Friday, April 28, 2017

A look at 1Q sales North of Montana - Santa Monica zip 90402

When looking at quarterly sales, many people make the mistake of looking at the sales price compared to previous quarters when examining the health of a market. The sample size is small enough that a few non-median sales on the high-end or low-end can artificially skew the numbers.

What we like to do is look at sales volume compared to the same quarter of the previous year along with how many single-family properties sold off-market and how many of the properties that were in the MLS sold at over the asking price. This information was collected via the MLS and title report records.

Overall, the numbers show a sizable drop in the amount of sales (30-2016 vs. 22-2017) in the 90402 zip thanks to disappearing inventory. Only two homes sold outside of the MLS compared to 11 in 2016. Of the 20 properties in the MLS, 7 sold at or over the asking price this year while 11 of the 19 listed in the MLS in 2016 sold at or over.

Quick Analysis- The most prestigious zip code in Santa Monica is still highly desired but the sellers are being a little more aggressive with listing prices and the market above $4.5M isn’t as hot as the lower price ranges. However, sales under $4M are hopping. Check out these two examples with a little inside dirt…

454 14th street- This 3+2, 1,972 sq. ft. home on a 7,518 sq. ft. lot sold was basically marketed as a tear down at an auction price of $2.949M. A few realtors and neighbors thought it would go out for around $3.250M but of the double digit offers, only about 7 were taken seriously and countered. In particular, one very interested party really wanted the home…the neighbor…who snagged it for $3.6M! The deal closed on March 3rd. Though this was a hefty price tag, it was a smart investment. Land is king on the Westside and large lots are few and far between in the 90402 zip and they typically trade at super premium pricing.

335 16th street- Another tear down opportunity, this 3+1, 1,358 sq. ft. home on a 7,512 lot was also listed at $2.995M and fed off the frenzy of the 14th street sale. Multiple bidders weren’t even allowed in the property. Listed a month later then 454 14th, this property sold to an all-cash buyer in two weeks for $3.450M. The closing date was March 20th. It will be interesting to see if the market truly holds around $3.5M for teardowns on 7,500 sq. ft. lots or if these were anomalies…if not, the Gillette Regent tear down lots which are 8,900 sq. ft. would be around a $4M value

Here is a quick look at the Average sale amount and the average price per square foot of the properties sold.

Average sale amount/Average price per sq. ft. 
2017: $4.452M -- $2,168
2016: $4.533M-- $1,371

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

Mortgage experts agree: There is no housing bubble...slow-steady growth await

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According to an article by Brena Swanson of HousingWire, three experts in the mortgage industry (Darius Bozorgi, Veros CEO, Mike Fratantoni, Mortgage Bankers Association chief economist and Douglas Duncan, Fannie Mae chief economist), all agree they don’t see a housing bubble on the horizon. They all took part in a HousingWire webinar this past week.

Check out the article: Mortgage experts agree- There is no housing bubble

Writing love letters and bidding $100K over asking - the reality of buying in Southern California

The LA Times just posted an article outlining the craziness we have seen over the past two months across Southern California. With some of the best employment numbers Los Angeles has seen in decades, tight inventory and the fear of eventual rising mortgage rates, the pressure is on especially when it comes to homes worth under $1M.

Check it out: Writing love letters and bidding $100K over asking- Buying in Southern California is Insane! 

Friday, April 21, 2017

Partners Trust 2017 Q1 Los Angeles market report
From the Westside to the San Fernando Valley and Malibu to the South Bay, this report provides an extensive look at sales data for the 1st quarter of 2017. We will be providing an in-depth look at the numbers and specific sales for certain Westside zip codes in the coming weeks. 

Mortgage rates drop below 4%

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Mortgage rates dropped below the psychologically important 4% mark, hitting the lowest point since November of last year.

The 30-year fixed-rate mortgage dropped to 3.97% for the week ending April 20, 2017. This is down from last week’s 4.08% but still up from last year’s 3.59%.

The 15-year FRM dropped to 3.23%, down from last week’s 3.34% but up from last year when it averaged 2.85%.

Weak economic data and growing international tensions are driving investors out of riskier sectors and into Treasury securities thus causing a shift in investment sentiment which has propelled rates lower.

The drop in rates in an environment where rates are expected to rise has increased pressure on serious buyers to find a home which gives more leverage to sellers. 

Source- Housing Wire & Freddie Mac Chief Economist Sean Becketti

Los Angeles is making it harder for landlords to take rent controlled units off the market

The Los Angeles City Council unanimously approved a new set of regulations on Wednesday to deter owners of rent-controlled building from taking their units off the market.

The new rules will require landlords who want to build at a site, make an equal number, or 20 percent of the new units affordable-whichever is larger.

Landlords will also have to pay for the relocation of tenants evicted under the Ellis Act and file annual reports with the city on the status of the units.

Last year, close to 1,400 units were taken off the rental market citywide due to Ellis Act evictions which was an increase of over 25% since 2015.

