Q: What’s Going on in Our Market?

Here is what has been happening in our housing market lately.

What are the latest numbers from our local market? Despite all the uncertainty in the world right now, there is some positive news when it comes to real estate:

Right now, our area’s single-family home prices are up by an average of 19.5% year over year. Townhouse and condo prices rose by 12.7% over the last year. These are incredible gains.

Interest rates remain steady between 2.85% and 3% depending on your credit, what kind of loan you’re getting, and the down payment.

In August, we had 272 pending sales and 600 active listings in the Long Beach area alone, which is two months of supply. Typically, August and September are months where we’ve had a lot of leftover inventory from the summer, but since we had slower months during the usual beginning of the selling season, we’re seeing that carry through into the fall. We also usually have somewhere between 700 and 800 homes on the market during this time, which shows us that inventory is very low.

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All in all, our market is very strong.

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The average days on market is only nine days. That means if a property has been on the market for much more than a week, the seller was maybe a little too aggressive with their pricing and should come down a bit. Additionally, 377 new listings came on the market last month and in the last two weeks alone, 103 new listings came onto it. Of those, 55 went pending.

All in all, our market is very strong. If you’re thinking about making a move, now is a great time to do so.

Feel free to reach out to us with any questions you have! We’d love to help you.

Q: How Is Our Market These Days?

These are the essential stats for our current real estate market.

Today I wanted to share a brief market update since there are so many things happening in the world right now and people are concerned with how the real estate market is being affected. One question I receive frequently is whether it’s currently a good time to buy or sell. In June, we’ve been seeing signs that people are ready to get back out there and either buy or sell a home.

Pre-pandemic, we would generally see, on average, about 300 sales per month in our area. In the last couple of months, we were only seeing about half that number of sales. However, we’ve been seeing more and more closings over the last 30 days.

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    If you’re considering selling your home, it’s a wonderful time to do so.

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The real difference in the past month has been the 349 pending sales. So in the next 30 days, we’ll see that number reflected in the number of closed sales. The most crucial statistic is that there are currently only 447 houses active on the market, which means if no other properties are listed, our inventory will be gone in about 30 days.

So, if you’re considering selling your home, it’s a wonderful time to do so due to the low inventory. If you’re thinking about buying a house, it’s also an excellent time because interest rates are extremely low. However, be prepared to compete over the property you want to buy.

If you have questions about whether now is the right time for you to make a move or anything else concerning real estate, give us a call or send an email. We would love to help you.

A Breakdown of Our Market as We Close Out 2018

As we close out 2018, we’re shifting into a more normal market, which is good news for buyers. 

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As we near the end of 2018, what’s the status of our Southern California market? The reality is that we’re at the end of an eight-year, upward-trending cycle. What happens at the end of every cycle like this is a bit of a market decline, and we’re beginning to see the start of this. The seasonality of the market is also causing things to slow down a bit. By no means do we think we’re headed for another crash like what we saw in 2008, though, so there’s no need to worry about that. Market conditions are completely different from the ones that preceded the 2008 crash. Here are some of the latest stats from our entire MLS that illustrate the change taking place:

• Our average original list-to-sale price ratio is 97%.
• Our average sale price peaked back in May at $771,000, but now it’s dropped 5% to $733,000.
• At the end of 2017, there were 46,631 homes on the market, and last month there were 63,596.
• During December 2017, there were 14,215 pending sales, but last month there were only 12,686 pending sales—a 28% drop.
• There were 19,058 closed sales during December 2017, but only 17,253 last month, which is an 11% decrease.
• Our average days on market has increased year over year from 23 days to 43 days.
• Our year-over-year average list-to-sale price ratio has stayed roughly the same: 99%.

If your home isn’t priced correctly, it won’t attract many showings or offers.

The real takeaway from these stats is that if your home isn’t priced correctly, it won’t attract many showings or offers. In general, they also indicate that we’re moving into a more normal market. Inventory is growing, which means buyers have more choices, and whenever this happens, prices naturally either flatten or decline. In a situation like this, sellers will price their homes competitively or offer incentives in order to get their homes sold. New builders are also more apt to offer competitive rates and more incentives. Normal homes are also more likely to stay on the market longer under these circumstances, which is why it’s all the more important to price your home correctly and work with a great real estate agent. In a normal market, there’s less profit appreciation. We’ve been very lucky in the Southern California region in that we’ve seen double-digit appreciation over the past decade, but that’s slowed down to a rate of 3% to 5%. Interest rates have risen over the past year, and that’s something that’s affected both buyers and sellers. Lastly, it’s important to note that although we’re shifting into a more normal market, we’re still not quite a buyer’s market yet. If you have any more questions about our market or you’re thinking of buying or selling a home soon, feel free to call or email me. I’d be happy to help you.

