidly embraced by Silicon Beach- Mar Vista continues to be very popular with those in the tech world. They love the proximity to Silicon Beach while being central too much of what LA has to offer. It is not as crowded as Venice and with Venice Blvd. and Washington Blvd starting to go through a revitalization with shops and restaurants, we don’t see this trend changing for a long time. The same can be said for Playa Del Rey and Westchester.  Both of these areas are also very popular with young families in the tech sector and even though some can afford what would be considered higher-end areas, they are specifically looking to be in these areas.

Caruso development in the Palisades will have an even bigger impact on home values than originally thought- The Palisades has always been at the top of the list of Westside locales of the rich and famous and even moreso with the current re-development of the Palisades village by renowned developer Rick Caruso. However, based on conversations we have had with area developers and real estate professionals, many believe the added value of this development will not truly be felt until it is fully in-use. They expect another step-up in value and demand for the beautiful seas-side area that will now provide amenities and cohesiveness the area did not provide in the past.

27 offers on a condo in Santa Monica with no laundry and heat- Condo with no laundry and heat in Santa Monica garners 27 offers and goes for almost 200K over asking!- When a sharp looking 2+2, 1070 sq. ft. unit located at 609 Washington hit the market for $896K, it definitely garnered a lot of attention but most thought it wouldn’t go crazy due to the unit not having inside laundry and no heating system. Typically, community laundry is a major handicap when it comes to resale value. However, that wasn’t the case this time. The listing agent was overwhelmed with 27 offers. They responded to the top 10 and supposedly sold to for around $1.070M…

871 Granville #202 (Brentwood) Open this Sunday and Coming Soon- 954 20th street #A (Santa Monica)

Our new listing at 871 Granville Avenue #202 will be open on Sunday from 2-5. 3 bed/ 3 bath, 1870 sq. ft. remodeled unit in the heart of Brentwood listed at $1.299M. Check out the Property Web-Site 

954 20th Street #A, a charming north Santa Monica 2 bed/3 bath + den, 1,700 sq. ft. townhouse will be hitting the market in the coming weeks. Feel free to contact us for more information.

Morgage rates hit another new low for 2017

Mortgage rates continue to hit new lows this year as the Treasury yield reached a new 2017 low for the second consecutive week, according to Freddie Mac’s latest Primary Mortgage Market Survey.

The 30-year fixed-rate mortgage “FRM” dropped to 3.78% for the week ending September 7, 2017. This is down from last week’s 3.82% but up from 3.44% last year.

The 15-year FRM also decreased, dropping to 3.08%, down from 3.12% last week. This is still up from last year’s 2.76%.

However, the five-year Treasury-indexed hybrid adjustable-rate mortgage increased slightly from last week’s 3.14% to 3.15% this week. This is up from 2.81% last year.

Freddie Mac stated the 30-year fixed-rate mortgage followed in the steps of the 10-year Treasury yield, hitting yet another new low for 2017.
click to enlarge

Source: Housing Wire& Freddie Mac


If you live in the city of Los Angeles, community policing and keeping a watchful eye out on your neighborhood is as important as ever. According to a Sergeant in the Los Angeles Police Department, the LAPD has a less officers patrolling the street then they did in 1982. The Los Angeles population has exploded since that time yet the police force is smaller. You would be shocked to know how few squad cars are available to patrol Venice, West LA and Mar Vista. If you speak to any LAPD representative, they talk of how important it is for neighbors to know each other and keep a vigilant eye on the neighborhood. A neighborhood watch is a great start to making the neighborhood less desirable to thieves. 

A few other tips the sergeant wanted to pass along-

*Top burglary/theft deterrent- Dogs: Homes with dogs that are visible and/or easily heard is typically something a thief does not want to deal with.

*Visible cameras/ring system- Not as effective as a dog but still a deterrent and coupled with a dog, it creates a great makeshift security system. 

