The 2008 financial crisis brought the global economy to its knees and sent American home prices into freefall. For anyone who managed to hang on to their job, savings, and credit score, the aftermath of the crisis was a prime opportunity to buy a house at a bargain price.
The Great Recession is the only economic downturn millennials have lived through as adults, so, naturally, they might think that the next recession—which more and more economists believe will hit by 2021—will present a chance for many millennials to finally join the ranks of homeownership.
It doesn’t bring me joy to report that this is unlikely to be the case.
The last recession was an anomaly in more ways than one, and its effect on the housing market is the biggest outlier relative to other recessions. The 2008 recession didn’t cause the housing market to go into freefall. The housing market going into freefall caused the recession.
Home prices in LA County surged to $635,000 in July, shattering an all-time record for the second month in a row.
The county’s median sale price rose 2.8 percent since June and a full 5 percent since July 2018, a new report from real estate data tracker CoreLogic shows. That was the largest yearly gain since November.
CoreLogic analyst Andrew LePage says in a report that the bump in prices may be due in part to falling mortgage interest rates, which have reduced monthly costs for homebuyers who aren’t making all-cash purchases.
Across all of Southern California, sale prices rose 2 percent year over year. But LePage points out that average mortgage payments dropped 7 percent in the same time period due to declining interest rates.
In Los Angeles, home price increases continue to be accompanied by sluggish sales. Last month, 6,965 homes sold countywide—exactly one fewer than in July 2018, despite the fact that this year the month had one additional business day for sales to process.
Across all of Southern California, sales during the month were 2.9 percent below average (excluding the bubble years leading up to the 2008 Great Recession).
In LA County, median sale prices eclipsed the $600,000 mark for the first time in May 2018. LePage says that how high home values grow will probably be determined by a combination of “mortgage rates, buyer confidence, job and income growth, and inventory levels.”
Though many economists expected mortgage interest rates to climb in 2019, they’ve instead dropped, creating a lending environment favorable to buyers—but also encouraging price growth. LA’s median sale price in July was a full $17,000 higher than a month before.
Photo Credit: abc7
Builders in Los Angeles County are reported to be on track to completing nearly 10,000 new homes before the end of the year. The 9,400 units of housing on the way in the second half of 2019 is higher than the number of units constructed in all of 2018—or 2017.
Most economists agree that building new housing is a key part of addressing steep rental prices and home costs throughout the state. Gov. Gavin Newsom pledged last year to oversee construction of 3.5 million new homes by 2025. If distributed according to population, that would leave LA County responsible for contributing nearly 900,000 residences to that total.
Hispanics are posting the largest homeownership gains of any ethnic group, new Census Bureau data shows. The wave of growth is a far cry from four years ago when the Hispanic homeownership rate reached a 50-year low. Since then, ownership among this segment has risen 3.3 percentage points, Census Bureau data shows.
To be clear, whites still have higher levels of overall homeownership. The Hispanic homeownership rate is at 47.4%, which still remains well-below the 73% rate for non-Hispanic whites in the first quarter. But it’s the growth in ownership rates among Hispanics that housing analysts are predicting could have a significant impact on the housing market over the next decade.
Since homeowners and renters require employment to make housing payments (with rare exception), the jobs recovery is key to the housing recovery. Over 4.5 million people are employed in Los Angeles County as of March 2019. This is 222,200 more jobs than at the 2007 peak.
Los Angeles’ jobs recovery rate has slightly trailed the statewide employment recovery in recent years and has begun to slow. From March 2018 to March 2019, the number of jobs grew by a meager 1.3%. This is roughly the same level of job growth experienced statewide.
No, The Fed Didn't Cut Mortgage Rates last week!
Mortgage rates were mostly unchanged, which will come as a surprise to scores of consumers who mistakenly believe the Fed's 0.25% rate cut equates to a 0.25% drop in rates. The Fed does not set mortgage rates!
Actually, to be fair, the Fed Funds Rate (that thing everyone was talking about last week) is in fact the basis for Home Equity Lines of Credit (HELOCs) in many cases, but that's it as far as the mortgage world is concerned. The most common mortgages are determined by other parts of the financial market.
New home-sharing regulations are in place for the city of Los Angeles, changing the way hosts from Airbnb and other rental platforms can book vacation stays and short-term rentals.