Is Our Market Beginning to Shift?

As we head toward the latter part of 2018, our market is beginning to shift. Here’s what I mean. 

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What’s the latest news from our Southern California market? Many economic observers are pointing to 2018 as the final period of a market price growth. We’ve had an upward-trending market for the last eight years, and typical market cycles last anywhere from five to seven years. Between these cycles, there’s usually an 18-to-24 month market correction. Rising prices and interest rates coupled with salary stagnation and a generational delay of people wanting to become homeowners are creating an environment of declining market sales. The latest year-over-year statistics prove this trend. New listings are up 0.8% for single-family homes and 7.5% for townhomes and condos, but pending sales have decreased 47% for single-family homes and 56% for townhomes and condos. The median sales price for single-family homes has risen to $715,000, while the median sales price for townhomes and condos has risen to $460,000. Our month’s supply of inventory, meanwhile, increased 25% for single-family homes and 73.7% for townhomes and condos. This is a significant change because it means buyers have a lot more homes to choose from and sellers have to be more competitive in terms of pricing their home and preparing it for the market.

Rising prices and interest rates coupled with salary stagnation and a generational delay of people wanting to become homeowners are creating an environment of declining market sales.

In our local area, there are 28,000 total homes for sale in our entire MLS, which is down 7.5% compared to last year. The number of active listings has risen 3.2%, which doesn’t seem like a lot until you consider how far our pending sales and number of closings have dropped—pending sales are down 23% and closed sales are down 17.7%. Our average days on market has risen 21% to 23 days. Earlier in the year, properties were selling right away, but that’s not the case right now. Inventory has risen 6.5% to a 3.5-month supply. Generally speaking, when our supply of homes is over six months, we’re considered to be in a buyer’s market. When our supply is between three and six months, we’re considered to be in a balanced market. Any supply level below three months, then, is considered a seller’s market. This rise in inventory means we’re moving toward a more balanced market. Lastly, the average combined sale price for single-family homes, condos, and townhomes in our MLS is $550,000, which is up 4% compared to last year, but down from our June high of $564,000. What’s in store for the future? Obviously, we expect interest rates to go up this year and another four times next year, which should put additional downward pressure on prices because of the affordability issue. However, it’s still a great time to buy a property because you can lock in a low interest rate over time. If you’re thinking of waiting a year or two to buy or sell, that might not be the best idea, but if you’re trading your equity from one home to another or you’re looking to buy your first home, it’s still a great time. If you have any other questions about our market or you’re thinking of buying or selling a home, don’t hesitate to reach out to me. I’d be happy to help you.

How Market Prices Have Changed From 2012 to Now

Since 2012, home prices in L.A. County have gone up significantly. Rental rates are on the rise, too.

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Where are we with home prices, and what’s happening with rents and investment properties? If you were to buy a house back in 2012, the average sale price in L.A. County was $290,000. At the end of 2017, the average sale price was almost $577,000. That’s a 50% increase in prices, which is a huge gain. Nationwide, rents have gone up about 20% since 2012. That is a pretty big increase. In L.A. County alone, rent prices went up almost 8% over the last year. If you are renting, it may be a good idea to sit down with your tax adviser and look at your options for buying a place, rather than dealing with your rents rising aggressively year after year.

Home prices in L.A. County have increased by 50% since 2012.

If you own a home, you may be surprised by how much your home has gone up in value. You may be able to refinance or pull money out of your home to make some upgrades. You can also use your equity to move from a smaller home into a bigger home. If you do own a rental property, I’m sure you’ve made some great strides in investment. If you haven’t raised your rents over the last few years, it may be time to evaluate where you are in the market. There are many people who leave rents where they are because they love their tenants. However, if you’re not keeping up with market trends, that can actually hurt the value of the property. If you have any questions or want to evaluate where your property might be, just give me a call or send me an email. I would be happy to help you!