*Be prepared for an emergency- City services are not equipped to serve all of Los Angeles should a major earthquake hit or an event happens in which we lose utilities for an extended period of time. Every home should have reserves they can tap into when it comes to water/food and some type of power source.

Thursday, August 24, 2017

30-year mortgage rates hit a new low for 2017

Mortgage rates decreased for the fourth consecutive week and the 30-year mortgage hit a new low for 2017, according to Freddie Mac’s Primary Mortgage Market Survey.

The 30-year fixed-rate mortgage dropped to 3.86% for the week ending August 24, 2017. This is down from last week’s 3.89% but up from 3.43% last year.

The 15-year FRM held steady at 3.16%, an increase from last year’s 2.74%.

The five-year Treasury-indexed hybrid adjustable-rate mortgage increased slightly, hitting 3.17%. This is up from 3.16% last week but down from 2.75% last year.

 Sources: Freddie Mac and Housing Wire

Friday, August 18, 2017

Partners Trust comprehensive Los Angeles Mid-Year Report + a few key highlights

**Please note this report doesn't just cover the also covers Malibu, Downtown LA, Pasadena, South Bay and the San Fernando Valley.

Overall sales volume is up around 12% compared to last year in most Westside locations despite tight inventory.  Cheviot Hills/Rancho park was up over 40% and the Hills of the Westside (Beverly Hills Post Office, Holmby Hills, Bel-Air, was up over 25%.  All Westside communities saw increases in the average sold price except for Westwood. However, all this means is that less higher-end homes traded hands in Westwood as the area is still appreciating in value. Days on market continue to decrease in most areas but that is not necessarily the case in the market above $5M.

The outlook for the rest of the year is strong. In terms of the buzz regarding off-market activity...only about 5-15% of the sales in most areas are happening off-market and the buyer better be willing to pay a premium in most cases.

Check out the latest Partners Trust Los Angeles Mid-Year report.

Thursday, August 17, 2017

Updated Westside Earthquake Map - Could bring development restrictions

Check out the recently updated Earthquake fault map for the Westside via this LA Times article.  This could bring development restrictions to Beverly Hills, Santa Monica and other Westside areas.

Articles on local development news around the Westside, Westchester and DTLA

 34 story tower planned for Brentwood -The project, located at 11770 Wilshire Boulevard, would replace an existing commercial building with 376 units of housing.

Santa Monica will force developers to build the most affordable housing in the state -
The Santa Monica City Council voted Tuesday to require developers to make 20 to 30 percent of all new condos and apartments built in Downtown affordable for low-income earners.

Howard Hughes Rendering
Update on the Promenade at Howard Hughes Center- $30M makeover set to wrap in 2018 

Art's District rendering
Mapping the Arts District’s never-ending parade of development- 23 projects in the pipeline right now in one of LA’s hottest neighborhoods- check out an interactive map 


National real estate articles for your edification

CNBC- JP Morgan points to a low risk of a US housing correction Multi-generational living making a big comeback

Home Prices hit yet another All-Time high – Increased in 87% of measured markets 

Brokerage Industry Consolidation in Los Angeles- Partners Trust acquired by Pacific Union

Just as we were getting comfortable with boutique real estate companies leading the charge on the Westside, some major players have recently come in to snap us up. New York based Douglas- Elliman just purchased Teles Properties and Pacific Union out of San Francisco is now the majority owner of our company Partners Trust. Along with recently purchasing John Aaroe and having a large stake in Gibson International, Pacific Union who will now have a significant imprint in Los Angeles as it looks to become the biggest national boutique firm. Pacific Union is currently one of the biggest players in Northern California.

Pacific Union and Partners Trust merge to create the largest independent real estate brokerage in California 

 Pacific Union International to acquire Partners Trust (via Real Deal)

Douglas Elliman to acquire Teles Properties (via Real Deal)

Friday, June 23, 2017

Notes on a Realtors Scorecard- The buzz from the street and networking meetings...

*New Construction continues to be in high-demand all over the Westside/South Bay and with that, tear-down lots are selling at strong premiums provided sellers have solid representation and don’t sell directly to a builder.