Starting July 1, 2019, hosts must register and pay an $89 fee to the city. Hosts can only register one property with the city at a time and the property must be their primary residence (where they live at least six months out of the year). Rentals are limited to a 120-day annual cap, and rent-stabilized units are no longer allowed to be used for home-sharing—even if the host owns the unit.
The city’s planning department has put together a detailed FAQ on the home-sharing ordinance with more information on how to register and pay fees before enforcement of the regulations begin on November 1, 2019.
Alternative Title Everyone Knows a Realtor
As a home owner or home buyer, there are a lot of real estate agents and brokers out there to pick from but precious few have worked in the business as consistently and diligently as I have. Let me explain.
As home sales volume declines, "part time agents" continue to go back into hiding with some expected to “pop up” again once the market returns to full strength.
There is a direct correlation between home sales volume** and agent licensing with licensing movement changing 6-12 months after a consistent change in home sales volume.
Today’s decreased license renewal rate is directly related to the flat-to-down home sales volume experienced since 2016 with 79.3% renewing in 2018 versus 81.4% the year prior 2017. Additionally new sales agents have declined about 10% from 2017 to 2018.
The next substantial increase in sales agents won’t occur until the next boom in real estate sales volume...
Temps start to soar when days start to get longer. Stop your energy and water bills from soaring, too, with these summer home maintenance tips:
#1 Stop Buying Cheap Tools
Repairs and home improvement projects go much smoother with quality tools — and you'll like the results more. Take advantage of sales to buy quality brands for less or buy used tools at a local auction or estate sale. Then ditch those make-do tools that have always frustrated you.
#2 Stop Heat-Drying Your Dishes
You're already paying extra to pump cool air into your house. Don't pay even more to use the heat-dry setting on your dishwasher. It can double your electrical load. Instead, open the dishwasher immediately after it runs, and pull out the racks. The evaporating steam will speed-dry the dishes. Some dishwashers have an air-dry button that will automatically prevent heat drying.
#3 Stop Watering Your Lawn So Much
Lawns are a bit picky about their drinking schedule. Rather than daily soaks, they prefer deep, infrequent watering, which promotes deeper root growth. In general, lawns need about 1 inch of water per week. In a well-watered lawn, you can stick a screwdriver 6 to 8 inches into the dirt without resistance.
#4 Stop Putting Bricks in the Toilet
Summer may be water-conscientiousness season but putting a brick in your toilet is the wrong means to that well-meaning end. Brick crumbles when exposed to water for too long. Instead, switch to a high-efficiency toilet. At $100-$300 per toilet, the $230 annual water savings is worth it. Or just swap your brick with a half-gallon milk jug filled with sand.
Source: CAR Client Direct
One of the most earthquake-prone urban areas in the nation, Los Angeles is likely to be rocked by a major temblor within the next few decades. As nerve-wracking as it may be, preparing for the big one is part of living in LA.
According to the United States Geological Survey, there’s a 60 percent chance an earthquake measuring in at magnitude 6.7 or higher will strike the Los Angeles area in the next 30 years; there’s also a nearly one-in-three chance that earthquake will measure in at 7.5 on the Richter scale.
Given that, it’s good to know what you’re up against.
WASHINGTON—Sales of previously owned homes rose in May, a sign that falling mortgage rates could be nudging the housing market toward a modest spring performance after a sluggish start to this prime selling season.
Sales rose 2.5% in May from the prior month to a seasonally adjusted annual rate of 5.34 million, the National Association of Realtors said Friday.
The spring is crucial to the housing market because roughly 40% of the year’s sales take place in March through June. May was the first month this spring when sales rose from the prior month, but compared with a year earlier sales in May still declined 1.1%
Picture above: one of my many satisfied customers, Thom Wilson!
What's the secret of selling your home fast, and for top dollar? Keeping your house looking fantastic, of course! To achieve that, most successful home sellers have certain key habits in common, whether it's clearing out their mail pile every day or doing a monthly deep clean.
So if you've resolved to sell your home this year, listen up: Here are the best habits you can adopt to proactively maintain your home all the way to a successful sale.
With some of the nation’s highest median home prices—and more than a few of its priciest individual homes—Los Angeles property owners collectively possess a massive pool of real estate equity worth an astonishing $760 billion.