Does the New Tax Law Impact Your 2018 Real Estate Holdings?

How does the new tax law impact you when it comes to real estate? I’ll cover a few important changes today.

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What has changed in the tax law that can affect you as far as real estate? There are a lot of changes happening. This is one of the biggest overhauls of the tax code, so I’m just going to focus on the changes that will impact real estate. A lot of people have heard that the standard deduction has changed. For single people, it’s now $12,000; for a married couple, it’s $24,000. That can affect people as far as real estate goes because depending on your other deductions, you may not need to itemize deductions anymore. It depends on how many deductions you have. The other thing that has changed is the mortgage interest deduction. There is now a cap of $750,000. This is only for new mortgages. If you already have a mortgage over that amount, it won’t change. That is only for new mortgages coming up in 2018. If you do have a second home and write-off the mortgage interest, the good news is that that write off hasn’t changed. The cap does remain at $1 million if you already have your second home. If you are buying a new second home, the cap remains at $750,000. Home equity lines of credit no longer count as deductions, which is a huge change. The only exception is if you are making a major improvement to the home.

The mortgage interest deduction now has a cap of $750,000.

What happened to capital gains tax? They were talking about requiring you to live in the home for five out of the last eight years. The good news is that they left this rule the same. If you live in a home for two years, you can still take a primary residence exemption if you move after those two years. If you’ve rented out a property, you want to make sure you plan on selling it before three years have passed so you don’t lose that deduction, which is $250,000 for a single person or $500,000 for a married couple. Another thing that has changed is that corporate taxes have been lowered. If you own investment properties, you may want to talk to your accountant if you are currently writing off your mortgage interest or other expenses as a schedule C item on your tax returns. See if it is worthwhile to put that property in an LLC or S Corp. See what makes sense for you. You may get more write-offs if you change the status of how you are holding that property. There is now a cap on your state and local property tax write-offs at $10,000. If you are taking more deductions than that, you are not going to be able to take more than $10,000 under this new tax bill. Finally, moving expense deductions have been eliminated for everyone but military personnel. If you are going to be moved for work and they’re not giving you a relocation package, it’s important to know that the moving expense deduction has gone away. If you have any other questions about this or other real estate topics, just give me a call or send me an email. I would be happy to help you.

Sellers Are Cashing in on This Market

We’ve got a hot seller’s market out there. Here’s what you should know if you plan on selling.

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The Southern California market has been hot since late February, and I want to give you a little snapshot of what it’s looking like today. We still have very low inventory. At the same time, we continue to have low interest rates. This means that there are a lot of buyers out there looking to buy a home and lock in a low interest rate, but there aren’t many homes for them to look at. If you’ve been thinking of selling and moving up into a bigger home or nicer neighborhood, these conditions present a great opportunity for you to do so. Let’s say you have a home that is worth $500,000. If you buy a new home that costs $650,000, you can take advantage of the equity you have in your current home. You may have a few hundred thousand dollars of equity, depending on when you purchased. You can carry that sum right over into your down payment if you wish and lock in that low interest rate at the same time.

Rates are still very low, historically speaking.

Rates have gone up considerably since November and they are expected to go up again soon, but keep in mind that they are still historically low right now in the mid 4% range. If they happen to go up a percentage point or two, it’s going to make monthly payments higher and reduce buying power greatly. If you or someone you know is interested in buying or selling in this hot market, don’t hesitate to give us a call or send us an email. We look forward to hearing from you.

How to Take Advantage of the Southern California Real Estate Market

The real estate market in Southern California is buzzing along. We’re seeing a very dynamic market that is favoring sellers, but buyers can still capitalize because of certain conditions.

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Overall, we’re seeing a seller’s market in North Orange County and South LA County. However, there are some indications that this could shift soon. Properties that are priced well and in good condition are getting offers right away.

If homes are not priced correctly, we’re seeing them sit longer on the market, and this means that their sales prices are falling. The longer a home sits on the market, the less it will sell for.

The good news for homeowners is that home values are continuing to rise. Although appreciation has slowed, inventory is low so you will face little competition and sell quickly. In fact, the average days on market is at 40 right now, and that’s a fairly quick amount of time to sell a home.