*In the past seven years, the value of land has exploded on the Westside. Lot values have grown 75-120% (depending on the area) while the average sales price has only gone up 45%-65%. A gap between new construction and tear-downs has opened up to the point that homes that were once considered livable while making a few upgrades, is now being scraped.

*Marina Del Rey might be the hottest market over the past 90 days, as entry level townhouses seem to be up about 10% in just three months. At one point the Marina was flying under the radar while areas like Playa Vista were on fire.  Properties that were selling for around $800K three months ago are going for closer to $900K now…

*Entry-level price points across Los Angeles continue to rise at a very strong pace, especially under the $2M mark. They type of multiple offer activity we are seeing from inner-city areas like Leimert Park, Jefferson Park, West Adams to the entry level condo in Culver City and Santa Monica is crazy. We were just involved in a multiple-offer situation for a condo on Girard Avenue in Culver City. The 1,200 sq. ft. 2+2 townhouse with a generous outdoor space had over 200 people at the first open house and attracted 15 offers at the $779K list price. Despite being across from a school and about a mile from the popular downtown Culver City area, the unit is in escrow for around $860K! Three years ago it sold just under the asking price for $615K. At the higher-end entry level points, we are seeing the same thing. It is almost impossible to get a house North of Montana in Santa Monica that is not a tear-down for less than $4M and small South Santa Monica homes in decent shape are trading for $1.750M+.

*Wealthy families and individuals are getting very aggressive when it comes monopolizing properties on the Westside/South Bay. They are buying properties, especially single family homes, at a quicker pace then we have ever seen before. Whether they are buying for their children or just investment purposes, these buyers are aggressive and feel the best long-term leveraged investment is real estate. A few principles have clearly stated to their agents that in the long run, the best financial investment they have ever made is Westside/South Bay real estate.

*Despite rates being about 15% higher than at this time last year, we are still seeing solid price appreciation. 

*The higher-end price point in each micro market is the only area that is somewhat struggling yet even then the choice properties are still moving quickly.

*The historic rains we received earlier in the year has led to a back-log of construction and some developers are hiring any subs they can to finish jobs which means the quality on some projects will be sub-standard.

*Speaking of historic rains, those of that live in the hills/fire hazard zones, should take note that officials are expecting this to be one of the worst fire seasons in years. The extra plant and grass growth will die during the summer months creating extra fuel for wildfires and the Los Angeles Fire Department wants to make sure everyone living in hillside areas is properly clearing brush near their homes. California also has a massive amount of dead trees from the recent drought so this combination is extremely combustible…

*Pricing your property for sale correctly at the outset is the key.  We can't over-emphasize this enough.  Proper marketing and pricing within the first 10-14 days can be the difference in $100K’s of thousands of dollars to the seller depending on price point. If a property doesn’t sell in the first few weeks in this fast moving world, the first question a buyer asks is “what is wrong with the property?”...not the thinking you want from a perspective buyer. 

Compared to 1985, today’s interest rates give buyer’s 122% more buying power!

Sometimes we forget just how important the impact of interest rates have on the value of your property and what a buyer can afford-- check out the info below...Where would property values be today if rates were more like 6.5%?

Americans are moving less than ever before and this declining mobility is a problem for Millenials…Here are the major contributing factors…

According to the latest data from the U.S. Census Bureau, the percentage of Americans moving over a one-year period fell to an all-time low of 11.2 percent last year. The drop is particularly prevalent among millennials. New survey data from the Pew Research Center found that 25- to 35-year-olds are relocating at much lower rates than the previous generation. Last year, 20 percent of millennials moved sometime in the last year. When older generations were the same age as millennials now, they moved at higher rates: Gen X was at 26 percent, as was the generation between 1925 and 1942.

This drop has many worried about the housing market and economic vitality as this change has been tough on young adults. The job market has improved since the recession and unemployment is down yet we aren’t seeing more Americans, especially Milennials, take the next step and purchase property.