That’s according to a new report from real estate analyst Black Knight. The study shows that Los Angeles leads the nation in “tappable equity,” that is, the value of homes that owners can access by selling or refinancing.
According to the California Association of Realtors, California home sales bounced back in February 2019, after hitting the lowest sales level in more than 10 years the previous month. February's annual sales level was the highest in six months, and the monthly growth in sales was the highest since January 2011.
Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 399,080 units in February, according to information collected by C.A.R.
The statewide annualized sales figure represents what would be the total number of homes sold during 2019 if sales maintained the February pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.
Plenty of people find themselves buying and selling a home simultaneously, but knowing that others have gone through the same stress does not make it one bit easier. After all, the stakes are so high: If your buyer backs out, you don't have any cash to land your next home! Or if your own purchase falls through but your current home sells, you're homeless!
It's all like walking across the Grand Canyon on a tightrope: The tiniest thing goes wrong, and you fall.
It turns out that most buying-and-selling mistakes are easily avoidable—or at least predictable. Follow these eight tips to enter escrow with eyes wide open.
1. Waiting too long to prep your home for selling
Despite a real estate slowdown gripping the nation, this year's housing market is expected to be busier than economists originally predicted late last year. That means more home sales are on the way.
The anticipated activity is due to lower mortgage rates, which make homes more affordable for buyers. The economists expected rates to climb to 5.5% in 2019, but instead they have hovered around 4%. (They were 4.17% on 30-year, fixed-rate mortgages as of April 18, according to Freddie Mac data.) Economists say rates are now likely to rise a little to 4.5%, still well below what buyers were dreading.
However, it'll be nothing like the feeding frenzy of recent years.
As I always mention in my seminars, what's happening in your local real estate market is based on location (including the micro concerning neighborhoods) and price point/TIERS. Although this graph could be considered "old" since it only goes up to Jan 2019, it is still a good indication of the market overall and where it may be headed.
**Price Index: Percentage number that shows the extent to which a price (or a 'basket' of prices) has changed over a period (month, quarter, year) as compared with the price(s) in a certain year (base year) taken as a standard. See also consumer price index.
** Source: businessdictionary.com
After years of steady escalation, home prices in Los Angeles County are tapering off. *
Real estate data finds that the county’s median home price was $579,500 in January, down slightly from December’s median price of $581,500.
That’s a 2.6 percent increase over the same time last year. By comparison, prices shot up nearly 8 percent between January 2017 and January 2018.
Homeowners who plan on moving at some point in the future are likely to ask the question: "What will my home be worth?" Ah, if only there was a real estate magic eight ball that could reveal the price tag sellers should slap on their homes! Location and real estate market conditions help determine your home's value, but unfortunately, pinpointing an exact number is far from a perfect science.
But there are certain tried and true tactics you can employ to help you get a ballpark figure for your home's worth. Below, our real estate experts offer their most reliable methods.
'What will my home be worth?'
Projecting out what your home will be worth in just a couple of years can be challenging, but in a conservative market, 3% appreciation per year is a good guideline to use, says Liane Jamason, broker associate at Smith & Associates Real Estate, in Tampa Bay, FL.
So, using that number, you can estimate that a $500,000 home you bought today could be worth $671,958 in 10 years. Of course, keep in mind that exceptions abound. In some markets, you can see jumps in value of 15% to 20% over short periods of time.
This year's spring home-buying season is when the frenzy typically kicks off for the year, appears to be off to a slow start—particularly in and around some of the nation's most expensive, coastal cities.
That's because for the fifth month in a row, the number of homes on the market surged 6% in February compared with the same time the year before, until last year the nation had seen several years of housing shortages.
It suggested that the housing market is starting on a cooler footing this spring than last spring. That's partly a result of the long-term housing shortage that pushed prices up so high, fewer people were able to actually buy a home.
The big, pricey, tech-fueled cities on the West Coast saw the greatest influx of homes on the market. The nation's most expensive market, Silicon Valley's San Jose, CA, experienced a 125% jump in the metro area in February compared with a year earlier. (The metropolitan area includes the main city and the surrounding suburbs.) The median home price in the metro is a whopping $1,079,800—and that's down 10% from the previous year!
Crissi Avila will teach you how to buy smart. We’ll look at location, development, and turnover so you can spot opportunities long before most even start considering them.