Sellers are also getting 98% of their asking price, and that includes all price ranges. Homes in the lower price brackets are extremely hot right now. We have a lot of people wanting to downsize, and we also have a lot of first-time buyers looking to buy starter homes.

If you’d like more information about a specific neighborhood or price point, please don’t hesitate to contact me. I look forward to hearing from you!

How Much Are Interest Rates Going to Rise By?

Looking to buy or sell a home in South LA County or North Orange County? Click here to perform a full home search, or if you're thinking of selling your home, click here for a FREE Home Price  Evaluation so you know what buyers will pay for your home in today's market. You may also call us at (562) 316-2915 for a FREE home buying or selling

Today I’m here to give you the latest market update for North Orange County and South LA County. Our team has recently completed our move to Century 21 Masters and are finally settled into our new office. We are ready to service all of your real estate needs.

Recently, we had a lot of volatility in the stock market and there has been much speculation about interest rates and when they will rise. From what we know, the rise could happen as early as this September, although the recent volatility may cause them to wait a little bit longer.

In the end, rates are probably not going to go up a ton, maybe by 1% or so. However, this makes a huge difference for buyers. A 1% increase in interest rates can have up to a 10% effect on your purchasing power. If you or someone you know has been thinking about buying a home, or selling their current home and trading up into a bigger one, now is a great time to do both of those things.

If you have any question for us, feel free to give us a call or send us an email. We look forward to hearing from you soon!

North Orange County and South LA Real Estate Market Update

Looking to buy or sell a home in South LA County or North Orange County? Click here to perform a full home search, or if you're thinking of selling your home, click here for a FREE Home Price  Evaluation so you know what buyers will pay for your home in today's market. You may also call us at (562) 316-2915 for a FREE home buying or selling consultation to answer any of your real estate questions.

North Orange County and South LA Real Estate Market Update

 

You may be hearing some different things about the real estate market here in LA and North Orange County, so I thought this would be a good opportunity to update you on your local real estate market.

• We're currently experiencing a lower inventory of homes. This means that we have a lot of buyer demand, but not a lot of homes on the market.
• Last month my team put 14 clients into Escrow, and a majority of those homes had multiple offers over the listing price.
• Now is a great time to sell your home and take advantage of buyer demand. Our marketing techniques will make sure that no money is left in your pocket.
• For buyers in North Orange County, you need to have a knowledgeable agent who knows what it takes to get your offer accepted. I know there have been a lot of rumors saying that the market has peaked, but I think we just haven't seen the amount of appreciation that we expected and also, the inventory hasn't grown extensively.
• On the flip-side of the this, the California Association of Realtors recently released some statistics saying that a few years ago before the market crashed, the average buyer was only putting 5% down. In today's market, the average buyer is putting 30% down. This stabilizes our market more than having homes with very minimal amounts of equity in them.

So, if you know anyone in North Orange County or Southern Los Angeles that is looking to buy or sell, please put them into contact with us because we would be more than happy to help them out.

Recap of 2013 & Predictions for 2014 for South Los Angeles and North Orange Counties

Looking to buy or sell a home in Long Beach, California? Click here to perform a full home search, or if you're thinking of selling your home, click here for a FREE Home Price  Evaluation so you know what buyers will pay for your home in today's market. You may also call us at (562) 316-2915 for a FREE home buying or selling consultation to answer any of your real estate questions.

A lot of clients have been asking me about what they can expect in 2014 for South Los Angeles and North Orange County Real Estate, and in order to forecast correctly, I'm going to do a short recap of 2013.

What we Saw in 2013
Prices rose significantly last year. Inventory was also so low that homes were receiving multiple offers and consistently selling above listing prices. Buyers were removing appraisal contingencies and anything else they could do just so they could buy a home. When Interest Rates rose midway through 2013, it cooled down the market somewhat. When cost went up as interest rates rose, demand slowed and people were much more conservative in pricing their properties.

What to Expect in 2014
Most experts predict to see a much more conservative appreciation in 2014 because of rising interest rates (although we're still experiencing the lowest rates in nearly 50 years). A low amount of inventory will help to raise prices, but expect prices to cool down overall.

If you know someone who wants to move up into a larger home, now would be a good time to do so with interest and prices looking to take a hike in the near future. The same goes for first-time home buyers - the time to buy is now.

You can contact me at (562) 316-2915 or email me at melinda.elmer@gmail.com

Thanks for watching!