Instead, they are stuck renting with upwards to 45% a renters income in Los Angeles going to rent for people between the ages of 22-34. They are unlikely to be able to save up enough to purchase a home and with more people renting, and more rental demand, property values rise. There is more incentive for property owners to be landlords with rental payments as percentage of U.S. GDP growth hitting an all-time high last month.

According to data from Moody’s Analytics, the average time someone stays in their home is up over 8.5 years, the longest amount of time since they began collecting this data. As little as 15 years ago, the median homeownership tenure was between 5-6.5 years. In another ten years, we could easily see homeownership average up over 11 years, especially with the “lock-in” effect with current homeowners being addicted to low monthly payments thanks to the record low interest rates we have enjoyed over the past five years. If rates rise a few percentage points, current owners have even less of an incentive to move when you figure in higher monthly payments and taxes. This “lock-in”, especially in areas like Los Angeles, is creating a vicious cycle of stagnation, less inventory, and higher prices.

The other issue that negatively impacts millennials ability to buy where the best jobs are is in the major cities and they are already dealing with population overflow, and the current residents don’t want new development and support laws that can’t accommodate new demand. Without new development, the supply is artificially constrained in hot housing markets, prices are bid up and only the rich elite can own property (see recent notes on a realtors scorecard blurb about the Westside rich playing a real monopoly game with homes). It is an increasingly winner-take all economy and the land-use restrictions help lock people out of opportunity. Between 2010 and 2014, 5% of metro areas accounted for half of the U.S. job growth.

These market realities make it extremely difficult for millennials, especially those without help from parents, to purchase a home. A homeowner’s net worth is approximately 45 times greater than that of renters and we need more people sharing in that expansion of wealth
Sources- LA Curbed, Census Bureau, Zillow, Housing Wire

Articles for your edification

Here are the five most unaffordable cities in the world- LA checks in at #4...Mexico City #1

LA’s is the most unaffordable housing market and it is not going to change anytime soon  

Neighborhood Spotlight- Westchester evolves into a techie utopia

Los Angeles County sets record with median home sale price surpassing last decade’s housing boom 

Los Angeles Rental Map- Where rents are highest and lowes for 1 bedroom apartments

Check out this interactive map provided by Zumper.

*Santa Monica checks in at $3,050...

Click to Enlarge

Mortgage rates hold steady at year to date lows

The 30-year fixed-rate mortgage dropped slightly to 3.9% for the week ending June 22, 2017. This is down from last week’s 3.91% but up from last year’s 3.56%.

The 15-year FRM also decreased, dropping from last week’s 3.18% to 3.17% this week. This is up from last year’s 2.83%.

The five-year Treasury-indexed hybrid adjustable-rate mortgage dropped slightly to 3.14%. This is down from last week’s 3.15% but up from last year’s 2.74%.

Source: Housing Wire

Sunday, May 14, 2017

A look at 1Q sales in Pacific Palisades (90272)

The Palisades market enjoyed a robust 1Q of 2017 compared to last year’s 1Q with overall sales increasing, and the most off-market activity of any area on the Westside.

The number of sales this year was 72 with a whopping 15 happening off-market while the 1Q of 2016 saw 58 sales with 7 happening off-market. Per MLS data, 10 homes sold for over the asking price while 11 sold over last year. You have to figure a fair amount of the off-market sales sold for a premium since the buyer had the privilege of purchasing the property without competition.

When reviewing the MLS sales individually, it was evident that quite a few sellers had an inflated view of their property value leading to some properties having to drastically reduce their price and selling for under market value despite this being a strong seller’s market.

Overall, it was a good quarter for the Palisades and one of the most sought after areas on the Westside will continue to command premium pricing throughout 2017.