 Here is a more in-depth article via LA Curbed: LA is making it harder for landlords to take rent controlled units off the market 

Homes are selling in 30 days or less

According to the California Association of Realtors, the median amount of time homes spent on the market before finding a buyer dropped below 30 days- from 38.8 in February and 43.2 last March. That’s the shortest amount of time on the market in over a year for the Los Angeles area. 

Los Angeles emerges as the top city for US international investment

A recent survey has divulged that the greater Los Angeles area is the #1 locale in North America for world citizens seeking new property in 2017. The Los Angeles Times accentuates this real estate phenomenon in an article highlighting the allure of the City of Angels.  Additionally, Knight Frank’s “Wealth Report” of 2017, which offers a global perspective on wealth and investment opportunities and strategies, has ranked Los Angeles as #5 out of 40 cities with the most formidable urban power in the world. It is widely acknowledged among Los Angeles real estate insiders that the market has not yet reached its paramount potential.

While San Francisco was ranked number one in the first CBRE Global Investor Intentions Survey, Los Angeles has increasingly become a safe bet. “Los Angeles is a safe haven for investment these days,” says Dario Svidler of Partners Trust Commercial. “Jobs, desirability, stability and lack of home affordability combine to make Los Angeles a steady growth market with little to no downside.”

The 2017 global investor assessment maintains that office spaces are the preferred type of real estate to purchase, while warehouses and multifamily residential buildings come in as second and third. Those who participated in this international survey were insurance companies, sovereign wealth funds, operators of pension and investment fund managers.

It is likely that the price of real estate in Los Angeles will increase as does demand. Several momentous deals have occurred in the last year, including Douglas Emmett Inc. and the Qatar Investment Authority’s $1.3 billion purchase of four Westwood office buildings and Boston Properties Inc.’s $511 million acquisition of the Colorado Center office complex in Santa Monica. These transactions were two of the largest deals made in the U.S. this last year.

While Los Angeles’ Westside is the epicenter for global investments, Downtown LA is quickly becoming another popular area among U.S., Chinese, and Canadian developers. The building boom in Downtown is the biggest we have seen since the 1920’s with some commercial brokers a little concerned it might be overkill but with the demand for housing in Los Angeles at an all-time high, the explosion of units that will come available should be absorbed.

Furthermore, the “Wealth Report” highlights Hancock Park as one of five areas throughout the world with the greatest real estate value. Thus, the Los Angeles real estate market is rapidly gaining traction and garnering attention from all corners of the globe.

“L.A. has been waiting for this moment for a long time,” says Lew Horne, president of SoCal and Hawaii’s CBRE Group Inc.

Source- Partners Trust Blog& LA Times

Sunday, April 9, 2017

Why Ocean Park and Sunset Park are exploding in popularity

The north Santa Monica zip codes of 90401, 90402 and 90403 will always be the most coveted when it comes to Santa Monica real estate, but the gap is beginning to close when you compare them to the 90405 areas of Sunset and Ocean Park. A statement like that would have been blasphemous as little as ten years ago but with older homes in the area beginning to transform into homes you used to see only built north of Wilshire, combined with fantastic walkability and a more centralized location to all of what LA has to offer, this trend will inevitably continue.  We have seen a hand-ful  of new construction sell for over $3.5M and poised to break the $4M mark.

More reasons to be bullish—*The Santa Monica Airport is due to shorten the runway later this year which will eliminate some of the nosier jets in the short-term and in the long-term the airport is set to fully shut down in 12 years if not sooner. *The city has already claimed 12 acres of the airport to expand the Airport Park (drawing of park expansion below). *The phenomenal restaurants on Ocean Park Blvd. are as popular as ever and the Sunset Park area of Pico Blvd. continues to improve with popular restaurants and bars.

SM Airport Park Expansion

Saturday, April 8, 2017

Playa Del Rey- A sleeping giant that's received its wake-up call

We have been very bullish on Playa Del Rey for the past few years as it offers a bargain for beach living when compared to locales like Venice and Santa Monica. The LA Times is now feeling the love as well. Check out this recent article- Playa Del Rey is a sleeping GIANT.

 Though you do have to deal with LAX noise, the sleepy beach community offers a centralized location to some of the best the Westside and South Bay has to offer while also being in an ideal position to benefit from the resurgence of the areas restaurant/shopping scene which still has plenty of room for improvement.

Articles for your edification- what $2600 rents you on the Westside; Cali not in a housing bubble and more

Property Radar: No, California is not in a housing bubble – Home sales fall to lowest levels since 2008

What $2,600 rents you on the Westside 

Mapping the development around the newly expanded Metro Line 

New Apartment Center near Howard Hughes Center in Westchester  to be developed

Why California stinks for first-time homebuyers

Mortgage rates just above 2017 lows

Mortgage rates dropped for the third consecutive week to just above 2017’s low. The 30-year fixed-rate mortgage dropped to 4.10% for the week ending April 6, 2017.

This is down from last week’s 4.14% but still up from last year’s 3.59%. Similarly, the 15-year FRM also dropped to 3.36%, down from last week’s 3.39% but still up from last year’s 2.88%.

The five-year Treasury-indexed hybrid adjustable-rate mortgage increased slightly to 3.19%. This is up from last week’s 3.18% and from last year’s 2.82%.

Source: Housing Wire