Average sale amount/Average price per sq. ft.
2017: $4.213M--$1,312
2016: $3.466M--$1,429

Favorite sale of the quarter- 1102 Galloway Street- This newly constructed Cape Cod 6+8, 7,400 sq. ft. home on a 7,500 lot is a stunning union of modern craftsmanship and traditional architecture. They built the home with the finest tastes in mind including a huge basement with a lavish theatre and enormous wine cellar, elevator, roof-top deck and more all while being within walking distance to the new Caruso development. The property hit the market in November of last year for $5.985M and sold for $6M with an early January close.

Sneaky good buy- 333 N. Mount Holyoke- This spectacular 16K lot with amazing bluff views provided the buyer a rare opportunity to build an estate or build two homes since the lot has two parcel numbers. Unfortunately for the seller, they originally priced the home for $6.2M, and after being on and off the market for over a year while constantly reducing the price, the property finally sold for what we believe was a below market price of $4.3M in late January.

Mortgage rates increase slightly but hold steady around the 4% mark

click to enlarge
Mixed economic reports over the last few weeks have anchored the 30-year mortgage rate around the 4% mark.

The 30-year fixed rate mortgage (FRM) is at 4.05% which is up slightly from the 4.02% last week. Last year at this time, the rate was only 3.57%.

The 15-year FRM is 3.29%,
up from 3.27% last week and 2.81% last year.

The five-year Treasury-indexed hybrid adjustable rate mortgage is at 3.14%, up from 3.13% last week and 2.78% last year.

Source: Housing Wire

A look at 1Q sales in Mar Vista and Rancho Park/Cheviot (90066 and 90064)

 90066 update-
Sales volume was higher in the 1Q of 2017 (73) compared to 62 in the 1Q of 2016. Off-market activity increased with 10 sales compared to last year’s 1Q when 6 sales sold off-market. The majority of the off-market sale activity involved tear-down/land value sales where the seller typically sold the property to a developer which unfortunately for the seller without proper market knowledge or representation, sell it to them for under market. The amount of sales over the asking price remained steady with over 50% of the MLS market sales going for over the asking price (2017=33 vs. 2016=32).

The competition between those vying for a home in Mar Vista is fierce with the area extremely popular with the Silicon Beach crowd and young families priced out of Santa Monica and the Palisades.

Average sale amount/Average price per sq. ft. 
2017: $1.463M--$1,083 sq. ft.
2016: $1.347M--$1,026 sq. ft.

Top sale of the quarter- 11927 Tabor Street- The newly constructed 5+6. 4,045 sq. ft. home on a 8,800 lot was listed for $3.395M and they accepted an offer of $3.4M before the first open house. The sale closed on February 14th. It was a beautifully done modern home that is great for entertaining that flows into a spacious backyard featuring a pool. City light views from the master bedroom helped create a strong emotional bond with the buyers. The developer hit a financial home-run with this sale.

90064 update-

It was a strong 1Q with 62 sales recorded compared to just 42 in the 1Q of 2016. The number of homes that sold over asking per the MLS wasn’t as robust as last year (2017= 12 2016= 24) while the off-market activity jumped up to 12 sales compared to just 3 in the 1Q of 2016. It appears that most of the off-market activity involved tear-down lots.

Similar to the sister 90066 zip code, the areas that encompass this zip code are very popular and the demand continues to push sale prices higher, which should be the trend throughout the rest of the year.

Average sale amount/Average price per sq. ft.
2017: $1.896M--$1,104 sq. ft.
2016: $1.214M--$917 sq. ft.

The sale of the quarter- 10974 Ayres Ave- Situated right near the Westside Pavillion and all that Pico Blvd. has to offer, this newly constructed Cape Cod, 5+6, 4,050 sq. ft. on a 6,597 lot created quite the buzz when it hit the market in early January. The $2.495M list price was quickly bid up in a multiple offer situation featuring 5+ buyers and the ultimate sale price was $2.1718M. The sale closed on March 10th. It was a very well-designed home with high-end finishes a great indoor/outdoor flow to take advantage of the So Cal lifestyle.

Builder buys 18 acres near Rams Stadium, announces plans for 228 homes

Harridge Development group says it will build 228 detached condos in a gated community on the site at 333 North Prairie Avenue, just south of Florence Avenue. The new tract of homes which will be called Grace Park, supposedly will be move-in ready by the time the stadium is scheduled to open in 2019. Harridge is betting the new homes would appeal to, “Los Angeles County’s highly educated tech workers”.

Source- LA Curbed

Friday, May 5, 2017

A look at 1Q single-family sales North of Wilshire (90403) and South Santa Monica (90405)

90403 update-

Sales volume doubled compared to the 1Q of 2016 (12 vs. 6). However, the amount of homes that sold over asking dipped to 3 while 5 of the 6 sales in 2016 sold over the asking price. We did not find any evidence of off-market sales in the 1Q of 2016 or 2017.

Quick Analysis- The north of Wilshire market is in high demand especially with the improved walk-ability of Wilshire Blvd. The educated SM buyer knows they can get most of the 90402 perks for a discount. The majority of sales were for tear-down properties but most listing prices tended to be above market, curtailing over asking price sales.

Here is a look at the sales price data. Per earlier posts, we strongly recommend you don’t depend on quarterly sales price data to draw strong conclusions regarding market health. In fact, activity in the 90403 zip provides a great example of this. Due to the amount of tear-down sales, the average sale price has dropped considerably compared to last year yet the highest selling property (see below) sold way over the asking price and significantly above what it sold for in 2015.

Average sale amount/Average price per sq. ft.
2017: $2.362M -- $1,141
2016: $3.666M -- $2,331

906 Princeton Ave- 3+3, 2,400 sq. ft. main house, 1,200 sq. ft. guest house on an 8K lot was listed for $2.995M in late October of 2016. They immediately received multiple offers and the property sold for $3.325M, closing in January. The house had a Spanish charm mixed with a modern feel creating quite a bit of interest. The home in similar condition sold in 2015 for $2.675M after being listed for $2.475M… 

90405 update-

The 1Q of 2017 pretty much mirrored that of 2016 from a sales volume perspective (22 vs. 21) and off-market activity (2 vs. 2). However, the amount of homes that sold over asking practically doubled (11 vs. 6).

Quick analysis- As we mentioned in a previous blog post last month, Ocean Park and Sunset Park are extremely popular with buyers and builders which leads to a very competitive environment with tight inventory. We expect this to continue for at least 12-18 months. Quite a few tear-downs/small homes traded hands this quarter which brought the average sale price down.

Average sale amount/Average price per sq. ft.
2017: $1.604M -- $1,258
2016: $2.215M -- $1,591

Crazy sales of the quarter-

1101 Cedar Street- This 3+2, 1,833 sq. ft. home on a 6K lot was nicely updated but has a bit of a weird floorplan and minimal yard area. Despite being located on one of the busier streets in the area (11th), they received over 10 offers at the $1.595M list price and ended up selling to an all-cash buyer at $1.907M! The deal closed on March 28th.

1713 Pier Avenue- This 3+2, 1,720 sq. ft. home Spanish home on a 7K lot was listed for $1.549M and received over a dozen offers. The property was a major remodel candidate but the second floor did feature views and the backyard has a pool. The selling price was $400K over asking at $2.0M and it closed March 15th.

Please feel free to contact us directly if you require further information or would like a market analysis of your property.

Rates hover near 4% mark

click to enlarge
Mortgage rates ticked up slightly, but hovered near the 4% mark after the weak gross domestic product increase and the Federal Open Market Committee’s decision not to raise rates.

The 30-year fixed rate mortgage edged down slightly to 4.02% for the week ending May 4, 2017. This is down from last week’s4.03% but still up from last year’s 3.61%.

The 15-year FRM held steady at 3.27%, an increase from last year’s 2.86%.

The five-year Treasury-indexed hybrid adjustable-rate mortgage increased slightly, hitting 3.13%. This is up from last week’s 3.12%, but down from 2.8% last year.

Source: Housing Wire